Employee Benefits Bulletin, March 2002
Retirement Reform Legislation Summary
Bush Proposal
- Employees may sell company stock in 401(k) plans after participating for three years
- Employers must provide workers with detailed, quarterly reports on their accounts and rights to diversify
- Executives prohibited from selling company stock during blackout periods
- Companies required to give participants notice of a blackout period 30 days in advance
- No caps on employer stock
Deutch/Green Bill (HR 3463) Deutsch (D-FL), Green (D-TX)
- Employer stock ownership capped at 10% of elective deferrals
- 100% diversification rights for all employer stock three years after contribution
- No additional blackout period rules
Miller Bill (HR 3657) Miller (D-CA)
- Immediate 100% diversification rights for vested, non-ESOP stock
- 100% diversification rights for publicly traded employer stock in ESOP after 10 years of participation
- 30 day advance participant notice of blackout periods; period limited to 10 business days
- Detailed benefit statements for all defined benefit and defined contribution plan participants
- No caps on employer stock
Boxer/Corzine Bill (S 1838) Boxer (D-CA), Corzine (D-NJ)
- Employer stock capped at 20% of assets in individual employee accounts
- 100% diversification rights for all employer stock/real property 90 days after contribution
- 100% diversification rights for all employer stock in ESOP plans at age 35 and 5 years of service
- Tax deduction of 50% for employers for matching contribution of employer stock to non-ESOP defined contribution plans
Boehner/Johnson Bill (HR 3762) Boehner (R-OH), Johnson (R-TX)
- 100% diversification rights for all employer stock three years after contribution in non-ESOP plans
- Companies required to give participants notice of a blackout period 30 days in advance
- Quarterly statements required
- Ability for sponsors to contract investment advice to participants from administrators
- No caps on employer stock
Portman/Cardin Bill (HR 3669) Portman (R-OH), Cardin (D-MD)
- 100% diversification rights for all matching contributions of employer stock after three years in DC plans with publicly traded stock
- 100% diversification rights for all other contributions of employer stock after five years
- Companies required to give participants notice of a blackout period 21 days in advance
- No caps on employer stock
Hutchison/Lott Bill (S 1921) Hutchison (R-TX), Lott (R-MS)
- 100% diversification rights for all matching contributions of employer stock after 90 days (except certain ESOPs)
- Companies required to give participants notice of a blackout period 30 days in advance
- DC plans must offer at least 4 investment options
- Prohibits the requirement of elective deferral in company stock or real property
- Quarterly statements with special notice to participants with greater than 25% in employer stock
- No caps on employer stock
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