BusinessWeek reports that Wall Street has its eye on a new pot of cash -- your pension. And it's a mighty big pot -- $2.3 trillion. But Wall Street is not looking at the entire pension industry, just a $500 billion portion known as "frozen plans" that are closed to new employees and whose benefits are capped. McKinsey forecasts that frozen plans will triple to a hefty $1.5 trillion by 2013.

As usual, Wall Street's plan to buy these frozen pensions will line its own pockets and it will help companies as well. For example, if Wall Street charged a 2% management fee, that alone would generate $30 billion in revenues by 2013 if it bought all the frozen plans, but that fee income is probably the tip of the iceberg.

Companies are eager to dump their frozen pension plans. Why? These limping plans weigh down corporate balance sheet and new accounting rules will require companies to mark the value of their pension assets to market each quarter. In a down market, that could wipe out a company's operating profits.

But the question that remains open is whether Wall Street can be trusted to protect the pensions of 44 million current and future retirees. Why wouldn't Wall Street stuff those frozen plans with the toxic waste that it wanted to get off its own balance sheet? $330 billion worth of Auction Rate Securities (ARS) or $2 trillion worth of Collateralized Debt Obligations (CDOs) come to mind here.

Despite a pension plan's goal of protecting your retirement income, riskier pension investments are likely to grow if Wall Street's plan is put into effect. As BusinessWeek wrote, "Alternative investments such as hedge funds, derivatives, and asset-backed securities represent less than 25% of pension assets. If financial firms get involved, exotic investments could swell to 50% of pensions assets by 2012."

A similar plan to buy frozen pensions has been put into effect in the UK. It's an idea that those plan proponents are trying to bring to the U.S. Those companies likely to benefit include Goldman Sachs (NYSE: GS), JPMorgan Chase (NYSE: JPM), Cerberus, Warburg Pincus and Deutsche Bank.

There are a couple of potential roadblocks to this plan taking hold on our shores. First, there is an unresolved tax issue. Pension plan contributions are partially tax deductible under federal pension laws, but since the banks and private equity firms pushing this plan do not employ the workers, it's not clear whether they would get that deduction. And its loss could make the frozen buyout deals less attractive. Second, U.S, pension regulators appear reluctant to let private equity firms get involved in this deal in case things go wrong because their balance sheets are too skimpy.

The nice thing about keeping a pension plan under the control of the company that employs you is that it needs its workers to continue functioning. So it has an incentive to preserve their pensions. But that's no longer true once the pension plan is in the hands of Wall Street.

If you like this plan of putting your pension at risk while further engorging the profits of Wall Street and corporations, you can have it by electing John McCain. BusinessWeek reports that a former senior advisor to McCain and former Pension Benefit Guarantee Corp. (PBGC) Chairman, Bradley Belt, is a big supporter of this plan.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.