2003 OASDI Trustees Report

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III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND
LEGISLATIVE CHANGES IN THE LAST YEAR

A. OPERATIONS OF THE OLD-AGE AND SURVIVORS INSURANCE
(OASI) AND DISABILITY INSURANCE (DI) TRUST FUNDS, IN
CALENDAR YEAR 2002

Detailed information on the operations of the OASI and DI Trust Funds1 during calendar year 2002 is presented in this section. Section IV.A provides projections for calendar years 2003-12.

1. OASI Trust Fund

A statement of the income and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund in calendar year 2002, and of the assets of the fund at the beginning and end of the calendar year, is presented in table III.A1. Included in total receipts during calendar year 2002 were $456.1 billion in employment tax contributions. These contributions were partially offset by transfers totaling $0.9 billion to the General Fund of the Treasury for the estimated amount of refunds to employees who worked for more than one employer during a year and paid contributions on total earnings in excess of the contribution and benefit base.

Taxes that were payable on estimated deemed wage credits for military service in 2000 and 2001 have not been paid in full and no partial payment was made in 2002. The amount that should have been received totals $482 million. Estimates presented later in this report do not include receipt of this total amount because it is not clear at this point whether that amount will be transferred. Although legislation eliminated deemed wage credits for military service after 2001, current law still requires payments for military service through 2001 and periodic adjustments for 1984-2001 to the extent that estimated amounts differ from actual wage credits.

Net contributions thus amounted to $455.2 billion, an increase of 3.1 percent over the amount in the preceding year. The increase in OASI tax contributions from calendar year 2001 to calendar year 2002 is due to increased earnings and the increases in the contribution and benefit base that became effective on January 1 of each year 2001 and 2002. (Table VI.A1 shows the tax rates and contribution and benefit bases in effect for past years.)

Income based on taxation of benefits amounted to $12.9 billion in 2002. Nearly 99 percent represented amounts credited to the trust funds, based on estimated Federal personal income taxation of benefits, generally in advance of the actual receipt of taxes by the Treasury. The remaining 1 percent of the total income from taxation of benefits represented amounts withheld from the benefits paid to nonresident aliens.

Table III.A1.--Operations of the OASI Trust Fund, Calendar Year 2002

[In millions]


Total assets, December 31, 2001
 
$1,071,540
Receipts:
 
Contributions:
 
 
Employment taxes
$456,057
 
 
 
Payments from the General Fund of the Treasury for contributions subject to refund
-858
 
 
 
 
Net contributions
 
455,199
 

Income based on taxation of benefit payments:
 
 
Withheld from benefit payments to nonresident aliens
146
 
 
 
All other, not subject to withholding
12,763
 
 
 
 
Total income from taxation of benefits
 
12,909
 

Reimbursement from the general fund for costs of noncontributory wage credits for military service before 1957
 
414
 
Investment income and interest adjustments:
 
 
 
 
Interest on investments
71,174
 
 
 
Interest adjustments 1
10
 
 
 
 
Total investment income and interest adjustments
 
71,184
 
Gifts
 
2/
Total receipts
 
539,706

Disbursements:
 
 
 
Benefit payments:
 
 
 
 
Gross benefit payments
389,340
 
 
 
Offset for collected overpayments
-1,170
 
 
 
Reimbursement from the general fund for unnegotiated checks
-51
 


 
 
Net benefit payments
 
388,119
 

Transfer to the Railroad Retirement "Social Security Equivalent Benefit Account"
 
3,493
 
Administrative expenses:
 
 
 
 
Costs incurred by:
 
 
 
 
 
Social Security Administration
1,935
 
 
 
 
Department of the Treasury
209
 
 
 
Offsetting receipts from sales of supplies, materials, etc.
-1
 
 
 
Miscellaneous reimbursements from the general fund 3
-6
 
 
 
 
Net administrative expenses
 
2,137
Total disbursements
 
393,749
Net increase in assets
 
145,957
Total assets, December 31, 2002
 
1,217,497

1Includes (1) interest on transfers between the trust fund and the general fund account for the Supplemental Security Income program due to adjustments in the allocation of administrative expenses, (2) interest arising from the revised allocation of administrative expenses among the trust funds and (3) interest on reimbursements to the trust fund for costs associated with union activities and pension reform.

2Less than $500,000.

3Reimbursements for costs incurred in performing certain legislatively mandated activities not directly related to administering the OASI program.

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

The OASI Trust Fund was credited with interest netting $71.2 billion which consisted of (1) interest earned on the investments of the trust fund, (2) interest on transfers between the trust fund and the general fund account for the Supplemental Security Income program due to adjustments in the allocation of administrative expenses, (3) interest arising from the revised allocation of administrative expenses among the trust funds, and (4) interest on reimbursements to the trust fund for costs associated with union activities and pension reform. The remaining $2,222 of receipts consisted of gifts received under the provisions authorizing the deposit of money gifts or bequests in the trust funds.

Of the $393.7 billion in total disbursements, $388.1 billion was for net benefit payments. The amount of net benefit payments in calendar year 2002 represents an increase of 4.2 percent over the corresponding amount in calendar year 2001. This increase is due primarily to (1) the automatic cost-of-living benefit increase of 2.6 percent which became effective for December 2001 under the automatic-adjustment provisions in section 215(i) of the Social Security Act, (2) an increase in the total number of beneficiaries, and (3) an increase in the average benefit amount.

Provisions of the Railroad Retirement Act require an annual financial interchange between the Railroad Retirement and OASDI programs. The purpose of such provisions is to put the OASI and DI Trust Funds in the same financial position they would have been had railroad employment always been covered by Social Security. Under those provisions, the Railroad Retirement Board and the Commissioner of Social Security determined that a transfer of $3.5 billion to the Social Security Equivalent Benefit Account from the OASI Trust Fund was required in June 2002.

The remaining $2.1 billion of disbursements from the OASI Trust Fund represented net administrative expenses. The expenses of administering the OASDI and Medicare programs are allocated and charged directly to each of the various trust funds through which those programs are financed, on the basis of provisional estimates. Similarly, the expenses allocated for administering the Supplemental Security Income program are charged directly to the General Fund of the Treasury on a provisional basis. Periodically, as actual experience develops and is analyzed, adjustments to the allocations of administrative expenses for prior periods are effected by interfund transfers and transfers between the OASI Trust Fund and the general fund account for the Supplemental Security Income program, with appropriate interest adjustments. As described earlier, the interest adjustments arising from the reallocation of administrative expenses are recorded in the trust fund accounting under investment income.

The vast majority of OASI disbursements recorded as administrative expenses represent the cost of administering the program and are charged to the trust fund by the Social Security Administration ($1.9 billion in 2002). In addition, the Department of the Treasury charges directly to the trust fund certain expenses that it incurs in helping to administer the OASI program ($209 million in 2002). Finally, there are some relatively small adjustments which reduced total administrative expenses by $7 million in 2002. The first of these adjustments is an offset ($1 million in 2002) representing income from the sale of excess supplies and equipment. The second adjustment represents net reimbursements from the General Fund of the Treasury for administrative costs incurred by the Social Security Administration in performing certain legislatively mandated activities that are not directly related to the OASI program. Such reimbursements totaled $6 million in 2002.

The assets of the OASI Trust Fund at the end of calendar year 2002 totaled $1,217.5 billion, consisting of $1,217.7 billion in U.S. Government obligations and, as an offset, an extension of credit amounting to $0.2 billion against securities to be redeemed within the following few days. The effective annual rate of interest earned by the assets of the OASI Trust Fund during calendar year 2002 was 6.4 percent, as compared to 6.7 percent earned during calendar year 2001. Table III.A2 shows the total assets of the fund and their distribution at the end of each calendar year 2001 and 2002.

Table III.A2.--Assets of the OASI Trust Fund, End of Calendar Years 2001 and 2002

[In thousands]

 
December 31, 2001
December 31, 2002
Obligations sold only to the trust funds (special issues):
 
 
 
Certificates of indebtedness:
 
 
 
 
4.5 percent, 2003
--
$71,454,577
 
 
5 percent, 2002
$54,987,439
--
 
 
5.125 percent, 2002
8,866,909
--
 
 
5.625 percent, 2002
677,850
--
 
Bonds:
 
 
 
 
5.25 percent, 2004
--
9,235,912
 
 
5.25 percent, 2005-06
--
18,471,822
 
 
5.25 percent, 2007-15
--
83,123,208
 
 
5.25 percent, 2016
--
9,235,911
 
 
5.25 percent, 2017
--
77,387,242
 
 
5.625 percent, 2003
9,621,438
4,295,720
 
 
5.625 percent, 2004
9,621,437
9,621,437
 
 
5.625 percent, 2005-11
67,350,066
67,350,066
 
 
5.625 percent, 2012-15
38,485,748
38,485,748
 
 
5.625 percent, 2016
68,151,331
68,151,331
 
 
5.875 percent, 2002
783,303
--
 
 
5.875 percent, 2003-12
61,692,730
61,692,730
 
 
5.875 percent, 2013
43,258,869
43,258,869
 
 
6 percent, 2002
6,693,627
--
 
 
6 percent, 2003-11
60,242,643
60,242,643
 
 
6 percent, 2012-13
13,387,256
13,387,256
 
 
6 percent, 2014
49,952,497
49,952,497
 
 
6.25 percent, 2002
3,150,975
--
 
 
6.25 percent, 2003-06
12,603,900
12,603,900
 
 
6.25 percent, 2007
3,150,974
3,150,974
 
 
6.25 percent, 2008
23,350,034
23,350,034
 
 
6.5 percent, 2002
11,008,649
--
 
 
6.5 percent, 2003
11,008,649
11,008,649
 
 
6.5 percent, 2004-09
66,051,900
66,051,900
 
 
6.5 percent, 2010
38,320,240
38,320,240
 
 
6.5 percent, 2011-14
34,309,584
34,309,584
 
 
6.5 percent, 2015
58,529,893
58,529,893
 
 
6.875 percent, 2002
3,975,270
--
 
 
6.875 percent, 2003
3,975,270
3,975,270
 
 
6.875 percent, 2004-09
23,851,626
23,851,626
 
 
6.875 percent, 2010-11
7,950,544
7,950,544
 
 
6.875 percent, 2012
37,089,596
37,089,596
 
 
7 percent, 2002
3,371,481
--
 
 
7 percent, 2003
3,371,481
3,371,481
 
 
7 percent, 2004-10
23,600,360
23,600,360
 
 
7 percent, 2011
33,114,324
33,114,324
 
 
7.25 percent, 2002
3,961,556
--
 
 
7.25 percent, 2003-06
15,846,224
15,846,224
 
 
7.25 percent, 2007-08
7,923,114
7,923,114
 
 
7.25 percent, 2009
27,311,591
27,311,591
 
 
7.375 percent, 2002
3,575,474
--
 
 
7.375 percent, 2003-06
14,301,896
14,301,896
 
 
7.375 percent, 2007
20,199,060
20,199,060
 
 
8.125 percent, 2002
3,611,348
--
 
 
8.125 percent, 2003-05
10,834,044
10,834,044
 
 
8.125 percent, 2006
16,623,586
16,623,586
 
 
8.625 percent, 2002
3,672,127
--
 
 
8.75 percent, 2002
7,099,803
--
 
 
8.75 percent, 2003
7,099,803
7,099,803
 
 
8.75 percent, 2004-05
26,024,476
26,024,476
 
 
9.25 percent, 2002
2,240,308
--
 
 
9.25 percent, 2003
5,912,435
5,912,435
Total investments
1,071,794,738
1,217,701,573
Undisbursed balances 1
-254,822
-204,383
 
 
Total assets
1,071,539,916
1,217,497,190

1Negative figures represent an extension of credit against securities to be redeemed within the following few days.

Note: Special issues are always purchased at par value. Therefore, book value and par value are the same for each special issue, and the common value is shown above. Where the maturity years are grouped, the amount maturing in each year is the amount shown divided by the number of years.

All securities held by the trust funds are backed by the full faith and credit of the United States Government, as required by law. Those currently held by the OASI Trust Fund are special issues (i.e., securities sold only to the trust funds). These are of two types: short-term certificates of indebtedness and long-term bonds. The certificates of indebtedness are issued on a daily basis for the investment of receipts not required to meet current expenditures, and they mature on the next June 30 following the date of issue. Special-issue bonds, on the other hand, are normally acquired only when special issues of either type mature on June 30. The amount of bonds acquired on June 30 is equal to the amount of special issues maturing, less amounts required to meet expenditures on that day.

Section 201(d) of the Social Security Act provides that the obligations issued for purchase by the OASI and DI Trust Funds shall have maturities fixed with due regard for the needs of the funds. The usual practice has been to spread the holdings of special issues, as of each June 30, so that the amounts maturing in each of the next 15 years are approximately equal. Accordingly, the amounts and maturity dates of the OASI special-issue bonds purchased on June 30, 2002, were selected so that the maturity dates of the total portfolio of special issues were spread evenly over the 15-year period 2003-17. The amount of bonds purchased on June 30, 2002 is shown in table III.A9.

2. DI Trust Fund

A statement of the income and disbursements of the Federal Disability Insurance Trust Fund in calendar year 2002, and of the assets of the fund at the beginning and end of the calendar year, is presented in table III.A3.

Line entries in the DI statement are similar to those in the OASI statement and the explanations of the OASI entries generally apply to DI as well. One additional source of disbursements in the DI statement is $75 million for the costs of vocational rehabilitation services furnished to disabled-worker beneficiaries and to those children of disabled workers who were receiving benefits on the basis of disabilities that began before age 22. Reimbursement from the trust funds for the costs of vocational rehabilitation services is made only in those cases where the services contributed to the successful rehabilitation of the beneficiaries.

Net contributions amounted to $77.3 billion, an increase of 3.1 percent from the amount in the preceding calendar year. This increase is attributable to the same factors, insofar as they apply to the DI program, that accounted for the change in contributions to the OASI Trust Fund.

Of the $67.9 billion in total disbursements, $65.6 billion was for net benefit payments. This represents an increase of 10.2 percent over the corresponding amount of benefit payments in calendar year 2001. This increase in DI benefit payments is due to the same factors that resulted in the net increase in benefit payments from the OASI Trust Fund. However, the number of persons receiving benefits from the DI Trust Fund increased more rapidly in 2002 than the number receiving benefits from the OASI Trust Fund.

Table III.A3.--Operations of the DI Trust Fund, Calendar Year 2002 

[In millions]


Total assets, December 31, 2001
 
$140,993
Receipts:
 
 
 
Contributions:
 
 
 
 
Employment taxes
$77,424
 
 
 
Payments from the General Fund of the Treasury for contributions subject to refund
-152
 
 
 
 
Net contributions
 
77,272
 

Income based on taxation of benefit payments:
 
 
 
 
Withheld from benefit payments to nonresident aliens
6
 
 
 
All other, not subject to withholding
924
 
 
 
 
Total income from taxation of benefits
 
930
 

Investment income and interest adjustments:
 
 
 
 
Interest on investments
9,175
 
 
 
Interest adjustments 1
3
 
 
 
 
Total investment income and interest adjustments
 
9,178
Total receipts
 
87,379

Disbursements:
 
 
 
Benefit payments:
 
 
 
 
Gross benefit payments
66,087
 
 
 
Offset for collected overpayments
-441
 
 
 
Reimbursement from the general fund for unnegotiated checks
-18
 
 
 
 
Net benefit payments
 
65,627
 

Transfer to the Railroad Retirement "Social Security Equivalent Benefit Account"
 
154
 
Payment for costs of vocational rehabilitation services for disabled beneficiaries
 
75
 
Administrative expenses:
 
 
 
 
Costs incurred by:
 
 
 
 
 
Social Security Administration
2,014
 
 
 
 
Department of the Treasury
39
 
 
 
Miscellaneous reimbursements from the general fund 2
-5
 
 
 
 
Net administrative expenses
 
2,049
Total disbursements
 
67,905
Net increase in assets
 
19,475
Total assets, December 31, 2002
 
160,468

1Includes (1) interest on transfers between the trust fund and the general fund account for the Supplemental Security Income program due to adjustments in the allocation of administrative expenses, (2) interest arising from the revised allocation of administrative expenses among the trust funds, (3) interest earned on the investments of the trust fund, and (4) interest on reimbursements to the trust fund for costs associated with union activities and pension reform.

2Reimbursements for costs incurred in performing certain legislatively mandated activities not directly related to administering the DI program.

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

The assets of the DI Trust Fund at the end of calendar year 2002 totaled $160.5 billion, consisting of $160.4 billion in U.S. Government obligations and cash totaling $88 million. The effective annual rate of interest earned by the assets of the DI Trust Fund during calendar year 2002 was 6.3 percent, compared to 6.5 percent earned during calendar year 2001. Table III.A4 shows the total assets of the fund and their distribution at the end of each calendar year 2001 and 2002.

Table III.A4.--Assets of the DI Trust Fund, End of Calendar Years 2001 and 2002

[In thousands]

 
December 31, 2001
December 31, 2002
Investments in public-debt obligations:
 
 
 
Obligations sold only to the trust funds (special issues):
 
 
 
 
Certificates of indebtedness:
 
 
 
 
 
4.5 percent, 2003
--
$8,887,553
 
 
 
4.75 percent, 2003
--
89,454
 
 
 
5 percent, 2002
$7,948,770
--
 
 
 
5.125 percent, 2002
1,011,890
--
 
 
 
5.25 percent, 2002
275,928
--
 
 
 
5.625 percent, 2002
497,885
--
 
 
Bonds:
 
 
 
 
 
5.25 percent, 2004-06
--
4,090,224
 
 
 
5.25 percent, 2007-11
--
6,817,035
 
 
 
5.25 percent, 2012-16
--
6,817,040
 
 
 
5.25 percent, 2017
--
10,263,256
 
 
 
5.625 percent, 2003
1,524,967
311,909
 
 
 
5.625 percent, 2004-06
4,574,901
4,574,901
 
 
 
5.625 percent, 2007-13
10,674,776
10,674,776
 
 
 
5.625 percent, 2014-15
3,049,934
3,049,934
 
 
 
5.625 percent, 2016
8,899,848
8,899,848
 
 
 
5.875 percent, 2002
116,192
--
 
 
 
5.875 percent, 2003-12
9,162,860
9,162,860
 
 
 
5.875 percent, 2013
5,361,805
5,361,805
 
 
 
6 percent, 2002
1,612,426
--
 
 
 
6 percent, 2003
1,437,946
1,437,946
 
 
 
6 percent, 2004-06
2,087,895
2,087,895
 
 
 
6 percent, 2007-12
4,175,796
4,175,796
 
 
 
6 percent, 2013
695,967
695,967
 
 
 
6 percent, 2014
6,057,772
6,057,772
 
 
 
6.5 percent, 2002
3,464,768
--
 
 
 
6.5 percent, 2003-06
13,859,072
13,859,072
 
 
 
6.5 percent, 2007
3,464,767
3,464,767
 
 
 
6.5 percent, 2008
4,381,228
4,381,228
 
 
 
6.5 percent, 2009-13
6,585,540
6,585,540
 
 
 
6.5 percent, 2014
1,317,109
1,317,109
 
 
 
6.5 percent, 2015
7,374,881
7,374,881
 
 
 
6.875 percent, 2002
265,249
--
 
 
 
6.875 percent, 2003
265,252
265,252
 
 
 
6.875 percent, 2004-07
1,061,000
1,061,000
 
 
 
6.875 percent, 2008-09
530,498
530,498
 
 
 
6.875 percent, 2010-12
13,336,560
13,336,560
 
 
 
7 percent, 2002
1,116,151
--
 
 
 
7 percent, 2003-08
6,696,906
6,696,906
 
 
 
7 percent, 2009
4,180,271
4,180,271
 
 
 
7.375 percent, 2004-06
142,803
142,803
 
 
 
7.375 percent, 2007
916,460
916,460
 
 
 
8.125 percent, 2004-05
300,322
300,322
 
 
 
8.125 percent, 2006
868,859
868,859
 
 
 
8.75 percent, 2003
174,477
174,477
 
 
 
8.75 percent, 2004-05
1,437,396
1,437,396
 
 
Total obligations sold only to the trust funds
(special issues)
140,907,127
160,349,372
 
Public issues:
 
 
 
 
Treasury bonds:
 
 
 
 
 
7.625 percent, 2007
10,000
--
 
 
 
11.75 percent, 2010
30,250
30,250
 
 
Total investments in public issues at par value, as shown above
40,250
30,250
 
 
Unamortized premium or discount, net
-146
-133
 
 
Total investments in public issues at book value
40,104
30,117
Total investments in public-debt obligations (book value 1)
140,947,231
160,379,489
Undisbursed balances
45,925
88,443
Total assets (book value 1)
140,993,156
160,467,932

1Par value, plus unamortized premium or less discount outstanding.

Note: Special issues are always purchased at par value. Therefore, book value and par value are the same for each special issue, and the common value is shown above. Where the maturity years are grouped for special issues, the amount maturing in each year is the amount shown divided by the number of years.

3. OASI and DI Trust Funds, Combined

A statement of the operations of the income and disbursements of the OASI and DI Trust Funds, on a combined basis, is presented in table III.A5. The entries in this table represent the sums of the corresponding values from tables III.A1 and III.A3. For a discussion of the nature of these income and expenditure transactions, reference should be made to the two preceding subsections covering OASI and DI separately.

Table III.A5.--Operations of the Combined OASI and DI Trust Funds,
Calendar Year 2002 

[In millions]


Total assets, December 31, 2001
 
$1,212,533
Receipts:
 
 
 
Contributions:
 
 
 
 
Employment taxes
$533,481
 
 
 
Payments from the General Fund of the Treasury for contributions subject to refund
-1,011
 
 
 
 
Net contributions
 
532,471
 

Income based on taxation of benefit payments:
 
 
 
 
Withheld from benefit payments to nonresident aliens
152
 
 
 
All other, not subject to withholding
13,687
 
 
 
 
Total income from taxation of benefits
 
13,839
 

Reimbursement from the general fund for costs of noncontributory wage credits for military service before 1957
 
414
 
Investment income and interest adjustments:
 
 
 
 
Interest on investments
80,349
 
 
 
Interest adjustments 1
13
 
 
 
 
Total investment income and interest adjustments
 
80,362
 
Gifts
 
2
Total receipts
 
627,085

Disbursements:
 
 
 
Benefit payments:
 
 
 
 
Gross benefit payments
455,427
 
 
 
Offset for collected overpayments
-1,612
 
 
 
Reimbursement from the general fund for unnegotiated checks
-69
 
 
 
 
Net benefit payments
 
453,746
 

Transfer to the Railroad Retirement "Social Security Equivalent Benefit Account"
 
3,647
 
Payment for costs of vocational rehabilitation services for disabled beneficiaries
 
75
 
Administrative expenses:
 
 
 
 
Costs incurred by:
 
 
 
 
 
Social Security Administration
3,949
 
 
 
 
Department of the Treasury
248
 
 
 
Offsetting receipts from sales of supplies, materials, etc.
-1
 
 
 
Miscellaneous reimbursements from the general fund 3
-11
 
 
 
 
Net administrative expenses
 
4,185
Total disbursements
 
461,653
Net increase in assets
 
165,432
Total assets, December 31, 2002
 
1,377,965

1Includes (1) interest on transfers between the trust fund and the general fund account for the Supplemental Security Income program due to adjustments in the allocation of administrative expenses, (2) interest arising from the revised allocation of administrative expenses among the trust funds, (3) interest earned on the investments of the trust fund, and (4) interest on reimbursements to the trust fund for costs associated with union activities and pension reform.

2Less than $500,000.

3Reimbursements for costs incurred in performing certain legislatively mandated activities not directly related to administering the OASI and DI programs.

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

To provide a context for estimates of future trust fund income and expenditures provided later in this report, table III.A6 compares past estimates of contributions and benefit payments for calendar year 2002, as shown in the 1998-2002 Annual Reports, with the corresponding actual amounts in 2002.2

Table III.A6.--Comparison of Actual Calendar Year 2002 Trust Fund Operations
With Estimates Made in Prior Reports 1 

[Amounts in billions]

  
Net contributions  2
 
Benefit payments  3
Amount
Difference
from actual
(percent)
Amount
Difference
from actual
(percent)
OASI Trust Fund:
 
Estimate in 1998 report
$426.0
-6.4
 
$383.2
-1.3
 
Estimate in 1999 report
434.9
-4.5
 
376.8
-2.9
 
Estimate in 2000 report
462.5
1.6
 
383.8
-1.1
 
Estimate in 2001 report
466.9
2.6
 
388.7
.1
 
Estimate in 2002 report
453.7
-.3
 
387.7
-.1
 
Actual amount
455.2
--
 
388.1
--
DI Trust Fund:
 
Estimate in 1998 report
72.3
-6.4
 
64.1
-2.5
 
Estimate in 1999 report
73.8
-4.5
 
64.0
-2.6
 
Estimate in 2000 report
78.5
1.6
 
64.3
-2.2
 
Estimate in 2001 report
79.3
2.6
 
63.3
-3.6
 
Estimate in 2002 report
77.0
-.3
 
69.4
5.6
 
Actual amount
77.3
--
 
65.7
--
OASI and DI Trust Funds, combined:
 
Estimate in 1998 report
498.4
-6.4
 
447.2
-1.5
 
Estimate in 1999 report
508.7
-4.5
 
440.8
-2.9
 
Estimate in 2000 report
541.0
1.6
 
448.1
-1.3
 
Estimate in 2001 report
546.1
2.6
 
452.0
-.4
 
Estimate in 2002 report
530.7
-.3
 
457.1
.7
 
Actual amount
532.5
--
 
453.8
--

1 The estimates shown are based on the intermediate assumptions.

2"Actual" contributions for 2002 reflect adjustments for prior calendar years (see appendix A for description of these adjustments). "Estimated" contributions also include such adjustments, but on an estimated basis.

3Includes payments, if any, for vocational rehabilitation services furnished to disabled persons receiving benefits because of their disabilities.

A number of factors can contribute to differences between estimates and subsequent actual amounts, including actual values for key demographic, economic, and other variables that differ from previously assumed levels. For example, the 2002 Trustees Report estimates of DI benefit payments for calendar year 2002 assumed that a one-time special disability workload would be processed in 2002-03, and would result in the payment of over $3 billion in retroactive benefits in 2002. In practice, as discussed later in chapter IV, very little of the special disability workload was processed in 2002, so the large retroactive payments were not made, and DI benefit payments were overestimated by that amount. Another factor contributing to such differences is new legislation. In particular, legislation eliminating the retirement earnings test for workers over the normal retirement age was enacted shortly after publication of the 2000 report. Consequently, actual OASI benefit payments in 2002 were larger than estimated for the 1998-2000 reports.

At the end of calendar year 2002, about 46.4 million persons were receiving monthly benefits under the OASDI program. Of these persons, about 39.2 million and 7.2 million were receiving monthly benefits from the OASI Trust Fund and the DI Trust Fund, respectively. The number of persons receiving benefits from the OASI and DI Trust Funds grew by 0.7 percent and 4.5 percent, respectively, during the calendar year. The estimated distribution of benefit payments in calendar years 2001 and 2002, by type of beneficiary, is shown in table III.A7 for each trust fund separately.

Table III.A7.--Distribution of Benefit Payments by Type of Beneficiary or Payment, Calendar Years 2001 and 2002 

[Amounts in millions]

 
Calendar year 2001
 
Calendar year 2002
Amount
Percentage
of total
Amount
Percentage
of total
Total OASDI benefit payments
$431,871
100.0
 
$453,746
100.0
 
OASI benefit payments
372,312
86.2
 
388,119
85.5
 
DI benefit payments
59,559
13.8
 
65,627
14.5
OASI benefit payments, total
372,312
100.0
 
388,119
100.0
 
Monthly benefits:
 
 
 
 
 
 
 
Retired workers and auxiliaries
290,754
78.1
 
303,943
78.3
 
 
 
Retired workers
268,934
72.2
 
281,587
72.6
 
 
 
Wives and husbands
19,488
5.2
 
19,882
5.1
 
 
 
Children
2,331
.6
 
2,474
.6
 
 
Survivors of deceased workers
81,347
21.8
 
83,963
21.6
 
 
 
Aged widows and widowers
65,356
17.6
 
67,313
17.3
 
 
 
Disabled widows and widowers
1,392
.4
 
1,461
.4
 
 
 
Parents
26
1/
 
25
 1/ 
 
 
 
Children
13,132
3.5
 
13,688
3.5
 
 
 
Widowed mothers and fathers
caring for child beneficiaries
1,441
.4
 
1,476
.4
 
 
Uninsured persons generally aged 72 before 1968
2/
 1/ 
 
2/
1/
 
212
.1
 
213
.1
DI benefit payments, total
59,559
100.0
 
65,627
100.0
 
 
Disabled workers
54,228
91.0
 
59,869
91.2
 
 
Wives and husbands
415
.7
 
423
.6
 
 
Children
4,916
8.3
 
5,335
8.1

1Less than 0.05 percent.

2Less than $500,000.

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

Net administrative expenses charged to the OASI and DI Trust Funds in calendar year 2002 totaled $4.2 billion. This amount represented 0.8 percent of contribution income and 0.9 percent of expenditures. Corresponding percentages for each trust fund separately and for the OASDI program as a whole are shown in table III.A8 for each of the last 5 years.

Table III.A8.--Administrative Expenses as a Percentage of Contribution Income and of Total Expenditures, Calendar Years 1998-2002
Calendar year
OASI Trust Fund
 
DI Trust Fund
 
OASI and DI
Trust Funds,
combined
Contribution
income
Total
expenditures
Contribution
income
Total
expenditures
Contribution
income
Total
expenditures
1998
0.5
0.6
 
2.7
3.1
 
0.8
0.9
1999
.5
.5
 
2.4
2.9
 
.7
.8
2000
.5
.6
 
2.3
2.9
 
.8
.9
2001
.4
.5
 
2.3
2.8
 
.7
.8
2002
.5
.5
 
2.7
3.0
 
.8
.9

Tables III.A2 and III.A4, presented earlier, showed the assets of the OASI and DI Trust Funds at the end of calendar years 2001 and 2002. The changes in the invested assets of the funds between those two dates are a result of the acquisition and disposition of securities during calendar year 2002. Table III.A9 presents these investment transactions for each trust fund separately and combined.

Table III.A9.--Trust Fund Investment Transactions, Calendar Year 2002

[In millions]

 
OASI
Trust Fund
DI
Trust Fund
OASI and DI
Trust Funds,
combined
Invested assets, December 31, 2001
$1,071,795
$140,947
$1,212,742
Acquisitions:
 
Special issues:
 
 
 
 
 
Certificates of indebtedness
505,526
83,115
588,641
 
 
Bonds 1
206,690
29,351
236,041
 
Public issues:
 
 
 
 
 
Treasury bonds
--
--
--
 
 
Total acquisitions
712,216
112,466
824,682
Dispositions:
 
Special issues:
 
 
 
 
 
Certificates of indebtedness
498,604
83,872
582,476
 
 
Bonds
67,706
9,151
76,857
 
Public issues:
 
 
 
 
 
Treasury bonds
--
10
10
 
 
Total dispositions
566,309
93,034
659,343
Net increase in invested assets
145,907
19,432
165,339
Invested assets, December 31, 2002
1,217,702
160,380
1,378,081

1Amounts shown were purchased on June 30, 2002. The interest rate on such purchases was 5.25 percent.

Note: All investments are shown at par value.


1Trust fund data are available by month, quarter, or year on the Internet at http://www.ssa.gov/OACT/ProgData/fundsQuery.html.

2Estimated amounts used to calculate percentage errors are before rounding to amounts shown in the annual reports.


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