Safeguarding Your Investments
Without question, some of the most tragic Enron stories have involved the financial losses incurred by employees.
Long-time staff with significant
401(k) investments in Enron stock saw these holdings wiped out in a
matter of months. And of course, it all happened just when their jobs
were on the line and they could least afford to lose their retirement
savings.
These developments have
prompted greater scrutiny of 401(k) plans and are likely to result in
important legal changes, including stricter limits on the funding of
matching contributions with company stock and greater flexibility for
employees who wish to exchange company stock for other investments.
It should be noted,
however, that these changes will have little direct effect on the
ContiGroup plan. In the first place, as a privately held firm,
ContiGroup does not make matching contributions with stock, and has in
fact always matched with cash. Moreover, while Vanguard does limit the
frequency of transactions, CGC itself does not restrict employees'
ability to reallocate their holdings.
"We know that people have
become more concerned with 401(k) security," says Bill Cafarella, "but
this is less of an issue for our plan. There is no funding with stock
and there are no restrictions on the movement of money between funds.
This means you can reallocate frequently."
"We're offering a strong
program with a broad range of investment opportunities--large cap
funds, small cap, domestic, international--as well as a variety of
educational and financial planning tools," says Bill. "The challenge is
getting people to make better use of these resources and to take
greater ownership of their accounts."