Social Security

The Social Security Administration's (SSA) individualized social security statement, which provides the public with basic information on their social security benefits, can be an important tool in personal financial planning. GAO recommended that SSA improve the layout and design of the statement it issued in 1996 and simplify its explanations. GAO also recommended that SSA explore alternative formats for the statement. On the basis of information it gathered from prototypes, focus groups, and a public opinion survey, SSA developed a new four-page statement for its fiscal year 2000 mailing that is much improved. The newly revised statement does a better job of providing basic information to individual workers. Adding the explanations necessary to fairly portray rates of return, however, would significantly increase the length of the statement and undermine efforts to simplify it, increasing the risk that recipients would neither read nor fully understand it.

GAO noted that: (1) the individualized Social Security Statement plays a specific and important role in providing some, but not all, of the information the public needs; (2) individuals should have clear and easy to understand information about what benefits they can reasonably expect to receive; (3) this is the specific and primary purpose of the Social Security Statement, which is now sent annually to nearly all working participants; (4) in addition, the statement helps individuals and the Social Security Administration (SSA) ensure that individual earnings records are accurate, which in turn is crucial to providing accurate benefit payments; (5) SSA has recently revised this statement so that it more effectively conveys this important information; (6) the public should understand the current and projected financial status of the Social Security program; (7) the Social Security Statement now contains a brief disclosure about this, but technical and detailed information about it is more appropriately conveyed through other vehicles, such as the annual Trustees' Report and the federal government's consolidated financial statements; (8) the public should have information to help it evaluate different proposals to restore solvency and make other program changes; (9) however, such information is complex and must be presented in a fair, consistent, and comprehensive way that helps the public weigh and balance the various difficult choices that must be made; (10) this type of information goes beyond estimating benefits and verifying earnings, which is the Social Security Statement's central purpose; (11) given the difficulties SSA has had in making just this information clear in the statement, adding information on reform proposals would likely make the statement lengthy, more complex, and even more difficult to understand; and (12) doing so could undermine the basic purpose of the statement.