The Social Security Administration’s computer system threatens to shortchange millions of future retirees because it is making serious errors in recording the income of many wage earners - particularly women, Latinos and Asian Americans - according to an internal agency report obtained by the Los Angeles Times.
The report, issued by the agency’s San Bernardino, Calif., district headquarters, asserts that the Social Security computer system is confounded by names that do not conform to a traditional Anglo format. The agency, it says, is failing to make an adequate effort to fix the problem.
“Our findings indicate millions of beneficiaries may be receiving less than they have paid for,” the report warns. “For some, especially those in locales such as Puerto Rico, the Dakotas and inner cities, the loss may be very large.”
The Social Security Administration has $234 billion worth of wage reports - some dating to 1937 - that it cannot match with individual accounts. The wage reports are used to compute benefits.
Until now, the agency has said that minorities and women have been affected no more than anyone else and it hotly has denied its policies or procedures are discriminatory.
But the new report details numerous cases in which individuals with Asian, Latino and Islamic names were mishandled by computers that did not know what to make of surnames with spaces (such as de la Rosa) or what to do with surnames that fall somewhere other than the end of a name (such as Park Chong Kyu and Carlos Romero Barcelo).
Women are the subjects of a large number of errors because they often do not notify the agency when they change their names after marriage.
California accounts for 35 percent of all the unmatched earnings, although the exact reasons are unclear. One small component involves Hollywood actors whose wages often are reported by studios under stage names different from those on file with Social Security, according to the report.
The report was authored by Jim Hodgson, Social Security district director for San Bernardino County and chief of the agency’s six branch offices spread across the massive jurisdiction.
Under Hodgson’s direction, the San Bernardino district has undertaken a wide-ranging effort to correct as many of the unmatched wage reports as possible. So far, according to the report, it has managed to fix about 100,000 mismatches nationwide over the past year.
But with an estimated 200 million unmatched wage reports, the San Bernardino group has skimmed only the surface of the problem, Hodgson acknowledged.
The San Bernardino report recently was submitted to Social Security Commissioner Shirley S. Chater. Chater declined to be interviewed, as did other agency executives.
Social Security spokesman Phil Gambino said the agency is doing vastly better at recording wages and denied that unusual spellings or spaces in the names of minorities cause serious problems. He added that the issue does not reflect a computer or software defect.
Among the 100,000 repairs made by the San Bernardino office are numerous cases in which back benefits in the thousands of dollars were owed to retirees and the disabled.
Rita Howell, disabled with lupus in the coal country of Kentucky, said in an interview that she was shortchanged by $7,000 because Social Security had no record of three years of her earnings at an engineering company, Bechtel Corp.
Hodgson’s workers found Howell’s earnings reports while surfing through the so-called “suspense file” - an electronic lost and found.
Howell said she never knew she was supposed to notify Social Security when she changed her name after marriage. A badly needed $7,000 Social Security check arrived in the mail this year.
In another case, the project uncovered errors that led to a widow’s being shortchanged by $14,765 in retirement benefits, according to the report.
The report says Puerto Ricans face serious problems because of the practice on the island of giving children the mother’s maiden name as part of the surname. In addition, the report says Native Americans, Arab Americans and converts to Islam face problems because their names often use unconventional constructions.
Social Security “needs to improve our responsiveness to religious and social realities by easing the burden on converts to Islam, members of blended families and all others who change their names at work,” the report says.
Among the case studies the report cites is a Defense Department civil servant who adopted a Muslim name in the late 1970s and never again received wage credit. The San Bernardino project was able to locate the lost wages and process an $800-per-month disability benefit for the woman, who has breast cancer.
“Her condition is terminal, but this will allow her to enjoy a little more dignity in her remaining days,” the report says.
Hodgson, a 31-year veteran with the agency, said he had been “condemned” for his efforts by officials at Social Security headquarters in Baltimore who contend they already are making a major effort to correct the problem.
“They never thought a field office would take it upon itself to discover errors in the central file,” Hodgson said. Social Security “has known for years that locating gaps in earnings is the single biggest quality complaint about the agency.”
Social Security spokesman Gambino said the agency does not intend any form of retribution against Hodgson. He added that while senior agency officials disagree with Hodgson’s conclusions, “nobody has ostracized him at this point.”
Gambino said Hodgson, while well-intentioned, is misinformed about the agency’s practices and policies.
But Gambino acknowledged the agency has adopted some of Hodgson’s recommendations and is looking for ways of implementing others.
Gambino said errors that cause wage reports to go unposted are mainly the fault of employers who submit erroneous data.