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OPA News Release: [02/13/2002]
Contact Name: Sue
Hensley
Labor Secretary Chao Announces Agreement To Replace Enron Pension
Plan Officials
Independent Fiduciary Will Assume Management of Retirement
Plans
WASHINGTON—Secretary of Labor Elaine L. Chao today announced
that an independent fiduciary will be appointed to replace Enron
Corporation’s Administrative Committees, whose members currently serve as
fiduciary of the company’s three retirement plans.
“The workers in these plans have suffered enough,” said Chao.
“I’m pleased that we have negotiated an agreement that requires the
company to pay for the independent fiduciary rather than further deplete
employees’ retirement savings.”
The agreement, signed today by the Labor Department and Enron Corp.,
requires Enron to pay the independent fiduciary’s fees for three years, up
to a maximum of $1.5 million per year, plus associated expenses. These expenses
will include the cost of any related services, such as outside legal or
accounting services, incurred by the independent fiduciary. The terms of the
contract between Enron and the independent fiduciary may have to be approved by
the bankruptcy court.
“The department is transferring control over the retirement plans
to an independent expert who can aggressively protect workers’ interests
during corporate bankruptcy proceedings and maximize the likelihood of
recovering funds for the plans,” said Chao. “Enron’s employees
should be confident that their interests will be protected by a fiduciary who
is unrelated to Enron.”
Under the terms of the agreement, the independent fiduciary will be
selected by the department. The independent fiduciary will assume control
over:
- Operating the plans and investing plan assets
- Selecting and monitoring plan investment managers
- Investing plan assets currently held in employer securities
- Selecting and monitoring funds offered as investment options under
the savings plan
- Implementing procedures relating to pass-through voting of employer
securities
- Retaining professional services.
Enron sponsors a 401(k) savings plan, cash balance defined benefit plan
and an employee stock ownership plan covering over 20,000 employees. The
company filed Chapter 11 bankruptcy on Dec. 2, 2001. The department’s
Pension and Welfare Benefits Administration opened an investigation on November
16, 2001 to determine whether there were any violations of the Employee
Retirement Income Security Act (ERISA) in connection with the operation of
Enron’s employee benefit plans.
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