Keywords
company stock concentration, retirement savings risk, employee wealth loss
Abstract
At the end of 2000, current and former employees of the energy trading company Enron Corporation held $2.1 billion in the firm’s 401(k) retirement savings plan. Sixty-two percent of that money was invested in Enron stock, then trading at $83 a share. In October 2001 Enron’s finances began to unravel as its accounting improprieties came to light. Enron stock plummeted over the next several weeks, and on December 2, 2001, the company declared bankruptcy, rendering its shares worthless. Thousands of Enron employees lost their jobs and a large fraction of their retirement wealth simultaneously.
Original Publication Citation
“Are Empowerment and Education Enough? Underdiversification in 401(k) Plans.” 2005. Brookings Papers on Economic Activity, 2:2005, pp. 151-198 (with James Choi and David Laibson). https://www.brookings.edu/wp-content/uploads/2005/06/2005b_bpea_choi.pdf
BYU ScholarsArchive Citation
Choi, James J.; Laibson, David; and Madrian, Brigitte C., "Are Empowerment and Education Enough? Underdiversification in 401(k) Plans" (2005). Faculty Publications. 9065.
https://scholarsarchive.byu.edu/facpub/9065
Document Type
Peer-Reviewed Article
Publication Date
2005
Publisher
Brookings Papers on Economic Activity
Language
English
College
Marriott School of Business
Department
Finance
Copyright Use Information
https://lib.byu.edu/about/copyright/