Women Seen Losing in Social Security Plan

Some women could lose as much as 6% of their retirement benefits under Social Security reform plans that will be proposed early next year by a special federal advisory council, according to a dissenting council member.

The Advisory Council on Social Security is expected to offer several competing plans for dealing with Social Security’s financial crunch, but all propose that benefit levels be based on average earnings of each recipient during 38 years of work, up from the current figure of 35.

This would hurt more women than men because many women take several years off from work to be at home with young children, Edith U. Fierst, a council member, noted. As of now, only 15% of women are in the work force for at least 38 years, compared with 57% of men, Fierst said in a statement that will appear in the advisory council’s final report.

Much of the public discussion surrounding the advisory council’s work has focused on the pros and cons of “privatization”--whether workers should be allowed to divert some of their Social Security payroll taxes into individual investment accounts.

However, Fierst said, she believes that the special impact of Social Security for women should receive more attention in discussing the future of the massive program, which has 42 million beneficiaries. The problems of women and Social Security should be debated as a “national issue” but are being ignored in most of the council’s deliberations, she said.

The proposal to increase the number of working years used for calculating the size of retirement checks could force women to make the painful choice between work and children, according to Fierst, a Washington lawyer.

“It would be unfortunate if mothers, pressured by fear of poverty in old age, gave up opportunities to stay at home with young children,” Fierst wrote in her statement, made available to The Times.

“Like many other Americans, I believe the option of child care provided by the mother, especially in early childhood years, is a choice families should be able to make,” she wrote.

“In an ideal world the father of her children would take care of the mother’s retirement needs when the couple jointly decide that she should provide home care for their children,” Fierst said.

Instead, some fathers may be absent, some women may get divorced and many women lose the right to share in their husband’s other assets, she noted.

“Considering how often women have to rely on their own earnings, we must be careful not to recommend changes in Social Security that will reduce the benefits women earned themselves,” Fierst said in her statement.

Using a base of 38 working years, Fierst calculated the reduction in benefits for all workers, men as well as women, who would fall short of that employment mark. The typical reduction, compared with the current system, would be 3% for men and 3.9% for women, with some women suffering a benefit loss as high as 6% because of absences from the work force for childbirths and other family considerations.

Even in the year 2020, when baby boomers are in the midst of retirement, only 29% of women will have met the 38-year standard, compared with about 58% for men, Fierst estimated.

Another issue of pressing importance for women is the need to increase the size of survivor’s benefits, according to Fierst.

A person can receive retirement benefits based on his or her work record or as the spouse of a worker. A working woman cannot get both benefits--she receives whichever is larger, the benefit based on her own work record or an amount equal to half the husband’s benefit.

“Survivor benefits must be increased to alleviate poverty among elderly widows, today’s and those of the future, since neither group is likely to benefit from the increasing employment of married women,” Fierst said in her statement.

Government statistics show that the poorest group of elderly Americans are aged widows, who have a poverty rate of 40% and more.

“Despite the sharp increase in working women . . . the figures on poverty among widows and widowers have not changed much and are unlikely to do so in the future,” she wrote.