The planned sale of Sears Holdings Corp. to its chairman, Edward Lampert, is under fire from the U.S. government’s pension insurer over a $1.7 billion funding gap that the agency says should sink his efforts to buy out the chain.

The Pension Benefit Guaranty Corp. filed papers Saturday in U.S. Bankruptcy Court in White Plains, N.Y., in opposition to Mr. Lampert’s proposed $5.2 billion bid to purchase about 400 Sears and Kmart locations out of bankruptcy. The filing adds an influential voice to the growing chorus of creditors...