Description of Proposed Provision:
B3.7: Progressive indexing (30th percentile) of PIA factors beginning with individuals newly eligible for OASI benefits in 2020, continuing through 2029, and resuming in 2068: Create a new bend point at the 30th percentile of the AIME distribution of newly retired workers. Maintain current-law benefits for earners at the 30th percentile and below. Reduce the 32 and 15 percent factors above the 30th percentile such that the initial benefit for a worker with AIME equal to the taxable maximum is reduced by 1.20 percent per year as compared to current law (for the years that progressive indexing applies). Disabled workers are: (a) not affected prior to normal retirement age; and (b) subject to a proportional reduction in benefits, based on the worker's years of disability, upon conversion to retired-worker beneficiary status.

Financial Estimates for the OASDI Trust Fund Program

  Proposal   Change from Current Law
  Expressed as a percentage of
current-law taxable payroll

Trust fund
ratio as of
January 1
Expressed as a percentage of
current-law taxable payroll
Calendar
year
Cost
rate
Income
rate
Annual
balance

Cost
rate
Income
rate
Annual
balance
201713.4113.03-0.38
298
0.000.000.00
201813.4912.93-0.56
287
0.000.000.00
201913.7012.95-0.75
273
0.000.000.00
202013.8512.96-0.89
259
-0.00-0.000.00
202114.0112.99-1.02
245
-0.00-0.000.00
202214.2513.02-1.23
230
-0.00-0.000.00
202314.5313.05-1.49
215
-0.01-0.000.01
202414.8113.08-1.73
199
-0.02-0.000.02
202515.0713.10-1.97
183
-0.03-0.000.03
202615.3313.13-2.20
166
-0.04-0.000.04
202715.5613.15-2.41
149
-0.06-0.000.06
202815.7713.16-2.61
132
-0.08-0.000.08
202915.9613.18-2.78
114
-0.11-0.010.10
203016.1213.19-2.94
97
-0.14-0.010.13
203116.2713.20-3.07
79
-0.18-0.010.17
203216.3913.21-3.19
61
-0.21-0.010.20
203316.4913.21-3.27
42
-0.25-0.010.24
203416.5513.22-3.34
23
-0.29-0.020.28
203516.5913.22-3.37
4
-0.34-0.020.32
203616.6113.22-3.39
----
-0.38-0.020.36
203716.6013.22-3.38
----
-0.42-0.020.39
203816.5713.22-3.34
----
-0.45-0.030.43
203916.5113.22-3.29
----
-0.49-0.030.46
204016.4413.22-3.22
----
-0.52-0.030.49
204116.3613.21-3.15
----
-0.55-0.030.52
204216.2813.21-3.07
----
-0.58-0.030.55
204316.2013.21-2.99
----
-0.61-0.030.58
204416.1213.20-2.92
----
-0.64-0.040.60
204516.0613.20-2.86
----
-0.66-0.040.63
204615.9913.20-2.80
----
-0.69-0.040.65
204715.9413.19-2.74
----
-0.71-0.040.67
204815.8813.19-2.69
----
-0.73-0.040.69
204915.8413.19-2.65
----
-0.75-0.040.71
205015.8013.19-2.61
----
-0.77-0.040.73
205115.7713.19-2.58
----
-0.79-0.040.74
205215.7513.19-2.57
----
-0.80-0.050.76
205315.7513.19-2.56
----
-0.82-0.050.77
205415.7613.19-2.57
----
-0.83-0.050.79
205515.7713.19-2.58
----
-0.85-0.050.80
205615.8013.19-2.61
----
-0.86-0.050.81
205715.8313.19-2.64
----
-0.87-0.050.82
205815.8613.20-2.67
----
-0.88-0.050.83
205915.9013.20-2.70
----
-0.88-0.050.83
206015.9413.20-2.74
----
-0.89-0.050.84
206115.9813.20-2.77
----
-0.90-0.050.85
206216.0213.21-2.81
----
-0.90-0.050.85
206316.0613.21-2.85
----
-0.91-0.050.85
206416.1113.21-2.89
----
-0.91-0.050.86
206516.1513.22-2.94
----
-0.91-0.050.86
206616.2013.22-2.98
----
-0.92-0.050.86
206716.2513.22-3.03
----
-0.92-0.050.87
206816.3013.23-3.07
----
-0.92-0.050.87
206916.3513.23-3.12
----
-0.93-0.050.87
207016.3913.23-3.16
----
-0.93-0.050.88
207116.4313.23-3.20
----
-0.94-0.050.88
207216.4713.24-3.23
----
-0.95-0.050.89
207316.4913.24-3.26
----
-0.96-0.050.90
207416.5113.24-3.27
----
-0.97-0.060.91
207516.5213.24-3.28
----
-0.98-0.060.93
207616.5213.24-3.28
----
-1.00-0.060.94
207716.5013.24-3.26
----
-1.02-0.060.97
207816.4813.24-3.24
----
-1.05-0.060.99
207916.4413.24-3.20
----
-1.08-0.061.01
208016.4013.23-3.17
----
-1.11-0.061.04
208116.3613.23-3.13
----
-1.14-0.071.08
208216.3313.23-3.10
----
-1.18-0.071.11
208316.2913.23-3.06
----
-1.22-0.071.15
208416.2613.23-3.03
----
-1.27-0.071.20
208516.2313.22-3.01
----
-1.32-0.081.24
208616.2113.22-2.98
----
-1.37-0.081.29
208716.1813.22-2.96
----
-1.43-0.081.35
208816.1613.22-2.94
----
-1.49-0.091.41
208916.1413.22-2.92
----
-1.56-0.091.47
209016.1213.22-2.91
----
-1.62-0.091.53
209116.1013.22-2.89
----
-1.69-0.101.60
209216.0813.22-2.86
----
-1.76-0.101.66


Summarized Estimates

  Proposal   Change from Current Law
Years Cost
rate
Income
rate
Actuarial
balance

Year of reserve
depletion
1

Cost
rate
Income
rate
Actuarial
balance
2017-2091 16.01% 13.80% -2.21%
2035
-0.65% -0.04% 0.61%

1 Under current law, the year of Trust Fund reserve depletion is 2034.
Based on Intermediate Assumptions of the 2017 Trustees Report.