NEW YORK (CNN/Money) -
Alan Greenspan has said something needs to be done to repair Social Security -- and perhaps the Fed has taken the first step with direct deposit.
The Federal Reserve and Treasury Department said Tuesday they are teaming up to encourage more people receiving benefit payments to sign up for direct deposit, saying it can save the government up to $100 million a year by eliminating cost of 156 million checks it sends out annually.
The Fed and Treasury will begin a marketing campaign this fall in Texas, Tennessee, Illinois and Puerto Rico to explain the benefits of direct deposit, such as fewer lost checks, more control over the money and faster deposits.
Only about 68 percent of new social security recipients, the largest group receiving government benefits, sign up for direct deposit, the government reported. It also said growth of direct deposit has slowed to less than 1 percent a year.
In August, Greenspan issued a warning that the Social Security system was in for a shock as the baby boomers approach retirement, and he repeated that sentiment last week.
"The fundamental challenge that we face is to come to grips with the adverse budgetary implications of an aging population and current health entitlements and with the limits on our ability to project the likely path of medical outlays," he said in testimony before the House Budget Panel.