61 You just cannot visualize it as an application coming into Chicago and somebody spending a day handling the case because there are so many people who handle the case at some time or other. Mr. FARNUM. You have 169,000 new claims each year? Is that what this says? HANDLING OF CLAIMS ALREADY FILED Mr. RUDISIN. That is the number of claims dispositions. Mr. FARNUM. What about the recurring ones, once the claim has already been processed and continues on for years? Do not these same people handle those, also? Mr. HABERMEYER. We may start out with an annuitant. The wife at the time is not eligible. She is not old enough. Then she becomes eligible, so we take an application on her. Perhaps they have minor children who would be involved in the computation of the benefits paid to the family. Then the man dies. We have to get all new evidence, evidence of his death. If she is a widow, we have to make new computations as to what benefits will be paid to her at that time. We make certifications. I think the 169,000 includes our certifications of records we send to the social security system for a man who died not covered under our system. Mr. RUDISIN. We make certifications under another workload item. We have some 200,000 certifications to social security which they need in developing cases where there is some railroad service involved. Mr. FARNUM. I can understand you have a lot of work, and I just wondered what all is involved in that 1.2 cases that are handled per day in terms of the individual working on these. You have a pretty standard procedure, once the case is filed. Mr. HABERMEYER. It is complicated. Mr. FARNUM. It is to start with, but once it has been approved Mr. HABERMEYER. We have to adjudicate it under our law and the social security law in order to determine what the benefit will be. Mr. FARNUM. Once it is determined and you are making the pay ments Mr. HABERMEYER. Once he is on the roll, it is simple to keep him on the roll; yes. As a matter of fact, we handle all that mechanically by computers. I do not think we have ever been late with a check. We are paying 890,000 people every month. Mr. FARNUM. This is a mechanical operation, the 890,000. It just takes people to operate the machines. POLICING OPERATIONS Mr. HABERMEYER. Yes. We do have problems with those on the rolls. We have to watch continually to be sure they are not violating work restrictions, that a disability annuitant is not out working full time, that widows are not earning more than $1,500 without suffering reduction in the benefits we pay, and that a man who is retired has not gone back to his last employer or to another railroad company and is working again, in which case he loses his entitlement. These policing operations are involved. To that extent, we have to keep reexamining the rolls. IMPROVING PROCEDURES Mr. FARNUM. Given the big majority of the work now is being handled mechanically or electronically in terms of processing checks, and so on, what has been done in terms of the procedures, in terms of systems analysis, cutting down the paperwork which is required for the processing of these new claims? Mr. HABERMEYER. We are constantly reviewing and improving our procedures. Mr. FARNUM. What are some of the improvements in the last few years? Mr. HABERMEYER. We take great pride, for example, in the fact that I do not think any insurance company or other Federal agency pays a widow a lump-sum benefit as fast as we pay it. We pay those claims off in 3 days. Mr. FARNUM. I am glad to see that you are paying them fast. I just would like to know what are some of the improvements that have been initiated and promulgated in the last year. Mr. HABERMEYER. We are gradually transferring a lot of the paperwork, the manual operations, over into computer operations or, instead of sitting down at the computing machine, we have the machine do the work for us. We punch up cards that show all the evidence that we have on a case. The machine is so programed that if everything is in order it will go into the computation, make the computation, and pay the claim. If one thing is out of line, it will stop the payments and tell us what is wrong with the case. We have to go out and get this piece of evidence or get this bit of information in order to pay the case. I think we have done a marvelous job in the last 2 years in streamlining, as evidenced by the fact that we have made a substantial reduction in personnel in the last 6 years. Mr. RUDISIN. We made very substantial reductions. I do not have the figures handy but I can furnish them for the record. Mr. HABERMEYER. There was a 28-percent reduction in the last 6 years. Mr. FARNUM. You are talking in terms of personnel you say you would have needed if you had not introduced these mechanical operations? Mr. HABERMEYER. Yes, sir. INNOVATIONS IN PROCESSING OF CLAIMS Mr. FARNUM. Let us get back to the processing of claims. What new innovations or systems have been devised to reduce work in the handling of paper you think is necessary to be handled in the processing of claims? Mr. MCKENNA. I think it is important to point out that every 2 years or so the Social Security Act is amended and in alternate years the Railroad Retirement Act is amended and many times the improvements we set up during the preceding year have to be completely revamped and revised during the coming year. We are continually confronted with changes in legislation calling for changes in procedures and methods. Mr. FARNUM. Do you have any people whose sole duties are to integrate these changes in your system? Mr. HABERMEYER. Yes. We have a very heavy force on that. Mr. HABERMEYER. I would say in program analysis we have 40 or 50 people. Is that about right? Mr. MCKENNA. The retirement program alone, I think it would be at least 40 people, because your supervisory staffs are involved in this also. Mr. HABERMEYER. Could we furnish you a statement on that? Mr. FARNUM. Yes, on what you have done in the last year in the way of systems improvements. Mr. HABERMEYER. Yes, sir. (The following was submitted for the record:) EXAMPLES OF SYSTEM IMPROVEMENTS IN THE OPERATIONS OF THE RAILROAD RETIREMENT BOARD Systems improvements in 1965 include the conversion of the adjudication of spouse claims from manual to electronic processing procedures. The new procedure provides for automatically determining eligibility for benefits, computing benefits amounts, transmitting data to the Treasury Department for the issuance of checks, notifying beneficiaries of the award, and establishing required Board records. The handling of some postadjudication actions also was converted from manual to electronic procedures. A procedure was installed under the computer automatically prepares notices, to the persons receiving payments for children who are attaining age 18, that the child's benefits will be terminated unless the child is disabled or in school. At the appropriate time the computer terminates the payment for the child, recomputes the benefits (if any) that remain payable to other beneficiaries in the family group, prepares appropriate notices, and updates the Board's records to reflect the action. In the past, this work was done manually; the cases were coded for callup, folders were examined, benefit amounts were recomputed, changes in benefit amounts were certified to the Treasury Department, and appropriate notices were prepared. Procedure was installed to notify automatically the beneficiary's last employer of the relinquishment of rights by disability annuitants at age 65. Other required actions are taken automatically at the appropriate time, such as preparing forms for policing a disability annuitant's continuing eligibility for benefits, or initiating clearance as to a beneficiary's eligibility or benefit status under the Social Security Act. In the past, these actions were all taken manually. A procedure has been designed to convert automatically, without obtaining another application, a spouse benefit to a widow's benefit when the employee annuitant dies. Under this procedure recomputation of the amount of the benefit, certification of the new amount to the Treasury Department for payment, preparation of appropriate award notices, and updating of the Board's records to reflect the action are all automatic. The Board arranged with additional employers to report wage data on magnetic tape to facilitate direct entry of the information into its records. In 1965, the earnings of 67 percent of all employees in the railroad industry were reported on magnetic tape, and almost all of the remainder were reported on punchcards enabling direct entry into computer processing. The Board improved the method by which it obtains sample data on gross earnings (that is, total earnings including amounts over the taxable limits) needed for certain actuarial and financial studies. Under the new method employers will report gross earnings currently each year for employees included in the sample. Furnishing the data currently rather than having it compiled retroactively upon the retirement of the individuals included in the sample, simplified procedures for both the railroads and the Board. Employees in the Board's district offices began recording change-of-address information, received personally from a beneficiary, on a form which can be routed directly to key punching, thus eliminating the need for manual coding. This is an extension of a procedure under which a change-of-address form is 59-316-66-pt. 1-5 printed on the back of envelopes in which benefit checks are mailed. The form serves as a constant reminder to keep the Board informed of his current address and provides beneficiaries with a standardized form for reporting address changes. These improvements have increased the percentage of cases in which the beneficiary reports all the information needed, and facilitates direct entry into the computer system. In addition to moving ahead with converting operations from manual to computer procedures and installing systems improvements in going operations last year, the Board planned, developed, and installed procedures to handle the entirely new medicare program introduced by the 1965 amendments to the Social Security Act. In planning for the administration of medicare, procedures were developed to have the computer identify beneficiaries already on the benefit rolls who were eligible for hospital insurance benefits, so the Board could send them enrollment forms for supplemental medical insurance benefits. Similarly, railroad employees who have not yet retired were identified and given an opportunity to apply for both the basic hospital insurance benefits and the supplemental medical insurance benefits. Procedures were developed to electronically adjudicate applications for enrollment, to prepare and issue health insurance identification cards, and to maintain master files of enrolled eligibles. Applications for medicare were designed to facilitate electronic processing with a minimum of manual handling. Some forms are on punch cards into which data have been prepunched, or can be key punched without any manual coding. For example, the punch card form for enrollment of a beneficiary in the supplemental medical insurance benefits program is prepunched so that it can be reentered into the system without any key punching, and paper forms have been so designed that data can be punched directly from them by key punch machine operators without manual coding of data. The Board arranged with the Chicago regional disbursing office of the Treasury Department to include the retroactive amounts due some 260,000 beneficiaries in the regular monthly benefit checks issued September 1, 1965, rather than issue separate adjustment checks. This saved the cost of preparing and mailing separate adjustment checks to cover the increase. To avoid printing a separate individual notice for each beneficiary, the Board also arranged to print on the September 1 check the new monthly benefit rate which would be payable in the future. INVESTIGATION OF CONTINUING ELIGIBILTY Mr. FARNUM. I notice under "Investigation of Continuing Eligibility" you make the statement on page 16 that this investigation of continuing eligibility consists of updating electronic tape and exchanging information between you and the people in the Social Security Administration. Do you have a good field investigative staff to determine whether or not, other than mailing questionnaires and so forth, people are still eligible? Mr. HABERMEYER. We do both. Mr. FARNUM. How much personal contact do you have to see if they are eligible? Mr. MCKENNA. The machines simply spot check and we make investigations where they are indicated. Mr. FARNUM. Talking about people who have been on the rolls 5 years and you automatically send out the checks, what percentage of these people do you make a check on to see if they are still eligible or even still alive? Mr. RUDISIN. We have practically 100-percent coverage so far as checking. Mr. HABERMEYER. We are in the process of mailing out our questionnaires and, where the answers indicate a further field investigation is required, we will make that investigation. Mr. FARNUM. A questionnaire can be filled out by anybody. I am asking about personal contact. Will you furnish that for the record? Mr. HABERMEYER. Yes. (The information requested follows:) PERSONAL CONTACTS REGARDING ELIGIBILITY OF BENEFICIARIES ON BENEFIT ROLLS Annually approximately 16,000 field office contacts are made that involve a check on continued eligibility. The field contacts are made for the following purposes: 1. To resolve discrepancies and inconsistencies and to get more complete information in connection with annual policing questionnaires sent to beneficiaries. 2. To investigate leads on unreported earnings and last person service. These leads are developed by the use of Social Security Administration's wage reports and reports of compensation made to us by railroads. 3. To investigate other leads on disqualifying conditions that come from a wide variety of sources that include inconsistent reports to us and SSA regarding disability and earnings, information from disputant wives and other relatives regarding the claims of other, checks and other mail returned undeliverable, and uncashed checks. 4. To get from representative payees (persons who receive benefits on behalf of others) an accounting of the use of the money. Mr. FOGARTY. Mr. Duncan. SIZE OF AVERAGE PAYMENT Mr. DUNCAN. What are we talking about when we talk about the average widow's payment and the average spouse's payment? Mr. HABERMEYER. The average widow's payment is $90 and the average spouse's payment is $70 per month. But the spouse has a husband who is getting a payment at the same time. Mr. MICHEL. What is the average? Mr. HABERMEYER. The average for career men coming on the rolls now is $180 to $190. The average annuity of everybody on the rolls is $142.27 as of September 1965. Mr. MICHEL. Is that men and women? Mr. HABERMEYER. Yes. There are not many women employees. Mr. MICHEL. What is the average of just the men? Mr. HABERMEYER. I do not have that now. Mr. HEALY. The average award last year to 30-year people was $180 a month: $218 is our maximum today. Mr. MICHEL. What is the lowest? Mr. HABERMEYER. Less than $50. Mr. FLOOD. What would the average person retiring from the Lehigh Valley last year get? Mr. HABERMEYER. $155 or $160. Mr. HEALY. Conductors and engineers are higher. They would get about $174. Mr. FOGARTY. Mr. Lyon, do you wish to add anything? Mr. LYON. No, Mr. Chairman, I have nothing to add. Mr. FOGARTY. Mr. Healy? Mr. HEALY. I have nothing to add. Mr. FOGARTY. Thank you very much. |