Enron correction
From Mr Dan Weeks Sir: I would like to qualify Charlotte Metcalf s assertion (Victims of their own greed', 5 October) that Enron's pension plan was 'tied to' the company's stock.
Enron matched up to 10 per cent of employees' pension contributions with its shares; in addition, staff could use their own contributions to buy company stock through the pension plan if they chose. Importantly, the pension plan did allow for investment choices other than Enron shares, However, many employees opted to put all of their own pension money into company stock, ignoring the principle of diversification.
It is, of course, tragic that the Enron stock many people counted on to fund retirement is essentially worthless. However, I think it's important to note that many employees did not diversify the investments they made with their own money, even though they could have done so. And while the plan may have been 'tied to' Enron shares in the sense that the company made matching contributions only in the form of stock, staff did not themselves pay for these shares, and, as noted, this amounted at most to only 10 per cent of employees' own money.
Dan Weeks
London NW1
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