Bipartisan legislation has been introduced in the House and
Senate to restore the delivery of annual Social Security projected benefit
statements.
Introduced by Senate Finance Committee Chairman Ron Wyden
(D-OR), Finance Committee Member Sen. Bill Cassidy (R-LA), House Ways and Means
Social Security Subcommittee Chairman John Larson (D-CT) and Ways and Means
Committee Member Vern Buchanan (R-FL), the Know Your Social Security Act would
clarify that the Social Security Administration (SSA) is required to mail a
yearly Social Security Statement to eligible workers.
Congress had previously enacted requirements for the SSA to
provide a statement annually, but since 2011, the SSA has only mailed annual
statements to those who are age 60 or older, those who are not receiving Social
Security benefits and those who have not registered for an online account with
SSA.
The SSA has cited limited resources and cost savings in
deciding to curtail the mailing of the statements, but the lawmakers contend
that few individuals are checking the statements online. They note that a
review by SSA’s Inspector General found that only about two out of five
individuals with a mySocialSecurity account (17 million out of 39 million
individuals) accessed their statement online in fiscal year 2018. And in fiscal
year 2020, they note that SSA mailed statements to about 19 million individuals
out of an estimated 180 million workers with covered earnings.
The legislation was introduced in the last Congress, but it
may get an added boost because Sen. Wyden is now chairman of the Senate Finance
Committee. “As younger Americans grow more doubtful about their chances for a
secure retirement, this bill will provide them clear view of what their earned
benefits will be,” Wyden said in a statement. “I am going to keep pushing to
get this done with our bipartisan, bicameral coalition so Americans know Social
Security will be there for them.”
The bill clarifies the requirement for SSA to mail an annual
Social Security statement to all workers aged 25 and older with covered
earnings who are not receiving Social Security benefits. The statement would
show how much a worker has earned each year of their career, the worker’s
contributions to both Social Security and Medicare, and the worker’s estimated
Social Security retirement, disability and survivor benefits. It would also
inform workers how to ensure the accuracy of their earnings record so that in
the future they will receive the correct Social Security benefit amount.
The bill also provides individuals the option to receive
their annual statement electronically, rather than by mail. By law, an
individual may also request a statement at any time during the year, but the
bill would require SSA to provide these on-demand statements by mail, unless an
individual chooses electronic delivery for that one-time request.
Lifetime Income Disclosure Rule Coming Soon
The Department of Labor’s unified regulatory agenda shows
that the department plans to issue a final rule by July detailing the SECURE
Act requirements to include lifetime income illustrations to pension benefit
statements furnished to participants in certain DC plans. An interim final rule
was published in September 2020, with a scheduled effective date of Sept. 18,
2021.
Like the Social Security statements, the lifetime income
illustrations aim to help participants better understand how the amount of
money they have saved so far converts into an estimated monthly payment for the
rest of their lives and how this impacts their retirement planning.
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