The Social Security Administration has enough problems without contemplating the loss of more contributors, but that's what it's facing now. More than 500 nonprofit organizations (half of them hospitals) and more than 300 state and local governments have officially served notice that they intend to leave the Social Security system. They represent a total of about 13 million workers and under current law, they can leave two years from the day they write the letter, unless they withdraw it.
Getting out of Social Security is an option available only to nonprofit or government institutions, which had to opt to get into Social Security in the first place. A relatively small percentage of workers covered by Social Security fall into this category. The SSA estimates, for example, that the 271 nonprofit hospitals that have said they want to withdraw represent a potential loss of $343 million in Social Security revenues for fiscal 1982 and 1983 combined. Social Security pays out about $150 billion annually.
The House Ways and Means subcommittee on Social Security is considering legislation to end the withdrawal syndrome; there is concern, both on Capitol Hill and in the Social Security Administration, that employes will get the old one-two if their employer pulls out, because private pension plans often have no disability benefits and are not usually portable, which means a worker loses credits if he switches jobs. Social Security Administrator John A. Svahn said, "There is a substantial industry around the country" seeking to convince hospital administrators to withdraw from Social Security and join cheaper, private plans.
Another concern on Capitol Hill is that senior employes of nonprofit organizations who have established full eligibility for Social Security will withdraw both themselves and their payroll deductions from the system, then claim Social Security upon retirement, which means the rest of us get to pay their benefits.