Saving for a rainy day has always been one of the important aspects of any individual's financial planning. The plight of thousands of workers who have lost their savings as well as their jobs due to the bankruptcy of Enron has raised questions about the management and investment strategies of pension funds.

The story of Enron, the largest bankruptcy ever in the corporate history of America is far from over. One of the major fallouts of the energy giant's debacle was the plight of 40,000 odd workers who have lost their jobs and worse, lost their savings too; they had invested a considerable chunk of their retirement savings in Enron stocks, which has now depreciated by more than 90 percent. They were not allowed to sell their stock and so were left with a loss-making investment in their hands and no way out till it was too late. While there are a number of issues that the Enron episode brings into light such as auditing lapses, disclosure norms and creative accounting practices, the issue of pensions and the plight of workers has far-reaching consequences for employees across the corporate world.

The issue of pensions and savings has always been an important decision in the life of any worker. All the more so as the role of the state as an employer is fast being replaced by the private sector. In a welfare society, the state would bear the burden of its populace even if it were not worthwhile or profit-generating. But enter private employment and all these promises vanish in thin air. There is no implicit promise that the company is going to take care of its employees. This is where most of the pensions with private participation come into being. In its role as a facilitator and to safeguard the interests of the investors the state has systems in place, which made it compulsory at least in the case of big companies that they offer their employees some kind of a pension plan. No matter which country one is working for, some such mechanism is available to make companies facilitate the retirement savings for the employees. Whether it is the 401(k) plans in the US or the pay-as-you-go policy of Germany and France, the end remains the same, ensuring that the employee is assured of some of kind of a minimum return in his old age.

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