What's The Alternative To Social Security?

     From Eduardo Porter's column in the New York Times:

... Consider the following calculation by James Poterba, a professor of economics at M.I.T.

If inflation-adjusted investment returns averaged 2 percent a year — not an unreasonable assumption given low interest rates and a stock market likely to deliver subpar returns over the next decade or so — a worker would have to save almost 15 percent of each paycheck for 40 years to get an annuity stream equal to half of final earnings at retirement, assuming a 2 percent risk-free rate of return. A late starter who saved for only 20 years would need to set aside a full third of earnings.

Matters would be easier if investments yielded 4 percent: With a 4 percent risk-free rate, affording an annuity equal to half the last paycheck upon retirement would require saving less than 10 percent for 40 years, or just over 25 percent for 20.

How does that compare with what workers actually save? From 1990 to 2010, the typical contribution to 401(k) accounts ranged from 4.7 to 5.2 percent of earnings. ...

ERE Almost Completely Non-Functional

     By this point, Social Security's Electronic Records Express (ERE) system which is supposed to allow attorneys to access their clients' Social Security records, is almost completely non-functional. This will cause hearings to be delayed. Attorneys will have to start mailing in copies of new medical records instead of uploading them. And, still, as best I can tell, there's nothing on any Social Security website acknowledging that there's a problem. If you e-mail them, you get a form reply back indicating that they're working on the problem but, so far, they keep acting like this is a minor matter. I would say this is the worst problem with ERE since its earliest days.

This Is How You Encourage Return To Work?

     Yesterday's hearing before the House Social Security Subcommittee featured testimony from David Weaver, Social Security's Associate Commissioner for the Office of Research, Demonstration, and Employment Support and from Daniel Bertoni of the Government Accountability Office (GAO). Here are a couple of charts from Weaver's testimony showing the complexity of Social Security's work incentives.

     Bertoni testified that GAO had "identified a number of situations where beneficiaries report work or earnings, but staff may not enter information into the system, which is inconsistent with federal internal control standards, or may not provide a receipt, as mandated by law." (footnotes omitted).

     By the way, the House Ways and Means Committee has redone its website recently. It's a real mess. It's hard to find anything on it. I think that Paul Ryan needs to show some leadership and get this fixed. It's a poor reflection on this venerable Committee.

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What's Going On With ERE?

     What's going on with Electronic Records Express (ERE), Social Security's online system which allows attorneys access to their clients' files? It's been barely functional all week. It hangs up, making it difficult or impossible to do anything. The website has a "What's New" feature but it's not been updated in a month. At least, you can admit there's a problem and say you're working on it. What? Did you think no one would notice?

     By the way, how's the system working for agency employees?

More Problems For Eric Conn's Former Clients

     The next problem for those 900 former clients of Eric Conn whose Social Security disability benefits are threatened: Few of them will be able to hire an attorney. Since they're now eligible for interim benefits as they appeal, there won't be any back benefits for an attorney to get a one quarter  fee out of. Of course, the local Social Security attorneys could drop everything else and represent all these folks pro bono but any attorney who did so would be bankrupt long before these cases are resolved.

     This is going to continue to be a mess for years into the future.

Insurance Companies Monitoring Social Security Disability Debate

     Companies which write Long Term Disability (LTD) insurance policies are paying attention to the debate over what to do about the impending shortfall in Social Security's Disability Insurance Trust Fund. LTD benefits are reduced, or offset, by the amount of Disability Insurance Benefits. Anything that reduces the Disability Insurance Benefits increases the amount paid by LTD insurance companies. The companies are making sure that the language in their policies protects them should there by any major change in Social Security disability benefits. Some insurance companies would like to make LTD insurance mandatory or, at least, make it an "opt out" for employees. Some companies would like to take over claims adjudication for Social Security.

An Early OASIS Cover

OASIS is Social Security's employee magazine. OASIS stands for Old Age and Survivors Insurance.

Helping To Implement The Social Security Act