Thousands of Washington Mutual Inc. employees across the country whose stock options are worthless now face the possibility that their pension benefits may be at risk.

JPMorgan Chase & Co., which took over Washington Mutual’s banking assets last Thursday, Sept. 25, is expected to make a decision about employees’ pension plans by the end of this week. The company has not disclosed the alternatives it’s considering.

WaMu’s employees also have suffered significant losses on their 401(k) plans because many of them were invested heavily in WaMu stock or WaMu funds that held company stock, according to an executive who recently left the company after nine years.

WaMu employs about 43,000 people across the country and more than half of all employees nationwide are estimated to be holding 401(k) plans. The company has 22 banking centers in San Antonio and operates a massive Regional Operations Center in San Antonio’s Stone Oak area. WaMu employs 1,800 people at the Regional Operations Center and 200 at its bank branches in San Antonio.

The company’s stock has lost nearly all of its value in the past year, plunging to 16 cents a share after the company’s seizure by the federal government and ensuing bankruptcy. Most of the options gave employees the right to buy stock at an average price of $44 a share.

Employees held about 31 million stock options at the end of 2007, according to WaMu’s annual report. Not all of the options were fully vested.

“It’s an unbelievable amount of money that got evaporated,” said the former WaMu executive, who declined to be named. “I think the only difference between this and Enron is the majority of WaMu employees will end up having jobs where everyone at Enron lost their job.”

Tom Kelly, a spokesman for JPMorgan Chase, said Tuesday that the company is working to sort through employees’ benefits, including its pension plans.

Kelly said the pensions are particularly challenging because employees are holding plans from other banks that were acquired by Washington Mutual and grandfathered into the bank.

He declined to give specifics on what the company might decide.

“We’re going through each plan to make sure we understand it,” he said. “We understand people have a lot of questions and we’re trying to get them answers as quickly as we can.”

In general, WaMu employees were eligible for pensions after a certain number of years and accrued between 2 percent and 3 percent of their salary each year paid by the company, according to the former executive.

At the end of 2007, WaMu had total pension plan assets of $2.2 billion and an estimated benefit obligation of $1.8 billion.

The pension plan assets included $4 million of WaMu common stock and fixed income securities, or about 0.17 percent of its total assets. Just over half of the plan was invested in domestic and international equities, which have taken a massive hit over the past several months amid increasing financial turmoil.

The amount of company stock owned by WaMu employees through their 401(k) retirement plans, isn’t known. But “it’s significant,” the former executive said.

Historically, there were no limits to how much employees could invest of their 401(k) in company stock.

At the end of August, WaMu sent a notice to 401(k) plan holders informing them that contributions to the Washington Mutual Stock Fund would be capped at 20 percent. A copy of the notice was obtained by the Puget Sound Business Journal, a sister publication of the San Antonio Business Journal.

WaMu’s letter of explanation warned employees that it’s “important to mix investments among different asset classes” and “investing large amounts in a single holding or stock — like the Washington Mutual Stock Fund — can leave a portfolio under-diversified.”

The new cap was slated to go into effect on Wednesday.

JPMorgan Chase took over only the banking assets and operations of the company. The stock stayed with the holding company, which is now in bankruptcy.

WaMu’s stock options were arranged in four categories: the 1994 Stock Option Plan, WaMu Shares Stock Option Plans, Acquired Plans and the 2003 Equity Incentive Plan. Many employees whose awards were wiped out were holding options that simply hadn’t vested yet.

In addition to the options listed in the last annual report, WaMu in recent weeks issued more options to senior executives priced at $2.32 a share, according to its regulatory filings. Those options, too, are now worthless.