Statement of Earnings and Benefit Estimates

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Social Security Administration

20 CFR Parts 404 and 422

RIN 0960-AD74

Statement of Earnings and Benefit Estimates

AGENCY: Social Security Administration, HHS.

ACTION: Proposed rules.

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SUMMARY: We are proposing to revise our rules on sending statements of

earnings and benefit information to individuals. Under our current

rules, which implement section 1143(a) of the Social Security Act (the

Act), we are required to send a statement to an eligible individual who

requests it. Under these proposed rules, we will provide the statement

without a request to an eligible individual, as required by section

1143(c) of the Act.

DATES: Your comments will be considered if we receive them no later

than March 20, 1995.

ADDRESSES: Comments should be submitted in writing to the Commissioner

of Social Security, Department of Health and Human Services, P.O. Box

1585, Baltimore, MD 21235, sent by telefax to (410) 966-0869, or

delivered to the Office of Regulations, Social Security Administration,

3-B-1 Operations Building, 6401 Security Boulevard, Baltimore, MD

21235, between 8:00 a.m. and 4:30 p.m. on regular business days.

Comments received may be inspected during these same hours by making

arrangements with the contact person shown below.

The electronic file of this document is available on the Federal

Bulletin Board (FBB) at 9 a.m. on the date of publication in the

Federal Register. To download the file, modem dial (202) 512-1387. The

FBB instructions will explain how to download the file and the fee.

This file is in Wordperfect and will remain on the FBB during the

comment period.

FOR FURTHER INFORMATION CONTACT: Jack Schanberger, Legal Assistant, 3-

B-1 Operations Building, 6401 Security Boulevard, Baltimore, MD 21235,

(410) 965-8471.

SUPPLEMENTARY INFORMATION: Section 1143 of the Act requires the

Secretary of Health and Human Services (the Secretary) to provide to

eligible individuals ``a social security account statement''

(statement). We must fulfill this requirement in three phases. In the

first phase, we were required, by October 1, 1990, to provide, upon the

request of an ``eligible individual,'' a statement that contains

certain information described below. Section 1143 defines an ``eligible

individual'' as one who has a social security account number, has

attained age 25 or over, and has wages or net earnings from self-

employment.

The statement we provide under section 1143 of the Act must contain

the following information as of the date of the request:

1. The amount of wages paid to and self-employment income derived

by the individual;

2. An estimate of the aggregate of the employee and self-employment

contributions of the individual for old-age, survivors', and disability

insurance benefits;

3. A separate estimate of the aggregate of the employee and self-

employment contributions of the individual for medicare hospital

insurance coverage; and

4. An estimate of the potential monthly retirement (old-age),

disability, dependents', and survivors' insurance benefits payable on

the individual's earnings record and a description of medicare hospital

insurance coverage.

We are carrying out this first phase, which is required by section

1143(a) of the Act and which we explained in the final rules published

November 23, 1992, in the Federal Register (57 FR 54917). In these

proposed rules, we explain how we will fulfill our obligations in the

second and third phases of section 1143.

The second phase of providing statements, as stated in section

1143(c)(1) of the Act, requires that by not later than September 30,

1995, we must furnish this statement to each ``eligible individual''

who has attained age 60 by October 1, 1994 (i.e., by the beginning of

fiscal year 1995), is not receiving benefits under title II of the Act,

and for whom we can determine a current mailing address by methods we

consider appropriate. We must also send this statement to each

``eligible individual'' who attains age 60 in fiscal years 1995 through

1999, i.e., October 1, 1994 through September 30, 1999, if the

individual is not receiving benefits under title II of the Act, and if

we can determine a current mailing address by methods we consider

appropriate. In the case of an individual who attains age 60 in fiscal

years 1995 through 1999, we will mail a statement to the individual in

the fiscal year in which he or she attains age 60. We will mail the

statement without requiring a request from the individual. We will also

advise individuals receiving these statements that the information in

our records will be updated annually and is available upon request.

The third phase of providing statements, as stated in section

1143(c)(2) of the Act, requires that beginning not later than October

1, 1999, we must provide this statement on an annual basis to each

``eligible individual'' who is not receiving benefits under title II

and for whom we can determine a current mailing address by methods we

consider appropriate. We must provide a statement without a request

from the individual and, unlike the second phase, regardless of whether

the eligible individual has attained age 60.

To implement the second phase of section 1143, we will use our

records of assigned social security account numbers to identify

eligible individuals who will attain age 60 by the appropriate times

and who are not receiving benefits under title II of the Act. We have

decided that the appropriate method now for determining an individual's

current mailing address is to obtain it from the individual taxpayer

files of the Internal Revenue Service (IRS). The IRS is authorized by

section 6103(m)(7) of the Internal Revenue Code (26 U.S.C. 6103(m)(7)),

as added by section 5111 of Public Law 101-508 (the Omnibus Budget

Reconciliation Act of 1990), to disclose this information to us for our

use in mailing the statements required by section 1143 of the Act. This

source of address information is readily available to us, i.e.,

electronically accessible, using social security numbers as

identifiers, and was clearly contemplated by Congress in the enactment

of section 6103(m)(7) of the Internal Revenue Code.

Because individuals who live in Puerto Rico, the Virgin Islands,

and Guam generally are not required to pay Federal income taxes, the

IRS does not have their addresses. We have arranged to use the

addresses from their local

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taxpayer records, which the tax agencies in these three entities will

provide to us.

In these proposed regulations, we state the circumstances under

which we will not send an unrequested statement. Those circumstances,

stated in proposed Sec. 404.812(b), are based on our judgment that

sending, or attempting to send, a statement to specified categories of

individuals would not reasonably be required under section 1143 of the

Act.

We will mail the statements throughout the fiscal year, rather than

in one mass mailing. This is an administratively effective and cost-

efficient method of handling the more than 6 million statements we will

mail in fiscal year 1995 and the nearly 2 million we expect to mail in

each fiscal year 1996 through 1999. The statements we send to eligible

individuals who attain age 60 during fiscal years 1995 through 1999 or

attain age 60 by the start of fiscal year 1995 will be mailed

throughout the fiscal year so that individuals will receive statements

in the fiscal year in which they qualify to receive one, as required by

section 1143.

To implement the third phase of section 1143, i.e., sending an

annual statement to eligible individuals who are not receiving benefits

under title II of the Act, we will follow essentially the same

procedures as those for the second phase of sending statements to

eligible individuals age 60 or older, except that we will send

statements to all eligible individuals, i.e., those age 25 and older.

In the final rules we published on November 23, 1992 (57 FR 54917),

we revised Sec. 404.810 to describe an individual's right to obtain a

statement of earnings and benefit estimate, how to request it, and the

information we need to comply with the request. In a new Sec. 404.811,

we listed the information that we will furnish in the statement of

earnings and benefit estimate. Further, we revised Sec. 422.125 so that

most of the rules on statements of earnings and benefit estimates are

now located in Subpart I of Part 404.

In these proposed regulations, we are revising Sec. 404.811 for

consistency with the new Sec. 404.812, which explains the statement we

will send without a request, as required by section 1143(c) of the Act.

We will also indicate whether the individual has the required credits

(quarters of coverage) to be eligible for each type of benefit, and the

ages at which various retirement amounts are potentially payable.

When individuals request statements, they are asked for information

about when they expect to retire, i.e., stop working, how much they

earned last year, and how much they expect to earn this year and in

future years up to retirement. In Sec. 404.811, we explain that if the

individual does not already have the required credits (quarters of

coverage) to be eligible to receive benefits, we may include up to

eight additional estimated credits (four per year maximum) based on the

requester's information about earnings for last year and this year that

are not yet on our records. In addition, we state that the benefit

estimate will be based partly on the information the requester provided

about his or her planned retirement age and current and future

earnings.

For the unrequested statements, we will not have information from

the individual. Instead, we will estimate the individual's recent and

future earnings based on his or her current social security record. In

Sec. 404.812, we explain that if there are earnings recorded in either

of the two years before the year in which the individual is selected to

get a statement, we will use the same earnings amount as that recorded

in the later of these two years to project earnings for the current

year and future years when we estimate the benefits. In addition, if

the individual does not already have the required credits (quarters of

coverage) to be eligible to receive benefits, we will use that last

recorded earnings amount to estimate up to eight additional credits

(four per year) for the last year and the current year. If there are no

earnings recorded in either of the 2 years preceding the year of

selection, we will not estimate any current and future earnings or

additional credits (quarters of coverage) for the individual.

In summary, both Secs. 404.811 and 404.812 list the information

that we will include in the revised statement format. In addition,

Sec. 404.812 explains who will be sent an unrequested statement, who

will not be sent an unrequested statement, and the selection and

mailing process we will use. We are also proposing to amend

Sec. 422.125 to conform it to the changes we have described for subpart

I of part 404.

Regulatory Procedures

Executive Order 12866

The Office of Management and Budget has reviewed these rules and

determined that they do not meet the criteria for a significant

regulatory action under E.O. 12866.

Regulatory Flexibility Act

We certify that these proposed regulations will not have a

significant economic impact on a substantial number of small entities

since these regulations affect only individuals. Therefore, a

regulatory flexibility analysis as provided in Pub. L. 96-354, the

Regulatory Flexibility Act, is not required.

Paperwork Reduction Act

These proposed regulations impose no additional reporting and

recordkeeping requirements subject to Office of Management and Budget

clearance.

(Catalog of Federal Domestic Assistance Program Nos. 93.802 Social

Security-Disability Insurance; 93.803 Social Security-Retirement

Insurance; 93.805 Social Security- Survivors Insurance; 93.773

Medicare-Hospital Insurance)

List of Subjects

20 CFR Part 404

Administrative practice and procedure; Blind; Disability benefits;

Old-Age, Survivors, and Disability Insurance; Reporting and

recordkeeping requirements; Social Security.

20 CFR Part 422

Administrative practice and procedure; Freedom of information;

Organization and functions (Government agencies); Social Security.

Dated: June 28, 1994.

Shirley Chater,

Commissioner of Social Security.

Approved: August 31, 1994.

Donna E. Shalala,

Secretary of Health and Human Services.

For the reasons set out in the preamble, we propose to amend

Subpart I of Part 404 of 20 CFR Chapter III and Subpart B of Part 422

of 20 CFR Chapter III as follows:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE

(1950- )

1. The authority citation for Subpart I of Part 404 continues to

read as follows:

Authority: Secs. 205(a), (c)(1), (c)(2)(A), (c)(4), (c)(5),

(c)(6), and (p), 1102 and 1143 of the Social Security Act; 42 U.S.C.

405(a), (c)(1), (c)(2)(A), (c)(4), (c)(5), (c)(6), and (p), 1302,

and 1320b-13.

2. Section 404.811 is revised to read as follows:

Sec. 404.811 The statement of earnings and benefit estimates you

requested.

(a) General. After receiving a request for a statement of earnings

and the information we need to comply with the request, we will provide

you or your authorized representative a statement of the earnings we

have credited to your record at the time of your request. With the

statement of earnings, we will include estimates of the benefits

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potentially payable on your record, unless you do not have the required

credits (quarters of coverage) for any kind of benefit(s). (However,

see paragraph (b)(3) of this section regarding the possibility of our

estimating up to eight additional credits on your record.) If we do not

provide a statement of earnings and an estimate of all the benefits

potentially payable, or any other information you requested, we will

explain why.

(b) Contents of statement of earnings and benefit estimate. The

statement of your earnings and benefit estimates will contain the

following information:

(1) Your social security taxed earnings as shown by our records as

of the date of your request;

(2) An estimate of the social security and medicare hospital

insurance taxes paid on your earnings (although we do not maintain tax

information);

(3) The number of credits, i.e., quarters of coverage, not

exceeding 40, you have for both social security and medicare hospital

insurance purposes, and the number you need to be eligible for social

security and also for medicare hospital insurance coverage. If you do

not already have the required credits (quarters of coverage) to be

eligible to receive social security benefits and medicare hospital

insurance coverage, we may include up to eight additional estimated

credits (four per year) based on the earnings you told us you had for

last year and this year that we have not yet entered on your record;

(4) A statement as to whether you meet the credits (quarters of

coverage) requirements, as described in subpart B of this part, for

each type of social security benefit when we prepare the benefit

estimates, and also whether you are eligible for medicare hospital

insurance coverage;

(5) Estimates of the monthly retirement (old-age), disability,

dependents' and survivors' insurance benefits potentially payable on

your record if you meet the credits (quarters of coverage)

requirements. The benefit estimates we send you will be based partly on

your stated earnings for last year (if not yet on your record), your

estimate of your earnings for the current year and for future years

before you plan to retire, and on the age at which you plan to retire.

The estimate will include the retirement (old-age) insurance benefits

you could receive at age 62 (or your current age if you are already

over age 62), at full retirement age (currently age 65 to 67, depending

on your year of birth) or at your current age if you are already over

full retirement age, and at age 70;

(6) A description of the coverage under the medicare program;

(7) A reminder of your right to request a correction of your

earnings record; and

(8) A remark that an annually updated statement is available on

request.

3. Section 404.812 is added to read as follows:

Sec. 404.812 Statement of earnings and benefit estimates sent without

request.

(a) Who will be sent a statement. Unless one of the conditions in

paragraph (b) of this section applies to you, we will send you, without

request, a statement of earnings and benefit estimates if:

(1) You have a social security account number;

(2) You have wages or net earnings from self-employment on your

social security record;

(3) You have attained age 60 or older by October 1, 1994; you

attain age 60 after October 1, 1994, but before October 1, 1999; or,

beginning October 1, 1999, you have attained age 25 or older;

(4) We can determine your current mailing address.

(b) Who will not be sent a statement. We will not send you an

unrequested statement if any of the following conditions apply:

(1) You do not meet one or more of the conditions of paragraph (a)

of this section;

(2) Our records contain a notation of your death;

(3) You are entitled to benefits under title II of the Act;

(4) We have already sent you a statement, based on your request, in

the fiscal year we selected you to receive an unrequested statement;

(5) We cannot obtain your address (see paragraph (c)(2) of this

section); or

(6) We are correcting your social security earnings record when we

select you to receive a statement of earnings and benefit estimates.

(c) The selection and mailing process. Subject to the provisions of

paragraphs (a) and (b) of this section, we will use the following

process for sending statements without requests:

(1) Selection. We will use our records of assigned social security

account numbers to identify individuals to whom we will send

statements.

(2) Addresses. If you are living in one of the 50 States, our

current procedure is to get your address from individual taxpayer files

of the Internal Revenue Service, as authorized by section 6103(m)(7) of

the Internal Revenue Code (26 U.S.C. 6103(m)(7)). If you live in Puerto

Rico, the Virgin Islands, or Guam, we will get your address from the

taxpayer records of the Territory in which you live.

(3) Age. If you have attained age 60 by October 1, 1994, we will

send you a statement on or before September 30, 1995. If you attain age

60 after October 1, 1994 but before October 1, 1999, we will send you a

statement in the fiscal year, i.e., October 1 through September 30, in

which you attain age 60. In either case, we will inform you that an

annually updated statement is available on request. Beginning October

1, 1999, we will send you a statement each year in which you are age 25

or older.

(4) Ineligible. If we do not send you a statement because one or

more conditions in paragraph (b) of this section apply when you are

selected, we will send a statement in the first appropriate fiscal year

thereafter in which you do qualify.

(5) Undeliverable. If the statement we send you is returned by the

Post Office as undeliverable, we will not remail it.

(d) Contents of statement of earnings and benefit estimates. To

prepare your statement and estimate your benefits, we will use the

earnings on our records. If there are earnings recorded for you in

either of the 2 years before the year in which you are selected to get

a statement, we will use the later of these earnings as your earnings

for the current year and future years when we estimate your benefits.

In addition, if you do not already have the required credits (quarters

of coverage) to be eligible to receive benefits, we will use that last

recorded earnings amount to estimate up to eight additional credits

(four per year) for last year and the current year if they are not yet

entered on your record. If there are no earnings entered on your record

in either of the two years preceding the year of selection, we will not

estimate current and future earnings or additional credits for you.

Your earnings and benefit estimate statement will contain the following

information:

(1) Your social security taxed earnings as shown by our records as

of the date we select you to receive a statement;

(2) An estimate of the social security and medicare hospital

insurance taxes paid on your earnings (although we do not maintain tax

information);

(3) The number of credits, i.e., quarters of coverage, not

exceeding 40 (as described in paragraph (d) of this section), that you

have for both social security and medicare hospital insurance purposes,

and the number you need to be eligible for social security benefits and

also for medicare hospital insurance coverage;

(4) A statement as to whether you meet the credit (quarters of

coverage) requirements, as described in subpart B of this part, for

each type of social security benefit when we prepare the

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benefit estimates, and also whether you are eligible for medicare

hospital insurance coverage;

(5) Estimates of the monthly retirement (old-age), disability,

dependents' and survivors' insurance benefits potentially payable on

your record if you meet the credits (quarters of coverage)

requirements. If you are age 50 or older, the estimates will include

the retirement (old-age) insurance benefits you could receive at age 62

(or your current age if you are already over age 62), at full

retirement age (currently age 65 to 67, depending on your year of

birth) or at your current age if you are already over full retirement

age, and at age 70. If you are under age 50, instead of estimates, we

may provide a general description of the benefits (including auxiliary

benefits) that are available upon retirement.

(6) A description of the coverage provided under the medicare

program;

(7) A reminder of your right to request a correction of your

earnings record; and

(8) A remark that an annually updated statement is available on

request.

PART 422--ORGANIZATION AND PROCEDURES

1. The authority citation for Subpart B of Part 422 continues to

read as follows:

Authority: Secs. 205, 1102, and 1143 of the Social Security Act;

42 U.S.C. 405, 1302, and 1320b-13.

2. Section 422.125 is amended by revising paragraphs (a) and (b) to

read as follows:

Sec. 422.125 Statement of earnings; resolving earnings discrepancies.

(a) Obtaining a statement of earnings and estimated benefits. An

individual may obtain a statement of the earnings on his earnings

record and an estimate of social security benefits potentially payable

on his record either by writing, calling, or visiting any social

security office, or by waiting until we send him one under the

procedure described in Sec. 404.812. An individual may request this

statement by completing the proper form or by otherwise providing the

information the Social Security Administration requires, as explained

in Sec. 404.810(b).

(b) Statement of earnings and estimated benefits. Upon receipt of

such a request or as required by section 1143(c) of the Social Security

Act, the Social Security Administration will provide the individual,

without charge, a statement of earnings and benefit estimate or an

earnings statement. See Secs. 404.810ff concerning the information

contained in these statements.

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[FR Doc. 95-1309 Filed 1-18-95; 8:45 am]

BILLING CODE 4190-29-P