TN 2 (07-02)

RM 01310.015 How We Derive the Data in “Your Estimated Benefits”

A. Introduction

This section is limited to a description of the system- and contractor-generated language contained in the sections “Your Estimated Benefits” on page 2 of the Social Security Statement.

A general description of the data the system generates for each part is indicated below. RM 01310.016 and RM 01310.017 provide more detailed explanations of how the system generates certain data displayed in these sections.

B. Policy

We will use the policies discussed in RM 01310.001C. and established methodology (see references below) to derive the benefit estimates displayed on the Social Security Statement, with the following exceptions:

1. Projected Lag Earnings Shown on On-Request Statements

• When computing the benefit estimates, we will always use the lag earnings for this year and last year provided on the incoming request, disregarding any earnings posted to the record for these years.

• Posted earnings for last year will only be used to compute the benefit estimates when no lag earnings are provided on the incoming request.

• We will not index lag earnings and future earnings.

2. Bend Points and PIA Formula for Both Statement Versions

• For all requesters who are age 62 or younger, we will use the bend points and Primary Insurance Amount (PIA) formula currently established for the year the Statement is produced.

• To compute the PIA for individuals over age 62, we will use the bend points and PIA formula that was established in the year they attained age 62.

C. Description of Data

The Statement system derives the following data for this section:

1. Retirement

Statement system derives the:

• number of credits the individual needs to be insured for Social Security and Medicare,

• age up to which earnings were used to compute the reduced retirement benefit estimate, full retirement benefit estimate,

• estimated amount of monthly reduced retirement benefits, full retirement benefits, and age 70 and over retirement benefits.

2. Disability

Statement system derives the:

• number of credits the individual needs to qualify for disability benefits as if disability occurred in the month the system processed the request. (The system uses the date the Statement system is processed as the disability onset date.)

• estimated amount of monthly disability benefits the individual could receive.

3. Survivors

Statement system derives the:

1. number of credits the individual needs for certain family members to receive benefits if death occurred at the time the system processed the Statement,

2. estimated amount of monthly survivor benefits the individual's:

   • child could receive,

   • child and surviving spouse could both receive,

   • surviving spouse could receive when he/she reaches full retirement age, and

   • the family could receive in total.