Social Security Updates Pay Records, Adds $84 Billion

The Social Security Administration disclosed Thursday that it has added $84 billion to workers’ wage records, increasing potential retirement benefits for 13 million workers who did not get full credit for their earnings between 1978 and 1987.

The additional earnings come from clearing up discrepancies between separate reports by businesses to the Internal Revenue Service and the Social Security Administration.

“Workingmen and -women in this country have a right to know that each dollar they earn will be accurately credited to their Social Security records,” Social Security Commissioner Gwendolyn S. King said. “It is simply unacceptable for anyone to receive less than their entitled Social Security benefits because their wages were, at some point in their career, improperly recorded,” she told a news conference.

Companies send the IRS quarterly reports on their workers’ total earnings and taxes withheld. In addition, the firms send the Social Security Administration annual reports for each individual worker. Because some companies disappear each year through mergers, buyouts and bankruptcies, the IRS and Social Security totals frequently do not match. For about 1 million workers a year, more earnings are reported to the IRS than are credited by Social Security.

A massive backlog of cases of under-reported income developed in recent years, drawing criticism from the General Accounting Office and members of Congress.

Social Security has become more aggressive in contacting businesses to clear up the backlog. About 60% of the backlog of cases between 1978 and 1983, which totaled about 9.7 million workers, has been resolved, with workers getting additional credit for their earnings, Norman Goldstein, Social Security’s chief financial officer, said.

Goldstein predicted that most of the remaining cases--nearly 4 million--will be resolved when individual workers ask Social Security for records of their past earnings and make corrections in mistaken reports.

Workers can request a Personal Earnings and Benefit Estimate statement by calling the local Social Security office or a toll-free number: 1-800-234-5772. The errors can also be corrected when workers apply for retirement benefits.

Pension benefits are calculated through a complex formula pegged to a worker’s highest 30 years of earnings. Social Security officials had no estimates of the amount of increased benefits now available to those workers whose records were corrected.

Corrections in the backlog of cases from 1984 through 1987 should be completed by October of next year, according to Goldstein. The IRS is preparing a regulation that would require businesses to compare their IRS and Social Security reports and clear up discrepancies.

Social Security is also beginning a campaign to persuade businesses to send better annual reports. King said that her agency has developed voluntary standards.