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Solvency provisions |
Summary Measures and Graphs |
Description of Proposed Provision:
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Estimates based on the intermediate assumptions of the 2015 Trustees Report
Summary Measures | |||||
---|---|---|---|---|---|
Present law [percent of payroll] |
Change from present law [percent of payroll] |
Shortfall eliminated | |||
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
-2.68 | -4.65 | 0.36* | 0.00 | * | 0% |
* A change in the investment of trust fund reserves to include some equities affects the size of all summarized measures because increased "present-value" discounting reduces the weight on values for more distant future years. As a result, the magnitude of the present-law actuarial balance and the summarized effects of most proposals is reduced. Therefore, the size of the change in the long-range actuarial balance indicated here cannot be interpreted directly as a reduction in the shortfall. The actual reduction in the shortfall from equity investment depends on the amount of reserves that are available for investment throughout the period. For example, if provisions to change revenue or scheduled benefits resulted in a purely pay-as-you-go system (reserves just above zero throughout the period), then investment in equities would have no effect on the actuarial balance. |
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