Government Guaranteed Pensions

On top of deposit insurance and too-big-to-fail, the U.S. government guarantees private pensions that are of the defined benefit (rather than defined contribution) sort. The agency that does so is the Pension Benefit Guaranty Corporation (affectionately known as Penny Benny), and a recent article from the Boston Globe indicates that it may be going bankrupt soon as well. Here is a link to the chart that goes with article. One interesting unintended consequence: unions have an incentive to force their financially troubled employers into bankruptcy so the government will take over the guarantee of their pensions.

Hat Tip: Malcolm Greenhill

Update: Time reports that the Boston Globe story has jumped the gun. The planned shift in the PBGF holdings toward more equities had only begun to be implemented. But of course the fund is in trouble anyway.

Hat Tip: Jack Dean