by Marie Cocco

THE COMPANY was a media darling. Its story line: It would bring a different era to a hidebound industry, delivering it from rusty shackles to the promised land of lean-and-mean competition.

The company flew high. Then it crashed calamitously low, taking its workers and retirees, but not its corporate officers, down with it. Retirees who'd been promised much were summarily told they'd get little after bankruptcy. And they would only get that because their old-fashioned, defined-benefit retirement plan was protected by a federal guarantee.

Laws were passed, vows were made. Never again, lawmakers said, would the government allow a flagrant corporate fleecing to lay its retirees so low.

The LTV Corp. bankruptcy of the mid-1980s (the steelmaker entered bankruptcy again last December) was altogether different from the Enron 401(k) debacle of today. Then, important people shrieked with outrage. Now they do not even whisper concern.

The Enron workers who invested their life savings in the company's stock through its 401(k) plan are broke. They must get in line at bankruptcy court, behind the big banks and the brokerages and the energy companies who are, without question, ahead of them.

Details of the caper are shocking, if not illegal. The company fraudulently pumped up its stock price with false information. It gave employees company stock, not cash, for the 401(k) plan's company "match" and encouraged them to buy more on their own. It blocked workers from selling the stock as it was becoming worthless - even as corporate officials sold theirs.

The Enron crash is a parable. The story so far is spun out as one of loyal but gullible workers who just don't get it. The TV financial advisers are saying, of course, you should not invest your retirement money in the company for which you work. Didn't you know that?

It is dandy advice for an investing public that, surveys show, cannot necessarily tell a stock from a bond. But its very premise reveals a crisis that is truer, and deeper.

They have sold us the idea that retirement is a do-it-yourself project.

The beauty, if you are an employer, is that if something goes terribly wrong, there is no contractor to sue. Most of the cost, and all the risk, is on the worker.

In exchange, workers are told they can, on their very own, build the Taj Mahal. All they need do is use well this wonderful new tool.

That is the advertising, anyway. Here is the truth: The average 401(k) balance last year was $49,000, according to the Employee Benefits Research Institute. That was before this year's downward stock spiral.

We simply don't have pensions anymore. Fewer than half of all private-sector workers are covered by any type of retirement plan, including the savings accounts that go by the name 401(k).

This is by corporate design and congressional collusion.

The last substantial piece of pension legislation enacted was a measure allowing high-income people to invest more money in 401(k)s. The only proposal moving forward now is The Retirement Security Advice Act. It would let your employers, and the big financial companies that oversee your account money, give you advice on how to invest it. Doesn't that sound secure?

There is no apparent rush to shield workers from future Enrons. The last person who tried, Sen. Barbara Boxer (D-Calif.), got thrashed by corporate lobbyists when she tried to limit company stock held by 401(k)s. The Boxer bill was thoroughly diluted. It passed, with language exquisitely crafted to apply to no plans.

Do not ponder this mystery. The financial industry is by far the biggest source of campaign contributions to candidates for federal office. It is the driving force behind President George W. Bush's plan to take Social Security, the only guaranteed retirement income most Americans will have, and turn it into a giant 401(k).

The workers of Enron were unfortunate guinea pigs. This botched experiment, if not brought to a halt, will one day produce a generation of retirees driven to throwing themselves under trucks.

Copyright © 2001, Newsday, Inc.

###