U.S. Chamber Urges Congress to Use Caution on 401(k)s

WASHINGTON, D.C. — In the wake of the Enron debacle, the United States Chamber of Commerce today warned lawmakers to proceed with caution in considering sweeping new mandates on employer-sponsored worker retirement plans, as over-regulation could restrict investment options and result in fewer employers offering 401(k) plans, employee stock ownership plans, and other retirement benefits.

"Congress needs to gather all the facts first. Acting swiftly for the sake of appearing engaged may be good politics, but it's bad policy," said Thomas Donohue, U.S. Chamber president and CEO. "If Enron is a case of bad actors breaking the rules, then punish the guilty and try to help those who were harmed. But politicians tinkering with a 401(k) system that protects 42 million American workers may do more harm than good."

Employers voluntarily provide retirement benefits to 90 million American workers — over and above their Social Security contributions. By rushing to pile more mandates on employers in the name of protecting employees, Congress risks making the system more complicated, more expensive, and less available, according to the Chamber.

"Beware of the salesman who peddles a one-size-fits-all approach to retirement investment," said Donohue. "Companies must retain control over how they offer the 401(k) match and other retirement contributions — to limit their discretion would only serve to discourage them from offering retirement plans. It is an equally bad idea for the government to dictate how employees invest their own money by imposing arbitrary investment caps."

The Chamber instead advocates more independent investment information for workers to help them better understand their investment options.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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02-08