In April 2011, the Social Security Administration (SSA) had stopped mailing the annual Social Security benefit statements to beneficiaries as part of budget cuts. The good news is that this September onwards, the SSA will resume the mailings at 5-year intervals to workers who have not signed up to view their benefit statements online. Workers at ages 25, 30, 35, 40, 45, 50, 55 and 60 will receive the statements. However, the SSA would continue to promote the use of online statements.
The annual Social Security benefit statement is a summary of a worker’s earnings history and estimated retirement benefits at different ages. It also shows how the benefits are calculated and the history of income subject to Social Security tax. It is usually sent about 3 months before the worker’s birth month. SSA had begun mailing the annual Social Security statements to 125 million workers age 25 and older in 1999, incurring an annual cost of about $70 million. The annual statement had assumed considerable significance because it had become a vital part of personal financial planning. It carried important information about future retirement income. In addition, it also served as a reminder of the need for personal savings to supplement the SS benefits.
The cuts in SSA budgets have resulted in deterioration in SSA customer service, with the staff reduced to 62,000 from 70,000 in the 1990s. Only ten million American wage earners, i.e. 6% of all workers have signed up at the SSA website so far. The problem is that many of the workers (including non-English speaking minorities and low-income group) who are bound to be most reliant on Social Security retirement benefits may not have access to the Internet. An applicant could apply online also for social security disability benefits that are calculated via a comprehensive review of medical records of the applicant.
The present move to restore mailings of benefit statements comes as a relief to most workers. This was made possible by the raise in SSA’s fiscal 2014 budget to $11.7 billion. President Barack Obama’s fiscal 2015 budget request is $12 billion.
Congressional appropriators had earlier included language supporting paper-based SS statements into the Joint Explanatory Statement to the Conference Report for H.R. 3547, the Fiscal Year 2014 funding bill that was signed into law on Friday, January 17, 2014. This conference report language that has the authority of a binding statutory requirement had directed the SSA to present a plan to the Congress within sixty days that “includes a significant restoration of the mailing of statements to beneficiaries”. This was also with a view to reduce the burden for at least one-third of workers without Internet access and those with cyber security concerns. A national poll commissioned by Consumers for Paper Options revealed that 72% of consumers wanted the government to continue the practice of mailing essential documents such as Social Security annual earnings checks and statements. This is proof that most Americans consider SS statements as a great way to verify the accuracy of their benefits and take informed retirement decisions.