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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 2009 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. |
-2.00 | -4.34 | ||||
| B1.1 |
Beginning with those newly eligible for OASDI benefits in 2016 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 |
2.28 | 7.16 | 0.27 | 2.82 | |
| B1.2 | Progressive price indexing of PIA formula
factors beginning with individuals newly eligible for OASDI
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. graph | table | pdf-graph | pdf-table | memo |
1.31 | 3.97 | -0.69 | -0.37 | |
| B1.3 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2016. 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 |
1.10 | 3.32 | -0.90 | -1.02 | |
| B1.4 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2016. 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 |
0.87 | 2.51 | -1.13 | -1.83 | |
| B1.5 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2016. 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 |
0.61 | 1.57 | -1.39 | -2.77 | |
| B1.6 (2013) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2013. 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 | 3.64 | -0.69 | -0.70 | |
| B1.6 (2016) |
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 |
1.14 | 3.46 | -0.86 | -0.88 | |
| B1.6 (2017) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI 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. 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 |
1.10 | 3.42 | -0.90 | -0.92 | |
| B1.6 (2018) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2018. 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 |
1.04 | 3.36 | -0.96 | -0.98 | |
| B2.1 (2019) |
For OASI beneficiaries becoming eligible for benefits in 2019 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2014 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 |
0.56 | 1.93 | -1.44 | -2.41 | |
| B2.1 (2022) |
For OASI beneficiaries becoming eligible for benefits in 2022 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2017 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 |
0.49 | 1.81 | -1.51 | -2.53 | |
| B3.1 |
For each year from 2010-2040, 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 2040 and later. graph | table | pdf-graph | pdf-table | memo |
1.51 | 2.94 | -0.49 | -1.40 | |
| B3.2 |
Beginning with those newly eligible in 2017, multiply the 90 and 32
PIA factors each year by 0.9925 and 0.982, respectively. Stop
reductions in
2054. Beginning with those newly eligible in 2012, multiply the 15
factor by 0.982. Stop reduction of the 15 factor in 2049. 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 |
2.03 | 5.31 | 0.03 | 0.96 | |
| B3.3 |
For all individuals becoming eligible for OASDI benefits in 2010 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 | memo |
0.23 | 0.29 | -1.77 | -4.05 | |
| B3.4 |
Multiply all PIA formula factors successively by 0.991 for new
benefit eligibility in each year 2013 through 2041. 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 |
1.45 | 3.11 | -0.56 | -1.23 | |
| B3.5 |
Progressive indexing of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2012, continuing through 2049, and
resuming in 2070. 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 1.1 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 |
1.25 | 2.90 | -0.76 | -1.44 | |
| B3.6 |
Progressive indexing of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2012 through 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 1.1 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
graph | table | pdf-graph | pdf-table | memo |
1.34 | 3.33 | -0.66 | -1.01 | |
| B3.7 |
Progressive indexing of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2012, continuing through 2021, and
then resuming in 2060. 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 1.1 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 |
0.63 | 1.59 | -1.38 | -2.76 | |
| 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 2010-2014. graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.43 | -1.71 | -3.91 | |
| 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 2010-2018. graph | table | pdf-graph | pdf-table | memo |
0.46 | 0.72 | -1.54 | -3.62 | |
| B4.3 |
Eliminate dropout years for OASI and DI computation of primary
insurance amount (PIA) for individuals newly eligible for benefits
from 2011 to 2019. Specifically, for OASDI benefit computation,
reduce the maximum number of drop-out years from 5 for benefit
eligibility in 2010, with a decrease of 1 computation year in
2011, 2013, 2015, 2017, and 2019.
graph | table | pdf-graph | pdf-table | memo |
0.63 | 1.02 | -1.37 | -3.32 | |
| B5.1 (2017) |
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 2026, and would be phased
in for new eligible in 2017 through 2025. 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 | -2.04 | -4.34 | |
| B5.1 (2018) |
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
2027, and would be phased in for new eligible in 2018 through 2026. 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 | -2.04 | -4.34 | |
| B5.2 |
Beginning in 2010, 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 |
-0.13 | -0.19 | -2.13 | -4.53 | |
| B5.3 |
Beginning in 2010, 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 |
-0.26 | -0.36 | -2.26 | -4.70 | |
| B6.1 | Reduce benefits by
3 percent for those newly eligible for benefits in 2010 and later. graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.50 | -1.64 | -3.84 | |
| B6.2 | Reduce benefits by
5 percent for those newly eligible for benefits in 2010 and later. graph | table | pdf-graph | pdf-table | memo |
0.61 | 0.84 | -1.39 | -3.50 | |
| 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 $21,021 in
2009. The credits would be available for all past years to newly
eligible retired-worker and disabled-worker beneficiaries in 2010
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 |
-0.24 | -0.35 | -2.24 | -4.69 | |
| B6.4 |
Provide a 5 percent increase to the benefit level of any beneficiary
who is 85 or older at the beginning of 2010 or who reaches their
85th birthday after the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-0.09 | -0.13 | -2.09 | -4.48 | |
| B6.5 |
Provide the same dollar amount increase to the benefit level of any
beneficiary who is 85 or older at the beginning of 2010 or who
reaches their 85th birthday after the beginning of 2010. 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 |
-0.09 | -0.14 | -2.09 | -4.48 | |
| B6.6 |
Increase benefits by 20 percent for all beneficiaries as of the
beginning of 2010 and for those newly eligible for benefits after
the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-2.98 | -3.34 | -4.98 | -7.68 | |
| B6.7 |
Increase benefits by 5 percent for all beneficiaries as of the
beginning of 2010 and for those newly eligible for benefits after
the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-0.75 | -0.83 | -2.75 | -5.17 | |
| B6.8 |
Increase benefits by 2 percent for all beneficiaries as of the
beginning of 2010 and for those newly eligible for benefits after
the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-0.30 | -0.33 | -2.30 | -4.67 | |
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