  This paper discusses the financial risks faced by the UK Pension Protection
Fund (PPF) and what, if anything, it can do about them. It draws lessons from
the regulatory regimes under which other financial institutions, such as banks
and insurance companies, operate and asks why pension funds are treated
differently. It also reviews the experience with other government-sponsored
insurance schemes, such as the US Pension Benefit Guaranty Corporation, upon
which the PPF is modelled. We conclude that the PPF will live under the
permanent risk of insolvency as a consequence of the moral hazard, adverse
selection, and, especially, systemic risks that it faces.
