(Archived Content)
Today the President announced four steps recommended by his Task Force on Retirement Security to enhance the safeguards protecting workers' retirement savings. The Treasury looks forward to working with Congress to enact these important reforms.
Large companies often make contributions to their employees' 401(k) accounts in the form of employer stock. Employers should continue to be encouraged to make generous contributions to these plans. When these contributions are made in the form of employer stock, workers should have the freedom to diversify those contributions into other investment options after they have participated in the 401(k) plan for three years.
Blackout periods occur when employees cannot change their investments due to administrative changes being made to their plans. These periods must be fair, responsible, and transparent. Thus, corporate executives should not be able to buy or sell company stock while the company's workers are prohibited from trading employer stock in their 401(k) plans due to a blackout. By requiring 30 days advance notice before a blackout period begins, workers will have appropriate time to plan around these changes.
Current law inhibits employers from hiring investment advisors to give investment advice at the workplace that could assist workers in making retirement planning decisions. Enactment of the House-passed Retirement Security Advice Act would remove the existing barriers.
Workers deserve timely information on their 401(k) accounts, including the value of those accounts, their right to diversify their investments, and the importance of asset diversification.
The Task Force's recommendations will provide hardworking Americans greater freedom to choose, better information to make decisions, and a level playing field during blackout periods, thereby enhancing their retirement security.