The federal agency that protects pension plans from becoming bankruptcy casualties shifted more investments into stocks ahead of the market collapse last year in an ill-timed move intended to improve returns.

While previous managers of the U.S. Pension Benefit Guaranty Corporation, or PBGC, opted to play it safe, the director who took over during the Bush administration, Charles Millard, adopted a more aggressive approach with the hope of eliminating the agency's $11 billion deficit. Now the deficit is no doubt worse than ever. Nice going Millard!

After Millard arrived in 2007, the PBGC more than doubled the percentage of its insurance fund invested in stocks and real estate to 55%, according to a report by the Boston Globe earlier this week. (Kudos to good old-fashioned newspaper reporting for continuing to look out for the common folk even as people turn away from their printed pages).

I wonder what's left of the $64 billion the agency once had in its fund. Is there enough to cover the pensions of General Motors and Chrysler if the carmakers wind up in bankruptcy?

That's how it played out previously with the airline industry bankruptcies that dumped pensions from Delta Air Lines ( DAL), UAL's ( UAUA) United Air Lines and US Airways ( LCC) onto the PBGC.

The collapse of Lehman Brothers also added to the PBGC's burden and I can't even imagine the damage that would come if the agency suddenly had to take on pensions from another major bank such as Citigroup ( C) or Bank of America ( BAC) on top of those from GM. Let's hope that doesn't happen.

With more than 44 million Americans counting on the PBGC (whether they know it or not) to make sure they have income in retirement, we can't afford to let this agency go bust.

While the PBGC is self-financed through premiums it charges companies to guarantee their pensions, it is nonetheless a government agency and could become a burden to taxpayers if it runs out of funds.

You just need to look at Fannie Mae ( FNM) and Freddie Mac ( FRE) for proof of that. Everyone always said that those two quasi-governmental agencies were independently financed and the government wasn't on the hook for their missteps -- but in the end taxpayers bailed them both out.

A taxpayer-funded bailout of the PBGC is not what we need right now. But then again, what's another $100 billion as long as we're printing money for AIG ( AIG) and other failing financial institutions.

The appointment of a new PBGC director by Obama may turn out to be a more important post than it seems.

Hall is the editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.

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