WASHINGTON (AP) — Workers could receive financial advice from the same companies that manage their 401(k) accounts under Enron-inspired legislation the House passed Wednesday for a second time.
The bill, approved 271-157, is supported by the White House and contains principles outlined by President Bush in his February 2002 pension proposal.
"Our goal here is to get real investment advice into the hands of everyday working people," said Rep. John Boehner, R-Ohio, chairman of the Education and Workforce Committee and sponsor of the bill, which the House also passed last year. It died when the session ended because the Senate had failed to act.
Democrats said such advice would be tainted by financial conflicts of interest because advisers could recommend funds that pay them fees.
"Does this make sense when many of the biggest investment houses in the nation … have just paid out nearly a billion and a half dollars for committing just these kinds of abuses?" said Rep. George Miller, D-Calif.
Business groups heavily lobbied Congress in the wake of those corporate scandals, cautioning against drastic investment plans.
As a result, 1 1/2 years after thousands of Enron workers lost their retirement savings in the company's collapse, Congress has yet to enact a law that would protect 401(k) account holders from similar failures.
The Senate has no plans to take up Enron-related 401(k) protections any time soon.
In the House, Republicans and Democrats agreed that workers need access to professional investment advice to help them diversify their 401(k) accounts. Enron workers who lost their life savings in their 401(k) plans were heavily invested in company stock.
But just how to provide the advice was the focus of debate.
Republicans said workers should be allowed to receive advice from some of the largest and best investment houses in the country. Conflicts of interest would be avoided because the bill holds personally liable any advisers that breach their legal obligations, Republicans said.
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