Congress is considering a bill that would help protect pension investments from the Year 2000 bug and give the federal government unprecedented regulatory powers to prevent interruption of many services due to the problem.
Introduced late yesterday by Senator Robert Bennett (R-Utah), the chairman of the newly established Special Committee on the Year 2000 technology problem, the legislation is intended to protect the employee benefit plans of U.S. citizens from the risks of the Year 2000 problem. It will also require that the federal government take adequate steps to prepare for Year 2000 readiness in its regulation of essential services like utilities, water, and telecommunications.
"For the 84 million Americans involved in pension plans, this legislation will provide them with the security that those managing their retirement programs pay attention to the effect of the millennial date change on their investments," Bennett said in a statement. "Over $2 trillion in assets are held by pension funds. For those entrusted with the responsibility to protect these assets, it is vital that they consider the impact of the millennial date change on both the viability of companies in which they invest, and the liquidity of the markets in which these investments are traded."
The bill addresses much of the criticism directed at the government for not doing enough to protect the markets and other sectors from the impact of the Year 2000 bug.
The Y2K problem, or the millennium bug, stems from shortcuts taken by computer programmers in the 1970s and 1980s, who tried to save valuable computer memory by abbreviating dates to the last two digits. Many computers will crash when they enter the next century because they will interpret the year 2000 as either 1900 or a meaningless 00.
If computers are not reprogrammed, the consequences could be calamitous. Experts say the bug could shut down companies, jam communications, and even freeze world trade if it is not eradicated.
Bennett's S.2000 amends the Employee Retirement Income Security Act (ERISA) to require that fiduciaries, or trustees, of employee benefit plans consider Year 2000 computer problems when making investment decisions. Specifically, the fiduciary must determine that the issuer of a security has taken, or is taking, steps to remove Y2K problems, and that the market in which the security is traded can continue to operate without interruption through the year 2000.
The bill would also ratify the President's Council on Year 2000 Conversion, giving it the support of the Congress. In addition, the bill gives the Council's chairman, John Koskinen, increased authority to use existing authorities to retrain essential government employees necessary for Y2K compliance initiatives. It would also authorize Koskinen to reallocate Executive branch resources critical to correcting the Y2K problems within federal agencies.
Bennett noted that market demand for qualified Y2K technical support is increasing, and said it is important that Koskinen have the ability to implement what authorities currently exist within the government and report back to Congress if additional authorities are needed.
"To a degree this is what we have been looking at for some time. This bill is codifying our initiatives," said Jack Gribben, a spokesman from the President's Council on Year 2000 Conversion.
In addition to giving the new Y2K council some teeth, the bill also requires that the Office of Management and Budget provide Congress with quarterly updates on the status of federal agencies in achieving Y2K compliance, something it does already but was not required to do.