This section presents detailed information on the operations of the OASI and DI Trust Funds
1 during calendar year 2017. Chapter IV provides projections for calendar years 2018 through 2095.
Table
III.A1 presents a statement of the income and disbursements of the Federal
Old-Age and Survivors Insurance Trust Fund in calendar year 2017, and of the
asset reserves in the fund at the beginning and end of the calendar year. As shown in this table, total trust fund receipts in 2017 amounted to $825.6 billion, while disbursements totaled $806.7 billion, an increase in trust fund reserves during 2017 of $19.0 billion.
Income to the OASI Trust Fund based on the
taxation of OASI benefits amounted to $35.9 billion in 2017. As first required by the 1983 Social Security Amendments, this income comes from two separate sources: (1) Federal income taxation on up to 50 percent of an individual’s or couple’s OASI benefits under certain circumstances, and (2) a tax withheld from the benefits paid to certain nonresident alien beneficiaries. For the direct Federal income tax portion, Treasury transfers estimated amounts to the OASI Trust Fund in advance at the beginning of each calendar quarter. Treasury makes subsequent adjustments based on the actual amounts shown on annual income tax records. There were no such adjustments made in 2017. The amount of income from direct Federal income taxation on OASI benefits constituted approximately 99 percent of income from benefit taxation. The remaining one percent of the income from benefit taxation is the amounts withheld from the benefits paid to nonresident aliens.
In 2017, the OASI Trust Fund earned $83.2 billion in net
interest, which consisted of: (1) interest earned on the investments held by the trust fund, (2) interest on adjustments in the allocation of administrative expenses between the trust fund and the General Fund account for the
Supplemental Security Income program, (3) interest arising from the revised allocation of
administrative expenses among the trust funds, and (4) interest on certain reimbursements to the trust fund.
Of the $806.7 billion in total OASI disbursements in 2017, $798.7 billion were for net benefit payments, including recovered overpayments, reimbursements from the General Fund for unnegotiated checks, and the reimbursable costs of vocational rehabilitation services.
2 Net benefit payments increased by 3.9 percent from calendar year 2016 to calendar year 2017. This increase is due primarily to: (1) an increase in the average number of beneficiaries during the year and (2) an increase in the average monthly benefit amount. The increase in the average benefit amount in 2017 was due in part to the automatic cost-of-living benefit increase of 0.3 percent which became effective for December 2016 under the automatic-adjustment provisions in section 215(i) of the Social Security Act. In addition, new beneficiaries tend to have higher monthly benefit amounts than previous beneficiary cohorts.
The Railroad Retirement Act requires an annual
financial interchange between the Railroad Retirement program and the OASDI program. The purpose of the interchange is to put the OASI and DI Trust Funds in the same financial position in which they would have been had railroad employment always been covered directly by Social Security. The Railroad Retirement Board and the Social Security Administration calculated an interchange of $4.3 billion from the OASI Trust Fund to the Social Security Equivalent Benefit Account for June 2017.
Table
III.A2 presents a statement of the income and disbursements of the Federal Disability Insurance Trust Fund in calendar year 2017, and of the asset reserves in the fund at the beginning and end of the calendar year.
Section 201(d) of the Social Security Act provides that the Treasury securities issued for purchase by the OASI and DI Trust Funds shall have maturities fixed with due regard for the needs of the funds. Each year, bond purchases for each trust fund are made on June 30, taking into account the projected reserve depletion date in the most recently issued Trustees Report. The usual practice has been to reinvest the maturing special issue securities, as of each June 30, so that the values of the securities maturing in each of the next 15 years are approximately equal. However, as of June 2017, the Trustees projected that the reserves in the DI Trust Fund would be depleted within 15 years. Therefore, the Department of the Treasury, in consultation with the Chief Actuary of the Social Security Administration, selected the amounts and maturity dates of the DI special-issue bonds purchased on June 30, 2017, so that the bonds would mature over the 6-year period 2018-23. The bonds purchased have an interest rate of 2.250 percent, reflecting the average market yield, as of the last business day of the prior month, on the outstanding marketable U.S. obligations that are due or callable more than 4 years in the future. As of June 30, 2017, most of the invested asset reserves of the DI Trust Fund had maturity dates of June 30 in 2022 and 2023, so this investment approach required that all bond purchases on June 30, 2017 be split over the maturity dates of June 30, 2018 through June 30, 2021. Table
III.A7 shows details on investment transactions during 2017.
Table
III.A3 presents a statement of the operations of the OASI and DI Trust Funds on a hypothetical combined basis.
3 The entries in this table represent the sums of the corresponding values from tables
III.A1 and
III.A2. The two preceding subsections that cover OASI and DI provide a description of the nature of these income and expenditure transactions.
Table
III.A4 compares estimates of total income and total expenditures for calendar year 2017 from the intermediate projections in the 2013 through 2017 Trustees Reports to the corresponding actual amounts for 2017.
