Alarming Number of Employees Unable to Receive Pension Checks
Pension Expert Explains How New Law and Financial Crisis Leaves Employees Without Pension Checks
PLAINVIEW, NY (MMD Newswire) November 10, 2008 - - Americans who thought their money was safely put away in traditional pension plans are now faced with possibly receiving only 50% of their money or nothing at all. Due to the loss in the market, a new pension law called Adjusted Funding Target Attainment Percentage or AFTAP may be preventing pension distributions to retirees and those who need their pension to pay bills. The new restrictions, which became effective in 2008, were enacted as part of The Pension Protection Act of 2006.
“The law is designed to protect employees in under-funded pension plans. However with the stock market down over 30% since its high in October 2007, many pension plans are now significantly under-funded,” explains Brett Goldstein, a Plainview, New York-based pension administrator and President of The Pension Department. He continues, “The new law is intended to shore up pension plans and put an end to under funded pension plans. However, in a time of financial crisis the law is actually hurting employees who are relying on their pension as their sole source of income at retirement. Retirees getting only 50% of what they were promised, or no pension check at all, are going to have a hard time making ends meet. It also hurts employees who are getting laid off due to corporate downsizing and are relying on their pension to pay bills while they look for a job.”
The new law requires employees be notified if their plan does not have sufficient funds to pay out all of the employees. If the pension plan does not have enough money to pay at least 80% of the employees, then the notice states that employees can only get 50% of their pension. If the pension plan does not have enough money to pay at least 60% of the employees, then the notice states that employees can’t get their benefit as a lump sum.
“Congress needs to change the AFTAP regulations during the financial crisis. Many traditional pension plans were under funded before the financial crisis. Now that the stock-market has lost over 30% of its value since October, many pension plans will not be able to distribute money to their employees. If employees can’t get their pension money due to the under funding, it may make the current financial crisis worse by slowing consumer spending,” urges Brett Goldstein.
About Brett Goldstein:
Brett Goldstein is a pension administrator and president of The Pension Department, a consultancy based in Plainview, New York. He is a speaker and media personality who specializes in providing businesses and individuals with affordable retirement planning solutions. Goldstein’s timely advice and tips have been featured in the New York Daily News, The Chicago Tribune, Newsday, National Public Radio, MSNBC.com, and on his weekly internet radio show “Your Money with Brett and Joe”. Investment services are offered exclusively through: Cadaret, Grant & Co., Inc. Member FINRA/SIPC.
Brett Goldstein is available for interview: In the Greater New York City area; nationwide by arrangement via telephone; available for interviews in print or broadcast.
Contact:
Brett Goldstein
Email: bgoldtpa@aol.com or bgoldtpa@optonline.net
Phone: (516) 346-2999 or cell 516-314-3289
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