Another bailout? Government pension insurer could be next, expert says

10/15/08

Jan Dennis, Business & Law Editor
217-333-0568; jdennis@illinois.edu

CHAMPAIGN, Ill. — Another multi-billion-dollar taxpayer bailout could lie ahead, this time to rescue a cash-strapped government program that insures pensions of 44 million American workers and retirees, a University of Illinois finance professor warns.

Jeffrey R. Brown says the troubled Pension Benefit Guaranty Corp., which steps in when private-sector employers with under funded defined-benefit plans go bankrupt, was $14 billion short of the cash it will need to cover pensions based on the latest estimates released a year ago.