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Compliance July 4, 2003
DoL Takes On Enron Over Retirement Plans
April 19, 2002 (PLANSPONSOR.com) - The Department of
Labor (DoL) has suggested that Enron intended to deceive the
government by entering an agreement with State Street
Corporation that it never meant to honor, according to the
New York Times.
Reported by Nicole Halsey
Last month, Enron agreed to turn over control of its retirement plans to State Street, who in turn would be paid up to $2.7 million a year out of Enron’s assets. Enron’s plans have reported assets of more than $2 billion.
Two weeks ago, DoL officials said that Enron backed out of the deal at a bankruptcy hearing in New York where the judge presiding over the case decided not to approve paying the fees out of the company’s assets.
Still, at a bankruptcy hearing earlier this month, Enron insisted that its lawyers stood by the deal with the Labor Department and told the judge that the company did not oppose paying the fees out of its estate.
However, in a letter to Enron sent last week Eugene Scalia, the DoL’s solicitor said the transcript showed that Enron asked the judge not to approve the fees. He added that the only reason the company’s lawyers agreed to the deal was to avoid a dispute with the agency.
In the meantime, the DoL may file papers in bankruptcy court seeking to have State Street take over the pension plans anyway and be paid temporarily out of the assets of the plans while the government’s investigation of Enron continues, the Times reported, citing people close to the case.
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