Opening Statement of the Hon. Mark Foley, a Representative in Congress from the State of Florida

Hearing on Employee and Employer Views on Retirement Security

March 5, 2002

Good afternoon Mr. Chairman. I want to thank you for holding these hearings today on this very important issue - employee retirement plans. After the collapse of Enron and the Chapter 11 filing of K-Mart, we in Congress were forced to look at the way employee retirement accounts are created, managed and invested.

Year after year thousands of employees invest billions of dollars in employee retirement accounts. Many of these accounts allow for 100% investment of an employees fund into the parent company. For many of these employees, most of whom are not financial advisors or have any investment background, they invest without any guidance by a professional. For some, this has led to a dangerous trend of relying on the earnings and growth of only one company -- and has we have seen in the past few months can falter for even one of the top Fortune 500 companies.

Mr. Chairman, as we proceed in this subcommittee in investigating this matter, we must be careful in balancing our approach. We must continue to allow individual investors to manage their accounts as they wish, while protecting those with little or no experience in this area from unscrupulous practices of their company leadership. Mr. Chairman, I believe we can attain such a balance if companies provide the investor with the appropriate knowledge to make the right choices. We must require businesses to provide adequate and regular information to employees about their retirement accounts so that they, and not the government, make the appropriate choices for themselves. Last November, the House took action on this issue when it passed H.R. 2269, the Retirement Security Advice Act of 2001. However, to date, the Senate has yet to take any action on this very important piece of legislation -- which is placing thousands of employees at continued risk.

Mr. Chairman, I believe that providing information to the investor is just the first step. We must begin to look at all aspects of these accounts by reviewing current holding periods, blackout periods, and diversification matters. Again, Mr. Chairman, I applaud your efforts in holding these hearings as we consider legislative corrections to the current crisis.