SSA will deliver even if banks aren't ready for 2000

The Social Security Administration may not have heard the last of the year 2000
problem, despite President Clinton’s proclamation last month that the agency’s
systems are ready and that Social Security payments are not at risk.

The hitch? The distribution of Social Security benefits hinges not only on the
administration’s systems but those of financial institutions, too. The readiness of
those systems is less sure.

So SSA will follow procedures similar to those it uses when a check is lost in the mail
if financial institutions’ systems fail after the year 2000, an SSA official said.

“This isn’t anything new to us,” said Kathy Adams, assistant deputy
commissioner of SSA for systems. “If it is an emergency, one of SSA’s 1,300
field offices can issue a third-party draft, which is like a check and the recipient can
use it to get their money.”

SSA submits the benefit payments to the Treasury Department’s Financial Management
Service, which then submits them to the Federal Reserve’s Automated Clearinghouse.
Finally, the money is transferred to the recipients’ financial institutions.

Financial institutions number about 20,000 in the country, with the largest 100
handling the majority of SSA’s transactions. SSA and FMS have been working with the
Reserve since July; it in turn has been working with financial institutions to ensure that
benefits go through, Adams said.

To get recipients their money, SSA also has contingency plans such as retransmitting
the direct deposits, having banks manually handle the deposits or having the banks cut
checks, Adams said.

President Clinton last month, in a ceremony at the Old Executive Office Building,
announced SSA had completed its year 2000 work, ensuring that 48 million Americans will
receive their benefits after Jan. 1, 2000.

SSA established itself as a leader in recognizing the year 2000 problem when it became
the first agency to begin work on the problem nine years ago and the second to complete
renovation, testing, implementation and certification of its systems.

The Small Business Administration was the first agency to finish its 2000 work [GCN,
Dec. 14, 1998, Page 1]. But SSA had a more
formidable task with its 308 mission-critical systems compared to SBA’s 42.

The agency will implement a moratorium on discretionary software changes from September
to March 2000 to ensure that systems stay 2000-ready.


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