Benefits March 20, 2025

Social Security Administration to Require Strict In-Person, or Online Identity Checks

Starting March 31, Americans must visit a field office or use the internet to sign up for Social Security benefits, which has ‘outraged’ the Alliance for Retired Americans.

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The Social Security Administration announced Tuesday that over the next two weeks, it will implement tighter identity-proofing measures for both benefit claims and direct deposit changes. According to the announcement, the changes are an effort to prevent fraudulent claims.

The SSA will require individuals seeking these services to use online identity confirmation or visit a local Social Security office to prove their identity in person. Effective March 31, Americans will not be able to use the phone to sign up for Social Security benefits or make major changes to their accounts that require ID verification. The changes will apply to new Social Security applications and to existing recipients who want to change their direct deposit information.

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“Americans deserve to have their Social Security records protected with the utmost integrity and vigilance,” said Lee Dudek, acting commissioner of Social Security, in a statement. “For far too long, the agency has used antiquated methods for proving identity. Social Security can better protect Americans while expediting service.”

The agency also announced it will expedite the processing time for all direct deposit change requests—both in person and online—to one business day. Prior to this change, online direct deposit changes were held for 30 days.

The agency’s two-week transition plan includes training employees and management about the new policy, according to the announcement.

The SSA will permit individuals who do not or cannot use the agency’s online my Social Security services to start their claim for benefits on the telephone. However, the claim cannot be completed until the individual’s identity is verified in person.

The agency recommends calling to request an in-person appointment to begin and complete the claim in one interaction.

While the SSA recently required nearly all agency employees to work in the office five days per week, the agency was projected to lay off at least 7,000 people as part of President Donald Trump’s efforts to drastically downsize the federal workforce through the Department of Government Efficiency Service Temporary Organization, run by Elon Musk. Prior to this downsizing, many reported that the SSA was already understaffed. DOGE has also published a list of at least 26 Social Security offices expected to close this year, starting in April, according to a report by the Associated Press.

More than 60 House Democrats, led by Representatives Jared Moskowitz of Florida and Al Green of Texas this week to share “grave concerns” about the planned changes.

“In fiscal year 2024 alone, the [SSA] received nearly 80 million calls to its 1-800 number, with phone-based claims accounting for about 40% of all claims processed. For many beneficiaries, online services are simply not an option due to technological limitations, lack of internet access, or physical and cognitive impairments,” they wrote.

The AARP on Wednesday urged the SSA to reverse its decision.

“SSA’s announcement not only comes as a total surprise but is on an impractical fast-track, with SSA saying the change will become permanent in two weeks,” said AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond in a statement. “SSA needs to be transparent about its service changes and seek input from the older Americans who will be affected, because any delay in Social Security caused by this change can mean real economic hardship.”

The nonprofit Alliance for Retired Americans also issued a statement in response to the agency’s changes, arguing that they will create “unnecessary hardships” for retirees seeking to claim their benefits.

“In just two weeks, the SSA will force millions of elderly and disabled Americans to either visit understaffed and closing field offices or navigate an online-only system to access the benefits they have earned,” the Alliance wrote in a statement. “They claim this move will reduce fraud—yet they have provided no evidence to support this assertion.”

The Alliance also stated that surveys consistently show that millions of seniors lack reliable internet access, either due to the absence of broadband service or because they do not own a computer or smartphone.

“Our members are outraged, and we are calling on Congress to act immediately to rein in Musk and protect Social Security for the millions of Americans who rely on it,” the Alliance stated.

People who do not already have a “my Social Security” account can create one at www.ssa.gov/myaccount/.

Compliance March 20, 2025

Lawsuit Against Lockheed Martin Criticizes Firm for Using In-House TDFs

The lawsuit claims that Lockheed Martin used underperforming target-date funds with high fees in its 401(k) plans for the company’s own benefit.

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Lockheed Martin Corporation and its subsidiary investment management company have been sued by current and former plan participations for using an in-house service provider and affiliated target-date funds.

The aerospace and defense company was accused of violating its fiduciary duties of prudence and loyalty by taking a “DIY” approach to their 401(k) investments and creating a “home-grown, ineffective private investment funds,” and paying themselves “excessive and unreasonable fees” using the plans’ assets.

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The lawsuit, Fezer et al v. Lockheed Martin Corporation et al, filed in the U.S. District Court of Maryland, concerns three of Lockheed’s 401(k) plans—the salaried plan, the bargaining plan and the capital plan. As of December 31, 2023, the salaried plan had approximately $47.267 billion in assets, the bargaining plan had approximately $2.171 billion in assets and the capital plan had approximately $267 million in assets.

Plaintiffs, represented by law firm Zuckerman Spaeder, accused Lockheed of violating their fiduciary duties of prudence and loyalty to more than 140,000 beneficiaries of their 401(k) plans by selecting and maintaining Lockheed Martin Investment Management Co. (LMIMCo) as the 401(k) plans’ manager, and by offering LMIMCo’s own “chronically under-performing high-cost TDFs” as investment options in their 401(k) plans.

LMIMCo. also began offering a private equity co-investment sleeve in the TDFs of the company’s DC plans last year. The most aggressive TDFs in Lockheed’s lineup only have about 7% invested in a private equity fund.

The lawsuit claimed that Lockheed’s decision to use its own in-house TDFs, which had “high fees” and had “worse performance” than other TDFs offered by independent investment managers, was “unusual.” Plaintiffs found that the in-house TDFs were two to five times more expensive than “better-performing” TDFs offered by Vanguard.

“Despite the plethora of higher-quality services and TDFs offered by reputable 401(k) plan managers like T. Rowe Price, Fidelity, and Vanguard, Lockheed employed its own subsidiary, LMIMCo, to manage its 401(k) plans,” the lawsuit stated.

Lockheed selected the in-house TDFs as the only TDFs available as investments in the 401(k) plans and made them the default, according to the lawsuit. The company also added more in-house TDFs between March 2019 and this year for younger workers with distant retirement dates.

The lawsuit further alleged that Lockheed marketed the in-house TDFs to participants in a way that made the funds sound like the only investment employees needed for retirement. For example, a Morningstar summary sent to beneficiaries said the funds were “a one-step approach to saving for retirement.”

“Because Lockheed has largely abandoned traditional pension plans … for new employees in recent decades in favor of … 401(k) plans, the plans represent substantially all the employer-sponsored retirement savings for tens of thousands of Lockheed employees,” the lawsuit stated. “Competent and loyal management of the plans was critical to the financial security and comfort in retirement for which plaintiffs worked and saved.”

The current and former employees are asking the court to declare that Lockheed breached its duties under the Employee Retirement Income Security Act of 1974, as well as order the disgorgement of all sums derived from the “improper” transactions.

A spokesperson from Lockheed Martin said, “In general, it is our company practice not to comment on ongoing litigation.”

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