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Administration Stepping Up Earnings History Notices

December 19, 1986

WASHINGTON (AP) _ Many workers over age 55 will get a report of their earnings history in 1987 to help them calculate their Social Security benefit when they retire, the Social Security commissioner said Friday.

The Social Security Administration plans to begin sending the reports ″to a good sample of over 55 in 1987,″ Dorcas Hardy, the Social Security commissioner, told a gathering of reporters in her office.

The agency plans to expand the reports to workers over age 45 and eventually every member of the workforce paying into Social Security would get a periodic report of their earnings.

Currently reports of earning history are given only to newly retired beneficiaries, though the agency advises workers to request a report every three years.

Ms. Hardy said the earnings report would tell each worker how much he or she earned each year and provide a formula for calculating benefits.

″What we send out today is totally incomprehensible,″ said Nelson Sabatini, associate commissioner for budget. ″We need to send out a document that makes sense.″

Sabatini said the report would be ″a kind of report to the stockholders of SSA″ and resemble the annual statements that most pension plans are legally required to give their workers.

The format for the report has not yet been devised Ms. Hardy said. The agency’s ability to straighten out incorrect earnings records among people over age 55 will determine how many reports will be sent out in 1987, she said.

When she took office last June, Ms. Hardy said, ″My earnings records were not in good shape.″ She estimated that 10 percent to 12 percent of SSA’s records of workers paying into Social Security are either incomplete or erroneous.

″I will hold my breath and hope it’s only that,″ she added.

To help unscramble erroneous records and speed claims processing, SSA is modernizing its computer systems, which have been critized as outmoded or ill- equipped for the increasing workload.

Ms. Hardy said 22,000 computer terminals have been purchased from IBM and will be installed in the next two years in district offices throughout the country to help speed processing of claims.

In addition, the agency is moving forward with efforts to update its main computer facilities outside Baltimore.

The modernization should be completed by 1988 or 1989, she said.

But agency officials reported improvements in service.

In 1978, it took SSA 38 months to post a worker’s earnings compared to seven months now. The time to process applications for new cards has been reduced from six weeks to 10 or 11 days.

The agency, which processes 12 million applications for new cards each year, expects an additional 9 million applications next year from parents of children age 5 and older, Ms. Hardy said.

Under the new tax law, children age 5 and older will be required to have Social Security cards to be claimed as deductions on their parents federal tax returns. The rule takes effect in the 1987 tax year.

Ms. Hardy estimated that two-thirds of children over age 5 already have cards.

Since it costs the agency $10 to $12 to issue each new card, the extra processing could cost the agency $90 million to $108 million yext year. But Ms. Hardy said the agency would enjoy a long-term savings by issuing the cards next year rather than doing it later

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