SSA is Y2K OK
Remarks by Kenneth S. Apfel, Commissioner of Social Security
Good afternoon, everyone. Thank you for being here today.
As you know, almost everyone in the United States is touched by Social Security. Whether it's the 50 million people that depend on Social Security or Supplemental Security income payments each month, or the 145 million workers who pay into the system, people rely on the Social Security Administration to get the right benefit payment to the right person at the right time. So it is very important that the public know that today, we have completed delivery of the January 2000 check and direct deposit payment files to the Treasury Department. The people that depend on us can rest assured that their payments will arrive on time. In other words, our customers can rely on us in January just as they have for over 60 years.
Our goal all along has been to have a Y2K compliant system ready and tested a year beforehand, so that if other, unanticipated problems arose, they could be resolved quickly and without impacting our customers.And we've done it
and so have our partners, the Treasury Department, the Federal Reserve and the United States Postal Service.
Their support and their commitment have been outstanding. In fact, since last October, all Social Security and Supplemental Security Income payments have been made through Year 2000 compliant systems at both SSA and Treasury. The tapes that have been sent to the Treasury Department to generate the upcoming January direct deposit payments have been checked and certified for accuracy, and the checks that will go to beneficiaries who still receive paper checks have already been printed.At SSA, we are Y2K OK.
Let me share with you why we at SSA are so confident about our ability to delivery on our promise to the American people that payments will be there on time. SSA depends on its information systems to support critical business functions. Since we are so dependent on information technology, we took the Year 2000 problem very seriously.
For us, it began back in 1989 when we realized that we were facing a systems calendar "glitch" that could cause our computers to break down or shut down. We immediately began taking steps to avoid any such problem that would affect our ability to honor our commitment to our customers. Since then, we have reexamined our entire information technology infrastructure
.our hardware, software and telecommunications networks
to ensure there are no Year 2000 problems. To reach this point, we literally had to examine every software line individually to see if change was needed. This monumental undertaking involved reviewing 308 mission critical computer systems, supported by more than 35 million lines of computer code.
We also have almost 2,000 data exchanges with our business partners, such as State governments, the IRS, Treasury and the Federal Reserve. All have been certified as Y2K compliant. Fortunately, we began early and finished early. Thanks to the work of nearly 2,000 SSA systems employees, including 700 programmers, we're prepared for the Year 2000.
To ensure that we are aware of what is happening around the country and around the world with regard to Y2K, we have taken some important steps that will allow us to respond to any potential problem. For example, in the final days before the end of 1999, and in the first few weeks of the Year 2000, SSA will operate our own Command Center out of our headquarters in Baltimore. Our home center will be directed linked to this facility here in Washington. From December 30th to January 3rd, our personnel will inspect, evaluate and report on the status of every Social Security office across the country. And just before midnight on December 31, Social Security's main data center in Baltimore will switch to jet fuel generators until the power company notifies the agency that everything is fine. We are taking every precaution to ensure that our service to the American public is not compromised by the Y2K issue.
Immediately after the century rollover at midnight, our teams will begin assessing our systems' readiness to process transactions for the year 2000. Later that day, staff at selected offices will begin to enter data, and we also will begin testing our national #800 telephone service.
Throughout New Year's Day, Social Security managers will report to their offices to inspect equipment and report their findings to regional offices which will forward data to the command center in Baltimore.
Besides assessing SSA's infrastructure readiness, our command center will communicate with non-SSA sites, such as the Treasury Command Center, to make sure we're aware of problems that might be experienced elsewhere.
We'll be advising the White House Information Coordination Center, the Congress and the media regarding our status. Then, on January 3rd, Social Security will be open for business as usual.
In the unlikely event that there are any unforeseen problems, SSA also has contingency plans to deal with such emergencies as inclement weather, natural disasters, accidents or equipment failure. We have developed a plan to ensure continuity of our business processes by identifying, assessing, managing and mitigating Y2K risks. While I don't have the time to detail all of these, let me give you the most compelling example
the one our customers will be most concerned about
In the unlikely event of payment disruptions, all 1,300 Social Security offices will be able to issue immediate benefit payments to recipients in dire need. The Treasury Department will issue replacement checks. We know that our job is not done until every Social Security payment is in the hands of our beneficiaries.
As Commissioner of Social Security, I am proud that our contingency plan is being used as a model by both other government agencies and the private sector.
If, after I'm done speaking, you have any questions about contingency plans or anything else related to our Y2K readiness, I have brought our Y2K expert; the man who is going to make it happen; Dean Mesterharm, our Deputy Commissioner for Systems. His component is the one that has been working on our Y2K readiness for over 10 years now.
We want the public to understand that we are prepared for the Year 2000 conversion. We want people to have accurate information, and we want to avoid misinformation and its related confusion that could generate overwhelming workloads, which could cause disruptions.
We appreciate your help in making the American public aware of the actions that Social Security and other federal agencies have taken to prepare for the Year 2000.
The bottom line is that we're ready, we're willing and we're able to enter the next century with the confidence that we'll be able to provide the world-class service that the American public has come to expect from the Social Security Administration and its employees.Even though the century will change, our dependability won't. Enjoy the countdown to the New Year knowing that you can count on Social Security.
Thank you, and I'll open it up to questions now.
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Congressionally Mandated Changes to Retirement Benefits Set to Take Effect in 2000
The normal retirement age for Social Security is set to increase for 150 million working Americans beginning in January 2000. Although 62 remains the earliest age at which individuals can retire and collect reduced benefits, the age for collecting full Social Security benefits will gradually increase from age 65 to 67 over a 22-year period. For those born in 1938 (age 62 in 2000) the new retirement age is 65 and 2 months. The increase in the retirement age was included in the Social Security Amendments of 1983.
"Deciding when to retire is probably one of the toughest and most important decisions American workers have to make," Social Security Commissioner Kenneth S. Apfel said. "Because it is so important, it is crucial for workers to have all the facts regarding the impact of their retirement decision on their current and future Social Security benefit."
The increase in the full retirement age begins with individuals born in 1938 whose normal retirement age will be 65 and 2 months. The age increases in two-month increments for workers born between 1939 and 1943 until the retirement age reaches 66 and remains there for all workers born through 1954. For those born after 1954, the retirement age begins to increase again in two-month increments until it reaches age 67 for those born in 1960 or later.
An additional provision of the 1983 law will give workers who continue working, and delay collecting Social Security benefits until after their normal retirement age, higher benefits. The amount of the increase, known as the "delayed retirement credit," is determined by a set percentage and increases the longer retirement is delayed. Currently, workers born in 1938 who delay retirement receive a 6.5% credit for each year they do not collect benefits. The yearly credit will increase to 8% for those born in 1943 or later. For individuals who work a partial year, the yearly percentage is broken into monthly increments. The increase stops at age 70, regardless of when a worker starts collecting benefits.
"Social Security benefits are the foundation of most Americans retirement," Commissioner Kenneth S. Apfel said. "And its important that everyone know how the retirement choices they make can have an impact on their benefits."
In October, the Social Security Administration began mailing Social Security Statements to all workers age 25 and older not receiving Social Security benefits. The statement tells workers their full retirement age and provides a retirement benefit estimate for age 62, full retirement age, and age 70.
"The Social Security Statement is a valuable financial planning tool that will help Americans prepare for their long term financial security," Commissioner Apfel said. "Its never too early to start retirement planning, but it can be too late!"
SSAs website, www.ssa.gov, provides more information on the increase in the retirement age, including an interactive feature that allows browsers to look up their own retirement age.
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Social Security Administration Earns High Marks in American Customer Satisfaction Index Survey
The University of Michigan announced today that the Social Security Administration (SSA) received an 82 in the most recent American Customer Satisfaction Index Survey (ACSI). This score is one of the highest earned by participating Federal government agencies and 10 points higher than the comparable private sector index.
The survey focused on SSA customers who are receiving retirement benefits, the agency's largest customer base serving 27.6 million beneficiaries. According to survey results, Social Security customers rated SSA personnel as courteous and professional, giving SSA an 86 for both Customer Service and Perceived Quality. Survey respondents gave SSA a 94 for Monthly Benefits citing the timeliness in which SSA sends benefit payments. According to ACSI, this score is a remarkable achievement for SSA as few ACSI scores reach the high 80s, much less the 90s.
"These scores reflect the hard work and dedication of Social Security Administration employees who put customer service first every day," said Kenneth S. Apfel, Commissioner of Social Security. "We will use this survey to build on the work we do well and improve the areas where our customers say we can do a better job."
While SSA scored an 86 for Customer Service, some customers would like SSA to make its employees even more accessible and easier to reach than they are today. In addition, beneficiaries felt that the information provided by SSA sometimes could be clearer and more relevant. "We are listening to what our customers are telling us and we have begun several initiatives to improve in these areas," commented Commissioner Apfel.
Since Vice President Gore launched his reinvention initiatives, SSA has worked diligently to improve the quality of its customer service. The agency's goal is to make doing business with the Social Security Administration an easy, pleasant experience for the over 100 million people who visit its offices or call the 800-number each year.
SSA has expanded 800-number offerings by adding features such as: multiple automated options for convenience and faster access to agency services; direct links to bilingual agents for non-English speaking customers; "next available agent" call routing for faster, more efficient access; and "immediate claims taking" for filing retirement and survivors claims over the phone.
Plain language has become the standard for recent SSA publications such as the Social Security Statement and the annual Cost-of-Living Adjustment notice which have been streamlined and reworked to make the information easier to read and more understandable to those who receive them. SSA employees have been trained to write all communications with the public in a reader-friendly format.
The American Customer Satisfaction Index (ACSI) is the only uniform, cross-industry measure of the quality of goods and services available in the United States. The ACSI is a trend measure and a benchmark for companies, industries and economic sectors of the household consumer economy. It is predictive of both companies' financial returns and national economic performance. The ACSI is produced through a partnership among the University of Michigan Business School, the American Society for Quality (ASQ) and Arthur Andersen and funded in part by annual fees paid by companies that receive detailed information on their own industries.
"At the Social Security Administration we believe that in order to truly serve our customers well, we must ask them how they want service delivered and encourage them to tell us how well we serve them today," stated Commissioner Apfel. "This survey is an important evaluation tool for our agency. Next year, the Social Security Administration plans to expand the survey to include disability and survivors beneficiaries."
Social Security Commissioner Kenneth S. Apfel Announces 2.4 Percent Social Security Increase
Social Security and Supplemental Security Income (SSI) benefits will increase 2.4 percent in 2000, Kenneth S. Apfel, Commissioner of Social Security announced today.
"This year's cost-of-living allowance reflects another year of very low inflation," Commissioner Apfel said. "Inflation is the greatest fear and worst enemy of elderly and disabled Americans living on fixed incomes."
"The cost of living adjustment is a centrally important feature of Social Security that insures that beneficiaries, no matter how long they live, will retain their purchasing power as costs rise," Commissioner Apfel said.
The 2.4 increase will begin with benefits that Social Security beneficiaries receive in January 2000. Increased payments to SSI recipients will begin on December 30.
For Social Security beneficiaries, the average monthly benefit amount for all retired workers will rise from $785 to $804. The maximum federal SSI monthly payments to an individual will rise from $500 to $512. For a couple, the maximum federal SSI payment will rise from $751 to $769.
Social Security and SSI benefits increase automatically each year based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year through the corresponding period of the next. This year's increase in the CPI-W was 2.4 percent.
Automatic COLAs became effective in 1975.
Commissioner Apfel also announced a number of changes today determined by another automatic provision of the law tied to the average increase in wages. They include:
· The maximum amount of earnings subject to the payroll tax will increase to $76,200 from $72,600;
· The maximum amount of earnings that a beneficiary under age 65 may earn without losing any Social Security benefits will increase from $9,600 this year to $10,080 in 2000 (Although established by law and not tied to average wage increases, the maximum amount of earnings a beneficiary age 65 to 69 may earn without losing any Social Security benefits will increase from $15,500 this year to $17,000 in 2000);
· The amount of earnings required to earn a quarter of coverage will increase to $780, up from $740 this year.
As a result of the increase in the wage base in 2000, the maximum yearly Social Security tax paid by employees and employers will increase by $223.20 each. For self-employed workers, it will rise by $446.40. About 10.9 million workers are affected by the higher wage base in 2000.
NOTE TO CORRESPONDENTS: A fact sheet showing the effect of the various automatic adjustments is available by clicking here.
For further information on the COLA by the Office of the Actuary, click here.
For the detailed Federal Register article on the increase, please click here.
(A copy of the Federal Register article is no longer available on Social Security Online.)
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Social Security Commissioner Kenneth S. Apfel Announces Federal Record Service Corporation Settlement
Federal Record Service Corporation, a New York Corporation, has agreed to a permanent injunction barring it from mailing out solicitations in violation of law that prohibits deceptive Social Security-related mailings, Kenneth S. Apfel, Commissioner of Social Security, announced today.
As a part of the agreement, Federal Record Service Corporation will also pay a $195,000 penalty within 30 days of the settlement date and a percentage of its pre-tax income over the next 10 years, up to $650,000.
"For far too long, the Federal Record Service Corporation has been swindling the American public out of their hard earned money for services the Social Security Administration provides for free," said Commissioner Apfel. "The combined efforts of the Social Security Administration's Office of General Counsel, our Inspector General and the U.S. Attorney's office sends a strong message to companies like the Federal Record Service Corporation that their deceitful activities will not be tolerated by the U.S. Government."
The company's mailings have long been the target of complaints from consumers who were duped into paying a $15 fee for a service that SSA offered without charge.
Action by the SSA's Offices of General Counsel and Inspector General and the Office of the U.S. Attorney in Manhattan led to a preliminary injunction issued last May by a federal judge from the U.S. District Court for the Southern District of New York that effectively shut down Federal Record Service Corporation operations.
"This case sends a clear message to the direct mailing industry," SSA Acting Inspector General James G. Huse, Jr., said. "Bilking consumers under Social Security's good name will not be tolerated. Fighting deceptive mailings involving SSA's trademarks and logos will continue to be a top investigative priority for our office."
In addition to monetary fines, Federal Record Service Corporation also agreed to additional terms:
· Federal Record Service Corporation, the New York Corporation, will be dissolved according to New York corporate law;
· Federal Record Service Corporation will not sell, give or transfer any personal information they have received from consumers to any person, corporation or other entity;
· Federal Record Service Corporation will not to have any involvement of any kind, including financial or consultative involvement, in any other business that offers services to consumers related to Social Security.
The settlement covers two of the four named defendants, Federal Record Service Corporation, the New York Corporation, and its president, Darrin Gleeman. Proceedings against the third and fourth named defendants are still pending.
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Social Security Begins Issuing Annual Statements To 125 Million Workers
Beginning October 1, the Social Security Administration (SSA) will launch the largest customized mailing ever undertaken by a Federal agency when it sends an annual Social Security Statement to 125 million workers. The 4-page statement is designed to help workers with financial planning by providing estimates of their retirement, disability and survivors' benefits. The statement will also provide workers an easy way to determine whether their earnings are accurately posted on their Social Security records. This is an important feature because Social Security benefits are based on an individual's career wage record.
"The Social Security Statement is a valuable tool that will help Americans prepare for their long-term financial security," Social Security Commissioner Kenneth S. Apfel said. "It puts the future in their hands."
The annual Social Security Statement is the result of efforts by Senator Daniel Patrick Moynihan to establish in law the requirement that all Americans receive an annual statement of potential Social Security benefits. By law, SSA will send the annual statements to workers who are ages 25 and older and not receiving Social Security benefits. SSA will stagger the mailing of the statements throughout the year, with approximately 500,000 statements delivered each day. Workers will automatically receive their statements about three months before their birth month.
The results of a recent survey, undertaken by the Gallup Organization, showed that receipt of a statement played a significant role in increasing Americans' understanding of Social Security. The survey showed that individuals who have received a Social Security Statement from SSA have a significantly greater understanding of Social Security than those who did not receive a statement. Those who have received a statement are significantly more likely to know that (1) the amount of Social Security benefits depends on how much they earned; (2) Social Security pays benefits to workers who become disabled; (3) Social Security provides benefits to dependents of workers who die; and (4) Social Security was designed only to provide part of total retirement income.
"The results clearly demonstrate that Social Security Statements are increasing the public's understanding of the basic features of Social Security," Commissioner Apfel said. "Knowledge is power, and all of us, young or old, male or female, single or with a family want the power to plan for our future."
SSA began sending the statements automatically to individuals age 60 and over in 1995. To date, nearly 73 million statements have been mailed to individuals 40 and older. In addition, individuals have been able to request statements from SSA since 1988. To date, SSA has responded to 37 million requests for statements over the past 12 years.
NOTE TO CORRESPONDENTS: A fact sheet giving details on the Social Security Statement is attached
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Social Security Increases Earnings Limit for Beneficiaries with Disabilities
Kenneth S. Apfel, Commissioner of Social Security, today announced that the earnings limit for beneficiaries with disabilities will increase by $200 a month, beginning on July 1.
The increase in the earnings limit to $700 - known as substantial gainful activity (SGA) -- is a part of the Clinton Administration's initiatives to encourage Social Security beneficiaries with disabilities to return to the workforce and reflects growth in average wages since 1990, when the level was set at $500.
"This regulatory change is necessary to help eliminate barriers that often limit the full potential of Americans with disabilities who want to work," Commissioner Apfel said. "It is important for the nation to create opportunities for workers with disabilities who can bring tremendous talent and energy to the workplace."
The term SGA is part of the statutory definition of disability that requires an individual to be unable to engage in substantial work for initial and ongoing eligibility under the Social Security Disability Insurance program and initial eligibility under the Supplemental Security Income (SSI) program.
The disability insurance program pays an average benefit of $722 to 4.7 million workers with disabilities. In addition, some 1.6 million members of their families receive monthly benefits.
Each year since 1993, nearly 400,000 beneficiaries with disabilities participated in some way in the workforce. Many others, however, did not attempt to work for fear of losing both cash and medical benefits.
The SGA level of $1,110 for workers who are blind is established by statute and is adjusted annually based on the national average wage index and is not affected by today's announcement. Since President Clinton established the National Task Force on Employment of Adults with Disabilities in early 1998, SSA has been actively involved in a number of initiatives designed to encourage Social Security beneficiaries with disabilities to return to work.
In addition, the Administration strongly supports the Work Incentives Improvement Act that provides the continuation of health insurance for workers with disabilities who return to work as well as enhanced employment services. That measure, sponsored by Senators Jeffords, Kennedy, Roth, and Moynihan, was approved by the Senate by a vote of 99 to 0 on June 16.
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Clinton/Gore Administration Announces Historic 5-year Affective Disorder Demonstration Project at the Social Security Administration to Help People with Mental Illness Return to Work in Honor of the White House Conference on Mental Health
Vice President Al Gore announced today that the Social Security Administration (SSA) will offer up to 1,000 Social Security Disability beneficiaries with affective disorders the opportunity to participate in a 5-year demonstration project to test improved treatments that could result in better functioning and a return to the workforce.
Research suggests that as many as 60 percent of affective disorder cases can be controlled with appropriate treatment, yet a review of approximately 200 Social Security claims showed that some beneficiaries with affective disorders received no treatment and many beneficiaries were not treated by mental health professionals. These results support anecdotal information that many beneficiaries with affective disorders receive less effective care than is available today because of restrictions in health insurance coverage, treating physicians without a psychiatric specialty and a lack of access to improved treatment methods. By providing the best possible treatment to disability beneficiaries with affective disorders, SSA believes that many of these individuals will be able to overcome the disabling effects of their illnesses and successfully transition back to work, ultimately enabling them to leave the disability rolls.
Under the study, SSA will allow participants' treating sources the opportunity to pick from a list of modern treatment regimens including the option to use modern medication or psychosocial therapy, or both. SSA will pay the costs of drugs and therapy for participants who continue to follow the prescribed regimen during the demonstration. Throughout the process, SSA will solicit input and advice of specialists in the medical community and advocates in the disability community.
Of the 4.7 million Social Security Disability Insurance (SSDI) disabled beneficiaries who received disability payments from SSA, approximately one of every nine (about 500,000) has a primary diagnosis of affective disorder. Affective disorders are characterized by a disturbance in mood (depression, mania or both). Many affective disorders are episodic in nature, with onset typically before age 35. Major diagnoses under affective disorders include Major Depressive Disorder and Bipolar Disorder.
Affective Disorders are the fastest growing category of disabilities, consistent with the increasing recognition by the medical profession of affective disorders in society. Over a lifetime, each SSDI beneficiary will receive an average of $90,000 in benefits.
The Administration has been actively involved in efforts to encourage citizens with disabilities to enter the workforce and is supporting legislation sponsored by Senators Jeffords, Kennedy, Roth and Moynihan that would eliminate work disincentives and expand the availability of health care services. In addition, the legislation includes a "ticket" that would enable Social Security Disability Insurance or Supplemental Security Income beneficiaries to obtain employment, rehabilitation, and/or support services that are tailored to their needs from a choice of either a public or private provider of services.
SSA will offer the return-to-work (RTW) resources available to all participants in the study. Outcomes for participants will be recorded at regular intervals for several years afterward. Success will be measured in terms of improvements in functioning and the extent to which study participants demonstrate the ability to sustain work, as well as in terms of increases in earnings and decreases in SSDI program costs.
The study will be conducted under two contracts. The first contract will be for the design of the study and is being currently announced for solicitation of proposals. A contract conducting the study will immediately follow the completion of the study design.
The study will be designed primarily as a return-to-work demonstration. SSA will be testing access to established treatment regimens as facilitators of work efforts for beneficiaries with affective disorders. The demonstration is intended to show that if SSA provides access to the right treatment for disabled beneficiaries, many will be able to return to work.
"It is my belief that this innovative pilot study will provide a gateway for individuals with affective disorders to return to work and lead more productive lives," said Kenneth S. Apfel, Commissioner of Social Security. "Everyone reaps benefits when each individual has an opportunity to make a unique contribution to society."
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Federal Judge Imposes Preliminary Injunction Against Federal Record Service Corporation
A Federal Judge from the United States District Court in the Southern District of New York has issued a preliminary injunction against the Federal Record Service Corporation for using misleading and fraudulent solicitations that include the program names of the Social Security Administration (SSA). The judge, in a stinging opinion issued on May 21, 1999, required Federal Record Service Corporation to cease disseminating its misleading and fraudulent solicitations, froze the corporations assets, and authorized the United States Postal Service to detain all incoming mail.
This is very good news for consumers, commented Kenneth S. Apfel, Commissioner of Social Security. The Courts action should serve notice to those who use Social Security program words to ply their trade. Our Inspector General is vigorously monitoring these activities and the Social Security Administration will act to shut down those who do not obey the law.
Section 1140 of the Social Security Act prohibits the use of Social Security program words, symbols or emblems in any solicitation or advertisement to convey the false impression that the solicitation is approved, endorsed or authorized by the Social Security Administration.
Federal Record Service Corporation targeted new parents and new brides for the approximately 2.2 million solicitations it sent each year. Of these, the company asserts, between 90,000 and 100,000 made use of the companys services that resulted in gross annual revenues in the range of $1.5 million per year. The Court noted in its opinion however, that this profit level is understated due to the substantial consulting fee that Federal Record Service Corporation pays to another company, National Investment List Services, owned entirely by Darrin Gleeman, President of Federal Record Service Corporation, and employing only Gleeman and his wife.
The mailings to new parents stated that their newborn children must have a Social Security number and offered to help the parents acquire the number for a $15 fee. Over 96% of the parents of children born in hospitals apply for a Social Security number during the birth certificate registration process which means there is little need for the service the company provides. Often these confused parents believed that the mailing from the Federal Record Service Corporation was a follow-up mailing from the Social Security Administration. Many parents learned that they were not dealing with SSA when the Social Security card they applied for in the hospital arrived a few days after they had paid the fee and provided the company with personal identification information.
Mailings to new brides informed the brides of the need to change their name on Social Security Record. Many brides, thinking that they had been contacted by the Social Security Administration, mailed in the $15 fee and included all their personal identification information.
The companys mailings are well known among consumer protection groups across the country, including the Better Business Bureau, which has received 443 complaints against Federal Record Service Corporation since 1996. This total makes Federal Record Service Corporation the third most complained about company to the Better Business Bureau over the last three years. SSAs Office of Inspector General has received a substantial number of complaints as well. We have received more complaints against the Federal Record Service Corporation than any other company in the history of OIG, SSA, James G. Huse, Jr., Acting Inspector General, SSA, said. We have taken aggressive action to stop Federal Record Service Corporation from misleading the public with deceptive Social Security-related solicitations.
By Court order, mailings sent by consumers to the Federal Record Service Corporation have been detained by the United States Postal Service and will be delivered to the Social Security Administration in Baltimore. SSA will respond to all mail sent by consumers to the Federal Record Service Corporation. Individuals who have sent a $15 fee to Federal Record Service Corporation will have their money returned to them by SSA. For parents of newborns who have replied to the Federal Record Service Corporation solicitation, SSA will check its records to determine if they applied for a Social Security Number at the hospital. Parents who applied at the hospital will receive a letter stating that they will receive the card soon and parents who did not apply for the number will receive an application and instructions on filling out the form.
SSAs Office of Inspector General has been instrumental in investigating and compiling information and complaints about the Federal Record Service Corporation. Consumer complaints to SSA were included in the U.S. Attorneys filing with the court. SSAs Office of General Counsel worked closely with the Inspector General and the United States Attorney in Manhattan, logging many hours to develop the case and prepare it for court action.
I commend U.S. Attorney Mary Jo White for the time and energy that she and her staff have devoted to this case, commented Commissioner Apfel. Through the team efforts of the Social Security Administration, our Inspector General and the U. S. Attorney, new parents and newlyweds across the country will be spared from the deceptive practices of the Federal Record Service Corporation.
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Social Security Commissioner Reacts To Federal Record Service Civil Suit
Kenneth S. Apfel, Commissioner of Social Security, commended the U.S. Attorney's action to file a civil suit in U.S. District Court in the Southern District of New York against Federal Record Service Corporation.
Filed in Manhattan federal court, the suit alleges that Federal Record Service misleads and defrauds the public through solicitations for services that purportedly assists people in obtaining Social Security cards for newborns or replacement cards for newlyweds. Federal Record Service charges citizens a $15 fee for services that can be obtained for free from the Social Security Administration (SSA). Many consumers have complained that the mailings led them to believe that they were being contacted by SSA or a company affiliated with SSA.
"For far too long, Federal Record Service has been picking the pocket of the American public through deceptive practices in an effort to sell an unnecessary service," Commissioner Apfel said. "Today's action by the U.S. Attorney proves that the Federal Record Service can run, but it can't hide from the law."
In the suit, U.S. Attorney Mary Jo White charged that Federal Record Service, in their solicitations for a fee, convey the false impression that their services are approved, endorsed, or authorized by SSA. The suit further alleges that the solicitation fails to inform the consumer that Social Security numbers are generally assigned as a part of the birth registration process and that newlyweds can obtain a replacement card to change their names without charge by dealing directly with SSA.
U.S. District Judge Barbara S. Jones, U.S. District Judge for the Southern District of New York, issued a temporary restraining order directing Federal Record Service to cease disseminating the solicitations, freezing the corporation's assets, and authorizing the U.S. Postal Service to detain incoming mail from consumers. Judge Jones has scheduled a hearing on May 13, 1999 at 10 a.m. to determine what further action is appropriate.
SSA's Office of the Inspector General (OIG) has been instrumental in investigating and compiling information relating to Federal Record Service solicitations.
"We have received more complaints against Federal Record Service Corporation than any other company in the history of the OIG, SSA," James G. Huse, Jr., Acting Inspecting General, SSA, said. "Today, we are taking aggressive action to stop Federal Record Service Corporation from misleading the public with deceptive Social Security-related solicitations."
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Statement Of Kenneth S. Apfel Commissioner Of Social Security Concerning The Release Of The 1999 Annual Report Of The Social Security Board Of Trustees
We are pleased to announce that the 1999 Report of the Board of Trustees indicates that the Social Security trust funds will gain two additional years of solvency. Instead of a projected exhaustion date of 2032 as reported last year, the trust funds are now expected to remain solvent until 2034.
The improvement in the financial condition of the trust funds is due to continued strong economic growth characterized by reduced unemployment, higher wages and low inflation. In addition, recent adjustments by the Bureau of Labor Statistics to improve the measurement of the Consumer Price Index contributed to the improved outlook of the Social Security program.
Social Security must remain a rock solid benefit that current and future beneficiaries can count on. Today's good news must not lull us into complacency. We should not just celebrate today's prosperity but use it to meet the challenges of the future. We cannot rest until we are able to meet our commitments to our youngest workers. Social Security must be on firm financial footing when they retire.
This strong economy has given us a unique window of opportunity to strengthen Social Security. By acting sooner rather than later, in good economic times, we can make gradual changes to the system that will allow people time to plan adequately for their retirement years. If we have the courage to make the thoughtful decisions for Social Security now, we will strengthen Social Security for future generations of Americans.
We believe wholeheartedly, that the President and Congress must continue bipartisan efforts to restore the long-term fiscal health of the trust funds. Without changes, the Social Security Old-Age, Survivors and Disability Insurance Trust Funds will be able to pay only about 71 percent of benefits when the reserves are depleted in 2034. Devoting a portion of the budget surpluses to Social Security over the next 15 years is critical to achieving a balanced resolution to the Social Security shortfall.
The Trustees also reported that tax revenues will exceed expenditures until 2014, a year later than last year, when it will be necessary to begin using interest income to meet obligations. Beginning in 2022, trust fund assets will be redeemed to pay benefits until 2034. Over the next 75 years, the trustees projected that the actuarial balance is a deficit of 2.07 percent of taxable payroll compared to 2.19 percent projected in the 1998 report.
We must work together to make the decisions necessary to ensure that Social Security will be there for future generations. If we have the courage to act now, we can restore public confidence in our Government institutions and strengthen Social Security for future generations of Americans.
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Social Security Trust Funds Gain Two Additional Years Of Solvency
The Social Security Board of Trustees announced today in their 1999 annual report that the long-range projections of the Social Security trust funds have improved by two years over last year's report. Under the new projections, the Social Security trust fund assets will be depleted in 2034 rather than 2032 as predicted last year.
According to the Trustees, improvement in the financial condition of the trust funds is the result of continued strong economic growth resulting in reduced unemployment, higher wages and low inflation. In addition, recent adjustments made by the Bureau of Labor Statistics to improve the measurement of the Consumer Price Index were a contributing factor.
As they did last year, the Trustees urged legislative action in the immediate future to restore long-term balance to Social Security.
"We welcome these favorable developments for Social Security and Medicare. Nonetheless, the need to put these programs on sound financial footing for the long term must still be met," said Treasury Secretary Rubin. "We should move forward on a bipartisan basis to finish the job by using the surpluses to pay down the national debt and substantially extend the exhaustion date of the Social Security and Medicare Trust Funds."
"Social Security must remain a rock solid benefit that current and future retirees can count on. Today's good news must not lull us into complacency," commented Kenneth S. Apfel, Commissioner of Social Security. "We should not just celebrate today's prosperity but use it to meet the challenges of the future. We cannot rest until we are able to meet our commitments to our youngest workers. Social Security must be on firm financial footing when they retire. By acting sooner rather than later, in good economic times, we can make gradual changes to the system that will allow people time to plan adequately for their retirement years. If we have the courage to make the thoughtful decisions for Social Security now, we will strengthen Social Security for future generations of Americans."
In his State of the Union Address, President Clinton proposed transferring 62 percent of the budget surpluses ($2.8 trillion) to Social Security over the next 15 years and investing about 20 percent of the transferred surpluses in private markets to earn a better rate of return. To achieve a 75-year actuarial balance in the trust funds, the President called on Congress to work with him on a bipartisan basis to make the decisions necessary to strengthen the Social Security program.
The 1999 annual report also indicates that in 2014, trust fund expenditures will begin to exceed tax revenues, a year later than estimated in 1998. Beginning in 2022, trust fund assets will be drawn down to pay benefits until exhaustion in 2034. At that time, tax revenues will be sufficient to pay only 71 percent of benefit obligations. Over the 75-year long-range actuarial forecast, the projected actuarial balance is a deficit of 2.07 percent of taxable payroll, compared to 2.19 percent projected in 1998.
In its 59th report to the Congress, the Trustees also reported the following:
· The Old-Age and Survivors, and Disability Insurance Trust Funds paid benefits amounting to $375 billion in 1998, and there were 44.2 million beneficiaries on the rolls at the end of 1998;
· In 1998, an estimated 148 million people worked in jobs covered by Social Security;
· Income to the combined trust funds amounted to $489.2 billion in 1998 and expenditures were $382.3 billion, increasing the assets of the combined funds by $106.9 billion to $762.5 billion at the end of December 1998;
· Interest earnings on the invested assets of the combined trust funds were $49.3 billion, representing an effective annual interest rate of 7.2 percent. The average interest rate on new securities purchased was 5.6 percent; and
· Administrative expenses were $3.5 billion, or about 0.9 percent of benefit payments for the year.
The Board of Trustees is composed of six members, four of whom serve automatically by virtue of their positions with the Federal Government: the Secretary of the Treasury, who is the managing Trustee; the Secretary of Labor; the Secretary of Health and Human Services; and the Commissioner of Social Security. The other two members are appointed by the President and confirmed by the Senate to serve as public representatives. Stephen G. Kellison and Marilyn Moon are currently serving four-year terms that began on July 20, 1995.
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SSA Proposes Rule Change to Enable More Disability Beneficiaries to Return to Work
As part of the Clinton Administration's ongoing efforts to help people with disabilities reenter the workforce, Vice President Al Gore announced today that the Social Security Administration is proposing an increase in the amount that disabled adult beneficiaries can earn while still remaining eligible for benefits. The proposed increase, from $500 to $700 per month, may affect as many as 250,000 Social Security beneficiaries with disabilities.
"This is good news for many of our disability beneficiaries," commented Commissioner Kenneth S. Apfel. "This increase will allow more beneficiaries with disabilities to return to the workforce and enable them to lead more productive, self-sufficient lives."
Current rules state that to become eligible for Social Security Disability Insurance (DI) or Supplemental Security Income (SSI) benefits, an individual must be unable to engage in any substantial gainful activity (SGA) that exceeds $500 per month. In addition, SGA is used as a measure in determining ongoing entitlement for DI benefits. The SGA level is set by the Commissioner through regulation.
"Many beneficiaries are leery of attempting work for fear of inadvertently crossing the SGA threshold and losing critically important cash and medical benefits," stated Commissioner Apfel.
SGA has been increased only once since 1980 and that increase occurred in 1990. The proposed increase would raise SGA to reflect the level of the growth in average wages since 1990.
Currently, less than one half of one percent of disability beneficiaries leave the rolls voluntarily and return to work. Each year since 1991, approximately 400,000 disability beneficiaries have remained on the rolls and have participated in the workforce. The higher SGA level is expected to prompt additional beneficiaries to venture into the workforce.
SSA has been actively involved in Administration efforts to encourage citizens with disabilities to enter the workforce. In addition to the change in SGA, the Administration recently announced its support of legislation sponsored by Senators Jeffords, Kennedy, Roth and Moynihan that would eliminate work disincentives and expand the availability of health care services.
In addition, the legislation includes a "ticket" that would enable DI or SSI beneficiaries to obtain employment, rehabilitation, and/or support services that are tailored to their needs from their choice of either a public or private provider of services.
In 1999, 4.8 million disabled workers are expected to receive Social Security benefits and approximately 4.3 million disabled adults are projected to receive SSI benefits.
"As a nation, we are best served when all of our citizens have the opportunity to contribute their talent, ideas and energy to the workforce. We must continue to seek new ways to ensure that persons with disabilities can share the benefits of our economic prosperity," concluded Commissioner Apfel.
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Statement From Kenneth S. Apfel
Commissioner Of Social Security On the Management Rating of the Social Security Administration by The Government Performance Project
I am pleased that the Social Security Administration has been recognized by the Government Performance Project for its performance in providing high-quality service to the American people. When Vice President Gore made reinvention of government a priority, he challenged each and every government agency to set clear goals. He told us to become more accountable. He told us to emphasize customer service. That's exactly what we did at the Social Security Administration. This high rating means that the efforts of our managers and 65,000 employees are paying dividends. We are developing the right approach to achieving efficient and effective service to the public.
I would like to thank the Maxwell School of Citizenship and Public Affairs at Syracuse University, Government Executive Magazine, Governing Magazine and the Pew Charitable Trusts for their efforts to make this project possible. This management report highlights our strengths as well as the areas we need to improve and will be very valuable to us at the Social Security Administration. The report will help us strengthen the management of our programs, improve service to the public, promote the economic security of Americans and ultimately reinforce the public trust in one of our most important institutions, Social Security.
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