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March 31, 2009

Gov’t-Run Pension Benefit Guaranty Corporation Lost Billions in Risky Investments
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In economic news, the Boston Globe is reporting the federal agency that
insures the retirement funds of 44 million Americans has lost billions
of dollars due to risky investment decisions. Last year, the Pension
Benefit Guaranty Corporation departed from its conservative investment
strategy and decided to put much of its $64 billion insurance fund into
speculative investments such as stocks in emerging foreign markets, real
estate and private equity funds. The decision was made just months
before the start of the stock market collapse. Analysts are concerned
that large portions of the trust fund might have been lost at a time
when many private pension plans are suffering major losses. The
guarantee fund would be the only way to cover the plans if their
companies go into bankruptcy. The investment strategy was implemented by
Charles Millard, a former managing director of Lehman Brothers.



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