More than $11m will be restored to the settlement fund for former Enron employees who lost their pensions when the company collapsed
Hewitt Associates LLC and the Enron Creditors Recovery Corp. have agreed to restore $11.2m to the court-supervised settlement fund for Enron participants, the US Department of Labor said.
The settlement resolves a contempt motion filed by the secretary of labor against Hewitt for having misallocated court-supervised settlement funds owed to Enron employees.
Secretary of Labor Elaine L. Chao, said: ‘This settlement will ensure that all pension plan participants will receive all the funds to which they are entitled.’
Hewitt, which served as the administrator for the settlement fund, caused it to have insufficient cash to pay Enron workers, retirees and beneficiaries all the amounts due them. The fund holds recoveries obtained by the Labor Department and class action plaintiffs in related lawsuits regarding Enron's pension plans.
The settlement will restore the funds necessary to permit full payment to the plan participants in accordance with the allocation formula originally approved by the court.
Without the settlement, the fund would have had less than it needed to pay all of the participants their promised recoveries. Enron and Hewitt have agreed to provide the funds necessary to make up the shortfall in the amount needed to make whole the underpaid participants.
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