The Social Security
Administration announced it will stop mailing estimated benefit statements to
most American workers in a cost-saving move that is expected to save about $11
million this year.
A senior agency official posted a
blog alerting the public that paper statements will now be sent only to people
who are 60 or older who have not established online My Social Security accounts
with the agency and who are not yet receiving Social Security benefits.
“We know that our cutbacks will
affect many of you, but we have no choice,” Doug Walker, deputy commissioner of
communications for the Social Security Administration, wrote in a blog posted
on the agency's website.
“During the past year, we began a
hiring freeze that will reduce our staff to the lowest level since FY 2013,”
Mr. Walker wrote. After adjusting for inflation, the agency's budget is now 10%
lower than it was in 2010, while the number of beneficiaries has gone up by
13%, largely due to the millions of baby boomers reaching retirement age.
Because of the staff shortage, more than a million people are waiting for a
hearing to determine if they are eligible for disability benefits.
“While we can't predict our
budget level for the rest of the fiscal year, we think there may be more bumps
in our journey together,” Mr. Walker warned. Congress has until April 28, 2017,
to pass a spending bill for the full year or pass another continuing resolution
for the remainder of the fiscal year that ends Sept. 30.
“Congress' refusal to provide an
adequate operating budget for the Social Security Administration, an agency
which is funded solely through the payroll contributions of American workers,
demonstrates a failure to acknowledge the importance and value of the
critically important services SSA provides to American workers, retirees, the
disabled and their families,” said Max Richtman, president of the National
Committee to Preserve Social Security and Medicare, an advocacy group.
“As the disability hearing backlog
grows, the SSA workforce shrinks and now the latest announcement concerning
elimination of the mailing of Social Security statements for individuals
younger than 60, the public will surely feel resentment, albeit misdirected,
towards SSA,” Mr. Richtman warned. If public confidence in SSA is undermined,
he predicted it will be easier to approve other cost-saving changes to Social
Security such as benefit cuts and raising the retirement age.
If Donald Trump makes good on his
promise to impose a government-wide hiring freeze, Social Security's ability to
service the needs of more than 60 million retirees, survivors, disabled workers
and their families could slow to a crawl.
Social Security began mailing
annual benefit statements to workers age 25 and older in 1999. Since then, the
statements have become an essential part of financial planning, supplying
critical information about future retirement income and serving as a stark
reminder of the need for personal savings to supplement those benefits.
In mid-2011, the agency announced
— for the first time — that it would stop mailing annual benefit statements as
a cost-saving measure. Personalized digital statements, identical to the old
paper versions, first became available in May 2012. So far, more than 27
million people have set up a personal account.
In response to critics and
congressional pressure, SSA resumed mailing paper statements in September 2014
to workers as they reached ages 25, 30, 35, 40, 45, 50, 55, and 60 and over who
are not receiving Social Security benefits and who are not registered for an
online account.
Social Security Administration spokesman
Darren Lutz said the latest cost-saving step of mailing fewer Social Security
statements will take effect this month. Approximately 20 million people under
age 60 who were born in the month of May will be the first to not receive a
paper statement in the mail, Mr. Lutz said. Normally, workers received their
benefit statements in the mail three months before their birthday.
In addition to benefit estimates,
the personalized statements provide individuals with a complete earnings
history and the total payroll taxes paid on those earnings throughout their
career. After adding up all those taxes, it should provide a clear incentive
for maximizing Social Security benefits through a strategic claiming strategy.
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