In June 1953, the average insurance benefit paid to a retired worker who had no dependents also receiving benefits was $48.20 a month. When the worker and his wife both received benefits, the average for the family was $83.60. Families consisting of a widowed mother and two children averaged $108.80. These figures reflect only partially the generally higher benefit amounts payable under the 1950 and 1952 amendments in cases in which the worker has had at least 6 quarters of coverage (roughly 18 months of covered work) after 1950. Benefits computed under the new formula applicable in such cases averaged $63.10 a month for a retired worker with no dependents receiving benefits, $104.30 for a retired worker and wife, and $152.40 for families consisting of a widowed mother and two children. Twenty-nine percent of all retired men on the benefit rolls whose benefits have been computed under the new formula are receiving benefits at the maximum amount of $85 a month. THE PROTECTION PROVIDED Some 90 million people living on January 1, 1953, had worked in covered employment and made contributions under the program at one time or another during the first 16 years of its existence. About three out of four had enough wage credits to be fully insured under the program; for one out of four the insurance protection was permanent. Of the 13.3 million people aged 65 or over in the United States in December 1952, 4.1 million were working or married to men who were working. Probably 1.9 million of them can now count on receiving monthly benefits under old-age and survivors insurance when their income from work stops. Of the population under 65 years of age, 62 million were insured under the program at the beginning of the calendar year 1953. Some 21 million of these people were permanently insured—that is, whether or not they continue to work in covered jobs they will be eligible for benefits at 65 and their families are assured of protection in the event of their death. An additional 41 million were insured but would have to continue in covered work for an additional period to make their insured status permanent. Four out of five of the mothers and young children in the Nation were assured that they would receive monthly benefits if the father or working mother of the family died. THE COVERAGE OF THE PROGRAM During the calendar year 1953 an estimated 62 million persons will work in employment or self-employment covered by old-age and survivors insurance and will earn credits toward their insurance protection. At the end of the 1953 fiscal year, about 80 percent of the Nation's paid civilian jobs were covered by the program. An addi tional 7 percent were covered by retirement systems of Federal, State, and local governments. About 13 percent of the Nation's gainful workers-most of them farmers, self-employed professional people, or farm or domestic workers who are not regularly employed by a single employer-have no coverage under any public program. Members of the Armed Forces are not covered by old-age and survivors insurance, but Congress has enacted legislation granting wage credits of $160 for each month of active military service during the period after September 15, 1940, and before July 1, 1955. CONTRIBUTIONS AND DISBURSEMENTS Benefit payments during the fiscal year amounted to $2,627 million; with administrative expenses of $89 million, the total outgo amounted to $2,717 million. Contributions totaled $4,097 million, and interest received on investments was $387 million, bringing total receipts to $4,483 million. The difference of $1,766 million represents the increase in the trust fund during the year. At the end of June 1953, the fund totaled $18.4 billion held and invested for the benefit of the contributors to the program. Chart 4.-THE OLD-AGE AND SURVIVORS INSURANCE DOLLAR On June 30, all assets of the fund, except $549 million held in cash, were invested in United States Government securities as required by law; $2.3 billion was invested in public issues (identical with similar bonds owned by private investors), and $15.5 billion was invested in special certificates of indebtedness bearing interest at the average rate paid on the total interest-bearing Federal debt at the time they are issued. The average interest rate on all investments of the trust fund at the end of the fiscal year was about 2.4 percent. ADMINISTERING THE PROGRAM Although the budget for the fiscal year 1953 was curtailed, the workload of the Bureau of Old-Age and Survivors Insurance increased 17 percent over that in the fiscal year 1952; the claims load was at a level some 39 percent above the 1952 load. A sharp increase in the volume of claims received occurred immediately after July 1, 1952. Potential claimants who could have filed earlier had delayed filing until that date to take full advantage of the new computation formula provided by the 1950 amendments. July and August were crucial months. Peak weekly claims were very close to the record highs established in September 1950 immediately after the 1950 amendments were enacted. Another critical situation developed when changes had to be made in the payment rate of approximately 4.6 million beneficiaries receiving monthly benefits, to put into effect the increases provided in the 1952 amendments. This had to be accomplished between July 18, when the amendments were enacted, and the date the benefit checks for September were issued. The work was completed on schedule by detailing personnel from other jobs, working overtime, and utilizing machine methods to the maximum. The systematic approach employed enabled the Bureau's area offices to keep reasonably current in their regular operations while completing the conversion to new rates. The regular fiscal year appropriation of $60,500,000 was insufficient for the workload resulting from the combined effects of the 1950 and 1952 amendments. The Bureau accordingly submitted a request for a supplemental appropriation. Pending congressional action on this request, the Bureau was authorized to spend at the annual rate of $64.5 million. In the second half of the fiscal year, Congress voted only $2 million of the Bureau's supplemental request of $4.4 million. Since spending had been at an accelerated rate, immediate action was necessary to reduce expenditures to an absolute minimum. All overtime authorizations were cancelled, recruitment was stopped, and drastic curtailments were made in expenditures for items other than salaries. The necessity for these cut-backs came at a time when the pending claims load in field offices was exceptionally high. Normally the pending claims load is about 65,000, but by the end of January it was at 143,700, and emergency measures were required to keep the backlog of work from increasing. By June 30, 1953, the pending claims load was reduced to 92,000. This reduction, however, was achieved only at some sacrifice of quality and service to the public, by the temporary elimination or curtailment of essential functions and expenditures, and through voluntary, unpaid overtime. Administrative costs in the fiscal year 1953, including costs incurred by the Treasury Department for the collection of social security taxes, were approximately $90 million, or 2.2 cents out of each dollar of contributions collected. Costs within the Department of Health, Education, and Welfare were approximately $66 million, or 1.6 cents out of each dollar of contributions. MANAGEMENT IMPROVEMENT ACTIONS One of the noteworthy aspects of the Bureau's management improvement efforts during the year was the degree to which savings were the result of cooperative action with other agencies. For example, a plan was adopted by the General Services Administration and the Bureau to transfer a portion of the inactive claims records to the Federal Records Centers operated by the General Services Administration. The initial transfer of these records resulted in a saving of approximately $100,000; an additional transfer to be completed in the coming year will save an estimated $210,000; and annual savings are estimated at $34,000 per year after 1955. As a second example, methods were worked out with the Veterans Administration to use its files in developing old-age and survivors insurance claims filed by Philippine citizens, after a study had revealed that more than 90 percent of these claimants had already filed claims with the Veterans Administration. The use of these files not only permitted maximum economy and prevented duplication of work on the part of both the claimant and the Bureau, but also ensured greater accuracy by enabling the Bureau to use the results obtained by the substantial investigatory staff maintained by the Veterans Administration in the Philippines. Perhaps the management improvement action of greatest potential scope was contained in a proposal made by the Internal Revenue Service of the Treasury Department to integrate old-age and survivors insurance wage reporting with annual reporting of withholding taxes. This proposal, which contains significant possibilities for savings to the Government and to employers, as well as improvements in the enforcement of tax legislation, is being carefully studied by the Internal Revenue Service and the Bureau of Old-Age and Survivors Insurance. Legislation changing certain provisions of law would be necessary before the plan could be put into effect. The Bureau's wage record operation has also furnished additional areas for administrative simplifications and economies. Last year's report cited the plan for a new wage record certification procedure that would reduce to a minimum detailed checking of wage records back to 1936. This procedure was installed early in 1953 with excellent results. Recent analysis indicates that the procedure has reduced by approximately 30 percent the cases where detailed checking of the wage record is necessary for information on earnings from 1936 to date. Research into the use of electronics in the Bureau's wage record and statistical operations has been still another activity which is expected to yield large long-range savings. Possibilities of adaptation to the Bureau's needs of a device which will scan printed material electronically and will automatically prepare punch cards from such material are being vigorously explored. If such a device can be perfected and installed to take the place of manual punching operations, it will eliminate a significant portion of the costs now involved in processing reports of employee earnings. In addition, tests are being run on the Bureau of Census electronic machine to determine the feasibility of carrying on some of the Bureau of Old-Age and Survivors Insurance statistical operations by electronic methods. The Bureau is also exploring the longer-run possibilities of high speed "random access" files using electronic storage media. The development of such files would make it possible to carry on the major part of the Bureau's record operations with electronic rather than punch card equipment, with the possibility of annual savings running as high as several million dollars. The development of personnel and the maximum use of their capacities continues as a major management objective. The grouping of positions into "job families" to facilitate the movement of employees among positions throughout the Bureau was cited in last year's report. During the 1953 fiscal year, additional job families were developed and this work was supplemented by the preparation of the first portion of a Job Information Handbook. This Handbook will contain detailed job information designed to acquaint Bureau employees with the facts about Bureau jobs so that they can make the most of career opportunities in the Bureau, with maximum contributions to the program. The Senate Subcommittee on Federal Manpower Policies in its report on S. 3493, a bill to "provide greater economy in the use of manpower, money, and materials by the development of more effective methods for selecting supervisory personnel in the Government service," gave special commendation to one of the Bureau's divisions for its planned program for selecting supervisors. Congress has appropriated funds to prepare for "construction of an office building and appurtenant facilities for the Bureau of OldAge and Survivors Insurance, including equipment, acquisition of land (including donations thereof), and preparation of plans and specifications." At present the Bureau occupies more than 600,000 square feet of space, at an annual rental of over $700,000 in nine scat |