From Mark Miller writing for Reuters:
It is one of the most important retirement documents you will ever receive - but fewer Americans are reviewing their Social Security benefit statement nowadays due to cost-cutting and a government push to online services that is falling short.
Until about a decade ago, all workers eligible for Social Security received a paper statement in the mail that provided useful projections of their benefits at various ages, along with reminders on the availability of disability benefits and Medicare enrollment information.
But the Social Security Administration (SSA) decided in 2010 to save money by eliminating most mailings of benefit statements. Instead, we would all be encouraged to obtain this information online.
It is now abundantly clear that this is not working out.
The number of workers accessing their statements online has been just a fraction of those who once were reached by paper statements. And the cost-benefit tradeoff is poor.
Forty-two million Americans have created online accounts with the SSA since they were first offered seven years ago, the agency says, compared with the 155 million paper statements that were mailed in 2010, before the cost-cutting began. Meanwhile, the number of online account-holders who accessed their statements fell dramatically in fiscal 2018, from 96 percent to 43 percent, according to a report issued in February by the SSA’s Office of the Inspector General (OIG). ...
I go online to get one every year, but mostly just to verify that they have the correct earnings information for the latest year. The statement gives estimated values for benefits "if you continue working until..." and then a value for your FRA, age 70 and age 62 (which it gave me even though I'm over 62). The values assume that you start benefits as soon as you stop working, but I plan to wait a while. So the values aren't very useful for me, and I just calculate them myself (all I need is my earnings history and the Average Wage Index for each year, the PIA break points for the year I turned 60, and any COLAs since I turned 62).
ReplyDeleteHe's relying on a faulty premise that the paper statements actually reached people. Unless he has some data that indicates a large percentage of Americans didn't just chuck their statements into the shredder or trash and actually did a thorough review of what SSA sent them, then he has no idea whether the online statements are clearly not working out. I certainly didn't throw mine away, but I also still access mine online on an annual basis to see what the estimates are for that year and to see what my earnings have been.
ReplyDeleteInterestingly, SSA still sends out hearing notices via standard mail, but a large percentage of unrepresented claimants still fail to respond to any written communication regarding their disability hearing, a far more pressing matter than reviewing an SSA statement.
For benefit estimate mailings, and all paper mail, the cost is considerable. Go to any office, especially larger/metro offices, and you will find a shocking amount of undeliverable mail returned by USPS. There has not been enough staff for years to develop correct addresses on notices not actually sent by the office. This is especially true of automated mailing of cost of living letters. Also, surprising amount of current beneficiaries change there direct deposit and or mailing address without notifying SSA causing problems all around with even more undeliverable mail.
ReplyDeleteI routinely ask claimants to pull their online statements for me to review when they first contact me, so I can determine D.L.I.. In almost every single case the claimants get locked out of the computer as they try to register an account, while they answer the historical identity questions. I realize that when SSA first put the statements online, with only a Social Security Number needed, that was too easy for anyone to get other's information. However, the verification system SSA uses to confirm identity is just too problematic. They should have the complex system for people that want to open an account, since that can result in unauthorized people doing things, such as changing mailing addresses. However, they should have a simpler method for accessing your earnings history. Perhaps something straight forward, like your social security number combined with your state I.D.# /or Drivers License I.D.# could be used to access the earnings statement. A hacker is unlikely to have both of those items, and the information is straight forward,so not likely to result in erroneous rejections.
ReplyDeleteThis is what we call "IG Math". When someone opens a my Social Security account, they "review their Statement". It's the first thing you see. So, in the initial year of sign-ups, everyone reviewed their Statement. This is true for every succeeding year for new sign-ups.
ReplyDeleteHowever, in subsequent years, every person with an account who doesn't log on to their account reduces the percentage. So, the 48% represents all the new 2018 sign-ups and all the people who created accounts during 2012-17 who logged on to their accounts during 2018. Viewed in that light, 48% looks pretty good.
I wonder if nearly 50% of all registered users logged into their Groupon account this year?
Online access is (mostly) fine for financially savvy people, less so for others. And that includes many people who might be unaware of the disability program. DI recipients tend to be less educated. A Rand researcher recently analyzed the PEBES phase-in and found that it led to higher DI applications. That makes sense; many people think of Social Security as a retirement program and are poorly informed about its disability protection. It stands to reason that, if sending PEBES to nearly everyone boosts DI applications, then cutting back dampens applications. Ironically, that might be one of the many factors that are boosting DI's solvency.
ReplyDeleteLinks:
The Role of Information in Disability Insurance Application: An Analysis of the Social Security Statement Phase-In, Philip Armour, American Economic Journal, August 2018,https://www.aeaweb.org/articles?id=10.1257/pol.20160605&&from=f
4 Reasons Why Disability Insurance Is Especially Important to Less-Educated Workers, https://www.cbpp.org/blog/4-reasons-why-disability-insurance-is-especially-important-to-less-educated-workers
I think the quote from Astrue was "we'll do less with less".
ReplyDelete"On March 29, 2011, after several years of increasing budget constraints, SSA suspended Statement mailings in order to conserve funds. Shortly thereafter, the agency established an internal workgroup to develop an online version of the Statement that would be easily and securely accessible to the public."
The agency based its decision to suspend Statement mailings on determinations by the Department of Justice's Office of Legal Counsel and the Government Accountability Office's Comptroller General that agencies reasonably anticipating a shortfall in their appropriations have both “the authority and duty to curtail or discontinue programs and activities, including activities required by statute” (SSA 2012c)
https://www.ssa.gov/policy/docs/ssb/v74n2/v74n2p1.html#mn18