March 17, 2003

Statement of Senator Ron Wyden on the Introduction of the "Catch-Up Lost Retirement Savings Act"

M. President, over a year ago the greed of some senior executives at the Enron corporation finally caught up with them. Enron's financial house of cards began to tumble, and along with it went the pensions and retirement dreams of thousands of employees and investors. Among the employees whose pensions were crushed in Enron's accounting avalanche were nearly all of Portland General Electric, or PGE's 2,700 employees in Oregon. Enron took over PGE in June of 1997, and two years later merged the PGE employee 401(k) retirement plan into a single plan. That plan allowed employees to contribute up to 15% of their income, with the company matching in Enron stock. When Enron took over PGE in l997, PGE's stock was trading at $27 a share; three years after the merger, Enron stock was trading at $85 a share, enticing employees to invest 100% of their 401(k) money in Enron stock. Enron's stock had begun to slide in August 2001, and it was not until October that real panic set in. At that time the captains of the Enron ship knew it was sinking. In an effort to prevent a massive stock sell-off, senior executives on the deck locked workers in the boiler room, preventing them from selling off 401(k) shares while they dumped their own. By the time the pension lockdown ended, an Enron share was worth less than ten dollars. In early December, Enron filed for bankruptcy. Earlier this year Congress enacted significant corporate accountability legislation so that executives and accountants can no longer use certified financial statements to play a game of financial hide-and-seek. But little was done for the workers who were locked in the boiler room. The purpose of the legislation I am introducing today the "Catch-Up Retirement Savings Act," is to give those PGE employees who were harmed by the greed of Enron executives the opportunity to catch-up on some of their lost retirement. My bill does two things to help workers. First, it allows employees to triple the deductible amount they may otherwise contribute to an IRA, and second, it gives employees a 50% tax credit on the amount they contribute to their IRA. The tax incentives would be available for five years to employees whose employer filed for bankruptcy and who was the subject of an indictment or conviction resulting from business transactions related to such case, and whose employer matched at least 50% of the employee's contributions to the pension plan.M. President, no act of Congress can ever respond fully to the egregious harm that has been caused to thousands of Oregonians by the collapse of Enron. But I believe that something must be done to help recoup some of the lost pension savings. The "Catch-Up Lost Retirement Savings Act" is a small but important step that Congress should take to help employees to begin to catch-up on their retirement savings. I ask unanimous consent that my statement and copy of the bill be printed in the Record.