Senate Panel Passes Bill Limiting 401(k)s

Associated Press

A Senate committee narrowly passed legislation that would limit employer stock in 401(k) plans, a response to hundreds of Enron Corp. workers who lost their retirement savings last year because they heavily invested in company stock.

The Democrat-controlled Senate Health, Education, Labor and Pensions Committee passed the bill along party lines, with Republicans arguing that the legislation would prompt companies to stop matching contributions or cease offering 401(k) plans altogether.

The legislation, sponsored by committee chairman Sen. Edward M. Kennedy (D-Mass.), would let employers make matching contributions to their employees’ plans with company stock or let workers buy the stock as a retirement investment option, but not both. The bill also would require that workers and plan participants be represented on a board overseeing retirement plans.