Pensions targeted as U.S. hits debt ceiling

The U.S. stopped fully investing in a pair of U.S. federal employee retirement funds on Monday as the federal government reached its legal debt limit.

U.S. Secretary Timothy Geither said Monday that federal retirees and employees would be unaffected by the actions. However he once again urged Congress to raise the U.S. debt limit past it's current $14.3 trillion level in order to protect the full faith and credit of the United States and avoid catastrophic consequences for citizens.

Geithner wrote in a letter to Congress on Monday that he would be unable to invest fully the portion of the Civil Service Retirement and Disability Fund not immediately required to pay beneficiaries.

A similar step would be taken with the 'G Fund' also known as the Government Securities Investment Fun of the Federal Employee's Retirement System in interest bearing securities of the U.S.

The U.S. has entered into a period where it can no longer issue new debt unless the U.S. Congress approves it. The current debt issuance suspension period will last until August 2 when the borrowing authority of the U.S. will be exhausted.

Each of these actions has been taken in the past by my predecessors during previous debt limit impasses, Geithner said. By law, the CSRDF and G Funds will be made whole once the debt limit is increased.