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Notch octogenarians should beware of Social Security scam.

Byline: Albert B. Southwick

COLUMN: Albert B. Southwick

A fancy piece of mail arrived the other day. It included an elaborate document - "The TSCL National Notch Register." It certified that I, Mr. Albert Southwick, am a participant in the campaign for "Notch Fairness" and am so recorded on the "National Notch Register."

The accompanying letter went on to say that I and thousands of other "Notch victims" have been ignored by an indifferent Congress and cheated out of our proper Social Security pension payments for no other reason than that we were born between 1917 and 1921. The solution is a resolution in Congress to give us oldsters a $5,000 lump-sum payment. To that end, we are urged to send money to something called the Senior Citizens League so that it can put pressure on the politicians to pass the resolution and then the bill, thereby giving of us each a check for $5,000, thus rectifying a terrible injustice.

This, no doubt, is gobbledegook to most readers. Unless you are at least 87 years old, you probably have never heard of the Notch. It first became an issue in 1977, when Congress adjusted the cost-of-living payments for Social Security recipients. Five years before, in 1972, the actuaries had made an error that threatened the solvency of the Social Security trust fund. Annual increases in COLA payments were much too high to be sustainable. Five years later, Congress corrected the error, beginning with those retirees born after 1917. A small number of really old folks continued to receive the larger COLA adjustments.

Congress made 1917 the cutoff date probably because it figured that the older retirees were too few to make much actuarial difference. But it opened the door to the demagogues. An organization miscalled the National Committee to Preserve Social Security and Medicare came up with the case of two sisters, one born in 1916 and the other in 1917. According to the NCPSSM, the revised COLA formula meant that the older sister was getting $2,208 more in retirement payments than her younger sister was. From that isolated case and others like it was built a movement for "justice." In the next several years, the NCPSSM raised many thousands of dollars from gullible oldsters. Although the General Accounting Office pointed out in a careful study that the Notch campaign could jeopardize "the short-run financial condition of the system and the ability to finance the coming retirement of the Baby Boom generation," the movement gained national attention and even support from members of Congress, including Richard Lugar and Tom Harkin. But growing problems of the Social Security trust fund put the movement on the back burner.

Now it's back, with even more questionable claims. The new mailing from the Senior Citizens League states flatly, "If you are like the average Notch victim, you've received about $2,200 less per year in Social Security income than if you were born before or after the Notch years."

This is a new twist. Originally, our 1917-1921 group was seen as being unfairly treated in comparison to the older retirees - those born before 1917. Now we supposedly are also losing out to those born after 1921 as well. That is absurd. Our COLAs are the same as those of anyone else in the system, except for a few people in their nineties. Individual retirement payments will always vary, depending on a number of factors such as year of birth, age at retirement, level of lifetime earnings, level of inflation, etc. Those variations are raw meat for those want to demagogue the issue. Any attempt to point out the facts is called an "outrageous distortion of the truth."

In 1994 a special commission was set up to study the Notch issue. It found that the claim of injustice has no merit and that Congress acted responsibly when it adjusted the COLA rates in 1977. AARP, the American Association of Retired Persons, has also examined the controversy in detail. The AARP traditionally speaks and campaigns for the elderly but, after analyzing the charges and claims, it concluded that the Notch is largely imaginary and that "benefits paid to those in the `Notch' years are equitable, and no new legislation is needed."

AARP also cautions anyone to be "as informed as possible" before donating money to any organization purporting to be working on the Notch issue. In other words, watch out for empty promises that cost you money.

I want to endorse that as strongly as possible. I have no idea how much money gullible seniors have donated to the various Notch groups over the years, but I bet it is a lot. The promise of a $5,000 lump sum payment is enticing, but empty promises should not be allowed to obscure the facts.

The Social Security system will have plenty of challenges in the years ahead as the Baby Boomer generation goes into retirement. It does not need to be burdened by a group of misled octogenarians seeking payment for a nonexistent flaw in the system.

Albert B. Southwick's column appears regularly in the Telegram & Gazette.
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Title Annotation:COMMENTARY
Publication:Telegram & Gazette (Worcester, MA)
Date:Jul 17, 2008
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