[Federal Register Volume 60, Number 12 (Thursday, January 19, 1995)]
[Proposed Rules]
[Pages 3787-3790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1309]



=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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 

[[Page 3788]]
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 

[[Page 3789]]
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 

[[Page 3790]]
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.
* * * * *
[FR Doc. 95-1309 Filed 1-18-95; 8:45 am]
BILLING CODE 4190-29-P