Enron Corp. wasn't the only company to implode last year, but the national attention it got served as one of the most urgent warnings about weaknesses in defined-contribution pension programs.

The Pension Protection Act, introduced last year by Reps. Peter Deutsch, D-Fla., and Gene Green,

But some industry experts say that while the bill is well-intentioned, it doesn't go far enough. Christian Echavarria, senior vice president of Invesmart Inc., a Pittsburgh-based retirement services company, says the country needs stronger legislation that directs employers to more responsibly fulfill their fiduciary responsibility. "The proposed legislation does not address the real issue, namely that the retirement industry must adopt policies that are in the best interests of their clients intended to be served."

Echavarria says new legislation should be amended to:

* Require plan-provider responsibility for an appropriate mix of funds and elimination of expensive insurance wrap fees and required proprietary investment funds.

* Enhance participation education about employee ownership and use of company stock in 401(k) plans.

* Remove mandatory holding periods that may force employees to hold company stock long after it has lost value.

* Educate plan sponsors about their fiduciary responsibility and mandate more complete investment policy statements.

New Health Plans

Defined contribution-based health plans may solve some financial problems, but few employers are ready to make sweeping changes in the way they deliver and pay for health benefits, says Samuel Levitt, vice president of Conning and Co., an insurance industry consulting company in Hartford, Conn.

Conning recently completed a study of a health-plan model that calls for employers to make limited contributions to health-care costs and for employees to directly manage their personal health care spending.

"The erosion of ERISA protection has made employers potentially more vulnerable to legal risks, something they don't want," Levitt says.

But employers who shift their employee benefits to a defined-contribution plan model will lose the ability to directly influence the quality of health care their employees receive, Levitt notes. Because employees make most health care purchasing decisions, the insurance market will be less likely to respond to employer needs.

And if employees make poor decisions, employers also may suffer the consequences in ways other than decreased productivity, he says. Employers could see increased absenteeism and higher disability costs.

Health Surfing

More employers will soon be turning to the Internet to deliver health benefits cost-control techniques and wellness information, says Cathy Tripp, a senior health benefits consultant at Watson Wyatt Worldwide in Minneapolis.

"Over the past few years, employers primarily have used Web-based tools for their annual benefits enrollment season--to help employees evaluate and compare health plans, coverage and costs as well as make actual enrollment decisions," she says.

This e-enrollment process paid off in real savings, she says, reducing annual sign-up costs from 60 percent to 70 percent. Now, however, the administrative savings have been realized, leaving employers to face a steady series of double-digit increases.

As a result, they're thinking hard about using the Internet to deliver advanced health-management information. A recent survey of 200 large employers revealed that three of four respondents are likely or somewhat likely to support employee health care education using Web-based tools.

Tripp says some employers are using external links to connect employees with the American Cancer Institute, American Diabetes Association, American Health Association, and the Centers for Disease Control and Prevention. These sites allow employees to perform health-risk appraisals; obtain information on fitness, nutrition and wellness; and create personal health records.

Len Strazewski can be reached via e-mail at lenstrazewski@compuserve.com.