The announcement comes after last month’s agreement with Enron to replace members of Enron’s pension administrative committee with an independent fiduciary.
Under the agreement, State Street will be responsible for the Enron Corp. Savings Plan, the Enron Corp. Employee Stock Ownership Plan and the Enron Corp. Cash Balance Plan.
ERISA gives Chao the authority to replace a plan’s fiduciaries either through an agreement with the company or by court order if the DoL feels participants’ interests aren’t being protected.
Included in State Street’s new duties, according to the DoL, are:
- investment of plan assets including that in Enron company stock
- selection and monitoring of investment managers
- representation of the plans’ interests in litigation.
The DoL said this includes involvement in Enron’s current bankruptcy proceedings in a Houston bankruptcy court as well as the selection and monitoring of funds and investment options offered under the Savings Plan.
Also Thursday, Chao announced that Enron employees wouldn’t have to pay for State Street’s services by having assets deducted from the plans.
That’s because Enron has agreed to pick up those costs up to $1.5 million annually for three years – subject to Bankruptcy Court approval. Otherwise, fees and expenses would be deducted from the plans.