Headline-making disaster could have been averted. Thousands of Enron Corp. workers wouldn't have collectively lost $1 billion in 401(k)s — if they had proper investment advice.

        At least that's what John Boehner says. The Republican congressman from West Chester last year introduced legislation that would make it easier for rank-and-file employees to get investment advice for their company-sponsored retirement plans.

        Pension laws limit such company-sponsored advice now because it potentially makes the company legally responsible for the 401(k) accounts.

        Mr. Boehner says his Retirement Security Advice Act addresses that conflict by providing the advice through independent firms. But advice is only half the battle, his spokesman said.

        “It still ultimately rests” with the employee, Steve Forde said. “But this empowers them with additional information.”

"A very high price'

        Mr. Boehner said Enron management could afford the professional money managers that the rank-and-file could not. That “advice gap” allowed the higher-ups to cash out while the underlings lost their life savings.

        “Sadly, due to the lack of sound investment advice, these employees are paying a very high price as a result of this tragic situation. They had no access to advice that might have helped them protect their retirement savings,” Mr. Boehner said last week in a written statement.

        “While expanded access to investment advice is not likely to be the only legislative change needed to prevent another Enron tragedy, it's one step we already know Congress needs to take.”

        Mr. Boehner's bill passed the House of Representatives in November and is now stalled in the Senate finance committee.

A need to hedge

        Still, all the advice in the world doesn't mean that anyone is going to follow it.

        In Enron's case, it certainly would have conflicted with the message coming from the CEO Kenneth Lay: The company will recover, buy more stock.

        News reports show that Enron employees knew that diversification was the No. 1 rule of financial planning — and yet, they still chose to plow their own money into Enron stock in addition to the shares they received as the company match.

        The Houston Chronicle reported this week that 89 percent of the Enron stock in the 401(k) plan was bought with employee contributions. Workers said they continued to buy more shares in their retirement plans after company officials assured them the stock would recover to its $82-a-share high.

        It didn't. Enron stock was at 49 cents Friday.

        How could third-party advice provided by Enron have prevented the losses, when everything coming from company management was promoting the stock?

        “The passage of this bill isn't going to solve a potentially criminal problem — but it certainly could have helped,” said Mr. Forde, Mr. Boehner's spokesman.

        “All the advice in the world isn't necessarily going to change the fact that employees were misled.”

        Contact Amy Higgins at 768-8373; ahiggins@enquirer.com; or 312 Elm St., Cincinnati 45202. She cannot reply to all individual questions.

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