401(k) Reform: Is the Market Correcting Itself?

When it comes to 401(k) reform, large corporations are one step ahead of Capitol Hill. In the wake of the Enron blowup, they're scurrying to make themselves look responsive to potential concerns of their workers.

Companies such as Lucent (LU Quote), Mellon Financial (MEL Quote) and AOL Time Warner (AOL Quote) are already fixing potential trouble spots, such as restrictions on company stock. These actions could sap some of the momentum for political reform, which in itself is good news for 401(k) investors. The caveat is that for now, employers are moving cautiously on one of the areas in most urgent need of reform: giving workers advice about how to invest.

It's all the more crucial that companies step up to the plate, because it's starting to look doubtful that Congress will pass a pension reform bill. Though a bill has passed the House, the Senate plans to roll post-Enron pension and accounting reform together into one giant bill. That's likely to make it tougher to achieve broad support for the legislation. ...