 |
|||||||||||
|
|||||||||||
 |
|
|
KEYWORD:
|
Employee Benefits Bulletin, March 2002WILL ENRON'S BANKRUPTCY AFFECT YOUR PLAN?There is a flurry of activity in the wake of the Enron bankruptcy, particularly surrounding the plight of the Enron 401(k) plan participants. Multiple class action suits have been filed, a variety of legislative proposals restricting plan sponsor stock in plans have been introduced, plan administrative "blackout" or "lockdown" periods are being examined, and, most recently, President Bush has outlined a reform proposal that would bar company executives from selling their company stock during a blackout period and would make executives responsible for performance of the employees' investments in the plan during the blackout. Industry experts are cautioning the government to move at a deliberate speed when considering these reforms. Restrictions resulting from the sudden backlash against plan-held employer stock could discourage companies from offering retirement benefits at all. And, the suggestion by the Bush administration that executives have a fiduciary duty for the stability of workers' investments during a blackout period has enormous implications for the future of 401(k) plans, since the employer currently is able to avoid liability for investment decisions made by the participant. The concern prompted by Enron will not go away any time soon. The LSRS ERISA & EB Group is monitoring the activity very closely and will keep you posted on any new developments. Back to Newsletter home |
||
|
|
