Government pension fund hard hit
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Bill Radke: What will these stock losses mean for your retirement? Part of that answer might reside in Congress. There's a hearing today concerning a government program that insures millions of pensions for companies that go under. As Marketplace's Steve Henn reports, it's been a rough year for that fund.
Steve Henn: The Pension Benefit Guarantee Corporation is a multibillion-dollar federal backstop that insures retirement benefits for millions. California Congressman George Miller says at the beginning of last year, the PBGC had more than $68 billion in assets conservatively invested. Then:
George Miller: They decided that they could get higher yields, higher returns by entering into riskier investments.
They bet heavily on equities, and in the past 12 months the PBGC lost more than $4 billion.
Jeffery Speicher: We experienced a loss of approximately 6.5 percent in fiscal year 2008, which is considerably better than most other participants in the markets.
Jeffery Speicher, the PBGC's spokesman, says he wishes his own investments had fared as well.
Speicher: My retirement account would be looking better now.
But Congressman Miller says the fund never should have taken on those new risks in the first place.
In Washington, I'm Steve Henn for Marketplace.