Skittish Sponsors Reconsider Plan Blackouts
Employee Benefit News (04/02) Vol. 16, No. 4 p.1; Gunsauley, Craig

In light of the Enron debacle, employers nationwide are re-examining the routine operations and policies of their 401(k) retirement plans. There are no current statutes governing how much notice should be given to employees in advance of blackouts. When Enron switched plan administrators, a period lasting from Oct. 26 to Nov. 13, Enron stock--60 percent of which covered assets in the 401(k)--declined in value from $15.40 a share to $7. President Bush is suggesting at least a 30-day notice prior to blackout periods. But other lawmakers want advance notice of at least 90 days before a transaction restriction. Meanwhile, the Securities and Exchange Commission is suggesting rules aimed at improving the financial reporting and disclosure system, with accelerated reporting of transactions by company insiders and required reporting on critical accounting policies.


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