SSA Benefit Statements:

Well Received by the Public But Difficult to Comprehend

HEHS-97-19: Published: Dec 5, 1996. Publicly Released: Dec 5, 1996.

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Cynthia Maher Fagnoni
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Pursuant to a congressional request, GAO reviewed the Social Security Administration's (SSA) overall progress in issuing the Personal Earnings and Benefits Estimate Statement (PEBES), focusing on: (1) whether the PEBES benefit estimates are reasonable; (2) what SSA has done to improve the statement; (3) the extent to which the statement communicates its goals and information clearly; (4) SSA plans to revise the statement further; and (5) actions that GAO believes will improve the statement.

GAO found that: (1) the methods and assumptions used by SSA for estimating future retirement benefits are consistent with those used by private and public pension plan sponsors; (2) the public feels that the PEBES can be a valuable tool for retirement planning; (3) although SSA has taken steps to improve PEBES, it fails to communicate clearly the complex information readers need to understand SSA programs and benefits, partly because the design and organization of the statement make it difficult for the reader to locate and understand important information; (4) readers are confused by several important explanations, such as who in their family is eligible for benefits; (5) SSA is considering redesigning PEBES, but only if the redesign results in reduced printing costs; (6) this approach overlooks hidden costs, such as the workload generated by public inquiries when people do not understand the statement, and the possibility that a poorly designed statement will undermine, rather than improve, public confidence; and (7) active leadership from SSA senior managers will be needed to ensure the success of this important initiative.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: SSA has significantly changed the 1999 PEBES (for FY 2000 mailings), presenting the information about its program and benefits more clearly. It is now called the "Social Security Statement" and has been reduced from six to four pages. Overall, the statement reads more smoothly. It provides condensed and simplified explanations, has a more reader-friendly layout, makes better use of highlighting to indicate key points, and refers to other agency pamphlets and brochures for additional information. SSA pre-tested the statement and found that readers liked it more than the previous one.

    Recommendation: In order for the PEBES to better convey information to the public about SSA programs and benefits, SSA should revise the current statement to improve its layout and design and to simplify explanations.

    Agency Affected: Social Security Administration

  2. Status: Closed - Implemented

    Comments: SSA held focus groups to gather input on the statement in late 1997. It then developed and tested through a mail survey four options for a new PEBES format and design. Based on public input, SSA selected the new "Social Security Statement," which provides condensed and simpler explanations in a four-page layout. Per SSA, the readers surveyed like the new statement better than the previous one.

    Recommendation: SSA should also evaluate and test alternative formats for communicating the information presented in the PEBES and the accompanying Commissioner's message.

    Agency Affected: Social Security Administration


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