[Federal Register Volume 61, Number 80 (Wednesday, April 24, 1996)]
[Rules and Regulations]
[Pages 18075-18078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9791]



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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 422

RIN 0960-AD74


Statement of Earnings and Benefit Estimates

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: We are amending 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 final rules, we will provide the statement without a 
request to an eligible individual, as required by section 1143(c) of 
the Act.

EFFECTIVE DATE: These rules are effective April 24, 1996.

FOR FURTHER INFORMATION CONTACT: Jack Schanberger, Legal Assistant, 3-
B-1 Operations Building, 6401 Security Boulevard, Baltimore, MD 21235, 
(410) 965-8471. For information on eligibility or claiming benefits, 
call our national toll-free number 1-800-772-1213.

SUPPLEMENTARY INFORMATION: Section 1143 of the Act requires the 
Commissioner of Social Security (the Commissioner) 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 
final 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 
either in the fiscal year in which he or she attains age 60 or in an 
earlier fiscal year, as resources allow. 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. In 
February 1995, we began mailing the statements to individuals who 
attained age 60 by October 1, 1994.
    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 eligible individual and, unlike the second phase, regardless 
of whether the eligible individual has attained age 60.
    To implement the second and third phases of section 1143, we are 
using our records of assigned social security account numbers to 
identify eligible individuals 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 taxpayer records, which the tax agencies in 
these three entities will provide to us.
    In these final regulations, we state the circumstances under which 
we will not send an unrequested statement. Those circumstances, stated 
in the new Sec. 404.812(b), are based on our judgment that sending, or 
attempting to send, a statement to specified categories of individuals 
is not reasonably required under section 1143 of the Act.
    We will mail the statements on a flow basis 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 mailed in fiscal year 1995 and the 10 to 120 million we 
expect to mail annually beginning in 1996. As resources allow, we may 
mail statements to some eligible individuals, who attain age 60 in 
fiscal years 1996 through 1999, even before the fiscal year in which 
they attain age 60.

[[Page 18076]]

    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 estimates, 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 estimates. 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 final 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 
estimates 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 two 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 amending Sec. 422.125 to 
conform it to the changes we have described for subpart I of part 404.
    On January 19, 1995, we published proposed rules in the Federal 
Register at 60 FR 3787. We received no comments. However, as explained 
previously, we have revised these final rules to provide that we may 
mail statements to some individuals even before the year in which they 
attain age 60. These revisions will be advantageous to eligible 
individuals and are consistent with the Act.

Regulatory Procedures

    Since these rules interpret the statute, and provide statements of 
policy, the 30-day delay in effectuating rules, as provided in 5 U.S.C. 
553(d), does not apply.

Executive Order 12866

    The Office of Management and Budget has reviewed these rules and 
determined that they meet the criteria for a significant regulatory 
action under Executive Order 12866.

Regulatory Flexibility Act

    We certify that these final 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 Public Law 96-354, the Regulatory 
Flexibility Act, is not required.

Paperwork Reduction Act

    These final regulations impose no additional reporting and 
recordkeeping requirements subject to Office of Management and Budget 
clearance.

(Catalog of Federal Domestic Assistance Program Nos. 96.001 Social 
Security-Disability Insurance; 96.002 Social Security-Retirement 
Insurance; 96.004 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: December 20, 1995.
Shirley Chater,
Commissioner of Social Security.

    For the reasons set out in the preamble, we are amending subpart I 
of part 404 and subpart B of part 422 of 20 CFR chapter III as follows:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-    )

Subpart I--[Amended]

    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), 702(a)(5), 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), 
902(a)(5), 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 
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 estimates. 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 such 
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

[[Page 18077]]

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 25 or older, as explained in paragraph 
(c)(3) of this section; and
    (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 or the 
District of Columbia, 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 place 
in which you live.
    (3) Age. If you have attained age 60 on or before September 30, 
1995, we will send you a statement by that date. If you attain age 60 
on or after October 1, 1995 but no later than September 30, 1999, we 
will send you a statement in the fiscal year in which you attain age 
60, or in an earlier year as resources allow. Also, 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 in our records. If there are earnings recorded for you in 
either of the two 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 estimates 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 such 
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 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.

[[Page 18078]]

PART 422--ORGANIZATION AND PROCEDURES

Subpart B--[Amended]

    1. The authority citation for subpart B of part 422 continues to 
read as follows:

    Authority: Secs. 205, 232, 702(a)(5), 1131, and 1143 of the 
Social Security Act (42 U.S.C. 405, 432, 902(a)(5), 1320b-1 and 
1320b-13.)

    2. Section 422.125 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec. 422.125  Statements 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 of this chapter. 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) of this chapter.
    (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 estimates or an 
earnings statement. See Secs. 404.811 through 404.812 of this chapter 
concerning the information contained in these statements.
* * * * *
[FR Doc. 96-9791 Filed 4-23-96; 8:45 am]
BILLING CODE 4190-29-P