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Chapter 5. What it Meant to “Do the Righ... > Evaporating Employee Pensions

Evaporating Employee Pensions

For years Enron maintained a pension plan for employees in which thousands of Enron workers kept substantial amounts of their investment in the form of Enron stock. In the months before the company's stock collapse, its chairman assured employees that the company's finances were sound. And for a critical period in the decline of the company's stock during the fall of 2001, the company changed plan administrators and prohibited employees from selling the stock, even as executives whose holdings of company stock were outside the plan were in many instances selling their shares. The consequence of several factors—including the heavy investment by employees in company stock, the transaction freeze, and the collapse of the company's share price—was that many employees lost virtually the entire value of their pension accounts.

Today State Street Corporation is assuming the oversight of Enron's retirement plans at the behest of the U.S. Department of Labor. State Street had itself held some 16 million shares of Enron stock at the end of September 2001, when the company's meltdown began, and as of the end of 2001, it had reduced its holdings to about half a million shares. [28]


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