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May 15, 2003

GOP "Pension Reform" Benefits Investment Firms

Have they no shame?

In the name of reforming the 401K debacles that screwed workers at Enron, the GOP has pushed through a "reform" that will allow the same companies to run 401K plans AND give those same workers investment advice on what to buy. So those firms will be in a position to push the investments that make them the most money on the side.

It was a victory for investment companies, which want the ability both to administer 401(k) programs and advise employees on where to put their money. Plan administrators are now prohibited from giving investment advice.

Democrats who voted against the bill said it would create conflicts of interest similar to the scandals that have roiled Wall Street because some companies would recommend the mutual funds that would make them the biggest profit.

This is pro-corporate cynicism of the highest order-- not dealing with the real needs of pension reform, while creating a conflict-of-interest boondoggle for the financial services industry, just as the SEC and NY's Spitzer have been cracking down on the problem. A twofer in screwing workers and undermining securities reform at the same time.

Posted by Nathan at May 15, 2003 10:46 AM

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