Retirement Security:
The Social Security Notch Issue
T-HRD-88-15, Apr 22, 1988
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GAO discussed the social security benefits disparity, known as the notch, specifically: (1) how the notch arose; (2) how it affects beneficiaries; and (3) alternatives for financing legislation to address the problem. GAO found that: (1) Congress amended the Social Security Act in 1977 to alter the social security benefits computation formula; (2) under the new formula, retirees born in or after 1917 receive smaller benefit amounts than those born before then; (3) rapid inflation in the late 1970's and early 1980's caused the benefits of the pre-notch group to rise faster and widened the gap between the two groups' benefits; and (4) legislation to award higher benefits to the notch group would be costly and would affect both the short- and long-term status of the trust fund. GAO believes that Congress may wish to: (1) keep the effect of notch legislation on current and projected trust fund balances as neutral as possible; (2) evaluate the resources and time required to implement the legislation; and (3) retain the current 5-year transition period.
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SSA Representative Payee Program
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SSA Representative Payee Program
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Social Security Administration
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Federal Retirement Processing
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Social Security Administration
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Social Security Administration
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Private Pensions
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401(K) Plans
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Private Pensions
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Retirement Security
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