Enron blocked employee transfers for several weeks during a recordkeeper conversion, according to reports. Unfortunately for workers, that freeze came during a period where questions about the firm’s accounting practices and a restatement of prior year earnings set off a dramatic plunge in the firm’s stock price.
The firm filed for Chapter 11 bankruptcy protection last Sunday.
The Labor Department said many Enron employees lost 70% to 90% of their retirement assets after the company said it would restate its earnings. The department said it is reviewing:
– Enron’s employee benefits plans
– the rules governing them and
– the steps the company took shortly before its collapse to keep employees from making transactions with their 401(k) plan assets
“Enron’s employees have gotten the short end of the stick in the sudden collapse of this company, and we are committed to doing everything we can to help them,” Labor Secretary Elaine Chao said in a statement.