- The Washington Times - Friday, February 8, 2002

Labor Secretary Elaine L. Chao said yesterday that she will do everything within her power to recover the retirement savings that thousands of Enron employees lost when the company went into bankruptcy.

Mrs. Chao said that the department's investigation into Enron's stock pension plan was moving "as quickly as we can."

"I'm very concerned about these workers. I will drive this investigation to wherever it goes and I will do everything I can to help make these employees whole."

Her remarks were the administration's strongest statement to date about the government's investigation into the huge losses suffered by Enron workers and its intention to recoup their losses. Many of them lost all of their retirement savings when the company collapsed and the Enron stock they had in their 401(k) pensions plans became virtually worthless.

"I don't want to raise people's hopes, but our whole team here is committed to doing everything we can to recover their savings," she said in an interview with The Washington Times.

Labor Department investigators are trying to determine whether there has been any violation of pension laws and Enron's fiduciary responsibility to workers who invested in the pension plan. Mrs. Chao said that "if we find there are grounds to begin a criminal investigation, we will seek one."

"We will try to do everything we can to get the money back and recover as much as we can for these employes," she said.

The Labor Department has a long record of recovering employee losses from failed pensions plans. In the past year alone the department recovered $662 million in pension money that it returned to workers, while obtaining 76 indictments and 49 convictions against wrongdoers.

The administration's task force on pension fund reform, headed by Mrs. Chao, has come up with a set of recommendations to Congress to ensure that workers who have 401(k) stock pension plans have more freedom to choose and diversify their retirement assets and are given more access to professional advice about how their investment portfolios should be structured.

Mrs. Chao said yesterday that the lesson to be learned from the Enron pension plan fiasco is that "it is important for people to diversify their retirement savings."

"Diversification is a tried-and-true investment strategy. It balances risks and rewards. Every year, at a minimum, a person should be looking at their 401(k) plan and see whether they are overconcentrated in any one stock or any one sector of stocks," she said.

But Mrs. Chao said the administration was unalterably opposed to Democratic proposals in Congress that would put a 20 percent cap on the amount that a worker's 401(k) plan could have in company's stock.

"The president's plan preserves a basic right. Under 401(k) plans, workers are given control over the funds. This is their money, they direct the funds in that account, they invest it as they see fit. They have a choice about what to do with that money and if they leave the company, they carry that fund with them," she said.

Pointing to many companies whose workers have become millionaires by investing in its stock, and thereby sharing in its financial growth and success, Mrs. Chao said that any new pension rules must not "take away the right of workers to choose their own investments."


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