Pension company will invest more in equities

[antigop]

Source: Reuters USA Today

The Pension Benefit Guaranty Corp. said Monday it has adopted a new investment policy, which increases the amount the company can invest in equities and is designed to increase chances the government pension guarantor will be fully funded within 10 years.

"The PBGC is responsible for the pensions of 1.3 million Americans, but we don't currently have the resources to keep all of our future commitments," director Charles Millard said in a statement announcing the policy.

The PBGC, a federal but privately funded corporation created by Congress in 1974 to guarantee payment of basic pension benefits for roughly 44 million American workers and retirees, had an accumulated deficit of $14 billion at the end of 2007.

"The new investment policy adopted by the PBGC Board of Directors will better manage our invested assets," Millard said. He added that although it should generate higher returns, it also offers lower risk through broader diversification.

The new investment strategy is pegged to give the corporation a 57% likelihood of full funding within 10 years, compared with a 19% chance under the previous policy, Millard said.

Read more: http://www.usatoday.com/money/perfi/retirement/2008-02-18-pensions_N.htm#uslPageReturn

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Well, I guess they need to prop up the stock market, huh?

[AdHocSolver]

1. The money they put in the stock market will boost the prices so the insiders can sell at a profit.

The article states that the pension group will increase its investments in the stock market from 15 percent to 45 percent. As they pour money into a select group of stocks (owned, no doubt, by friends and family), this will drive the stock prices up (increase in demand). As they reach the 45 percent level, the insiders will sell after which time there will be little further purchases of the stocks that they favor. Just as in the housing market, when people stop buying (reduced demand), the prices on those stocks will drop.

If they time it right, the insiders will get out before the economy tanks completely, and they will blame the losses that they incurred on the vagaries of a stock market over which "they have no control".

Of course, this is nothing but an old-ashioned Ponzi scheme for stealing the pension fund. However the boobs who have their life savings stolen won't really understand it, and the thieves will just chalk it up to bad luck in the stock market. It doesn't take rocket science to understand that, with a weak economy and the stock market as "wobbly" as it is, this is a bad time to buy stocks. The only reason they would take the "risk" is to use their authority over the pension fund to steal it.

The government will wring their hands that there is nothing that they can do because no laws were broken. That is the sad part. This is so blatantly a scam to rob the pensioners' life savings. It is another Enron scam. The government does nothing to prevent it. The vultures were prevented from "privatizing" (i.e., stealing outright) Social Security, so they substituted this scam in its place.

[flashl]

2. It seems that retirees can expect another reduction in their pensions. nt

[DemReadingDU]

3. morning kick