www.socialsecurity.gov
|
Skip to content Social Security Online |
Actuarial Publications | |
|
www.socialsecurity.gov
|
Home FAQs Contact Us Search |
| Actuarial Publications |
Summary of Provisions That Would Change the Social Security Program |
|
Description of Proposed Provisions:
|
|
Estimates based on the intermediate assumptions of the 2010 Trustees Report
| Change from present law | Results with this provision | |||||
|---|---|---|---|---|---|---|
| Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
|||
| Present Law, Alternative II. |
-1.92 | -4.12 | ||||
| B1.1 |
Beginning with those newly eligible for OASDI benefits in 2017 and later,
reduce PIA formula factors so that benefits grow by inflation rather than
by increases in real wages. graph | table | pdf-graph | pdf-table | memo |
2.51 | 7.50 | 0.59 | 3.38 | |
| B1.2 | Progressive price indexing of PIA formula
factors beginning with individuals newly eligible for OASDI benefits
in 2017. Create new bend point at the 30th percentile of earners.
Maintain current-law benefits for earners at the 30th percentile and
below and reduce upper 2 formula factors (32% and 15%) such that maximum
worker benefit grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
1.43 | 4.11 | -0.49 | -0.01 | |
| B1.3 | Progressive price indexing of PIA formula
factors beginning with individuals newly eligible for OASDI benefits in
2017. Create new bend point at the 40th percentile of earners. Maintain
current-law benefits for earners at the 40th percentile and below and
reduce upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
1.19 | 3.40 | -0.73 | -0.72 | |
| B1.4 | Progressive price indexing of PIA formula
factors beginning with individuals newly eligible for OASDI benefits in
2017. Create new bend point at the 50th percentile of earners. Maintain
current-law benefits for earners at the 50th percentile and below and
reduce upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
0.93 | 2.49 | -0.99 | -1.63 | |
| B1.5 | Progressive price indexing of PIA formula
factors beginning with individuals newly eligible for OASDI benefits in
2017. Create new bend point at the 60th percentile of earners. Maintain
current-law benefits for earners at the 60th percentile and below and
reduce upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
0.64 | 1.53 | -1.28 | -2.59 | |
| B1.6 (2014) |
Progressive price indexing of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2014. Create new bend point at the 30th
percentile of earners. Maintain current-law benefits for earners at the 30th
percentile and below and reduce upper 2 formula factors (32% and 15%) such
that maximum worker benefit grows by inflation rather than the growth in
average wages. Disability benefits are not affected by the proposal. Disabled
worker beneficiaries, upon attaining normal retirement age, would be subject
to a proportional reduction in benefits based on the worker's years of
disability. addition, the reduction to the upper 2 formula factors is
suspended for any year in which sustainable solvency over the next 75 years
is expected. With this provision taken alone, suspension is not expected
within the next 75 years. graph | table | pdf-graph | pdf-table | memo |
1.48 | 3.85 | -0.44 | -0.27 | |
| B1.6 (2019) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2019. Create new
bend point at the 30th percentile of earners. Maintain current-law
benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages.
Disability benefits are not affected by the proposal. Disabled worker
beneficiaries, upon attaining normal retirement age, would be subject
to a proportional reduction in benefits based on the worker's years
of disability.
graph | table | pdf-graph | pdf-table | memo |
1.13 | 3.47 | -0.79 | -0.65 | |
| B1.7 |
Progressive price indexing of PIA formula factors for individuals newly
eligible for OASI benefits in 2018 through 2055. Create new bend point at
the 40th percentile of career-average earnings for new retirees. Maintain
current-law benefit credit for career-average earnings up to the 40th
percentile. Reduce PIA formula factors (32% and 15%) that apply above the
new bend point such that the maximum worker benefit grows with price inflation
from one generation to the next rather than with growth in the average wage.
Disability (DI) benefits are not affected by the proposal. Disabled worker
beneficiaries, upon attaining normal retirement age, would be subject to a
proportional reduction in benefits based on the worker's years of disability.
Hold harmless from this provision young survivors (children of deceased workers
and surviving spouses with a child in care).
graph | table | pdf-graph | pdf-table | memo |
0.91 | 2.35 | -1.01 | -1.77 | |
| B2.1 (2020) |
For OASI beneficiaries becoming eligible for benefits in 2020 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2015 to the life expectancy at age 67 for the 4th year prior
to the year of benefit eligibility. Unisex life expectancies, based
on period life tables, would be used as projected by SSA's Office of
the Chief Actuary. Disability benefits are not affected by the proposal.
Disabled worker beneficiaries, upon attaining normal retirement age,
would be subject to a proportional reduction in benefits based on the
worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
0.55 | 1.87 | -1.37 | -2.24 | |
| B2.1 (2023) |
For OASI beneficiaries becoming eligible for benefits in 2023 and later,
multiply the PIA factors by the ratio of life expectancy at 67 for 2018
to the life expectancy at age 67 for the 4th year prior to the year of
initial benefit eligibility. Unisex life expectancies, based on period
life tables as computed by SSA's Office of the Chief Actuary, would be
used in determining the ratio. Disability benefits are not affected by
the proposal. Disabled worker beneficiaries, upon attaining normal
retirement age, would be subject to a proportional reduction in benefits
based on the proportion of years at ages 22 through 61 not disabled.
graph | table | pdf-graph | pdf-table | memo |
0.48 | 1.75 | -1.44 | -2.37 | |
| B3.1 |
For each year from 2011-2041, multiply the 32 and 15 percent formula
factors by 0.987, reducing the factors to 21 percent and 10 percent
respectively, for new eligibles in 2041 and later. graph | table | pdf-graph | pdf-table | memo |
1.49 | 2.88 | -0.43 | -1.24 | |
| B3.2 |
Beginning with those newly eligible in 2018, multiply the 90 and 32 PIA
factors each year by 0.9925 and 0.982, respectively. Stop reductions in
2055. Beginning with those newly eligible in 2013, multiply the 15 factor
by 0.982. Stop reduction of the 15 factor in 2050. Disabled workers will have present
law scheduled benefit and proportional reduction at conversion to retired
worker benefits at normal retirement age, based on years of disability. graph | table | pdf-graph | pdf-table | memo |
2.02 | 5.22 | 0.10 | 1.10 | |
| B3.3 |
For all individuals becoming eligible for OASDI benefits in 2011 and
later, use a modified primary insurance amount (PIA) formula. The
modified formula would increase the first bend point to the equivalent
of $800 in 2009. Also, a new bend point would be placed between the
reset first bend point and the current-law second bend point. The new
bend point would be equal to the reset first bend point plus 75 percent
of the difference between the bend points. The PIA formula factor between
the new bend point and the upper bend point would be lowered from 32% to
20%. The PIA formula factor above the upper bend point would be lowered
from 15% to 10%.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.30 | -1.70 | -3.82 | |
| B3.4 |
Multiply all PIA formula factors successively by 0.991 for new benefit
eligibility in each year 2014 through 2042. Disabled workers and young
survivors (surviving spouses with a child-in-care and survivor children)
would not be affected by this provision. Upon conversion from disabled
worker to retired worker benefits, benefit levels would be proportionally
reduced based on the fraction of years the individual was not disabled
between ages 22 and 62.
graph | table | pdf-graph | pdf-table | memo |
1.44 | 3.06 | -0.48 | -1.06 | |
| B3.5 |
Progressive indexing of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2013, continuing through 2050, and resuming in
2071. Create new bend point at the 30th percentile of earners. Maintain
current-law benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker benefit is
reduced by 1.2 percent per year as compared to current law, for the years that
progressive indexing applies. Disability benefits are not affected by the
proposal. Disabled worker beneficiaries, upon attaining normal retirement age,
would be subject to a proportional reduction in benefits based on the worker's
years of disability.
graph | table | pdf-graph | pdf-table | memo |
1.27 | 2.97 | -0.65 | -1.15 | |
| B3.6 |
Progressive indexing of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2013 through 2062. Create new bend point at the
30th percentile of earners. Maintain current-law benefits for earners at the
30th percentile and below and reduce upper 2 formula factors (32% and 15%)
such that maximum worker benefit is reduced by 1.2 percent per year as compared
to current law, for the years that progressive indexing applies. Disability
benefits are not affected by the proposal. Disabled worker beneficiaries, upon
attaining normal retirement age, would be subject to a proportional reduction in
benefits based on the worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
1.32 | 3.21 | -0.60 | -0.91 | |
| B3.7 |
Progressive indexing of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2013, continuing through 2022, and then resuming
in 2061. Create new bend point at the 30th percentile of earners. Maintain
current-law benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker benefit is
reduced by 1.2 percent per year as compared to current law, for the years that
progressive indexing applies. Disability benefits are not affected by the proposal.
Disabled worker beneficiaries, upon attaining normal retirement age, would be
subject to a proportional reduction in benefits based on the worker's years of
disability.
graph | table | pdf-graph | pdf-table | memo |
0.59 | 1.51 | -1.33 | -2.61 | |
| B3.8 |
Create a new bend point at the 50th percentile of new retired and disabled worker
entitlements. Beginning for those newly eligible in 2017, do the following: a) reduce
the 32 percent PIA formula factor below the new bend point to 30 percent by 2050; b) reduce
the 32 percent PIA factor above the new bend point to 10 percent by 2050; and c) reduce
the 15 percent factor to 5 percent by 2050.
graph | table | pdf-graph | pdf-table | memo |
0.86 | 2.12 | -1.06 | -2.00 | |
| B3.9 |
Reduce the upper 15-percent PIA formula factor to 10 percent over a 30-year period
from 2023 through 2052. Affects OASI and DI benefit computations.
graph | table | pdf-graph | pdf-table | memo |
0.07 | 0.02 | -1.85 | -3.91 | |
| B4.1 |
Increase the number of years used to calculate benefits for retirees
and survivors (but not for disabled workers) from 35 to 38, phased
in 2011-2015.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.42 | -1.63 | -3.70 | |
| B4.2 |
Increase the number of years used to calculate benefits for retirees and
survivors (but not for disabled workers) from 35 to 40, phased in 2011-2019. graph | table | pdf-graph | pdf-table | memo |
0.46 | 0.71 | -1.46 | -3.41 | |
| B4.3 |
Eliminate dropout years for OASI and DI computation of primary insurance
mount (PIA) for individuals newly eligible for benefits from 2012 to 2020.
Specifically, for OASDI benefit computation, reduce the maximum number of
drop-out years from 5 for benefit eligibility in 2011, with a decrease of
1 computation year in 2012, 2014, 2016, 2018, and 2020.
graph | table | pdf-graph | pdf-table | memo |
0.62 | 1.00 | -1.30 | -3.12 | |
| B5.1 |
Increase the PIA to a level such that a worker with 30 years of
earnings at the minimum wage level would receive an adjusted PIA
equal to 120 percent of the Federal poverty level for an aged
individual. This provision would take full effect for all newly
eligible OASDI workers in 2028, and would be phased in for new
eligible in 2019 through 2027. The percentage increase in PIA would
be lowered proportionately for those with fewer than 30 years of
earnings, down to no enhancement for workers with 20 or fewer years
of earnings. (Year-of-work requirements are "scaled" for disabled
workers based on their years of potential work from age 22 to benefit
eligibility). The benefit enhancement percentage would be reduced
proportionately for workers with higher average indexed monthly earnings
(AIME), down to no enhancement for those with AIME at least twice that
of a 35-year steady minimum wage earner.
graph | table | pdf-graph | pdf-table | memo |
-0.02 | 0.00 | -1.94 | -4.12 | |
| B5.2 |
Beginning in 2011, increase the special minimum benefit by making
the following changes: (a) A year of coverage is defined as a year
in which 4 quarters of coverage are earned. (b) At implementation,
set the PIA for 30 years of coverage equal to 125 percent of the
monthly poverty level (about $1,128 in 2009). The PIA per year of
coverage (after the first 10 years) would be $1,128/20 = $56.40.
(c) Index the initial PIA per year of coverage by wage growth for
successive cohorts, so that the special minimum keeps up with the
wage-indexed benefit formula.
graph | table | pdf-graph | pdf-table | memo |
-0.22 | -0.31 | -2.14 | -4.43 | |
| B5.3 |
Beginning in 2011, increase the special minimum benefit by making the
following changes: (a) A year of coverage is defined to be either a
childcare year or a year in which 4 quarters of coverage are earned.
Childcare years are granted to parents who have a child under 5, with
a limit of 8 such years. (b) At implementation, set the PIA for 30
years of coverage equal to 125 percent of the monthly poverty level
(about $1,128 in 2009). The PIA per year of coverage (after the first
10 years) would be $1,128/20 = $56.40. (c) Index the initial PIA per
year of coverage by wage growth for successive cohorts, so that the
special minimum keeps up with the wage-indexed benefit formula.
graph | table | pdf-graph | pdf-table | memo |
-0.31 | -0.44 | -2.23 | -4.55 | |
| B5.4 |
Beginning for those newly eligible for benefits in 2017, increase the
special minimum benefit by making the following changes. (a) A year of
coverage is defined as a year in which 4 quarters of coverage are earned.
(b) Set the PIA for 30 years of coverage equal to 125 percent of the monthly
poverty level (about $1,128 in 2009). The PIA per year of coverage (after the
first 10 years) would be $1,128/20 = $56.40. (c) Increase the PIA per year of
coverage from 2009 to the year of implementation, 2017, using the chain-CPI
index; then index the initial PIA per year of coverage by wage growth for
successive cohorts, so that the special minimum keeps up with the wage-indexed
benefit formula. Scale work requirements for disabled workers based on the years
of potential work (not disabled).
graph | table | pdf-graph | pdf-table | memo |
-0.15 | -0.26 | -2.07 | -4.38 | |
| B5.5 |
Reconfigure the special minimum benefit to ensure that an individual with at least 3
0 creditable years of earnings (equal to at least 20% of the "old law taxable maximum")
would receive a PIA of 133 percent of the Aged Federal poverty level, with the formula
phased linearly from zero for workers with 19 creditable years to 133 percent of poverty
for those with 30 creditable years. Up to 8 years with own child under the age of 6 could
be used as creditable years, if not otherwise counted as a creditable year. Scale the
creditable year requirements and number of child-care years for disabled workers and workers
dying under age 62 based on the proportion of years from 22 through 61 alive and not disabled.
This provision is effective for individuals newly eligible for benefits in 2012 and later.
Wage-index the poverty level from 2009 up to 2 years prior to benefit eligibility.
graph | table | pdf-graph | pdf-table | memo |
-0.09 | -0.14 | -2.01 | -4.26 | |
| B6.1 |
Reduce benefits by 3 percent for those newly eligible for benefits in
2011 and later. graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.49 | -1.56 | -3.62 | |
| B6.2 |
Reduce benefits by 5 percent for those newly eligible for benefits
in 2011 and later. graph | table | pdf-graph | pdf-table | memo |
0.60 | 0.82 | -1.32 | -3.30 | |
| B6.3 |
Give parents earnings credits for up to five years if they have a child
under 6. The earnings credited for a childcare year would be such that
the resulting earnings assigned to the parents would equal one half of
the Social Security average-wage index -- about $21,542 in 2010. The
credits would be available for all past years to newly eligible
retired-worker and disabled-worker beneficiaries in 2011 and later. The
5 most advantageous years would be used if more than 5 childcare credit
years are possible; that is, the 5 years that make the biggest difference
in indexed earnings.
graph | table | pdf-graph | pdf-table | memo |
-0.28 | -0.41 | -2.20 | -4.52 | |
| B6.4 |
Provide a 5 percent increase to the benefit level of any beneficiary who is
85 or older at the beginning of 2011 or who reaches their 85th birthday after
the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-0.09 | -0.14 | -2.01 | -4.26 | |
| B6.5 |
Provide the same dollar amount increase to the benefit level of any beneficiary
who is 85 or older at the beginning of 2011 or who reaches their 85th birthday
after the beginning of 2011. The dollar amount of increase equals 5 percent of
the average retired worker benefit in the prior year.
graph | table | pdf-graph | pdf-table | memo |
-0.10 | -0.14 | -2.02 | -4.26 | |
| B6.6 |
Increase benefits by 20 percent for all beneficiaries as of the beginning of 2011
and for those newly eligible for benefits after the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-2.96 | -3.29 | -4.88 | -7.41 | |
| B6.7 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2011
and for those newly eligible for benefits after the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-0.74 | -0.82 | -2.66 | -4.94 | |
| B6.8 |
Increase benefits by 2 percent for all beneficiaries as of the beginning of 2011
and for those newly eligible for benefits after the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-0.30 | -0.33 | -2.22 | -4.45 | |
| B6.9 |
Starting in 2011, provide a 5% uniform benefit increase, beginning 20 years after
eligibility. The benefit increase would be phased in at 1% per year from the 20th
through 24th years after initial benefit eligibility. For disabled workers the
eligibility age would be the initial entitlement year to the benefit. The benefit
increase is equal to 5% of the PIA of a worker assumed to have career-average
earnings equal to SSA’s average wage index.
graph | table | pdf-graph | pdf-table | memo |
-0.15 | -0.23 | -2.07 | -4.35 | |
| B6.10 |
Provide an increase in the benefit level of any beneficiary who is 85 or older at
the beginning of 2012 or who reaches their 85th birthday after the beginning of
2012. The beneficiary’s PIA would be increased based on an amount equal to the
average retired worker PIA at the end of 2011, or at the end of the year age 80 if
later. The beneficiary’s PIA would be increased by 5 percent of this amount for
those older than 85 at the beginning of 2012 and by 5 percent of this amount at age
85 for others, phased in at 1 percent per year for ages 81-85.
graph | table | pdf-graph | pdf-table | memo |
-0.13 | -0.18 | -2.05 | -4.30 | |
 |
Privacy Policy
| Website Policies
& Other Important Information
| Site Map Last reviewed or modified April 26, 2011 |