Via TPM Muckraker, the Boston Globe reports today that the Pension Benefit Guarantee Corporation moved from bonds into stocks just before the market fell last fall:
The agency refused to say how much of the new investment strategy has been implemented or how the fund has fared during the downturn. The agency would only say that its fund was down 6.5 percent - and all of its stock-related investments were down 23 percent - as of last Sept. 30, the end of its fiscal year. But that was before most of the recent stock market decline and just before the investment switch was scheduled to begin in earnest.
... Charles E.F. Ponzi Millard, the former agency director who implemented the strategy until the Bush administration departed on Jan. 20, dismissed such concerns. Millard, a former managing director of Lehman Brothers, said flatly that "the new investment policy is not riskier than the old one."
...The Pension Benefit Guaranty Corporation may be little-known to most Americans, but it serves as a lifeline for the 1.3 million people who receive retirement checks from it, and the 44 million others whose plans are backed by the agency.
The agency was set up in 1974 out of concern that workers who had pensions at financially troubled or bankrupt companies would lose their retirement funds. The agency operates by assessing premiums on the private pension plans that they insure. It insures up to $54,000 annually for individuals who retire at 65.
Josh Marshall pointed out two things: first, this is akin to an insurance company taking out hurricane policies and investing the premiums in beachfront property; and second, perhaps most relevant, Charles Millard was formerly the head of Lehmann Brothers.
Now imagine if Shrub had gotten his wish to privatize Social Security....