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Selected Research & Analysis: Reform of Social Security > Administrative Aspects

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Outcome Variation in the Social Security Disability Insurance Program: The Role of Primary Diagnoses
from Social Security Bulletin, Vol. 73, No. 2 (released May 2013)
by Javier Meseguer

This article investigates the role that primary impairments play in explaining heterogeneity in disability decisions. Using claimant-level data within a hierarchical framework, the author explores variation in outcomes along three dimensions: state of origin, adjudicative stage, and primary diagnosis. The findings indicate that the impairments account for a substantial portion of claimant-level variation in initial allowances. Furthermore, the author finds that the predictions of an initial and a final allowance are highly correlated when applicants are grouped by impairment. In other words, diagnoses that are more likely to result in an initial allowance also tend to be more likely to receive a final allowance.

Managing Independence: The Governance Components of the National Railroad Retirement Investment Trust
from Social Security Bulletin, Vol. 71, No. 2 (released May 2011)
by Kevin Whitman

This article reviews the management components of the National Railroad Retirement Investment Trust (NRRIT) and their relationship to political independence. Centralized equity investment is sometimes proposed as a method for improving Social Security program financing and, echoing the debate over the NRRIT, politicized investment decisions are seen as one potential obstacle to the policy's success. This article does not advocate for or against investing Social Security's trust fund assets in equities, but examines the NRRIT's structure and experience to provide background information for policymakers.

An Empirical Study of the Effects of Social Security Reforms on Benefit Claiming Behavior and Receipt Using Public-Use Administrative Microdata
from Social Security Bulletin, Vol. 69, No. 3 (released October 2009)
by Hugo Benítez-Silva and Na Yin

In the past few years, the Social Security Old-Age and Survivors Insurance benefit system in the United States has undergone some of the most significant changes since its inception. Using the public-use microdata extract from the Master Beneficiary Record, we are able to uncover a number of interesting trends in benefit claiming behavior and level of benefit receipt, which can help us understand how the changes in the system are shaping the retirement benefit claiming behavior of older Americans.

A Legislative History of the Social Security Protection Act of 2004
from Social Security Bulletin, Vol. 68, No. 4 (released March 2009)
by Erik Hansen

The Social Security Protection Act of 2004 (SSPA), with its administrative remedies and program protections, can be seen as another incremental step in the development of a social insurance program that best meets the evolving needs of American society. This article discusses the legislative history of the SSPA in detail. It also includes summaries of the provisions and a chronology of the modification of these proposals as they passed through the House and Senate, and ultimately to the president's desk.

Benefit Adequacy Among Elderly Social Security Retired-Worker Beneficiaries and the SSI Federal Benefit Rate
from Social Security Bulletin, Vol. 67, No. 3 (released April 2008)
by Kalman Rupp, Alexander Strand, Paul S. Davies, and James Sears

The federal benefit rate (FBR) of the Supplemental Security Income program provides an inflation-indexed income guarantee for aged and disabled people with low assets. Some consider the FBR as an attractive measure of Social Security benefit adequacy. Others propose the FBR as an administratively simple, well-targeted minimum Social Security benefit. However, these claims have not been empirically tested. Using microdata from the Survey of Income and Program Participation, this article finds that the FBR is an imprecise measure of benefit adequacy; it incorrectly identifies as economically vulnerable many who are not poor, and disregards some who are poor. The reason for this is that the FBR-level benefit threshold of adequacy considers the Social Security benefit in isolation and ignores the family consumption unit. The FBR would provide an administratively simple but poorly targeted foundation for a minimum Social Security benefit. The empirical estimates quantify the substantial tradeoffs between administrative simplicity and target effectiveness.

Design and Implementation Issues in Swedish Individual Pension Accounts
from Social Security Bulletin, Vol. 65, No. 4 (released May 2005)
by R. Kent Weaver

Sweden's new multipillar pension system includes a system of mandatory fully funded individual accounts. The Swedish system offers contributors more than 600 fund options from a variety of private-sector fund managers. However, in the most recent rounds of fund choice, more than 90 percent of new labor market entrants have not made an active choice of funds and thus have ended up in a government-sponsored default fund.

The Swedish system offers a number of lessons about implementing a mandatory individual account tier. Centralized administration keeps administrative costs down but requires considerable lead time. A very large number of fund options are likely to be offered unless strong entry barriers are in place. Engaging new labor market entrants in fund choice is likely to be difficult. A significant percentage of those making an active fund choice may choose funds that are very specialized and risky. Finally, special care must be devoted to designing a default fund and continual consumer communication.

SSA's Estimates of Administrative Costs Under a Centralized Program of Individual Accounts
(released January 2001)
by Lawrence E. Hart, Mark Kearney, Carol Musil, and Kelly A. Olsen

Over the past several years, a number of policymakers have proposed creating national individual accounts (IAs) for retirement whose assets would be individually owned and directed among investment options. Some proposals would create an IA program outside Social Security; others would integrate IAs into the Social Security program itself. All IA proposals, however, would entail administrative functions, costs, and considerations. Identifying and recognizing those administrative elements are important steps in assessing the desirability, feasibility, and optimal design of IAs.

This paper summarizes the administrative operation of Social Security today; provides SSA's estimated administrative costs for two hypothetical IA programs (that is, only the costs that SSA could experience, not those that employers, other agencies, and other parties could incur); and highlights major considerations raised by IA administrative costs and choices.

What Stock Market Returns to Expect for the Future?
from Social Security Bulletin, Vol. 63, No. 2 (released December 2000)
by Peter A. Diamond

High stock prices, together with projected slow economic growth, are not consistent with the 7.0 percent return that the Office of the Chief Actuary has generally used when evaluating proposals with stock investments. Routes out of the inconsistency include assuming higher GDP growth, a lower long-run stock return, or a lower short-run stock return with a 7.0 percent return on a lower base thereafter. In short, either the stock market is overvalued and requires a correction to justify a 7.0 percent return thereafter, or it is correctly valued and the long-run return is substantially lower than 7.0 percent (or some combination of the two). This article argues that the former view is more convincing, since accepting the "correctly valued" hypothesis implies an implausibly small equity premium.

State and Local Pension Plans' Equity Holdings and Returns
from Social Security Bulletin, Vol. 63, No. 2 (released December 2000)
by Mark A. Sarney

This article examines the recent trends in the size and performance of the equity investments of state and local pension plans. It also provides a context for the discussion about investing some portion of the Social Security trust fund reserves in private equities.

Participation in Voluntary Individual Savings Accounts: An Analysis of IRAs, 401(k)s, and the TSP
from Social Security Bulletin, Vol. 63, No. 1 (released July 2000)
by Glenn R. Springstead and Theresa M. Wilson

This article compares participation rates in three existing voluntary individual account-type plans—individual retirement accounts (IRAs), 401(k)s, and the federal Thrift Savings Plan (TSP)—in an effort to analyze who might participate in a voluntary individual account system.

Summary of Legislation of Interest to SSA Enacted During the 103rd Congress
from Social Security Bulletin, Vol. 57, No. 4 (released October 1994)

During the 103rd Congress, some 400 bills of interest to SSA were introduced. Of these, nine that affect SSA programs were enacted. This note covers these enactments.

Report of the National Commission on Social Security Reform
from Social Security Bulletin, Vol. 46, No. 2 (released February 1983)
Ten Years of Social Security Administration in the Southwest
from Social Security Bulletin, Vol. 9, No. 5 (released May 1946)
by Oscar M. Powell