2011 OASDI Trustees Report

B. TRUST FUND FINANCIAL OPERATIONS IN 2010

The table below shows the income, expenditures, and assets for the OASI, the DI, and the combined OASDI Trust Funds in calendar year 2010.

 

Table II.B1.—Summary of 2010 Trust Fund Financial Operations

[In billions]

		OASI	DI	OASDI
Assets at the end of 2009		$2,336.8	$203.5	$2,540.3
Total income in 2010		677.1	104.0	781.1
	Net payroll tax contributions	544.8	92.5	637.3
	Reimbursements from General Fund of the Treasury	2.0	.4	2.4
	Taxation of benefits	22.1	1.9	23.9
	Interest	108.2	9.3	117.5
Total expenditures in 2010		584.9	127.7	712.5
	Benefit payments	577.4	124.2	701.6
	Railroad Retirement financial interchange	3.9	.5	4.4
	Administrative expenses	3.5	3.0	6.5
Net increase in assets in 2010		92.2	-23.6	68.6
Assets at the end of 2010		2,429.0	179.9	2,609.0

Note: Totals do not necessarily equal the sums of rounded components.

In 2010, net payroll tax contributions accounted for 82 percent of total trust fund income. Net payroll tax contributions consist of taxes paid by employees, employers, and the self-employed on earnings covered by Social Security. These taxes are paid on covered earnings up to a specified maximum annual amount, which was $106,800 in 2010. The tax rates scheduled under current law for 2010 and later are shown in table II.B2.

 

Table II.B2.—Payroll Tax Contribution Rates for 2010 and Later

	OASI	DI	OASDI
Payroll tax contribution rate for employees and employers, each (in percent)	5.30	0.90	6.20
Payroll tax contribution rate for self-employed persons (in percent)	10.60	1.80	12.40

Note: Under Public Law 111-147, most employers were exempt from paying the employer share of OASDI payroll tax on wages paid during the period March 19, 2010 through December 31, 2010, to certain qualified individuals hired after February 3. Under Public Law 111-312, the OASDI payroll tax rate is reduced for 2011 by 2 percentage points for employees and for self-employed workers. These temporary reductions in 2010 and 2011 payroll tax revenue due to lower payroll tax rates have been and will be made up by reimbursements from the General Fund of the Treasury to the OASI and DI Trust Funds.

Less than one percent of OASDI Trust Fund income in 2010 came from reimbursements from the General Fund of the Treasury. The primary reimbursement for the year resulted from Public Law 111-147, the Hiring Incentives to Restore Employment (HIRE) Act, which specified general fund reimbursement for temporary reductions in employer payroll taxes on behalf of certain qualified individuals.

Three percent of OASDI Trust Fund income in 2010 came from subjecting up to 50 percent of Social Security benefits above specified levels to Federal personal income taxation, and 15 percent of OASDI income came from interest earned on investment of OASDI Trust Fund reserves. Trust fund assets are invested in interest-bearing securities of the U.S. Government. In 2010, the combined trust fund assets earned interest at an effective annual rate of 4.6 percent. More than 98 percent of expenditures from the combined OASDI Trust Funds in 2010 were retirement, survivor, and disability benefits totaling $701.6 billion. The financial interchange with the Railroad Retirement program resulted in a net payment of $4.4 billion from the combined OASDI Trust Funds, or about 0.6 percent of total expenditures. The administrative expenses of the Social Security program were $6.5 billion, or about 0.9 percent of total expenditures.

Assets of the trust funds provide a reserve to pay benefits whenever total program cost exceeds income. Trust fund assets increased by $68.6 billion in 2010 because total income to the combined funds, including interest earned on trust fund assets, exceeded total expenditures. At the end of 2010, the combined assets of the OASI and the DI Trust Funds were 353 percent of estimated expenditures for 2011, down from an actual level of 357 percent at the end of 2009.