Proposed Changes in Social Security Rules Concerning More Frequent Deposits of Social Security Contributions by States

The Social Security Administration's "Notice of Proposed Rulemaking" would increase the frequency with which States and interstate instrumentalities must deposit social security contributions on wages and salaries paid to covered employees from quarterly to monthly. The proposal would result in substantial interest earnings to the Social Security Trust Funds, but it may not go far enough to maximize earnings. The proposal includes a plan for immediate implementation no less than 18 months after the final rules are published and five options for phasing in the rules. Immediate implementation would be more desirable than any of the options. The proposed rules seem ambiquous as to the frequency of required reporting by States on contributions for employees' earnings and should be clarified.