DOL Wants Enron Execs Off Retirement Committee

February 11, 2002 ( - The Labor Department wants to replace Enron executives on the administrative committee that oversees the firm's retirement plans, according to published reports.

The DOL has been negotiating with Enron lawyers for about a month, and negotiations are continuing, according to the Associated Press. 

‘Our objective is to replace them with an independent fiduciary, expert in ERISA, and experienced in protecting the interests of participants and beneficiaries in complex pension plans like Enron’s,’ Ann Combs, the assistant secretary for pension and welfare benefits, said Sunday, according to the report.

‘If no agreement is reached in the very near future, we will seek a court order replacing these people with a qualified independent fiduciary,’ she said.

Miller Letter
Among the members of that administrative committee is Cindy Olson, the Executive Vice President for Human Resources at Enron, who testified at several congressional hearings last week.

During last Thursday’s hearings at the House Committee on Education and the Workforce, ranking Democrat George Miller (D-California) expressed concerns that people on the administrative committees were doing things differently with their own portfolios than they were – or were talking about doing – with the 401k assets. 

Those concerns triggered a letter from Miller to Labor Secretary Elaine Chao requesting a change which said, in part, ‘Despite the repeated signs and warnings and a loss to Enron employee retirement savings estimated at over a billion dollars, the plan’s fiduciaries, including Ms. Olson, continue to serve on the plan’s administrative committee.’

In addition to the 401(k) plan, Enron also offered workers an Employee Stock Ownership Plan (ESOP) and a cash balance plan.


Enron employees held approximately 54% to 60% of their 401(k) plan assets in company stock.  However, according to a background memo from the Workforce Committee, Congressional Research Service (CRS) reports that 89% of this Enron stock was purchased voluntarily by Enron employees, not through the company match.

Plan participants were reportedly notified of the change in recordkeepers and subsequent blackout by a mailing sent out in September.  Two weeks prior to the blackout – which took place at the close of trading on October 26, according to testimony from both Northern Trust and Hewitt – Enron announced a $638 million loss and a $1.2 billion reduction in shareholder equity. 

The blackout period lasted 13 business days – a period during which Enron stock continued a long slide, dropping from $13.81 to $9.24 per share, according to press reports.  Enron subsequently filed for bankruptcy on December 2, 2001.