Blogging Employee Benefits

October 24, 2006

Proposed New Accounting Standard for Social Insurance

Filed under: Social Security — Fuguerre @ 12:10 am

The Federal Accounting Standards Advisory Board has published Preliminary Views toward amending its Statement of Federal Financial Accounting Standards No. 17, Accounting for Social Insurance (included in the FASAB’s massive Statements of Federal Financial Accounting Concepts and Standards) to accelerate the government’s recognition of expense and liabilities for social insurance programs, including Social Security, Medicare, and Railroad Retirement. (FASAB Issues Preliminary Views Regarding Accounting for Social Insurance, News Release)

The Preliminary Views present two opposing approaches, a majority Primary View and a minority Alternative View:

  • Primary View – Expense would be recognized when participants in a social insurance program become fully insured, then as benefits increase due to additional work in covered employment by fully insured individuals. For example, under Social Security, expense would be reported for an individual upon completion of 40 quarters of work in covered employment, and a liability for accumulated unpaid expense would be recognized.
  • Alternative View – Expense and liability would continue to be measured and recognized according to current rules under SFFAS 17, upon satisfaction of all eligibility criteria for benefit entitlement, when benefits become due and payable.

Written comments are requested by April 16, 2007 (although the press release gives April 18 as the comment deadline).

February 13, 2006

CBO Reports on LMS Social Security Reform Plan

Filed under: Social Security — Fuguerre @ 9:44 pm

Total Social Security benefits would be slightly lower than under current law through 2035 under the Liebman-MacGuineas-Samwick (LMS) Nonpartisan Social Security Reform Plan, according to a CBO report on the proposal. Benefits under the LMS plan would then approximately equal benefits under the current system through 2052. The CBO report also projects that the LMS plan’s benefit reductions and revenue increases would generally improve federal budget balances, although federal budget deficits would increase in early years under the plan as redirection of payroll taxes to individual accounts would appear as budget outlays. [Long-Term Analysis of the Liebman-MacGuineas-Samwick Proposal, CBO, 2/8/06]

January 24, 2006

Social Security Agreement Between U.S. and Japan

Filed under: International, Social Security — Fuguerre @ 7:18 am

An agreement coordinating the U.S. and Japanese social security programs went into force on October 1, 2005, according to a notice from the Social Security Administration. [71 FR 3913; Totalization Agreement with Japan; U.S.-Japan Social Security Agreement] Under the agreement, an employee in one of the countries who is sent to work in the other country for no more than 5 years will remain covered only by the social security system of the sending country. Additional rules under the agreement eliminate dual social insurance coverage in other work situations, such as those encountered by self-employed individuals. The agreement also addresses situations where workers lose social security benefit rights by dividing their careers between the two countries.

The agreement does not cover Medicare benefits.

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