(The writer is a Reuters columnist. The opinions expressed are
his own. For more from Mark Miller, see link.reuters.com/qyk97s)
By Mark Miller
CHICAGO May 10 Your annual Social Security
benefit statement, which provides an important annual reminder
and explanation of benefits, has moved online.
Paper statements were eliminated last year for most
participating workers in a budget-cutting move, which saves $70
million annually in printing and postage. Last week, the Social
Security Administration (SSA) introduced the replacement - an
online statement accessible to anyone who sets up an account at
the agency's website (here).
So far 130,000 Americans have signed up.
Social Security Commissioner Michael Astrue pitches the
online statement as a modernization move, and an "important
financial planning tool." But technology doesn't always make
things better. I signed up myself, and can report there is
nothing there that you did not already get in the annual paper
statement. More importantly, most Americans will not remember to
log on to check their benefits on a regular basis - and for now,
they won't be receiving email reminders even after they have
signed up. The savings hardly seem worth it compared with the
And here's the kicker: the SSA's move arguably violates
federal law, which requires that a personalized statement be
mailed to all participating workers over age 25 under amendments
to the Social Security Act passed in 1989 and 1990.
The SSA claims it has the legal authority to suspend the
mailings "As the Department of Justice and the General
Accounting Office have recognized repeatedly in the past, an
agency head has the authority to curtail or discontinue programs
and activities, including those required by statute, in order to
avoid exhaustion of agency funds," says an SSA spokesman.
Social Security advocates don't agree. "This is a choice the
commissioner has made in terms of what he wants to cut from the
budget," says Max Richtman, president and CEO of the National
Committee to Preserve Social Security and Medicare Foundation.
"He's not bound by law to stop sending the statements."
The shift to online services also raises digital divide
issues, especially for rural and low-income areas of the
country. One in five adults don't use the Internet, according to
the Pew Internet & American Life Project. Seniors, non-native
English speakers, low-income and less-educated households are
least likely to have access. Pew also reports that 62 percent of
households had access to broadband last year, with minority
groups, rural areas and low-income households least likely to
have high-speed service.
Evidence is mixed on the effectiveness of the statement as
an educational tool. Two-thirds of respondents to a survey by
the SSA recalled receiving their statement, and only two-thirds
of that group actually read it. So if only a fraction of workers
make the effort to access the information, that data suggests it
won't be a big loss.
But an analysis of the survey data by the bipartisan Social
Security Advisory Board - an independent panel appointed by the
president, Congress and Social Security commissioner - found a
clear link between receipt of the statement and understanding of
Social Security benefits. More than half of those who read the
statement reported that as a result, they increased their
savings rate or revised their financial plans for the future; 25
percent said they contacted a personal financial adviser. And
that seems like a pretty big deal.
The cutbacks in the SSA's public outreach and education go
well beyond paper statements. The SSA also has frozen hiring for
the past two years, and projects that it will have lost 9,000
employees through attrition by the end of fiscal 2013 - a 10
percent reduction in workforce. Some local field offices are
being consolidated, and all are closing in the midafternoon due
to the staff shortages. The SSA also has suspended an outreach
program that periodically sends staffers into remote areas far
from offices to answer questions one-on-one.
Individual counseling is important for the SSA's more
complex services. Disability insurance and Supplemental Security
Insurance, for example, both require interviews and
applications. Even filing for retirement benefits can raise
thorny questions around the most beneficial date to file, along
with spousal and survivor benefit issues.
"The commissioner says people just need to get accustomed to
using the Internet," says journalist Eric Laursen, author of an
exhaustive new history of the politics surrounding Social
Security called "The People's Pension: The War Against Social
Security from Reagan to Obama" (AK Press). "But a host of
programs the SSA administers don't lend themselves to the Web."
The idea of a statement was first championed by the late
U.S. senator Daniel Patrick Moynihan of New York. Here's what he
said about the importance of the statement at the time:
"We pay our taxes to federal, state and local governments
and we hear back from them every year - reminding us to tote up
how much we've paid in and how much we still owe or are due
back. We receive monthly statements from our banks and credit
card companies. Yet every month, in every paycheck, we see money
withheld for Social Security, but we hear nary a word from the
Social Security Administration."
So now we are at that place where you get to continue paying
your Federal Insurance Contributions Act taxes (FICA) - which
fund not only benefits but the SSA's administrative and public
outreach expenses, but you only get a statement if you have
Internet access - and know how to use it.
(Follow us @ReutersMoney or here;
Editing by Beth Pinsker Gladstone and Matthew Lewis)