The collapse of Enron several years ago has lingering consequences. Ask any corporate executive about the Sarbanes-Oxley legislation that theoretically requires more accounting disclosure —— no more cooking the books. It has created a paperwork nightmare that most agree has had little effect.

However, investors seem to have shorter memories and have failed to heed the lessons learned following the collapse of the energy giant. A surprisingly high number of workers continue to load up on company stock in the 401(k) retirement accounts, ignoring one of the golden rules of investing: diversification.

At the time of the collapse, 58 percent of the company's 401(k) assets were invested on Enron stock. One reason for the high concentration was the fact that the company's matching contributions were done with stock, not cash. And, employees were prohibited from selling the shares they received from the company until they reached the age of 50.

But, the main reason Enron employees were loaded up on company stock was because they bought the propaganda hook, line and sinker. Never mind diversifying your retirement portfolio, if the CEO says the stock is strong then go ahead and load me up.

Not all workers bought into the story. The Enron 401(k) plan offered a variety of investment options including 20 mutual funds and guaranteed interest accounts. None of these assets were lost when the company went bankrupt. Only the assets invested in company stock vaporized.

The National Association of Securities Dealers (www.nasd.com) has just released an alert warning about overloading 401(k) portfolios with company stock. Recent reports say that about 42 million Americans have nearly $2 trillion invested in employer-sponsored retirement plans. On average, 45 percent of assets are in stock funds, 16 percent on company stock, 9 percent in balanced funds, 10 percent in bond funds and 13 percent in guaranteed interest contracts.

However, when you dig a little deeper there is evidence of investment trouble. Information from the Employee Benefits Research Institute found that 16 percent of workers over the age of 60 have more than 80 percent of their retirement savings in company stock. That exposes their nest egg to an unhealthy amount of risk. True, they are loyal to the company they work for, but there could be a high price for that loyalty.

Following the demise of Enron there was a legislative push to limit the amount of company stock that an employee can own in their 401(k).

The most common proposal was to cap out company stock holdings at 20 percent.

Fortunately, the legislation was quickly defeated. The last thing we want is Congress telling us how to diversify our retirement portfolios.

What we all need to do is personally accept the responsibility of balancing our portfolios. There are people who say the only reason they will retire in comfort is because the company stock has treated them well over the years. But, ask people at Qualcomm, Peregrine Systems or other tech companies if they are glad they bulked up on company shares. In the long run it may pay off, but workers close to retirement needs to balance their holdings to reflect their situation.

George Chamberlin is a regular contributor to the North County Times and also is a TV and radio commentator. Contact him at geoc@cox.net.