Social Security is already facing a financial crisis as more people rely on payments and fewer taxpayers pay into the program. Now it may soon face a people crisis.
The Social Security Administration is ill-prepared to deal with the large numbers of its workers who are planning to retire, even as the agency's workload is increasing, according to a new Government Accountability Office report that warns that one of the consequences could be an increase in erroneous retirement and disability payments.
“Over the next decade SSA’s ongoing retirement wave, coupled with a hiring freeze that has been in place since 2010, will create significant management challenges for the agency in meeting its projected growth in work demands,” the GAO said. “This loss of knowledge and expertise could result in increasing workloads, backlogs and improper payments.”
The number of Americans receiving Social Security benefits keeps rising. In 2012, 62 million people received more than $826 billion in benefits, according to SSA data. By 2025, projections show that 85 million people will be receiving Social Security. During the same time period, between 20,000 to 30,000 SSA employees are expected to retire, leaving the agency with a serious workforce shortage, GAO said.
The retirements also bring a loss in expertise and knowledge that will further hamper the agency, GAO cautioned. It usually takes two to three years for new hires to become “fully proficient,” investigators said, but in response to budget cuts the SSA has also been curtailing its training.
And that has led to some inexperienced employees being put in supervisory roles, GAO said. Several SSA officials told federal investigators that these inexperienced supervisors would often make “poor decisions.”
The unsettled conditions have the potential to create a perfect storm.
“According to SSA officials, the pressure to keep up with workload demands in the face of staff losses and the loss of leadership development programs will likely negatively affect employee morale,” the GAO said. “Some officials also said low morale and a feeling of being stretched too thin are hastening retirement among those who are eligible.”
The SSA has little long-term planning to address the issue, GAO added. The agency hasn’t had an individual or group dedicated to strategic planning since 2008, investigators said, and the five-year plan it drew up only focuses on current initiatives, not on long-term thinking. Its latest “succession plan” on how responsibilities will be transferred from retiring employees to other workers and new hires was written in 2006, despite the fact SSA “experienced significant changes since that time,” GAO said.
The SSA said it agreed with the GAO’s evaluation and is working to fix many of its ongoing challenges. The agency appointed a Chief Strategic Officer to focus on long-term planning and an update to the succession plan is expected later this year. SSA said it is also looking to close some field offices since many services are now available over the internet.
“We must continue to respond to the fiscal realities, which means that we cannot do business as we always have,” a response from the SSA said.
There are daunting challenges facing the agency. Already surpassing 700,000 in 2012, the number of disability claims the agency must process is projected to go up another 100,000 by 2025.
And SSA is pouring millions into updating its computer systems and offering more services online. The GAO noted that many SSA computer programs use “COBOL, which is one of the oldest computer programming languages.”
Once again, retirements could leave the agency without people who can change or update some of its systems and programs in the antiquated programing language, GAO said. SSA officials disagreed, saying that currently the costs to upgrade to a newer programming outweigh the benefits, and that its computer systems are “sufficient for their needs and point out that it is still used by other businesses.”
Investigators said that despite ongoing uncertainty over the federal budget, it is critical the SSA address its problems.
“Without prompt action to address these challenges, the agency jeopardizes its ability to provide quality service to the public,” GAO said. “Given its budget constraints, SSA needs a solid, long-term strategy to guide decisions about how to best leverage its limited resources.”