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

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. But he predicts the shortfall will soar as a sour economy shutters more businesses and a plunging stock market carves into pension fund assets, with a government fix similar to this month's $700 billion Wall Street bailout as the likely solution. "Over the next decade, we could easily end up with... [read full story]