Seniors Will Get $250.00 Stimulus Checks In May

3/04/2009

posted by N. Sioris

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In May 2009, senior Social Security recipients and retirees will receive $250.00 per person from Uncle Sam, as part of the economic stimulus plan.

The senior payment figures are; $250.00 for individuals, $500.00 for couples that both receive Social Security benefits. This will include retirees, older veterans, Supplemental Security Income (SSI) beneficiaries, and people with disabilities.

Unlike the previous rebate distribution program in 2008, recipients will not have to file a tax form in order to receive the money. It will simply show up in the regular Social Security distributions - either through direct deposit or a check in the mail.

Federal and State retirees who do not receive Social Security benefits also qualify to receive the payment but may have to file a 2009 tax return in order to receive it.

The House of Representatives draft of the stimulus package, which was approved in January did not include the senior payment, however it did end up in the Senate approved bill after Montana Democrat, Max Baucus, Chairman of the Senate Finance Committee proposed it. The Senate provision was also strongly promoted by Democrat Senator, Sheldon Whitehouse, of Rhode Island.

AARP supported the measure from the beginning. AARP sent a letter to lawmakers arguing that many retirees would be ineligible for "workers' tax credits" but were in need of hardship relief. AARP cited research that shows that older people tend to spend such cash payments immediately.

You can read more about the Social Security's Economic Recovery One-Time Payment by clicking here.

You can also link to Frequently Asked Questions about the the payments by clicking here.

Will The Pension Benefit Guaranty Corp. Be Next In Line For A Bailout?

2/17/2009

posted by N. Sioris

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The Pension Benefit Guaranty Corporation was created by Congress in 1974. Its purpose is to guarantee the retirement security of workers covered by defined-benefit pension plans. It insures more than 29,000 employer-sponsored benefit pension plans and the pensions of 44 million workers and retirees.

The deepening recession spells trouble for PBGC, which all ready has an $11 Billion deficit that more than likely will grow larger as Corporate America continues to falter through the worst economic crisis since the Great Depression. As companies report shortfalls in their pension funds, it is certain that The Pension Benefit Guaranty Corporation will be forced to take over the pension plans of a rising number of bankrupt businesses.

The future financial health of PBGC is difficult to forecast. It hinges on interest rates, the length of the recession and the agency's ability to successfully "play" the market with its own investment portfolio.

Currently the agency has $63 Billion in assets. However, it is obligated to spend $74 Billion on pension benefits in the coming years. PBGC might have time to rebound, but over the long term it could become insolvent and require a bailout.

The agency gets its money from premiums paid by companies that sponsor the pension plans along with revenue that it earns from its investments. The corporation's balance sheet has taken heavy hits in recent years. Nine of the ten largest pension plan terminations in the agency's history, including United Airlines, Bethlehem Steel and Kaiser Aluminum, have taken place since 2001.

When a pension plan is terminated, the agency takes over and pays the benefits to the retired workers. However, the retirees may not get the full amount that was promised by their company. The maximum guaranteed amount from the PBGC is currently $54,000 per year for someone that is retiring at age 65.

Some pension experts shrug off the agency's $11 Billion deficit. They note that the 35 year old corporation has operated at a deficit for most of its existence. They say the agency has many years to recoup its losses and fulfill its obligations to pensioners.

But to those "experts" I say what President Obama and many folks in Congress have been saying recently, and that is: "These are uncharted waters that we are in today." Are we really able to predict the future based upon the past?