WASHINGTON - 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 remedy 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 SSA 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 has hotly denied that its policies or procedures are discriminatory.
Agency officials, arguing that they are doing a good job overall, say the $234-billion gap represents just a small portion of the wage reports the agency has handled since the program was enacted in 1935.
The San Bernardino report, however, details for the first time 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 (Park Chong Kyu and Carlos Romero Barcelo).
Women are the subjects of a large portion of the errors because they often do not notify the SSA when they change their last name 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 written by Jim Hodgson, 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 only skimmed the surface of the problem, Hodgson acknowledged.
The San Bernardino report was recently 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 was doing vastly better at recording wages than in the past and denied that unusual spellings or spaces in the names of minorities caused serious problems. He added that the issue did not reflect a computer or software defect.
Investigation was blocked
Rep. George E. Brown Jr., D-Calif., has sought to get authorization for a General Accounting Office investigation, but was blocked last summer by House Ways and Means Committee Chairman Bill Archer, R-Texas.
"There has never been a thorough examination of this problem," Brown said.
A spokesman for Archer said he decided against a GAO investigation because the SSA's inspector general already was looking into the matter. Gambino said the inspector general had been investigating the issue since last summer but was not close to issuing a report.
Among the 100,000 repairs made by the San Bernardino office were 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 eastern 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 the 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 that she never knew that 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.
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, since their names often use unconventional constructions.
`Improve our responsiveness'
"SSA 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 that they are already 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. "SSA has known for years that locating gaps in earnings is the single biggest quality complaint about the agency."
Gambino said the agency did not intend any form of retribution against Hodgson. He added that while senior agency officials disagreed with Hodgson's conclusions, "nobody has ostracized him at this point."
Gambino said that Hodgson, while well intentioned, was misinformed about the agency's practices and policies. Nonetheless, Gambino acknowledged that the agency had adopted some of Hodgson's recommendations and was looking for ways of implementing others.
Gambino said the errors that caused wage reports to go unposted were mainly the fault of employers who submitted erroneous data. The agency, he said, is doing everything possible to remedy the problem.