Enron has agreed to take $321 million from the $4.45 billion sale of its U.S. pipelines to fully fund four defined-benefit pension plans, according to published reports.
Nearly 17,000 Enron pension plan holders are affected, according to the Houston Chronicle.
The reimbursements don’t, however, affect the bankrupt energy company’s 401(k) or stock option plans, Reuters reported. Those plans made up the bulk of the retirement packages of Enron’s employees.
The settlement “represents a significant step toward preserving the benefits of participants in Enron’s defined-benefit pension plans,” said Bradley Belt, executive director of the Pension Benefit Guaranty, the federal pension insurer.
Enron reportedly agreed to the arrangement last Friday during a bankruptcy court hearing, where it was seeking approval of the sale of the pipeline business.
Although the company at first sought to set aside $200 million for the plans, the PBGC stepped in and said the amount should be closer to $300 million, according to the Associated Press. Enron agreed, and the court approved the sale of its pipeline business, the wire service pointed out.
In June, PBGC filed a “notice of determination” in an attempt to gain control of the plans. The pensions that will get the funding are the Enron Corp. Cash Balance Plan; Garden State Paper Pension Plan; Enron Financial Services Pension Plan; and San Juan Gas Company Pension Plan.