Pension Reform Bill with Key Provision for PGE Employees Now Goes to the President

(Washington, D.C.) - A provision by U.S. Senators Ron Wyden and Gordon Smith to help Portland General Electric (PGE) employees “catch up” on their retirement savings was included in a major pension reform bill passed by the full U.S. Senate late last night.

“Many PGE employees lost much of their retirement savings through Enron’s unforgivable actions,” Wyden said. “This ‘catch-up’ language will help the folks hurt by Enron to rebuild their retirement savings.”

"No one should be faced with a loss of their hard-earned retirement savings to the hands of unscrupulous executives," said Smith. "By allowing PGE employees to 'catch up’ on their contributions, this measure takes an important step to restore their retirement security."

“We appreciate the hard work of Senators Wyden and Smith to win Congressional action on the 401(k) losses suffered by PGE employees when the company was under Enron ownership,” said Carol Dillin, PGE’s vice president for public policy. “This will give qualified employees an important option to rebuild their personal retirement savings and augment their PGE defined-benefit pension plan.”

Under the Senators’ catch-up provision, eligible PGE employees could increase their maximum allowable contribution to their Individual Retirement Account (IRA) by approx. $3,000 from 2007 through 2009. By increasing their maximum allowable IRA contribution, these workers could more quickly rebuild — or “catch-up” — their retirement savings, which were lost in 2001 through Enron’s misconduct.

Many PGE employees lost much of their 401(k) retirement savings in Enron's collapse, although PGE’s defined benefit pension plan was not affected and remains intact.

In June 1997, Enron took over PGE and two years later merged the PGE employee 401(k) retirement plan with its plan. This allowed PGE employees to contribute as much as 15 percent of their income and receive a company match in Enron stock.

By 2000, Enron stock was trading at $85 per share and many PGE employees were invited to invest 100 percent of their 401(k) contributions in Enron stock.

When the value of Enron stock began to plummet in 2001, PGE employees were locked out from changing their 401(k) accounts and selling their Enron shares.

By the time employees regained access to their accounts, a share of Enron stock was worth less than $10 and many retirement accounts were completely wiped out. Enron filed for bankruptcy in December 2001.