Detailed Information on the
Social Security Old-Age and Survivors Insurance Assessment

Educating the American people on the solvency issues facing the OASI program and working with the Administration and Congress on legislative reform proposals necessary to achieve long-term solvency.

Updating the tactical plan for electronic services to include IT and non-IT projects that will be developed and implemented.

Developing new automated techniques to detect and correct errors in name/Social Security Number matching.

Measure: Percent of individuals who do business with SSA rating the overall service as "excellent," "very good," or "good."

Explanation:Satisfaction ratings are derived from the Office of Quality Performance's annual surveys of 800 number callers and visitors, and hearings office visitors. Percent of respondents surveyed by our Office of Quality Performance who rate overall service as "good," "very good," or "excellent" on a 6-point scale ranging from "excellent," to "very poor" divided by the total number of respondents to that question. This measure directly supports our strategic goals relating to service. We continue to make technological advancements, both in external services made available to the public through the Internet and on the telephone, and in internal applications used by employees, which help fulfill the program's purpose. The satisfaction ratings are a proxy for how well we fulfill the program's purpose.

Measure: Through changes in the law, achieve and maintain sustainable solvency such that today's and tomorrow's workers can expect to receive the benefits scheduled in law as reformed rather than as determined by Trust Fund solvency, while continuing to protect those who depend on Social Security the most.

Explanation:In its 2006 report, the Social Security Board of Trustees projected that the OASDI program will begin experiencing cash flow deficits in 2017, and in 2040 will be unable to make all scheduled benefit payments on a timely basis, under the Trustees' intermediate assumptions. Should that outcome be realized, beneficiaries will realize a 26 percent reduction in benefits in 2040, with that reduction gradually increasing to 30 percent by 2080. Alternatively, payroll taxes would need to be increased to 16.65 percent in 2040 and continue rising to 17.78 percent in 2080. The President has identified ensuring Social Security solvency as a key domestic policy priority and nearly a dozen bills have been introduced in Congress recently to deal with the program's solvency problems. Sustainable solvency, as defined on page 205 in the 2006 Social Security Trustee's Report, "is achieved when the program has positive trust fund ratios throughout the 75-year projection period and these ratios are stable or rising at the end of the period." Attainment of this long-term performance measure will be dependent on legislative reform. While the Social Security Administration alone cannot fix the program's solvency problems, SSA provides research and analytical support to Administration policymakers and Congress as they consider alternative approaches to achieving sustainable solvency for the OASDI program. The Office of the Chief Actuary provides cost memoranda in response to formal requests to score solvency reform proposals and the Office of Policy analyzes distributional outcomes associated with such proposals. Since Social Security solvency is a significant public policy issue, with direct implications for all covered workers, beneficiaries, and their families, SSA also provides public education on the short-term and long-term financial outlook for the OASDI program and on the expected effects of various reform proposals.

Measure: Cumulative productivity improvement for Retirement and Survivors Insurance claims (compared to FY 2005)

Explanation:Retirement and Survivors Insurance (RSI) claims are calculated at the Agency level and the percent increase will be calculated using fiscal year 2005 (571 claims processed per workyear) as the base. A 16 percent increase from this base means that the goal in 2013 is for us to process 662 claims per workyear. If we are able to process more cases per workyear, we do more work with the same input, which improves efficiency. The RSI claims productivity per workyear number will be derived from SSA's Workload Trend report and includes all retirement benefit claims, survivors benefit claims, and initial claims for Medicare.

Measure: Average Agency productivity

Explanation:We measure Agency productivity by comparing the total number of SSA and Disability Determination Services (DDS) workyears that would have been expended to process current year SSA-level workloads at the prior year's rates of production to the actual SSA and DDS workyear totals expended. We calculate the average annual productivity using a five-year rolling average.

Measure: Percentage of Old-Age, Survivors, and Disability Insurance payments free of overpayment (OP) errors.

Explanation:This measure calculates the percentage of Old-Age and Survivors Insurance benefit payments free from overpayments. This payment accuracy rate is determined by an annual review of a statistically valid sample of the beneficiary rolls. The overpayment error rate is computed by dividing the overpayment dollars by the total dollars paid for the fiscal year. The overpayment accuracy rate is calculated as 100% minus this overpayment error rate. A separate performance measure calculates the underpayment accuracy rate.

Measure: Percentage of Old-Age, Survivors, and Disability Insurance payments free of underpayment (UP) errors.

Explanation:This underpayment accuracy rate is determined by an annual review of a statistically valid sample of the beneficiary rolls. The underpayments detected from the review are expressed as a percentage of total outlays paid for the fiscal year to obtain the underpayment error rate. The underpayment accuracy rate is calculated as 100% minus this underpayment error rate. A separate performance measure calculates the percentage of payments that are free from overpayments.

Measure: Percent of Retirement and Survivor Insurance (RSI) claims receipts processed up to the budgeted level.

Explanation:This measure compares the number of initial retirement, survivors, and Medicare claims that we process to the number of initial retirement, survivors, and Medicare claims received up to the budgeted level. The budgeted level is the projected number of claims to be received in the fiscal year, at the time the budget is determined. Although we did not realize the number of RSI claims projected, we did process all of the RSI claims received, which is a significant increase over 2005 and allowed the program to maintain acceptable processing times. Each year we project the number of RSI claims we expect to receive and subsequently process. The realization of this projection is dependent upon the number of RSI claims actually received each year. We process virtually all of the RSI claims we receive. Beginning in 2007, we altered the goal to become more outcome oriented, reflecting that we will process all of the claims we receive. This is a new measure starting in 2007. This measure includes claims processed in the Regional Offices, Field Offices, Immediate Claims Taking Units, and Office of Central Operations. The claims include totalization claims.

Measure: Issue an annual SSA-initiated Social Security Statement to eligible individuals age 25 and older.

Explanation:As required by law, SSA issues annual Social Security Statements to all eligible individuals (SSN holders age 25 and older who are not yet in benefit status and for whom SSA can determine a current mailing address). The Statement contains information about Social Security benefit programs, financing facts, and provides personal benefit estimates.

Is the program purpose clear?

Explanation: Social Security was designed as the foundation on which individuals could build a secure retirement. The traditional model of retirement income envisions that retirees would supplement Social Security benefits with income from employer-sponsored pensions and their personal savings.

The Old-Age and Survivors Insurance (OASI) program was established in 1935 as part of the Social Security Act (Public Law 74-271), in order "To provide for the general welfare by establishing a system of Federal old-age benefits??." Since then, the program's purpose has remained largely unchanged. Subsequent amendments expanded entitlement to auxiliaries of insured workers: wives and children under age 18 (1939), husbands (1950), disabled children age 18 and over (1956), students age 18 to 21 (1965 though phased out in 1981), divorced wives (1965), and divorced husbands (1983).

Evidence:
The Social Security Act, http://www.ssa.gov/OP_Home/ssact/title00/0000.htm.

Munnell, Alicia H. and Soto, Mauricio. 2005. "How Much Pre-Retirement Income Does Social Security Replace?," http://www.bc.edu/crr/ib_36.shtml, page 2.

House Report 76-728, Report by the Committee on Ways and Means to Accompany H.R. 6635, June 2, 1939 (1939 amendments).

Does the program address a specific and existing problem, interest, or need?

Explanation: The purpose of the Old-Age and Survivors Insurance (OASI) program is to provide monthly income to aged insured individuals, their dependents, and also survivors of insured individuals. The Great Depression triggered a crisis in the nation's economic life. It was against this backdrop that the Social Security Act emerged. In the U.S. retirement income system, Social Security is the single most important source for most people. It provides a basic level of income, which individuals may choose to augment through personal or employer-sponsored retirement savings.

Social Security continues to be "America's Family Protection Plan." As of the end of fiscal year 2005, the OASI program provided benefits to approximately 33 million retired beneficiaries and their dependents and to approximately 7 million survivors of deceased workers. Younger workers and their families receive valuable survivor's insurance protection. About 97 percent of persons aged 20-49 who worked in Social Security-covered employment in 2004 have acquired survivorship protection for their children under age 18 and surviving spouses caring for children under age 16. For all persons age 65 or older in calendar year 2004, 92 percent were receiving OASI benefits.

Evidence:
Office of the Actuary Fact Sheet on OASDI, January 2006, http://www.ssa.gov/OACT/FACTS/fs2005_12.pdf.

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, page 9.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: While there are other private or governmental programs that provide some benefits upon retirement or death (e.g., annuities, pensions, insurance), the Old-Age and Survivors Insurance (OASI) program is the only universal program that provides a safety net for covered workers who retire, their dependents, and/or their survivors. The intent of the OASI program is to complement retiree's assets as well as private and government pensions they may have. However, in 2003 only 30 percent of all retirees received income from a private pension.

Today, approximately 50 percent of the private sector workforce is covered by a private pension. Over the last decade, those pensions have increasingly changed from being defined benefit plans (employer-sponsored retirement plans for which retirement benefits are based on a formula indicating the exact benefit one can expect upon retiring) to defined contribution plans (employer-sponsored retirement plans under which contributions are made by the employer, employee, or both, to individual member accounts to generate funds for distribution to the member at retirement). The U.S. Government Accountability Office notes that under defined contribution plans, "workers face the potential of both greater return and greater risk." About 96 percent of workers in paid employment and self-employment are covered or eligible for coverage under Social Security.

Evidence:
The Social Security Act, Section 202, http://www.ssa.gov/OP_Home/ssact/title02/0202.htm, provides for the specific types of OASI benefits.

Fast Facts and Figures About Social Security, 2005, http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2005/fast_facts05.pdf, page 5.

Employee Benefit Research Institute, Fast Facts #16, February 3, 2006, http://www.ebri.org/pdf/PR_728_3Feb06.pdf.

GAO testimony before the Special Committee on Aging, U.S. Senate, February 3, 2005, http://www.gao.gov/new.items/d05303t.pdf, page 21.

Office of the Actuary Fact Sheet on OASDI, January 2006, http://www.ssa.gov/OACT/FACTS/index.html.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The Old-Age and Survivors Insurance (OASI) program's long-term financial shortfall presents a major challenge to the program's effectiveness over the long-term. Each year, the Social Security Board of Trustees reports to the Congress on the financial and actuarial status of the OASI and Disability Insurance (DI) Trust Funds. In the 2006 report (the most recently available at the time this report was prepared), the short-range actuarial projections (2006-2015) under the intermediate assumptions showed the OASI program to meet the short-term test for financial adequacy. (Generally, the Trustees focus on the combined OASI and DI trust funds, which will be done in the rest of this discussion.) In the 2006 report, the long-range projections (over the next 75 years) showed, under the intermediate assumptions, that the program will begin experiencing cash-flow deficits in 2017 and be unable to meet all scheduled benefit payments in 2040. The report states that, in 2040 under these assumptions, present tax rates would only be sufficient to pay 74% of scheduled benefits and 70% of scheduled benefits in 2080. In the report's conclusion, the Trustees wrote: "The projected trust fund deficits should be addressed in a timely way to allow for a gradual phasing in of the necessary changes and to provide advance notice to workers. The sooner adjustments are made the smaller and less abrupt they will have to be. Social Security plays a critical role in the lives of this year's 49 million beneficiaries, and 162 million covered workers and their families." With informed discussion, creative thinking, and timely legislative action, Social Security will continue to protect future generations.

The Comptroller General of the United States, in testimony before the Special Committee on Aging, U.S. Senate, February 3, 2005, stated that "...Social Security has always been a largely pay-as-you-go system. This means that the system's financial condition is directly affected by the relative size of the populations of covered workers and beneficiaries. Historically, this relationship has been favorable." The Comptroller General continued by stating, "Over the long term, as the baby boom generation retires and as Americans continue to live longer and have fewer children, Social Security's financing shortfall presents a major program solvency and sustainability challenge that is growing as time passes."

The Social Security Administration (SSA) remains actively involved in educating the American people on the solvency issues facing the OASI program and in working with the Administration and Congress on proposals to address these solvency issues.

To date, no consensus has been reached on a set of reforms that would achieve sustainable solvency for the OASDI program. Ensuring long term solvency will require legislative action by Congress and the President. While SSA certainly remains committed to assisting in that effort to ensure solvency, the power and authority to address the problem through passage of legislation does not rest with SSA.

It is important to note that the OASI program operates extremely efficiently: total administrative costs are less than 1% of total program outlays. OASI payment accuracy has consistently been over 99.5% for each of the last 5 years. Increased electronic data exchanges with employers reporting wages, interfaces with the Internal Revenue Service, and verifications of citizenship with the U.S. Citizenship and Immigration Services are examples of initiatives that promote program effectiveness and efficiency.

For nearly 70 years, Social Security has provided a foundation of financial protection, helping the great majority of Americans to retire with dignity and without fear of poverty or reliance on others. It has also developed into the most important program to prevent families from falling into poverty upon the sudden and often unexpected loss of income due to a worker's death or disability.

Evidence:
Government Accountability Office testimony before the Special Committee on Aging, U.S. Senate, February 3, 2005, http://www.gao.gov/new.items/d05303t.pdf, page 4.

The 2006 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, May 2006, http://www.ssa.gov/OACT/TR/TR06/tr06.pdf, pages 7-17.

Long Range Solvency Proposals, http://www.ssa.gov/OACT/solvency/index.html.

"Frequently Asked Questions About Social Security's Future," http://www.ssa.gov/qa.htm.

Government Accountability Office testimony before the Special Committee on Aging, U.S. Senate, February 3, 2005, http://www.gao.gov/new.items/d05303t.pdf, page 4.

Title II Payment Accuracy (Stewardship) Reports for FY 2000-FY 2004.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The Old-Age and Survivors Insurance (OASI) program provides near universal coverage for retirement and survivors' benefits. The OASI program is the foundation upon which other income security programs are built. OASI does not duplicate these other programs.

As of the end of fiscal year 2005, the OASI program provided benefits to approximately 33 million retired beneficiaries and their dependents and to approximately 7 million survivors of deceased workers. Administrative costs are less than 1 percent for this program - a very efficient targeting of program resources to the actual beneficiaries. According to the Government Accountability Office (GAO), "Social Security is an important and successful social insurance program that affects virtually every American family." GAO also stated, "Social Security is the foundation of the nation's retirement income system, helping to protect the vast majority of American workers and their families from poverty in old age. The program has been highly effective at reducing the incidence of poverty among the elderly, and the survivor benefits have been critical to the financial well being of millions of others."

The OASI program purpose is also demonstrated by its positive influence on the poverty rate for aged people. The earliest census data available shows that in 1959, the poverty rate for all people age 65 and older was 35.2 percent. OASI benefit payments, as well as pensions, personal savings, the Supplemental Security Income program, Medicare, Medicaid, and other government programs have all helped reduce this figure for beneficiaries to 8.4 percent for 2003.

Over the 5-year period from FYs 2000-2004, of a total of over $1.9 trillion paid to Old-Age and Survivors Insurance beneficiaries, only $2.1 billion was overpaid (0.1 percent of outlays) and $2.1 billion was underpaid (0.1 percent of outlays).

Evidence:
Government Accountability Office testimony before the Special Committee on Aging, U.S. Senate, February 3, 2005, http://www.gao.gov/new.items/d05303t.pdf, page 1.

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, page 9.

Annual Statistical Supplement, 2005 - Highlights and Trends, http://www.socialsecurity.gov/policy/docs/statcomps/supplement/2005/highlights.html.

Current Population Survey, http://www.census.gov/hhes/www/poverty/histpov/hstpov3.html - indicates percent of elderly living in poverty.

SSA FY 2005 President's Budget, http://www.ssa.gov/budget/FactCard2005.pdf.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The Social Security Administration (SSA) has goals that emphasize service delivery, such as customer satisfaction and productivity in processing claims as well as a goal focused on the long-term solvency of the program.

In its 2006 report, the Social Security Board of Trustees projected that the OASDI program will begin experiencing cash flow deficits in 2017, and in 2040 will be unable to make all scheduled benefit payments on a timely basis, under the Trustees' intermediate assumptions. Should that outcome be realized, SSA will no longer be able to make all scheduled OASI benefit payments on a timely basis and the program's ability to meet its purpose will be compromised. The outcome measure "Through changes in the law, achieve and maintain sustainable solvency such that today's and tomorrow's workers can expect to achieve the benefits scheduled in law as reformed rather than as determined by Trust Fund solvency, while continuing to protect those who depend on Social Security the most" is intended to address the program's long-term solvency issues before they affect beneficiaries. While attainment of the measure would be dependent upon legislative reform, efforts that SSA undertakes to achieve this goal include providing policymakers with complete, timely information regarding proposals for achieving sustainable solvency for the OASDI program.

Service is also critical to fulfilling the program's purpose. The service measure is tied to the result of periodic surveys of individuals who do business with SSA and rate the overall level of service they received. As the baby boomers retire, SSA will be overcoming a retirement wave of its own workforce, creating additional challenges for SSA to maintain quality service. In preparation for this, SSA continues to make technological advancements, both in external services made available to the public through the Internet and on the telephone, and in internal applications used by employees. The service measure is tied to the result of periodic surveys of individuals who do business with SSA and rate the overall level of service they received.

An additional measure, Retirement and Survivors Insurance (RSI) PPWY (case production per workyear), represents the average number of claims a person can process in one year. RSI claims include claims for Medicare hospital insurance. Because the full retirement age has been incrementally raised from 65 to 67, the number of these Medicare-only claims is increasing. The Internet Social Security Benefit Application allows the public to apply for Social Security retirement, spouse, and disability benefits online. In fiscal year 2005, approximately 7 percent of the RSI claims processed by the Agency last year were completed on the website. Implementation of Title II Redesign (the further automation of claims and post-entitlement processing) resulted in productivity savings.

Evidence:
SSA's Performance and Accountability Report for fiscal year 2005, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 9, 83 and 103.

Social Security Plan Your Retirement web page, http://www.socialsecurity.gov/r&m1.htm.

SSA Workload Trend Report.

Fiscal Year 2004 Performance and Accountability Report, http://www.ssa.gov/finance/2004/Full_FY04_PAR.pdf, page 11.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: SSA has developed ambitious targets for its long-term outcome and efficiency goals. With respect to the long-term solvency goal, SSA's efforts in this area center on the Agency's responsibility to provide policymakers with complete, timely information in response to requests regarding various policy proposals and to keep the public fully informed of the solvency situation and how it could affect them. SSA does the former through cost memoranda provided by the Office of the Chief Actuary in response to formal requests to score solvency reform proposals and by analyzing possible distributional outcomes associated with such proposals using sophisticated projection models in the Office of Policy. The agency does the latter through numerous educational tools including the annual Social Security statement sent to workers and through its website and other public outreach efforts.

The aging of the baby boomer generation will result in increases in retirement and survivors claims. The challenge of achieving the performance goals is heightened due to the increases in these workloads, complicated by the steady addition of disability claims filed by younger boomers in disability-prone years. In addition, SSA's own workforce will experience its own retirement wave, creating a "brain-drain" and an additional hurdle for the Agency in meeting the program's ambitious targets. At the same time, SSA can anticipate operating in an environment of substantial resource constraints at least over the near term.

In the face of anticipated rising workloads, the employee retirement wave, and constrained resources, SSA has set ambitious targets and timeframes for its long-term Old-Age and Survivors Insurance (OASI) measures of service and increased productivity. For service, SSA's goal is to achieve 87 percent of survey respondents rating overall service as "good," "very good," or "excellent" by 2013.

SSA has also set ambitious targets for Retirement and Survivors Insurance claims productivity. The Agency has set a goal of cumulative productivity improvement of 16 percent through 2013. This measure is consistent with SSA's commitment to an overall annual productivity increase of 2 percent on average.

Evidence:
SSA Workload Trend Report.

Data on SSA's "Plan Your Retirement" webpage.

Information about Requesting a Social Security Statement, https://s044a90.ssa.gov/apps6z/isss/main.html.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The Social Security Administration (SSA) has annual measures that address program performance and demonstrate progress toward achieving the program's long-term goals. They include:

?? Continue to pay Old-Age and Survivors Insurance benefits correctly.
?? Increase Agency productivity by 2 percent annually on average.
?? Process Retirement and Survivors Insurance claims.
?? Remove 3 percent of the earnings items that remain in the Earnings Suspense File (ESF) for a new tax year and post the earnings to the correct earnings record.

For example, yearly progress in meeting the third measure above will aid in meeting the long-term efficiency measure "Achieve a cumulative productivity improvement for Retirement and Survivor's Insurance claims of 16 percent through 2013."

In addition to ensuring that earnings have been correctly posted to their earnings record, the Social Security Statement is also a vehicle for educating the public about the OASI program's long-term solvency issues. The front page of the Statement has a section that outlines the long-term financial shortfall facing the program. Through the Agency's research and statistical reports, SSA strives each year to enhance public understanding of the OASI program's long-term solvency concerns. In addition, when benefit payments are made timely and accurately, the result is fewer re-contacts for claims status inquiries and savings in terms of efforts required to correct and collect incorrect payment amounts. This helps achieve the long-term target of customer satisfaction.

Evidence:
SSA Workload Trend Report.

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 89, 90 and 103.

Fiscal Year 2007 Annual Performance Plan (APP) and Revised Final Fiscal Year 2006 APP, http://www.ssa.gov/performance/, pages 9 and 11.

SSA Tracking Report.

"Fast Facts & Figures About Social Security," 2005, http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2005/index.html.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The Social Security Administration (SSA) has excellent baseline data for its annual measures and sets ambitious Key Performance Indicator targets as part of the annual budget process. The Commissioner meets with the Deputy Commissioners on a regular basis to review actual progress towards meeting Agency performance commitments versus budget plans, and making funding adjustments, when necessary, to maximize the Agency's ability to meet performance commitments.

The challenge of achieving the performance goals is heightened by the expected increase in retirement applications with the retirement of the baby boom generation. As the baby boomers retire, SSA's own workforce will experience a retirement wave of its own workforce, creating an additional hurdle for the Agency in meeting the program's ambitious targets. Also, even as the first baby boomers retire in 2008, younger boomers are reaching or continuing to pass through their disability-prone years, thus affecting Agency resources available to process Old-Age and Survivors Insurance workloads.

Evidence:
SSA Tracking Report.

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, page 20.

Fiscal Year 2007 Annual Performance Plan (APP) and Revised Final Fiscal Year 2006 APP, http://www.ssa.gov/performance/, pages 9 and 11.

The 2006 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, May 2006, http://www.ssa.gov/OACT/TR/TR06/tr06.pdf, pages 7-17.

Related data may also be found in various SSA actuarial publications, http://www.ssa.gov/OACT/pubs.html.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The Social Security Administration (SSA) is committed to working toward the annual and long-term goals of the Old-Age and Survivors Insurance (OASI) program. These annual and long-term goals and targets are communicated in SSA's Agency Strategic Plan (which is produced every 3 years) and its Annual Performance Plan. SSA also communicates annual goals and targets to all its employees using a desk aid that displays the annual goals and targets.

SSA partners with the Department of Treasury's Financial Management Service in disbursing OASI payments to beneficiaries. The Financial Management Service's first strategic goal is to provide Federal payments timely and accurately, to move toward an all-electronic Treasury for payments (i.e., direct deposit), and determine the optimal payment processing environment for the future. This goal supports SSA's mission to enhance the economic security of the Nation's people and the strategic objective to improve service through technology, focusing on accuracy, security and efficiency.

SSA partners with the Department of Health and Human Services' Centers for Medicare and Medicaid Services in implementing the provisions of the Medicare Modernization Act. For Medicare beneficiaries with limited incomes and resources, SSA assists retired seniors and disabled individuals in applying for "Extra Help" with the prescription drug benefit. SSA also accepts and adjudicates applications for this benefit, which offers more choices and better benefits under Medicare. For the income related Part B premium that takes effect in 2007, SSA is preparing to notify higher income beneficiaries of the new provisions. The Agency plans to accept evidence of declining income to assure that Medicare beneficiaries are not overcharged for their Part B coverage.

SSA continues to pursue partnerships with other Federal and State governments in order to improve its service through shared processing or data sharing. The Agency's data exchange efforts and its support of the various government-wide initiatives all promote better service. Computer matching programs that will continue to be used to determine eligibility and continued entitlement to monthly benefits include agreements with the Internal Revenue Service, the Department of Labor, the Department of Homeland Security, the Railroad Retirement Board, and the Department of Veterans Affairs.

Evidence:
SSA's Agency Strategic Plan for Fiscal Years 2006 - 2011, http://www.ssa.gov/strategicplan.html.

Fiscal Year 2007 Annual Performance Plan (APP) and Revised Final Fiscal Year 2006 APP, SSA's Agency Strategic Plan for Fiscal Years 2006 - 2011, http://www.ssa.gov/performance/, pages 6 and 45.

Department of Treasury Performance and Accountability Report for Fiscal Year 2005, http://www.ustreas.gov/offices/management/dcfo/accountability-reports/2005-par/full_report.pdf.

Department of Health and Human Services' Annual Plan for 2007, http://www.hhs.gov/budget/07budget/FY2007AnnualPlan.pdf.

The Retirement Research Consortium, Department of Health and Human Services' Annual Plan for 2007, http://www.ssa.gov/policy/about/partnerships.html, consists of three multidisciplinary centers housed in three separate institutions (Boston College, http://www.bc.edu/centers/crr/, the University of Michigan, http://www.mrrc.isr.umich.edu/, and the National Bureau of Economic Research, http://www.nber.org/programs/ag/rrc/rrchome.html) and provides a multitude of evaluations on the Social Security program.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Independent quality evaluations are performed on a regular, ongoing schedule and on an as needed basis to evaluate effectiveness of the program, support program improvements and create effective solutions to complex problems. The Social Security Administration's (SSA) Office of Quality Performance (OQP) conducts ongoing, statistically valid, outcome-based Stewardship reviews on the accuracy of Old-Age and Survivors Insurance (OASI) payments. That is, OQP measures the Agency's ability to provide beneficiaries the correct benefit payment to which they are entitled. Where payment amounts are incorrect, this formal review distinguishes between payments that are too high and those that are too low. Postentitlement reviews also provide analyses and corrective actions for various problematic areas such as Automatic Earnings Reappraisal Operations processing and Earnings Suspense File.

The Social Security Advisory Board (SSAB) issues annual statements that analyze SSA's programs, including OASI, and makes recommendations to the President and Congress as appropriate. The SSAB is an independent, bipartisan board appointed by the President and Congress created to advise the President, Congress, and the Commissioner of Social Security on matters related to the Social Security and Supplemental Security Income programs.

In addition, the Office of the Inspector General and the U.S. Government Accountability Office (GAO) provide additional independent evaluations on many topics such as representative payee effectiveness, Social Security number use, and performance and accountability. Broad scope and outcome focused policy evaluations such as income replacement issues and managing risks in retirement are performed by the Retirement Research Consortium funded by SSA.

PricewaterhouseCoopers provides an audit report each year on behalf of the Inspector General on the effectiveness of OQP's stewardship reviews of the Old-Age, Survivors, and Disability Insurance programs. These findings are summarized in the Performance and Accountability Report each year. In the many years this audit has taken place, there has never been a finding casting doubt on the accuracy of the Stewardship findings. In calendar year 2005, PriceWaterhouseCoopers (PwC) conducted a full review of OQP's Title II Stewardship methodology and found that SSA's data are reliable. For the review, PwC conducted detailed testing of the Title II Stewardship processes for sample selection, profiling, stratification, database management, case weighting scheme, and calculation of payment accuracy rates.

In the past, the Office of the Inspector general has independently reviewed OQP's Title II Stewardship methodology and they also found the data reliable.

GAO and the Congressional Budget Office frequently study and report to Congress on issues pertaining to OASI, including the program's long-term solvency issues. Solvency issues are also analyzed and reported on by a wide range of independent researchers, policy analysts, and interest groups.

Evidence:
The OASI program pays over 99 percent of its payments accurately (99.67 percent of payments were free of overpayments and 99.87 percent were free of underpayments in fiscal year 2004). These accuracy rates are a testimony to the efficient and effective administration of a complex program on behalf of the American public. Fiscal Year 2004 Title II Payment Accuracy (Stewardship) Report (August 22, 2005).

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 90 and 110.

The Retirement Research Consortium, http://www.ssa.gov/policy/about/partnerships.html, consists of three multidisciplinary centers housed in three separate institutions (Boston College, http://www.bc.edu/centers/crr/, the University of Michigan, http://www.mrrc.isr.umich.edu/, and the National Bureau of Economic Research, http://www.nber.org/programs/ag/rrc/rrchome.html) and provides a multitude of evaluations on the Social Security program.

American Customer Satisfaction Index, http://www.theacsi.org/government/govt-all-05.html.

SSA's Office of the Inspector General Audit Reports, http://www.ssa.gov/oig/office_of_audit/auditreports.htm.

PMA Scorecard Results on SSA FY 2007 President's Budget, http://www.whitehouse.gov/omb/budget/fy2007/ssa.html.

Congressional Budget Office, see http://www.cbo.gov/publications/collections/socialsecurity.cfm.

Government Accountability Office, http://www.gao.gov/new.items/d05649r.pdf.

The Social Security Advisory Board, http://www.ssab.gov.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: In formulating its annual budget request, the Social Security Administration (SSA) assesses the impact of policy, procedural, legislative and automation changes on its workloads, which include assessing the impact on productivity, pending levels, etc. SSA's Service Delivery Plan presents key performance goals through fiscal year 2012 based in large part on Agency strategic performance plans and projected resource levels. During the budget cycle, SSA is able to assess workload effects of increases or decreases in funding. SSA has developed automated tools to assist the Agency in determining the full and marginal costs of achieving performance outcomes. Specifically, SSA is able to estimate the budgeted unit cost for key Old-Age and Survivors Insurance workloads and reflect the marginal costs of changes in performance.

Evidence:
SSA Fiscal Year 2007 President's Budget, http://www.whitehouse.gov/omb/budget/fy2007/ssa.html.

Fiscal Year 2007 Budget Appendix, SSA, http://www.whitehouse.gov/omb/budget/fy2007/pdf/appendix/ssa.pdf.

Budget and Performance Integration, President's Management Agenda Initiative - SSA achieved green status on all six standards for success as of the third quarter of fiscal year 2004. The Agency is maintaining these standards as it continues to improve its ability to integrate budget and performance outcomes.

Improved Financial Management, President's Management Agenda Initiative - Social Security attained a status score of "green" for the Improved Financial Performance PMA initiative as of the third quarter of fiscal year 2003. The Agency has maintained its "green" status.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: On an ongoing basis, the Social Security Administration (SSA) assesses, evaluates and improves its strategic plans and performance measures. SSA recently published its Strategic Plan for fiscal years 2006 - 2011. The Agency improved its Service-related strategic objective to focus not only on improving service through technology, but also on accuracy, systems security and efficiency. In the fiscal year 2007 Performance Plan, the Agency improved upon its long-term and annual measures to make them more outcome oriented. For example, under the strategic objective to improve service through technology, SSA has long-term outcomes to:

?? Allow the public to more easily interact with the Agency by increasing partnerships with government and non-governmental agencies; and
?? Improve and expand the service capabilities by making optimal use of technology, including telephone and other electronic services.

The Office of the Chief Strategic Officer was established to direct the administration of the Agency's comprehensive management programs including competitive sourcing, quality management, strategic planning and workforce analysis. This restructuring ensures key consultation and support activities are provided for mission critical projects and organizational change initiatives.

The Agency will continue to pursue partnerships with government agencies and businesses in order to improve service through shared processing and data sharing. Old-Age and Survivors Insurance (OASI) payment accuracy is consistently at such a level (i.e., over 99.5 percent for each of the last five years) that in the Strategic Plan the Agency made a commitment to maintain those levels. These improvements demonstrate the Agency's commitment to attach accountability to the goals for service and stewardship. Under the leadership of the Chief Strategic Officer, the Agency's executives meet on a regular basis to review actual progress toward achieving these goals. Also, the Agency will continue to provide support to the Administration and Congress in developing legislative proposals and implementing reforms to achieve sustainable solvency for the OASI program.

Evidence:
SSA's Agency Strategic Plan for Fiscal Years 2006 - 2011, http://www.ssa.gov/strategicplan.html.

Fiscal Year 2007 Annual Performance Plan (APP) and Revised Final Fiscal Year 2006 APP, http://www.ssa.gov/performance/, page 8.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Timely and credible performance information is collected through systematic and consistent processes. Executive Staff meet monthly with the Commissioner and Deputy Commissioner to review data on performance measures from the Social Security Administration (SSA) Tracking Reports and make any necessary adjustments to maximize program performance and efficiency.

SSA has established periodic quality controls to confirm the validity of the data and reviews a sample of Old-Age and Survivors Insurance claims each quarter to determine their accuracy. SSA uses the data to adjust program priorities, allocate resources, or take other appropriate management actions.

SSA also works with key program partners to ensure payment accuracy. Computer matching agreements with the Internal Revenue Service are critical for posting earnings information to SSA's records.

Evidence:
Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 20, 21, 89, 90 and 110.

Fiscal Year 2007 Annual Performance Plan (APP) and Revised Final Fiscal Year 2006 APP, http://www.ssa.gov/performance/, page 32.

SSA Tracking Report.

SSA's Office of the Inspector General Audit Reports, http://www.ssa.gov/oig/office_of_audit/auditreports.htm.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Social Security Administration (SSA) executives are held responsible for all performance measures. Monthly meetings are held and progress is tracked in the SSA Tracking Report. The performance plans for Senior Executive Staff and GS-15s have been revised to incorporate performance standards that are linked to Agency goals and objectives. Revised performance plans linking performance to Agency goals and objectives for employees in the GS-14 and below grade structure are being implemented.

Evidence:
SSA executives track performance progress on the SSA Tracking Report.

Revised performance plans for Senior Executive Staff and GS-15s. Performance plans for GS-14 and below employees are in the process of being implemented.

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, page 105.

Budget and Performance Integration, President's Management Agenda Initiative.

Human Capital, President's Management Agenda Initiative.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: Program funds are obligated consistent with the rules of the program. Procedures exist for reporting actual expenditures. The Agency has also received an unqualified opinion on its financial statements with no material weaknesses cited by the auditor. Financial systems are compliant with Federal law, demonstrating to the Office of Management and Budget that the Social Security Administration (SSA) uses accurate and timely information to manage the Agency. According to the annual Title II Stewardship Reports, virtually all OASI payments are made correctly. In fiscal year 2004, 99.67 percent of all OASI payments were free of overpayments, while 99.87 percent of all OASI payments were free of underpayments.

Evidence:
Report on Budget Execution (SF-133).

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 100, 114, and 165.

The 2006 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, May 2006, http://www.ssa.gov/OACT/TR/TR06/tr06.pdf, pages 7-17.

Budget and Performance Integration, President's Management Agenda Initiative - SSA achieved green status on all six standards for success as of the third quarter of fiscal year 2004. SSA is maintaining these standards as it continues to improve its ability to integrate budget and performance outcomes.

Improved Financial Performance, President's Management Agenda initiative - The Agency achieved green in June of 2003 and is achieving the milestones established for improvement.

Fiscal Year 2004 Title II Payment Accuracy (Stewardship) Report (August 22, 2005).

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The Social Security Administration (SSA) continually looks for means to achieve efficiencies and cost effectiveness both in program management and administration of the Old-Age and Survivors Insurance program. The Agency has two efficiency measures: Retirement and Survivors Insurance productivity and overall Agency productivity. Agency executives meet monthly with the Commissioner and Deputy Commissioner to analyze data on performance measures from the SSA Tracking Reports and make any necessary adjustments to resource commitments to maximize program performance and efficiency. The budget process builds these changes into the development of cost estimates as part of the Agency's analysis of productivity factors. SSA also has productivity measures and unit costs for all its workloads.

In general, information technology (IT) improvements are a particularly important means of leveraging limited resources to meet growing workloads and provide more timely service. SSA's IT capital planning process requires for all projects a cost-benefit analysis that includes the expected return-on-investment for each new systems initiative. The process also provides the operational IT plans required to develop the technology and other IT resources needed to achieve the Agency's strategic goals and performance objectives. Some of SSA's accomplishments include the following:

?? An Electronic "Signature Proxy" Process that is an alternative to pen-and-ink signatures on benefit applications. It is used by claimants who file online via the Internet, by telephone, or in person. This feature continues the Agency's progress toward a fully electronic environment by providing relief from printing, routing, folder preparation, mailing, and storage costs.
?? Social Security Online, the official Social Security website (www.socialsecurity.gov), is a cost-effective method of providing information that attracts over 33 million visitors a year. Social Security Online includes a retirement planner site that assists the public in calculating expected benefits and allows them to file for their benefits online.
?? Internet Social Security Benefit Applications allow the public to apply for Social Security retirement, spouse and disability benefits online. In fiscal year 2005, approximately 265,000 applications for Social Security benefits were submitted online through secure Internet connections, which represents approximately 7 percent of the RSI claims processed by the Agency last year. The Internet Social Security Benefit Application took the top place among Federal ACSI sites.
?? Electronic Services for Current Beneficiaries include requests for changes of address and direct deposit arrangements, replacement Medicare cards, benefit verifications and replacement Internal Revenue Service Form 1099. Cumulatively, these services using the Internet and 800-number speech recognition features handled over 3 million transactions in fiscal year 2005.
?? Electronic Wage Reporting simplifies the process for businesses by allowing them to submit employee wage reports online. The service also includes the AccuWage tool for businesses that improves reporting accuracy and reduces the volume of error correction and necessary follow-up contacts. In tax year 2003, 60 percent of all employee wage items (Forms W-2) were submitted electronically. As a result of SSA's marketing and outreach efforts, 64.5 percent of all 2004 wage items received through July 2005 were submitted electronically.

In the 2005 American Customer Satisfaction Index, produced by the University of Michigan, retirement beneficiaries rated SSA in the top 10 percent for public satisfaction with Federal Government services. As part of this survey, SSA's Business Services Online scored an 80, the Retirement Planner a 78, and the Answers to Your Questions website scored a 75. As a result of these and other initiatives, the Agency's productivity has increased 12.6 percent since 2001.

Evidence:
Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 30-35, 81-82, and 95.

Social Security Online - SSA's website, located at http://www.socialsecurity.gov/r&m1.htm.

The annual ACSI measures household consumption experience provided by 70 Federal agencies. The 2005 Survey was published December 15, 2005. See http://www.theacsi.org/government/govt-05.html.

Agency processing service centers realized a decrease of approximately 2.5 million folders in fiscal year 2005 compared to fiscal year 2003, which was the last year without signature proxy.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The Old-Age and Survivors Insurance (OASI) program works effectively with other related programs such as Medicare, Supplemental Security Income (SSI), Railroad Retirement Board (RRB), the Disability Insurance program, and other Federal government programs. In administering the OASI program, the Social Security Administration (SSA) works effectively with a number of other Federal and State agencies. For example, an agreement with the Internal Revenue Service sets forth the manner in which SSA and IRS "will share information about certain accrued employee benefits reported by private pension plans under the requirements" of the Employee Retirement Income Security Act.

SSA has long-standing reciprocal data exchanges with the Centers for Medicare and Medicaid Services (CMS) involving both OASI and Medicare benefits. SSA determines eligibility and withholds premiums from OASI benefits for Medicare. In addition, SSA shares information with CMS about its mutual beneficiaries including change of address and death.

The exchange of data between the OASI program and the SSI program includes earnings, address, and benefit amounts. Such exchanges reduce overpayments and provide timely corrections to beneficiary's records.

OASI and RRB programs share data on earnings and eligibility to adjudicate claims and maintain ongoing information for both programs.

SSA also has contracts to exchange data with States and jurisdictions. For example, SSA receives information from States to enable SSA to verify birth records online for use in OASI claim adjudication. Other agreements allow SSA to verify the SSN of a decedent, while a State gives SSA a death report with a verified SSN.

IRS shares information about certain accrued employee benefits reported by private pension plans; SSA in turn, provides notification to beneficiaries about their potential eligibility for those benefits. Additionally, SSA reviews draft IRS forms and publications to ensure compatibility.

As the Disability Insurance program is well-integrated into the OASI program, the Agency's operations are designed to work seamlessly in administering each of these programs.

Evidence:
Federal and State Connections
SSA's Government Information Exchange web page, http://www.ssa.gov/gix/connections.html.

Social Security Administration - Internal Revenue Service (IRS) Agreement
?? SSA: Program Benefits Policy, signed the Memorandum of Agreement (MOA) on August 17, 1995.
?? IRS: Chief of Taxpayer Services, signed the MOA on December 22, 1995.

Social Security Administration - Railroad Retirement Board Agreements
?? Chicago Extract Match??Number 1006 - Effective April 4, 2006.
?? System-to-system Access??Number 1007 - Effective December 6, 2005.

Agreement between the Social Security Administration, the Internal Revenue Service, and the Centers for Medicare and Medicaid
?? Medicare Secondary Payer Program--Number 1048??Effective March 6, 2006.

Does the program use strong financial management practices?

Explanation: The Social Security Administration (SSA)'s President's Management Agenda (PMA) item on the Improved Financial Performance initiative has been scored as green since June 2003. The Agency's goal is to maintain the green status and to achieve the milestones established for improvement.

SSA's integrated financial and performance systems allow Agency managers to routinely access financial and performance information to make day-to-day decisions. The Agency has also received an unqualified opinion on its financial statements with no material weaknesses cited by the auditor; having financial systems compliant with Federal law; and demonstrating to the Office of Management and Budget (OMB) that SSA uses accurate and timely information to manage the Agency. The accuracy of the Agency's data has been confirmed by 12 successive unqualified, or clean, opinions on SSA's annual financial statements. The Agency has new initiatives to "Get Beyond Green" that will improve the quality, consistency and access to information used by managers and analysts to manage work and account for resources. The lynchpin of these initiatives is a modernized cost accounting system which will integrate workload counts, processing times, and administrative cost data at all levels of the organization. This data will be used to calculate unit cost and productivity management information for the Agency's programs down to the office level to support strategic decision making. SSA's core accounting system is in compliance with all OMB requirements, incorporates commercial best practices and includes the Agency's core accounting functions. The system interfaces with administrative systems to enhance the Agency's ability to soundly manage assets and SSA will continue to invest in infrastructure needed to sustain superior performance into the future. SSA continues to meet the challenges of timely and accurate financial reporting. During this year, SSA produced quarterly financial statements and submitted them to OMB by the required due dates and met the required delivery date for the Fiscal Year (FY) 2005 Performance and Accountability Report. SSA will continue to improve its procedures for assembling, analyzing and reporting financial information on a timely basis.

In addition to efforts related to the PMA, SSA is aggressively working to ensure compliance with the recently revised OMB instructions on management responsibility for internal controls. Beginning in FY 2006, the circular requires that the internal controls that support the financial reporting process are documented and tested to allow management to make an assertion regarding the effectiveness of these internal controls. SSA has documented the financial reporting process, determined the most significant risks, as well as the controls in place to mitigate these risks and developed a test plan to test the effectiveness of these controls. This information, as well as the results of SSA's review programs, will serve as the basis for the required assertion on the internal controls over financial reporting as of September 30, 2006.

SSA also monitors and reports on improper payments in accordance with OMB guidelines implementing the provisions of the Improper Payments Information Act of 2002. As of the first quarter of FY 2005, OMB implemented a PMA program initiative on Eliminating Improper Payments (EIP). SSA has achieved a green in progress and a yellow in status in the EIP initiative. Stewardship review findings provide the basis for reports to Congress and other monitoring authorities. Data from these reviews are also used in corrective action planning and in monitoring performance as required by the Government Performance and Results Act of 1993. Over the five year period from FYs 2000-2004, of a total of over $1.9 trillion paid to Old-Age and Survivors Insurance beneficiaries, $2.1 billion was overpaid (0.1 percent of outlays) and $2.1 billion was underpaid (0.1 percent of outlays).

Evidence:
Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 54-55, 100, 165-168 and 192-194.

Improved Financial Performance, President's Management Agenda initiative - The Agency achieved green in June 2003 and is achieving the milestones established for improvement.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The Agency has taken a number of important actions to improve performance of the Old-Age and Survivors Insurance (OASI) program. Specifically, under the overall strategic goal of stewardship, the following areas have been identified as key objectives:

?? detect and prevent fraudulent and improper payments and improve debt management;
?? strengthen the integrity of the Social Security Number (SSN) issuance process to help prevent misuse and fraud of the SSN and card;
?? ensure the accuracy of earnings records so that individuals can receive the proper benefits due them; and
?? manage Agency finances and assets to link resources effectively to performance outcomes.

In addition, the Social Security Administration (SSA) integrates management controls into its business process and financial management systems to identify weaknesses. Once identified, SSA develops and implements corrective action plans, and reviews the controls of the new or changed processes to ensure they remain effective. SSA continues to receive an unqualified opinion with no reported material weaknesses in internal controls or noncompliance with laws and regulations on its consolidated financial statements from the independent auditors. For the Fiscal Year 2004 Performance and Accountability Report, the Agency was also awarded its seventh Certificate of Excellence in Accountability Reporting from the Association of Government Accountants. SSA is the only Federal agency to have received the award 7 years consecutively.

Evidence:
The Social Security Administration's Agency Strategic Plan for Fiscal Years 2006 - 2011, http://www.ssa.gov/strategicplan.html, pages 20, 23, 26 and 28.

Fiscal Year 2007 Annual Performance Plan (APP) and Revised Final Fiscal Year 2006 APP, http://www.ssa.gov/performance/.

Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 3 and 163 (Stewardship).

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: SSA is demonstrating some progress in meeting its long-term performance measures. While the long-term efficiency measure for Retirement and Survivors Insurance (RSI) productivity per workyear is a new measure and did not have targets before 2007, to achieve a 16% increase between 2005 and 2013 would require RSI productivity to grow by nearly 2% per year on average. In 2006, RSI productivity was at 0.98%.

SSA's performance on their long-term customer satisfaction goal had been increasing and meeting the target each year, but in 2006 it declined and did not meet the target for that year.

SSA is successfully meeting its long-term solvency goal by providing policymakers with information on various policy proposals, providing both cost memoranda from the Office of the Chief Actuary and by analyzing possible distributional outcomes associated with such proposals in the Office of Policy. The Office of the Chief Actuary posts, for many of these proposals, a complete actuarial analysis of comprehensive proposals showing the estimated effect on the long-range financial status of the OASDI program. These include various provisions that have been suggested to modify the Social Security program and improve its financial status, including those introduced in Congress as part of a comprehensive solvency proposal. The Office of Policy publishes work that tends to examine the distributional effects of certain types of reform proposals or to examine general topics related to the income distribution. The Office of Policy website contains a fairly comprehensive listing of both Office of Policy and Research Retirement Consortium studies.

Evidence:
The Social Security Administration's Fiscal Year 2007 President's budget, http://www.whitehouse.gov/omb/budget/fy2007/ssa.html.

Fiscal Year 2004 Performance and Accountability Report, page 11, http://www.ssa.gov/finance/2004/Full_FY04_PAR.pdf.

Fast Facts and Figures About Social Security, 2005, http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2005/fast_facts05.pdf.

Office of the Chief Actuary: http://www.ssa.gov/OACT/index.html.

Solvency Estimates - Proposals: http://www.ssa.gov/OACT/solvency/index.html.

Solvency Estimates - Provisions: http://www.ssa.gov/OACT/solvency/provisions/index.html.

The Office of Policy maintains the following website: http://www.ssa.gov/policy/docs/policyupdate/.

Below are a few examples of Office of Policy studies:
New Evidence on Earnings and Benefit Claims Following Changes in the Retirement Earnings Test: http://www.ssa.gov/policy/docs/workingpapers/wp107.xml.

Social Security and the "D" in OASDI: The History of a Federal Program Insuring Earners Against Disability: http://www.ssa.gov/policy/docs/ssb/v66n3/v66n3p1.html.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The Old-Age and Survivors Insurance (OASI) program achieved a large portion of its annual performance goals. The program achieved the annual productivity goal, number of Social Security statements issued, and part of the payment accuracy goal. Although it did not realize the number of Retirement and Survivors Insurance (RSI) claims projected, it did process all of the RSI claims received, which is significant since it is an increase over 2005 and allowed the program to maintain acceptable case processing times. Each year, SSA projects the number of RSI claims the agency expects to receive and subsequently process. The realization of this projection is dependent upon the number of RSI claims actually received each year. Social Security processes virtually all of the RSI claims the agency receives. For FY 2007, SSA is altering the goal to be more outcome oriented, reflecting that it will process all of the claims it receives.

According to the annual Title II Stewardship Reports, virtually all OASI payments are made correctly. In fiscal year 2005, 99.6 percent of all OASI payments were free of overpayments, while 99.8 percent of all OASI payments were free of underpayments, consistent with the previous year.

SSA has an impressive track record in increasing agency-wide productivity. In 2006, productivity climbed for a total gain of 13.09 percent since 2001. This represents an average annual increase of 2.49 percent.

The OASI program did not achieve the annual goals for customer satisfaction or removing items in the suspense file. The program strengthened its performance in these areas for FY 2007.

Evidence:
Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 79 and 89-90.

SSA's Workload Trend Report.

Fiscal Year 2004 Title II Payment Accuracy (Stewardship) Report (August 22, 2005).

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The Social Security Administration (SSA) generally continues to improve efficiencies in meeting program goals each year. Consistent with the Agency's Strategic Plan, SSA's Service Delivery Plan includes a commitment to achieve an average annual productivity increase of 2 percent each year through fiscal year 2008. SSA is very proud of this goal and its performance to date. SSA has met or exceeded this goal for the last 4 years. The total change over the 4 years from fiscal year 2001 (the base year) through fiscal year 2005 is 12.8 percent. This success can be attributed to the hard work of the Agency's employees and ongoing efforts to streamline the business processes and automate workloads. The public can also be assured that SSA maintains its high standards of productivity and can look forward to improvements each year. The Agency believes that, given the array of services SSA provides and the major workload processing initiatives the Agency implements each year, incremental productivity improvements are sustainable. As workloads increase, the public benefits when SSA can process more work, while improving processing timeliness and maintaining accuracy.

The Agency continues to take steps to improve its service to the public through automation with its Title II System redesign. The goal of the Title II System redesign is to provide a single system for processing virtually all initial claims and client initiated post-entitlement actions in an online interactive mode. Title II System redesign provides greater capability to process work at the first point of contact with the Agency, offers online user access to more comprehensive information, and results in an automated system that is less costly to maintain and easier to modify. This project is consistent with the citizen-centric strategies in the President's Management Agenda. It fully supports SSA's mission to provide world class service and to pay benefits correctly and on time. It also is consistent with the Agency's goal to ensure the integrity of the Social Security programs, with zero tolerance for fraud and abuse. It supports SSA's strategic objective of maintaining at 99.8 percent the overpayment and underpayment accuracy based on non-medical factors of eligibility of Old-Age, Survivors, and Disability Insurance (OASDI) payment outlays. This project also addresses the Agency's objective of maintaining the accuracy, timeliness, and efficiency of service to people applying for OASDI benefits.

The Agency has taken steps to automate more telephone calls and to minimize the time it takes a caller to select a service. The implementation of speech recognition technology has reduced the time callers spend navigating through menu prompts and has reduced manual workloads. The Agency has also improved efficiency and cost effectiveness through the implementation of a number of online services that enable people to conduct much of their business with SSA through the Internet. Most noteworthy is the effectiveness of SSA's Internet Social Security Benefit Application which has enabled approximately 265,000 people to apply for their benefits through SSA's website in 2005 alone, which represents approximately 7 percent of the RSI claims processed by the Agency last year.

Evidence:
Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 30-35 and 95.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There are no comparable programs with similar purposes and goals. For American workers, Old-Age and Survivors Insurance (OASI) is the only universal, portable defined-benefit pension system. The purpose of the program is to provide monthly income to aged insured individuals, their dependents, and also survivors of insured individuals.

In addition, no other government pension program at any level can compare in scope, size or even purpose with the OASI program. Other Federal pension benefit programs, such as the Civil Service Retirement System (CSRS), the Federal Employee Retirement System (FERS), military service pensions, Department of Veterans Affairs pensions, and the Railroad Retirement Board (RRB) benefit system, are limited in scope and size, with comparatively much smaller numbers of beneficiaries paid. For example,

?? About 161 million people work in OASI-covered employment.
?? About 91 percent of the population aged 65 or over are receiving OASI benefits.
?? About 97 percent of persons aged 20-49 who work in covered employment in 2005 have acquired survivorship protection for their children under age 18 (and surviving spouses caring for children under age 16).
?? During 2005, 40 million OASI beneficiaries received more than $36.1 billion in direct payments each month, or about $434 billion for the year.

By comparison, other government pension programs are far from universal. Each exists only to provide economic protection to a specific and much smaller sector of the U.S. workforce. (All figures are for fiscal year 2005, unless otherwise noted.)

?? Only 2.6 million civilians worked in Executive branch employment covered by CSRS, FERS and other Federal pension programs. Only 2.4 million employees and survivors received civil service (CSRS and FERS) benefits (and this includes disability payments), amounting to under $55 billion.
?? Only 1.4 million persons were in the uniformed military services. Military retirees, dependents and survivors received less than $39 billion.
?? Only 326,000 survivors received Veterans benefits, amounting to $4.1 billion.
?? Unlike OASI, RRB pension benefits are paid to workers in a specific industry. In fiscal year 2002, retirement and survivors benefits of about $8.6 billion were paid to more than 684,000 beneficiaries. Also, the beneficiary pool is declining as RRB's retiree population ages. The number of RRB beneficiaries has been declining at the rate of 20,000 annually, in recent years.

Some 23 million workers are employed by 50 State and thousands of local governments. Non-Federal pension systems cover few workers, compared to the nationwide Social Security program. Such contributions are generally not portable from one government to another.

Finally, Social Security dwarfs even the largest private defined benefit pension plan, which promises benefits to more than 600,000 workers, retirees and surviving spouses.

Evidence:
Office of the Actuary Fact Sheet on Old-Age, Survivors, and Disability Insurance, January 2006, http://www.ssa.gov/OACT/FACTS/fs2005_12.pdf.

Budget of the United States Government Fiscal Year 2007, http://www.whitehouse.gov/omb/budget/fy2007/ .

Budget of the United States Government: Historical Tables Fiscal Year 2007,
Table 11.3 ?? Outlays for Payments for Individuals by Category and Major Program: 1940-2011.
Table 17.5 ?? Government Employment and Population, 1962-2005.

Railroad Retirement Board Agency Strategic Plan 2003-2008, http://www.rrb.gov/strategicplan2003/appendix.asp.

Fast Facts from the Employee Benefit Research Institute, February 3, 2006, http://www.ebri.org/pdf/publications/facts/fastfacts/fastfact020306.pdf.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: The Social Security Administration's (SSA) Old-Age and Survivors Insurance (OASI) program is widely regarded as highly effective and achieves positive outcomes for its participants. GAO has testified that the OASI program has been highly effective at reducing the incidence of poverty among the elderly and critical to the financial well-being of millions of others.

The Retirement Research Consortium (Boston College, the University of Michigan, and the National Bureau of Economic Research) provides SSA with independent evaluations of the Social Security program. Consortium studies show the OASI program's poverty-ameliorating effects, specifically that OASI benefits are the most important source of income for elderly Americans, particularly for the more vulnerable among the old.

?? Weir et al (2002) state, "Under age 75, it is primarily widows who are lifted out of poverty by Social Security. Although the impact on widows continues to rise with age, the impact of Social Security on married women and divorced women rises even more rapidly to the oldest-old, where over 40 percent of all marital status groups are kept from poverty by Social Security."
?? Engen et al (2004) state, "reductions in Social Security benefits could have significant deleterious effects on the adequacy of saving, especially among low-income households."
OASI program effectiveness is not only measured by benefit payments, but also by service levels. How well SSA responds to the American public's needs, including providing timely and accurate payment, documents, and information, is reflected in the high level of public satisfaction with the program as a whole. In the 2005 American Customer Satisfaction Index, produced by the University of Michigan, retirement beneficiaries rated SSA in the top 10 percent for public satisfaction with Federal Government services. SSA's public satisfaction score of 81 percent compares favorably to the Federal Government's overall satisfaction score of 71.3 percent. As part of this survey, SSA's Business Services Online scored an 80, the Retirement Planner a 78, and the Answers to Your Questions website scored a 75.

SSA conducts several public satisfaction surveys including: ?? Service Satisfaction Survey - surveys overall public satisfaction with service
?? Internet Service Satisfaction Survey - surveys satisfaction related to new or expanded Internet services made available to the public or for other issues related to Internet service delivery
?? Employer Survey - surveys employer satisfaction with SSA's service
SSA educates the public by providing annual Social Security Statements to all people age 25 and older.

SSA's own Satisfaction Survey of Nondisabled Initial Applicants confirms high levels of satisfaction with overall service of SSA's OASI programs. RSI respondents gave a 98 percent excellent/very good/good rating of overall service, according to the most recent report, published in 2004.

Because financial errors or fraud would undermine OASI program effectiveness, it is essential that the program operates according to sound financial principles and effective controls. In its annual financial statement audits, PricewaterhouseCoopers consistently finds that SSA is in compliance with all laws and regulations selected for financial statement audit. In addition, SSA's systems of accounting and internal control are consistently in compliance with the Office of Management and Budget's internal control objectives.

Evidence:
The Government Accountability Office, "Long Term Challenges Warrant Early Action," GAO-05-303T, February 3, 2005, http://www.gao.gov/new.items/d05303t.pdf.

Weir, David, Robert J. Willis, and Purvi Sevak (2002): The Economic Consequence of a Husband's Death: Evidence from the HRS and AHEAD." See http://www.mrrc.isr.umich.edu/publications/papers/pdf/wp023.pdf.

Engen, Eric, William G. Gale, and Cori Uccello (2004): Lifetime Earnings, Social Security Benefits, and the Adequacy of Retirement Wealth Accumulation." See http://www.bc.edu/centers/crr/papers/wp_2004-10.pdf.

The annual ACSI measures household consumption experience provided by 70 Federal agencies. The 2005 Survey was published December 15, 2005. See http://www.theacsi.org/government/govt-05.html.

Fiscal Year 2004 Title II Payment Accuracy (Stewardship) Report (August 22, 2005).

Report on the Satisfaction Survey of Non-disabled Initial Applicants, 4/21/04.

PricewaterhouseCoopers Financial Statement Audit, SSA Fiscal Year 2005 Performance and Accountability Report, http://www.ssa.gov/finance/2005/FY_05_PAR.pdf, pages 163-169.

PricewaterhouseCoopers Financial Statement Audit, SSA Fiscal Year 2004 Performance and Accountability Report, http://www.ssa.gov/finance/2004/Full_FY04_PAR.pdf, pages 193-202.

PricewaterhouseCoopers Financial Statement Audit, SSA Fiscal Year 2003 Performance and Accountability Report, http://www.ssa.gov/finance/2003/FY03_PAR.pdf, pages 165-175.