Re "Corporate Pension Games," editorial, Jan. 17: You advocate throwing the baby out with the bathwater regarding 401(k) plans funded with company stock.
What percentage of 401(k) plans containing company stock have gone bankrupt like Enron's as opposed to those which have given their employees the ability to garner a very large amount of net worth for a corresponding meager investment on the employee's part? Most 401(k)s limit the amount that the employee can contribute to 6% to 8% of his or her gross annual income. This is sheltered from payroll taxes to the extent that the real out-of-pocket cost to employees is about two-thirds of what they put in.
Those who have worked for companies like Wal-Mart, Microsoft and others have become financially comfortable to wealthy as a result of investing in their company's stock. In retrospect, had this proposed limitation been in effect they would have been restricted to 20% of what they have today. Is that fair?
There is a wealth of investment advice people can read, including "Investing for Dummies." Indeed, most lay investors are warned about putting all their eggs in one employer's basket, but the specter of relying on Social Security's 2% return that you can't touch until age 62 today is ample incentive to invest in the company you work for if it is doing well. The better thing for Sens. Barbara Boxer (D-Calif.) and Jon Corzine (D-N.J.) to push for is long jail time for white-collar crooks.