Benefits Behemoth

May 15, 2002

By George Cahlink

Downsizing often is cited as the key reason for declining service at SSA. About 20,000 employees have been lost to attrition and early retirements since the early 1980s. Most recently, the agency cut more than 1,000 management and supervisory positions in field offices as part of the Clinton administration's initiative to trim management layers. Those reductions nearly doubled the ratio of staffers to managers in field offices from 8-to-1 in 1990 to 15-to-1 today-one of the highest staff-to-supervisor ratios among the 23 largest federal agencies. The Social Security Advisory Board warned about service problems in its 2001 report. In 2000, more than 7 million of the 76 million calls to the agency's toll-free number were greeted by a busy signal, the board found. Another 17 million callers hung up while waiting for someone to answer. All told, only 66 percent of the callers were served. Customers who seek service in person often encounter overcrowded waiting areas. In some field offices, it is not uncommon to wait as long as four hours for service, according to the report. Sue Roecker, SSA's director of strategic management, says top leaders are aware of criticism from the field. "There's been a feeling for some time that we are really stretched thin and customers' expectations are rising. Even if we are doing the same jobs as before, our customers are expecting more. There is a sense that we'd like to do better." SSA has a strategy for dealing with its workforce and service challenges in the next 10 years. The strategic plan known as Vision 2010, published in late 2000, calls for investing heavily in automated systems, such as the Internet and the toll-free number, so citizens can complete routine transactions from anyplace at any time. The agency also seeks broadly skilled workers who can handle more complex transactions and offer tailored services to suit each region's population. Another key to carrying out Vision 2010 will be to build a more agile workforce. James Kissko, SSA's assistant deputy commissioner for operations, says the agency has been flexible in allocating staff to handle toll-free calls. Over the past decade, as the agency automated more functions and eliminated more jobs, it retrained hundreds of clerical workers at data-processing centers to serve customers calling the toll-free number. More recently, Kissko says, clerical workers have been trained to serve as backup customer service operators during peak calling periods. "We clearly redirect resources where we have the greatest impact and efficiency," Kissko says. Technology will help SSA deal with its growing workload. Operations chief Kissko says the agency plans to use more automated systems to process routine retirement claims, freeing employees for work that cannot be automated, such as determining eligibility for disability benefits. Social Security Commissioner Jo Anne Barnhart, who was confirmed by the Senate in November 2001, said at her confirmation hearings that managers are feeling "pressured and stressed" as the agency's workload increases. "Social Security employees are among the most dedicated workers I have ever known," Barnhart told lawmakers at her October confirmation hearing before the Senate Finance Committee. "But when you look at the workload today, and the pressures and stresses that employees are under. . . . I think that unless we remove some of the stress and feeling of being overwhelmed, they are going to follow the leads of their federal counterparts elsewhere in the federal government, and they will opt to retire when they're eligible." Created: 1935

SSA outshines other agencies in customer service, but workers are overwhelmed by a growing load of retirement and disability claims.

aniel O'Connor, manager of the Social Security Administration's Germantown field office in Philadelphia, keeps a slightly faded letter on his office wall to remind him why he comes to work every day. His grandmother received the one-sentence letter from the agency in 1946 telling her that her monthly benefit would be $7.14. The missive is short and to the point. His elderly grandmother could easily understand it. "It's a reminder to be clear and understandable. That's really why we are here-to provide quality service," he says.

A similar work ethic is pervasive among the agency's 63,000 workers and has helped SSA win top rankings in various surveys measuring customers' satisfaction with federal agencies. In SSA's annual surveys, more than 80 percent of its customers rate the service they receive as good or excellent. Independent reviewers concur. "Even with its considerable workload, the SSA is considered a leader in federal service delivery," the General Accounting Office stated in a 2001 review of the agency's management challenges (GAO-01-261). But O'Connor increasingly finds managing the office's 30 workers "a big juggling act." Each day, he must make sure enough staff is on hand to handle the nearly 200 customers seeking services ranging from the replacement of Social Security cards to the approval of new benefits. Most service goals are being met, but O'Connor wonders how long that will continue.

"We have fewer workers, but the number of people getting benefits is always increasing and the expectations for service are greater than they've ever been," he says.

Favorable customer reviews, the public's overwhelming support for the government's largest entitlement program, and a veteran workforce schooled in the nuances of complex benefit issues mask growing concern among SSA's front-line managers that service is slipping. Recent surveys, interviews and independent assessments suggest that the agency's workers soon will be exhausted. More employees are needed and technology must be upgraded, observers and managers say. Without such changes, SSA no longer will be able to adequately serve the more than 26 million people who visit the agency's 1,300 field offices each year.

"Despite a dedicated workforce, SSA is facing serious delivery problems in carrying out its important responsibilities. These problems stem from a combination of factors, including a prolonged period of downsizing, a growing workload and increasing program complexity," according to a 2001 report, "Agenda for Social Security: Challenges for the New Congress and New Administration," by the Social Security Advisory Board. The seven-member bipartisan panel advises the president, Congress and the SSA commissioner.

The Social Security Administration is responsible for promoting the economic security of the elderly, the disabled and their dependents by administering three major benefit programs: a retirement program, a program for workers who become disabled on the job and an income assistance program for aged, blind or disabled individuals whose income falls below a certain threshold. About 154 million workers and their employers pay into a $1.3 trillion trust fund that they will draw on when they retire or if they become disabled. In 2002, the agency expects to spend $7.5 billion approving and reviewing benefits for:

39.2 million retirees and their survivors, who will receive $384.3 billion.
7 million disabled workers and their families, who will receive $62.8 billion.
6.4 million low-income blind, elderly, and disabled people, who will receive $31.5 billion.

Downsizing and Service

"Nobody feels they have enough workers to get the job done," says Lorna Walters, district manager for the agency's four field offices in Washington. Orland Bergenes, district manager for the agency's Billings, Mont., field office, says his staff has shrunk from 45 to 22 in recent years. Bergenes often receives complaints from customers who call seeking service and get busy signals. The office hasn't added more telephone lines because it doesn't have the staff to answer them. "We are understaffed to the point we are unable to provide the service the public deserves. We have downsized too far in both staff and management," Bergenes says.

Other SSA front-line managers agree that workforce reductions have led to a decline in service. Their opinions are reflected in a January 2002 survey of 2,200 managers of SSA field offices and teleservice centers conducted by the National Council of Social Security Management Associations, a professional organization that represents more than 3,000 agency managers. Of the managers surveyed:

77 percent said quality has declined in the past five years.
82 percent called for training improvements.
73 percent said their offices did not provide acceptable telephone service.
72 percent contended that customer waiting times had increased in the past five years.

Amid questions about service, the agency is facing an unprecedented surge in work over the next decade as baby boomers age. During that time, the number of retirement checks the agency issues will increase by 20 percent as the oldest boomers reach retirement age, and disability work could increase by half. By 2020, the workload will weigh even more heavily on the agency as the bulk of boomers hit their golden years.

It's not just the aging population that will pose service challenges-SSA's own graying workforce will, too. The average SSA employee is 47 years old and has worked for the government for about 20 years. By 2009, more than half of the agency's 63,000 workers will be eligible for retirement. In 2010, 80 percent of the agency's senior executives and managers will be eligible. SSA anticipates a retirement wave that will peak from 2007 to 2009, with nearly 3,000 workers retiring each year. That's about double the retirement rate for 2000. "Increasing workloads coupled with human capital shortages will further stress SSA's ability to provide quality service to the public," the agency's inspector general said in a 2001 report.

The Future Is Now

The agency's southern California field offices are models for making all of SSA's service operations customer-friendly and community-based in the next decade, Roecker says. Sheila Leiter, SSA's area director for Los Angeles, oversees 24 field offices. She says providing superior service means employees not only must know the ins and outs of benefit programs, but also must be attuned to the cultures of their clients, who range from recent Russian immigrants to second-generation Hispanic Americans. "The big challenge is to understand the different cultures and how they feel about telling government very personal things. Many immigrants who come here are very suspicious of government," she says.

Pedro Sarquis, assistant district manager for the agency's Hollywood, Calif., field office, says his largely immigrant clientele is served by a 60-person staff that speaks more than 20 languages. In recent years, his office has hired only bilingual workers. "A lot of times claimants will come in and ask for someone who speaks their native language. Otherwise, they will not trust them," says Sarquis. Veronica Mendoza, manager of Social Security's Los Angeles district office, sends some of her claims representatives to community forums on issues such as AIDS, so they can become more sensitive to the needs of the area's growing number of people infected with the virus. Every week, she sends a Chinese-speaking claims representative from the Los Angeles office to take claims and address benefit issues at the Chinatown Service Center, a community-based organization that offers a variety of health, education and human services to the area's large ethnic Chinese population. "Doing this helps us build trust in the community," Mendoza says.

Implementing Vision 2010 not only will require specialized service, but a budget infusion of several hundred million dollars a year. By the end of the decade, the plan calls for SSA's operating budget to increase by as much as $400 million each year to support about 100,000 workers. SSA's annual spending on information technology would increase by $200 million to $300 million to buy new technologies and upgrade existing capabilities. And upfront spending would be needed to train 1,000 to 2,000 SSA employees a year for new, more complex jobs that will require them to be familiar with numerous benefit programs.

Barbara Bovbjerg, director for education, workforce and economic security issues at GAO, calls Vision 2010 a step in the right direction, but she says it is not a "complete blueprint" for how SSA will transform itself. The agency needs to develop annual plans for specific IT investments, set annual targets for hiring and come up with customer service goals it will need to reach by 2010, she says. SSA has had varying degrees of success in achieving its current goals, according to GAO. In a June report (GAO-01-778), SSA won praise for having 34 ways to measure whether it is "providing, timely, accurate and useful" information and services to the public. SSA met about half its customer service goals in 2000, and often took steps to improve performance where it fell short. For example, after finding its toll-free telephone service lacking, the agency offered more training to operators, GAO noted.

GAO also found the agency has made improvements in providing timely information to policy-makers on program issues. In 2002, SSA will work with other agencies on research projects and is establishing measures for how the agency's programs affect the economic well-being of the public. "SSA has not always been sufficiently active in research that would support policy decision-making. However, in recent years SSA has taken steps to strengthen its research and policy development," the auditors found.

Workforce Flexibility

Paul Barnes, SSA's deputy commissioner for human resources, says the agency also is redirecting human resources by offering early retirements to offset the wave of workers expected to leave by decade's end. SSA offered 1,400 early outs in 1999, 730 in 2000 and 660 in 2001. SSA then hired 3,500 new workers in 2000 and 3,700 new workers in 2001. By 2010, those new hires will be considered experienced workers with more up-to-date technical skills.

Barnes says surveys of workers have eased concern about a retirement surge. It turns out that most workers are not planning to retire from SSA when they become eligible at age 55. Most will not retire until they turn 61. If the survey findings hold up, SSA will have 500 fewer retirements than expected each year from 2007 to 2009, he adds.

SSA is using leadership and career development programs to shape its workforce for 2010. Since 1998, 1,200 employees have completed national, regional or component-level leadership programs. "Leadership development programs are a big part of the agency's succession program," says Barnes. SSA also trains employees on ever-changing benefit regulations using videoconferencing tools at field and regional offices.

Management Tools

The Bush administration's 2003 budget proposal lauds SSA's "constructive steps" in the past two years toward expanding online services, but notes it "remains a paper-driven agency." Only 3.5 percent of retirement claims are handled through the Internet, and other online services suffer a similar "low utilization rate," according to budget documents. By 2005, the administration wants 67 percent of customer services to be provided through the Internet or the agency's toll-free number.

"Unless SSA improves its current business processes by investing in and making use of technology improvements, resources may not be able to meet workload demands over the next 10 years," according to the 2003 budget proposal, which calls for $688 million in IT spending for the agency.

Dean Mesterharm, SSA's chief information officer, says the 2003 budget request is an improvement over previous IT budgets. The fiscal 2002 request was $600 million, about the same as provided annually for the past decade. In recent years, SSA has moved from large-scale IT purchases to smaller buys that are bringing new technology to the agency faster. For example, SSA has upgraded 90,000 employee computer workstations in the past three years by procuring 20,000 to 40,000 workstations a year rather than buying them all at once. "When you make large-scale procurements you end up on the tail end of technology because its takes forever to go through the government procurement process," says Mesterharm.

Better financial planning is another part of the agency's strategy for dealing with increased work. Outside auditors have given SSA's financial statements a clean bill of health for more than a decade, but the budget planning process has been limited. Last fall, SSA began experimenting with a more collaborative process that requires deputy commissioners from across the agency to hear one another's budget requests and act as a board of directors in creating and reviewing the budget. In the past, each regional director submitted a request to the agency's budget shop without knowing what the others had requested.

"Nobody knew how each other's budget fit together. The goal is a more unified budget. We can't do everything, but at least they'll know what we have, why we did it and how we'll execute," says Peter Spencer, former deputy commissioner for finance, assessment and management, who recently became head of the San Francisco regional office.

The Bush administration's budget request notes that SSA does not yet have "fully integrated financial and operating management systems" despite its record of clean audits. Spencer says the agency is testing a commercial cost-accounting system to be used agencywide by 2005. The agency wants more than $1 billion in fiscal 2003 to determine whether retirees and the disabled are getting the right benefits. SSA estimates it could save $11 in program costs for every disability benefit claim it reviews and $7 for every retirement benefit claim-a potential savings of more than $30 million. The savings would result from finding overpayments or discovering beneficiaries who no longer are eligible to receive payments.

The Road Ahead

Barnhart, a former member of the Social Security Advisory Board and assistant secretary for children and families at the Health and Human Services Department in the early 1990s, declined to be interviewed for this story. The first glimpse of Barnhart's plan for tackling SSA's challenges was expected in her initial evaluation of the agency, known as the Service Delivery Assessment, due to Congress this spring. Barnhart told lawmakers the review would focus on determining the optimum level of service the agency should provide and the resources required to provide it.

Most agency executives, managers and observers say Barnhart is a good choice to head the agency at this critical juncture. Many cite her work at the Social Security Advisory Board-which has been raising concerns about the quality of service and the increasing workload for more than five years-as a good starting point for understanding the agency's problems. Others note that Barnhart is the first SSA commissioner appointed to a six-year-term since the agency was created in 1994, and that will give her time to tackle problems that would be hard to even understand in the year or two most past administrators have spent in the job.

Barnhart must tackle those challenges as a political debate rages about the future of Social Security. The Bush administration is pushing to partially privatize the retirement program by allowing workers to invest a portion of their benefits in the stock market. SSA's role in the debate has been limited, but privatization could substantially change how, and perhaps whether, the agency administers the Social Security Trust Fund.

Social Security Administration

Mission: To promote the economic security of the nation's people.

Top official: Jo Anne Barnhart