[wideawake]

Not to reinvent the wheel, but a 401(k) works basically like this:

You have a choice in investing your contribution between a handful of approved mutual funds and company stock.

Your company can choose to match those funds.

Your company, if it chooses to match, can match them with cash investments into your chosen mutual fund or it can opt to pay you in stock.

Either way, the matching funds are gravy and the company gives them because it is advantageous to the company from a tax point of view.

What we have in Enron is people who worked for Enron, used their 401(k) contribution to buy Enron stock and also got Enron stock to match.

Basically, they tripled down on Enron.

Because Enron stock ballooned, people who normally would have had 300-400 thousand saved had 2 million in the kitty - all in Enron stock.

These people were taking a gamble on outsized returns.

A rational person would have taken the free Enron stock, but used their own contribution on more conservative investments.

[Ready4Freddy]

So you've seen a breakdown of where the Enron stock in the plan was, contributory vs match? Otherwise your suggestion that they should have made more conservative investments is well.. speculative. ;>)

A rational person would have taken the free Enron stock, but used their own contribution on more conservative investments.