(excerpt)

The bankruptcy filing by American Airlines could saddle the obscure federal agency that insures company pensions with a $9 billion loss, officials say, raising the financial pressures on the debt-laden government fund and the possibility it could need a taxpayer bailout.

The Pension Benefit Guaranty Corp. is already facing a $26 billion deficit, the largest in its 37-year history, after being staggered by company failures across the country during the recession. ...

... “The PBGC is yet another government program that is facing a solvency crisis,” said David Kudla, chief executive and chief investment strategist of Mainstay Capital Management.

Based in Michigan, Kudla counts as clients hundreds of retirees from the auto-parts maker Delphi, which shifted its pension plan to the PBGC in 2009. He warned workers and retirees with pensions not to assume all of their pension will be there when they need it.

PBGC has $81 billion in assets and is obligated to pay out $107 billion in pension payments over time. The shortfall means the agency would eventually run out of money without additional funds.

“Many people who never thought this could happen to them or the company they worked for for decades are struggling to deal with the shortfall in the pension payments,” he said. “Every employee needs to recognize that the PBGC risk is real.”


If you would like a copy of the complete article, please send an email request to This email address is being protected from spambots. You need JavaScript enabled to view it., or call toll-free 1-866-444-6246. If sending an email request, please include the following: title, date of article, and your mailing address.

Important Consumer Disclosure

Mainstay Capital Management, LLC is an investment advisor registered with the Securities and Exchange Commission. Due to various state regulations and filing requirements, Mainstay and its representatives may only provide investment advisory services in those states in which it is first appropriately registered or otherwise exempt or excluded from registration requirements. The purpose of this website is to provide the public with general information about the services offered by our investment management firm. Mainstay does not render personalized investment advice or services or effect, or attempt to effect any securities transactions, on this website. Our firm continuously monitors its filing requirements in all states, and will provide individualized advisory services only in accordance with various state regulations. Mainstay does not make any representations or warranties as to the accuracy, completeness, or relevance of any information prepared by any unaffiliated third party provider, whether linked to Mainstay's website or incorporated herein. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.