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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (311)	1/16/2002 8:07:37 PM
From: Lazarus_Long	Read Replies (1) \| Respond to of 3602

OUCH! Actually, I think some Enron executives are going to be saying that soon. That looks like a smoking gun.

To: stockman_scott who wrote (311)	1/17/2002 12:30:00 PM
From: Gordon A. Langston	Respond to of 3602

Enron, for all it's faults and likely criminal behavior did not have a bad 401K policy in place. Jonathan Lansner Enron's 401-k plan not villain January 17, 2002 By JONATHAN LANSNER The Orange County Register No, I haven't gone mad. Enron had a good 401-k. Yes, the program offered now-sullied Enron stock as an investment option. Yes, Enron paid its matching portion in company shares. Yes, there were curious selling limits on shares. Get past the splashy headlines of this debacle, though, and you see that the retirement savings plan itself appears a fairly sound one. Undoubtedly, Enron employees bet too much on their employer, placing 54 percent of the assets in Enron shares at the last public count before the company's collapse. Still, the monetary anguish of those savers is real. These folks were clearly led astray by their bosses. Yet, almost as painful is the fact that these workers had plenty of places to put their nest eggs. The 401-k offered 20 choices, including household fund names like Fidelity (including its giant Magellan, Growth and Income, Equity Income, Growth Companies and OTC); Vanguard (the popular 500-stock index and Windsor II funds); and T. Rowe Price Small Cap. There were two international stock funds for the risk-takers while the skittish could park cash in a bank-like stable asset fund or Pimco Total Return. Those who wanted others to make asset allocations could pick Fidelity Balanced or a set of three lifestyle funds that match risk to age. And if that wasn't enough choice, one could put money in the self-directed option and buy whatever stocks, bonds or funds they wanted to through a brokerage. "An awfully good selection," says Don Phillips, head of fund tracker Morningstar. "A very nice array. An excellent plan," says David Wray of Profit Sharing/401-k Council of America. Now don't get these observers or me wrong. Enron is a horrible scam. Company execs and the outside advisers who aided this charade will hopefully go to jail. However, one emotional focus in the fallout, temptation to revamp the nation's 401-k system, is misguided. Certainly, most workers need more education about these plans and the risks involved. And many companies - not Enron - should offer far more investment choices. But should ownership of company stock, roughly 40 percent of all 401-k assets nationwide, be limited? That's a tough debate juggling risk tolerance vs. the value of employee ownership in the workplace. Two years ago in this town, Rockwell tried to get employees and retirees to lower their savings-plan stakes in spinoff Conexant, which soared in the tech stock boom. The company was criticized for the heavy-handed push and eventually muted the sell-off. Funny, nobody complains today as Conexant shares have badly sunk along with other tech issues. Face it. Investing is hard. And it is very personal. Not an easy chore to regulate. So as the Enron probes get going, one hopes one key fact isn't forgotten: The structure of Enron's 401-k was more than adequate. The sad losses it unfortunately created should not be used as an excuse for knee-jerk tampering with a great savings tool for most Americans. Copyright 2001 The Orange County Register