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| Actuarial Publications |
Summary of Provisions That Would Change the Social Security Program |
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Description of Proposed Provisions:
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Estimates based on the intermediate assumptions of the 2008 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. |
-1.70 | -4.20 | ||||
| B1 | Increase the number of years used to
calculate benefits for retirees and survivors (but not for
disabled workers) from 35 to 38, phased in 2009-2013. graph | table | pdf-graph | pdf-table |
0.31 | 0.44 | -1.39 | -3.76 | |
| B2 | Increase the number of years used to
calculate benefits for retirees and survivors (but not for
disabled workers) from 35 to 40, phased in 2009-2017. graph | table | pdf-graph | pdf-table |
0.49 | 0.75 | -1.20 | -3.45 | |
| B3 |
For each year from 2009-2039, 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 2039 and later. graph | table | pdf-graph | pdf-table |
1.55 | 2.98 | -0.15 | -1.22 | |
| B4 | Reduce benefits by
3 percent for those newly eligible for benefits in 2009 and later. graph | table | pdf-graph | pdf-table |
0.36 | 0.50 | -1.34 | -3.70 | |
| B5 | Reduce benefits by
5 percent for those newly eligible for benefits in 2009 and later. graph | table | pdf-graph | pdf-table |
0.60 | 0.83 | -1.09 | -3.37 | |
| B6 |
Beginning with those newly eligible for OASDI benefits in 2015 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 |
2.30 | 7.18 | 0.60 | 2.97 | |
| B7 | Progressive price indexing of PIA formula
factors beginning with individuals newly eligible for OASDI
benefits in 2015. 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 |
1.36 | 4.13 | -0.34 | -0.08 | |
| B8 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2015. 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 |
1.15 | 3.47 | -0.55 | -0.73 | |
| B9 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2015. 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 |
0.93 | 2.65 | -0.77 | -1.55 | |
| B10 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2015. 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 |
0.68 | 1.69 | -1.02 | -2.51 | |
| B11 |
Beginning with those newly eligible in 2016, multiply the 90 and 32
PIA factors each year by 0.9925 and 0.982, respectively. Stop
reductions in
2053. Beginning with those newly eligible in 2011, multiply the 15
factor by 0.982. Stop reduction of the 15 factor in 2048. DI 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 |
2.06 | 5.33 | 0.36 | 1.13 | |
| B12 |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2015. 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 |
1.18 | 3.61 | -0.52 | -0.59 | |
| B12.1 |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2012. 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. In 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 |
1.31 | 3.71 | -0.39 | -0.49 | |
| B13 |
For OASI beneficiaries becoming eligible for benefits in 2021 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2016 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 |
0.47 | 1.71 | -1.23 | -2.49 | |
| B13.1 |
For OASI beneficiaries becoming eligible for benefits in 2018 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2013 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 |
0.52 | 1.80 | -1.17 | -2.40 | |
| B14 |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2016. 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 | 3.55 | -0.57 | -0.65 | |
| B15 |
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 2025, and would be phased
in for new eligible in 2016 through 2024. 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 |
-0.04 | 0.00 | -1.74 | -4.21 | |
| B16 |
For all individuals becoming eligible for OASDI benefits in 2009 and
later, use a modified primary insurance amount (PIA) formula.
The modified formula would increase the first bend point to $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 |
0.28 | 0.34 | -1.41 | -3.86 | |
| B17 |
Eliminate dropout years for OASI and DI computation of primary
insurance amount (PIA) for individuals newly eligible for benefits
from 2010 to 2018. Specifically, for OASDI benefit computation,
reduce the maximum number of drop-out years from 5 for benefit
eligibility in 2009, with a decrease of 1 computation year in
2010, 2012, 2014, 2016, and 2018.
graph | table | pdf-graph | pdf-table | memo |
0.65 | 1.03 | -1.05 | -3.17 | |
| B18 |
Multiply all PIA formula factors successively by 0.991 for new
benefit eligibility in each year 2012 through 2040. 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 |
1.46 | 3.11 | -0.24 | -1.09 | |
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