Pension Underfunding Undermines Financial Health of the PBGC, Worker Retirement Security
The historical parallel to the Federal Savings and Loan Insurance Corporation (FSLIC, R.I.P.) is chilling. Government sets up insurance program to socialize the risk that private institution will become insolvent. Private institution proceeds to engage in risky behavior, because, hey, it's all federally insured so nobody gets hurt. Private institution fails. Taxpayers pick up the tab. In the case of the S&L collapse the total cost was $153 billion, of which the taxpayers got stuck with 81% and the industry with 19%. What will happen with these insured pension funds that are on rocky ground?