when the federal government bailed out the huge insurance company aig during the 2007 2008 financial crisis it said one reason was to keep aig from defaulting on its gics 
as officials of the federal reserve bank of new york later testified pension plans that had placed funds in aig guaranteed investment contracts or gics which function much like deposits in a bank would have experienced significant losses losses that would be passed along to retirees or to others whose aspirations to be retirees would surely have been changed 1since gics pay relatively low rates of interest it can be easy for inflation to outstrip their performance gic investors face interest rate risk and inflation is also an issue for example if a gic pays 4 annual interest over its 10 year term but inflation averages 6 during that same period the purchaser will lose money in terms of purchasing power 