Association for Financial Professionals Adopts Positions on Penison Reform
The Association for Financial Professionals (AFP) has adopted a set of positions on reform proposals triggered by the bankruptcy of Enron Corporation. These proposals deal with accounting and auditing, corporate governance and financial reporting, pension plan management, and derivatives. AFP's position was shared in an April 8 letter to The Honorable Michael G. Oxley (R-OH), chairman of the House Committee on Financial Services, whose bill (H.R. 3763) would establish an independent body to oversee the accounting profession. H.R. 3763 also would restrict external auditors from performing information system design and implementation, or internal audit services for their clients.
"In light of the issues raised by Enron Corporation, AFP supports legislation that enhances the integrity and oversight of the audit process and improves financial controls," said AFP's President and CEO Jim Kaitz who signed the letter to Oxley. "Any legislation should protect the interests of investors, employers and retirees." AFP also sent its letter to the full House Financial Services Committee.
AFP supports policy changes to strengthen the private sector retirement system, enhance confidence in retirement plans, and promote diversification as a means of assuring retirement security for plan participants. To enact positive change for plan participants, AFP recommends:
- Allowing retirement plan participants to diversify company stock received as a match after three years
- Requiring adequate notice (30 days) prior to any "blackout" period
- Limiting the ability of senior executives to sell company stock during "blackout periods"
- Removing barriers to investment advice to participants
- Disallowing employer stock as an option for elective deferrals if matching contributions are required to be in company stock, when the 401k plan is the primary retirement vehicle for participants
Background
The Association for Financial Professionals in Bethesda, Maryland, supports more than 14,000 individual members from a wide range of industries throughout all stages of their careers in various aspects of treasury and financial management. AFP is the preferred resource for financial professionals for continuing education, financial tools and publications, career development, certifications, research, representation to legislators and regulators, and the development of industry standards.
Rick Meigs, Publisher, 401khelpcenter.com, LLC
