Columns

Thursday, February 14, 2002

protecting worker pensions

In Iowa's Interest - A Column By Tom Harkin

To me, Enron and pension reform isn't about politics. It's about Iowa families like the Heilands.

I recently spoke with Sheri Heiland from Durant. Sheri's father worked at Northern Natural Gas in Redfield for 30 years before passing away in 1979. Those decades of hard work earned him a good pension. But when Enron bought out Northern Natural Gas that companies stock was transferred into Enron stock.

As Enron's stock plummeted, Sheri's mother, a 77 year old widow living alone in Penora, lost much of her retirement savings. Sheri told me that her mother trusted Enron and Ken Lay "to be honest and above board." While her dad had some retirement savings in another fund, Sheri's mother can no longer afford repairs to her home, making it more difficult for her to continue living on her own.

Families like the Heiland's are why I released a six point plan to protect worker pensions. My pension protection proposal emphasizes the creation and preservation of employee pension plans that are secure, transparent and fair.

First, my plan would prohibit a company's accountants from also auditing employee pension plans. That's a dangerous conflict of interest that threatens pension security.

Second, companies would be required to carry insurance to cover employee pension losses due to company fraud. Companies should pay when they rob workers of a secure retirement.

Pension laws are complicated and it's hard for workers to know their rights. That's why the third piece of my plan establishes an Office of Pension Protection at the Department of Labor to act as an advocate for pension holders.

The fourth part of my plan would require that "blackout" or "lockdown" periods, where stock may not be traded, affect company executives the same way they affect other employees. Corporate executives shouldn't be able to unload stock and get a golden parachute while their employees are anchored to plummeting stock.

When executives do dump stock their employees should know about it. That's why my plan would also require that executive stock sales are reported on the same day and posted on the Internet.

Finally, my plan would deny tax breaks to companies that fail to offer employees a diversified portfolios. Some companies, like Enron, require their employees to be fully invested in their company's stock. That's not a recipe for a pension security. The United States government subsidizes 401(k) plans for a reason - to encourage employers to provide employees with a stable retirement plan.

I believe the Congress and the president must make clear - in both actions and words - that a worker's pension is not a corporate executives private piggy bank. While most employers do right by their workers, we must protect workers and their pensions from unscrupulous executives. I look forward to working with President Bush to pass these needed pension reforms into law.