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.