IBEW to Congress: Protect Workers From Enrons Abuse of Retirement Savings
February 5, 2002
IBEW Local 125 Business Manager Bill Miller today urged Congress to take measures to protect workers in the future from the devastating losses Enron inflicted on Portland General Electric employees.
Miller spoke before the U.S. Senate Committee on Governmental Affairs chaired by Democratic Sen. Joseph Lieberman (D-Connecticut), who is investigating Enrons locking in of workers 401(k) plans last fall before the value of company stock hit bottom. Enron, which purchased the Portland, Oregon utility in 1997, filed for bankruptcy in early December.
"Our people played by the rulesthey werent sophisticated investors, just hard-working honest folks who became victims of Enrons lies," Miller told the committee. "There is so much more that needs to be said and done. Our local union is willing to assist in any way we can to make sure our tragedy can be avoided elsewhere."
PGE s relationship with Enron was symbolic of the rampant changes deregulation wrought in the electricity industry. Enron was one of the biggest, most vocal supporters of deregulation; PGE was known as a reliable, safe employer that delivered power to Oregons homes and a good, steady job to its workers. Miller said when Enron purchased PGE, employees were fascinated by the new company but apprehensive of the uncharted territory of deregulation. They would soon find out Enrons brand of change would do them no good.
"The day of the stable utility employer no longer exists, thanks in large part to Enron," Miller said. "Employees of these once stable entities can no longer trust their employer for a true accounting of what their companys future holds for them."
The 900 active employees of PGE and 550 retirees were locked out of their 401(k) retirement plans last fall, losing millions of dollars while top executives traded their stock for cash as the price started falling.
"That left many of them feeling like their hands were tied to the deck of a sinking ship, and they were," Senator Lieberman said. "The thought of employees sustaining huge losses while executives were able to sell stock for millions is infuriatingand especially infuriating because it was preventable. The risk of a catastrophic loss in the value of a 401(k) account occurring during a lock-down increases exponentially when employees have most of their assets invested in a single stock."
Miller urged Congress to address issues surrounding mandatory stock matches, total percentages of company stock in the 401(k) plans and advance notice and limitations on the duration of lockout periods.
Senator Jean Carnahan (D-Missouri) compared the 401(k) lockout to the Triangle Shirtwaist fire in New York in 1914 when more than 100 women died because management locked them in to the rooms where they sewed clothing.
Senator Susan Collins (R-Maine) said she and Senator Jeff Bingaman (D-New Mexico) have cosponsored legislation to encourage employers to offer employees independent investment advice.