Wall Street May Scoop Up Troubled Pension Plans

Businesses stand to benefit, but opponents worry about big guns' motives
By Jim O'Neill,  Newser User
Posted Aug 6, 2008 11:05 AM CDT
A trader works on the floor of the New York Stock Exchange.   (AP Photo/Richard Drew)
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(Newser) – Though still smarting from the subprime debacle, some of the Wall Street’s biggest players are lobbying the government to be allowed to buy up and manage some of the $2.3 trillion in US corporate pension funds, BusinessWeek reports. Many businesses, eager to get the plans off their books, are backing the movement—but consumer advocates have reservations.

Critics worry companies running the plans—including JPMorgan Chase, Citi, and Cerberus—would put their own for-profit interests ahead of those of the aging beneficiaries. "In the wake of the subprime crisis, it would be crazy to allow financial institutions to manage these plans," said one advocate, who fears the big guns could dump risky investments off their books and into the plans.