I've Never Seen Something Like This

     I would invite readers to review this heavily redacted report by Social Security's Office of Inspector General (OIG) on fraudulent internet claims released late Friday afternoon and say whether they think it was properly redacted. Was OIG's point in redacting this to protect information which could be used to defraud the trust funds or was it to reduce the agency's embarrassment? Here's a little bit of the report to give you an idea:

     Why are all the numbers that would give one an idea how bad the problem is redacted? Also, why was this released late on a Friday afternoon, the traditional time for dumping embarrassing information? I wouldn't think that OIG would be trying to reduce the agency's embarrassment but just look at the redactions! Were the redactions OIG’s idea or something done at the agency’s insistence? I have seen dozens, probably hundreds, of OIG reports over the years but never one with redactions. There have been quite many where only a stub is released due to security concerns but never one with redactions. There has to be a story behind this.

Mr. Buckets Of Money Settles His Case

     Reuters reports that Raymond Lucia of Lucia v. SEC fame has settled his case with the Securities and Exchange Commission.  In the Lucia case, the Supreme Court decided that the constitution requires that Administrative Law Judges (ALJs) be appointed by agency heads. This caused problems at Social Security since its ALJs had not been appointed by the Commissioner of Social Security. That problem has since been rectified but litigation continues in cases decided before the ALJs received their official appointments. In fact, I'm surprised that there's only been one decision from a Court of Appeals on this issue so far.

     The new case that Mr. Lucia settled had to do with the issue of whether ALJs are unconstitutionally shielded from dismissal. This is all part of the Federalist Society "unitary executive" theory that Presidents must have unbridled discretion, that is if they're Republicans. The Federalist Society will suddenly discover that the constitution imposes dramatic limitations on Presidential power if Joe Biden is elected President.

     Mr. Lucia eventually settled because he was tired of fighting constitutional battles. All Mr. "Buckets of Money" really wants to do is bilk simple-minded investors!

     The assault on ALJs isn't over just because Mr. Lucia settled his case. It doesn't identify them but the Reuters article says there are at least three other such ALJ removal cases pending. The upcoming Supreme Court decision in the Seila Law case will probably have implications for this litigation.

Small Bore Identity Theft Bill Passes In Senate

     From a press release: "The U.S. Senate yesterday passed bipartisan legislation ...  to require the Social Security Administration (SSA) to provide a single point of contact to help Americans who are victims of identity theft."

New Retirement Claim Portal

     Social Security has issued a press release saying that it has redesigned its online portal for filing retirement claims.

That's A Lot Of Underpaid Widows And Widowers

     From a recent report by Social Security's Office of Inspector General (OIG):

... We identified 30,768 individuals receiving retirement benefits as of January 2019 who may be eligible for additional widow(er)’s benefits. From this population, we selected a random sample of 100 beneficiaries for review. ...

Of the 100 retirement beneficiaries sampled, 69 were eligible for higher widow(er)’s benefits. Of these 69 widow(er)s, there were

• 20 who filed claims and whom SSA determined were entitled to widow(er)’s benefits before the start of our audit and
  
• 49 who were eligible for approximately $630,000 in widow(er)’s benefits. ...
  

This occurred because SSA (1) employees did not always assess and take action when cases were alerted for possible payment increases, and/or (2) did not have processes to detect beneficiaries potentially eligible for higher widow(er)s benefits. Based on the results of our review, we estimate 15,076 retirement beneficiaries were eligible for $193.8 million in widow(er)’s benefits as of September 2019. Further, we estimate 12,615 of these beneficiaries could lose an additional $530.9 million in widow(er)’s benefits over their lifetimes. ...

     Social Security agreed that it will have to do something to address this problem.

     My guess is that the underpaid group includes more widowers than you might think. A lot of widower claims get missed because the widowers just don't think of applying for benefits on their late wife's account. In my experience two types of claims most often missed are Disabled Adult Child and Widowers benefits.

Looking For A New Path Forward

     From a Request For Information (RFI) posted by the Social Security Administration:

... The Social Security Administration’s Digital Identity team is issuing this RFI. The information obtained because of this RFI will be used to create a Market Assessment Report, which may inform budget and acquisition decisions for the agency.

The Social Security Administration (SSA) Office of Systems is researching a solution for managing all aspects of Identity Credential and Access Management (ICAM) for external users that is separate and apart from anything we have in production today; the potential end goal is to replace the existing external ICAM platform(s) currently in use at SSA. ...

     What they're talking here about here is how the public logs on to their Social Security portals (my Social Security) to transact business, such as changing bank account information. I can guess that the agency needs to address at least two problems. First, what they're using now hasn't been completely successful in preventing fraud. Second, Social Security would like to encourage members of the public to do more business with the agency online. Perhaps easier login would help. Obviously, there may be tension between these two goals. In any case, they're clearly not happy with what they have now which is based upon credit information.

A Benefit Computation Controversy Coming?

     From Think Advisor:

If Congress does nothing to shore up the Social Security Trust Fund, benefits will be cut 21% when the [trust] fund is depleted, which could happen as soon as a dozen years from now if not sooner. ...

Pre-retirees born in 1960 may suffer another blow to benefits. That’s because the Social Security Administration employs a complicated formula to calculate benefits, which includes using the top 35 years of a retiree’s earnings, adjusted by an indexing factor. That factor, in turn, is based on the Average Wage Index for the year an individual turns 60, which will be 2020 for those born in 1960.

Job losses and declines in average wages this year due to the pandemic will affect the average wage index, which has risen almost every year since the 1950s, according to Wade Pfau, director of the Retirement Income Certified Professional (RICP) program at the American College of Financial Services. The index fell in 2009 but only slightly, according to Pfau.

“We don’t know what will happen this year but if the average wage index has a dramatic drop, then suddenly those born in 1960 would have a lot lower benefit than those born in 1959,” said Pfau. ...

     People are being laid off in this recession in numbers not seen since the Great Depression but I don't know that average wages have been cut. We'll see. I started to compare this to the Notch Baby controversy but unlike that controversy this could be real. I've probably made some old timers mad at me for even mentioning "Notch Babies"! Sorry to bring up the bad memories!

How Well Has Andrew Saul Performed His Duties As Commissioner?

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