Social Security security??? : LUSENET : TimeBomb 2000 (Y2000) : One Thread

What likelihood is there for a failure of Social Security payments?? In other words, there are millions of retirees who in some cases completely depend on those benefits for survival. Do you think that these will be maintained? Also other pensions.. such as California Public Employees Retirement system, etc.. Thanks, Bev

-- Beverly Hilliard (, March 27, 1998


At this point I don't think the hard data available allows an inference as to"likehood" of contiued social security payments. The SSA gets its updates from withholding checks which flow thru the IRS and Treasury (if I've got this right) and the data goes on to SSA. If the SSA systems get y2k compliant (they are not yet, tho reportedly farther along than most) and their electronic data interchange with Treasury works, and if Treasury's systems work, and their EFTs to banks work and the private companies that sell the Treasury its check stock are able to get wood pulp and rags to produce and transport the kinds of paper stock required to print the checks then maybe.However, Treasury and IRS are waaaay behind in remediation.

As for State Retitement Funds the problem has a different spin. Unlike SS, which has no underlying investments - just taxpayers - state and city pension funds invest billions in private companies. NYCity has five pension funds for employees with $80 Billion in assets - 59% in domestic stocks and 10% in foreign equities (soon to go to 15% according to Jon Lukomnik, the city's deputy controller for pensions). So the first vulnerabilityis in the y2k business risk for each of the companies invested in (as foreign countries are futher behind, they are more vulnerable on average). I know from conversations with institutional money managers, that none of them that I have spoken with thinks that y2k is an issue that justifies assuming a bearish protective stance, as they are graded upon increased performance in comparison with their competing money managers. Big money rarely moves except as the herd moves. And who knows if these money managers have their underlying fund management computer systems y2k compliant to insure they know whats going on.

The second problem is that the civil service administrators of the pension systems themselves have to have the managing computer systems y2k compliant. At last report the Texas Teachers Retirement System was reportedly behind in its remediation. E-mails to the Nqational Association of State Pension Fund managers have yielded no answers on the state of the States. That is a thumb nail sketch of what little I have been able to learn. Hopefully, others on this bb have checked their ststes and have more data.

-- Victor Porlier (, March 27, 1998.

Victor has provided a very thoughtful, detailed response below; I can only add one or two small comments.

First: with regard to the major Federal agencies, SSA has consistently gotten top scores for its Y2K work -- primarily because they began their efforts in 1991. That doesn't guarantee that they'll finish 100% of their work, or that they'll escape the bugs that normally exist in newly-modified programs, but at least it's hopeful.

Second: SSA doesn't stand alone, and I suspect that the greatest risk will be the Y2K problems of the federal agencies, and many hundreds (if not thousands) of other organizations it interacts with. If I remember correctly, SSA doesn't even print its own checks -- they're printed by some other part of the U.S. Treasury, which I recall reading was behind schedule on its Y2K work. Also, relatively few people have checks mailed to them directly any more (which would require proper functioning of the US Postal Service, which a colleague told me last fall was in a state of Y2K paralysis, because none of the major systems-integration vendors had bothered replying to a fixed-price, fixed-deadling, severe-penalty-clauses kind of RFP that USPS had issued for its Y2K work). A substantial number of retirees now have their monthly retirement checks direct-deposited into their bank accounts, for convenience and safety. But you know what kind of risks that entails; I suspect that there are half a dozen computer systems (if not more!) between SSA and the retiree's bank account.

If I depended on SSA checks as my primary source of income, I would be _very_ nervous at this point, though I don't think there is anything you can do about it. If any of the state plans allow you to "cash out" your retirement benefits, it certainly ought to be considered as an option.


-- Ed Yourdon (, March 27, 1998.

In my opinion, there is zero chance that SSA will be processing checks.

They've been working at it for the better part of a decade and do not appear to have a good idea of their current progress. Late last year, agency officials testified before Congress that given all the time they had to work on it, they were about one-third done.

Early this year, they testified that in only a few months, they had progressed to two-thirds done.

Now, either they're lying or just incompetent. How could it take eight years to do one-third and six months to do another third? Did they suddenly eliminate 30 million lines of code?

At best the agency has no true idea where they stand.

Even if it was true that they're actually 2/3 done, that took them more than eight years. At that rate, it'll be 2002 before they finish.

It doesn't matter very much, anyway, since the printers that cut the checks are dependant on electrical power to run. As there is currently no electric utility in the US that is compliant (and one-third of them haven't started and another third consider themselves "behind") ...

Wel, YOU figure it out. if they can't power their computers to computer the amount due recipients, and if they can't run the printers which cut those checks ...

Then there's the Department of Treasury, which I assume (though I may be wrong) actually cuts the checks. Their systems, according to congressional estimate, won't be complete until nearly the second decade of the next century.


The federal government, most of the state governments, and nearly all local governments are going to fall. Plan accordingly.

John Smith

-- John Smith (, March 27, 1998.

A related question is the fate of Medicaid (state funded for indigent patients) and Medicare (federal funded health care). In Illinois, the legislature has recently appointed a commission to study the y2k bug and give their recommendations...this report is due in November of 1998. This allows 13 months to review the commission's report, and after the inevitable political wranging of state representatives, budget some money to actually start work on correcting the problem. So all of the nursing homes and hospitals, which are heavily dependent on state funding, can count on uninterrupted flow of funds, right? Not to mention the payments to the drug stores (who are already six months to a year behind in receiving their payments)? What amazes me is that anyone thinks this lack of concern and preparation will not result in a disaster! I suppose the politicans think that the nursing homes, their staff, and vendors, will continue to work without payment while the computers get fixed after 1 Jan 2000?

-- Dennis Sherwood (, March 27, 1998.

If I remember correctly, it was but a couple of months ago that SSA was receiving an "A" grade for its remediation work and that it was 70% or so complete, then only to be told that the 70% of 30 million or so lines of code did not include the ADDITIONAL 30 million lines or so that was overlooked and was specific to the disability checks sent monthly by the states - I think I remember that SSA's response was that the States' disability checks were not considered "mission critical" -- is that why Congressman Horn is still giving SSA an "A"... if so then that means the disabled don't count. That says alot.

-- j.w.parker (, March 27, 1998.

An interesting, but tangential, bit on Social Security taken from the Mar28 issue of World:

" a 1960 court case, the Supreme court ruled that, as a legal matter, Congress is under no obligation to pay Social security, no matter what citizens believe about having paid in advance for their benefits. The rights of a Social Security beneficiary, the Court said, 'cannot be soundly analogized to that of a holder of an annuity.'

"The bottom line, at least legally, is that Congress has the right to change 'all programs and their spending any time,' explains Kenneth Clarkson, director of the Law and Economics Center at the University of Miami."

How do you think that decision might be interpreted in a super financila systems crunch? Obviously, no one knows. We can all just speculate and plan accordingly.

-- Victor Porlier (, March 29, 1998.

In answer to the question: "How could it take eight years to do one-third and six months to do another third?" there may be some hope in the 80-20- principle .I encounter this in my work as a free-lance tech book copy editor, working on screen. I find (after 40 years experience) that it usually takes 80 percent of my allotted time to edit the first 20 percent of the book, then the remaining 20 percent to edit the remaining 80 percent. Has the author's writing gotten better in the latter part? Have I gotten careless? No, actually I have gotten set up to work efficiently. I now know just what has to be done and have internalized the process of doing it.

I know that eight years does not relate to six months in the ratio 80 : 20. I suspect that during the first few years, though, they weren't working very hard.

-- Robert Lentz (, June 22, 1998.


With computer programs I believe that is a 90-10 principal. That is, you spent 10 percent of the time on the first 90 percent of the problem.

The last 10% of the problem.......needed to fix the bugs that are found.......takes 90% of the time.

That doesn't offer much encouragement.

-- Rocky Knolls (, June 23, 1998.

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