PSCA SUPPORTS ENRON INQUIRIES BUT URGES POLICY MAKERS TO WAIT FOR RESULTS

Chicago (December 10, 2001) – The Profit Sharing/401(k) Council of America (PSCA) is deeply troubled over the allegations of financial misconduct at Enron and the ensuing deterioration of Enron employees’ retirement plan accounts. These allegations strike at the integrity of the equity trading system and should concern everyone who invests in the equities market; including the millions of American workers who invest through their employers' defined contribution retirement plans. PSCA fully supports the investigations and hearings announced by Congress and the executive branch.

At the same time, we urge all policymakers to wait for the results of these inquiries before embarking on any efforts to change retirement policy or regulation. ERISA holds plan sponsors to the highest standards of fiduciary behavior and includes harsh sanctions and effective remedies when a fiduciary breach is discovered. The role of employer stock in retirement plans is similarly regulated. Congress has a clear policy of encouraging employees to hold an equity position in their employer and company stock in retirement plans is a key component of this policy. The existing rules strike a careful balance between that goal and prudent retirement investment.

Should these inquiries identify any shortfalls in the existing retirement plan regulatory system, PSCA will join in all efforts to address them. At this point, it’s important to remember that we don’t know what happened at Enron or if the existing regulations and laws are inadequate to address this troubling turn of events.

The Profit Sharing/401(k) Council of America (PSCA), a national non-profit association of 1,200 companies and their 6 million employees, advocates increased retirement security through profit sharing, 401(k) and related defined contribution programs to federal policymakers and makes practical assistance with profit sharing and 401(k) plan design, administration, investment, compliance and communication available to its members. PSCA, established in 1947, is based on the principle that “defined contribution partnership in the workplace fits today’s reality.” PSCA's services are tailored to meet the needs of both large and small companies with members ranging in size from Fortune 100 firms to small, entrepreneurial businesses.