You're assuming that the PBGC won't be a broke & defunct Gov't entity when retirement rolls around. The US Gubniment can't manage a wooden nickel...why should this be any different?
That is true. That's why I said the choice is easy unless you believe the world is coming to an end. PBGC is independent and funded by fees on all pensions plans in the US. It also carries a government guarantee. The government COULD default but then you'd have to push that risk out into every other type of investment. There are also some constitutional arguments that could be made that Congress is not authorized to default. But that's a separate issue.
It's like the people who talk about Social Security running out of money - it can't. We have a unified federal budget. Congress can vote to change SS any time it wants. But if money truly gets short, entitlements and financial obligations rank higher than appropriations like defense spending. So basically, Congress is powerless to default without crippling the country and losing the support of all their lobbyists (I mean constituents). Congress could vote to discontinue PBGC but would have to figure out a way around the "taking" prohibitions of the constitution. It could happen but it's not something that is very likely.
In any event, the trade is a 9+% government guaranteed return through age 65 against a risky return. Seems like a no-brainer.