SOCIAL SECURITY ADMINISTRATION BALTIMORE, MD 21235-0001

SOCIAL SECURITY

Office of the Chief Actuary

June 1, 2017

The Honorable Tom Cotton

United States Senate

Washington, D.C. 20510

Dear Senator Cotton:

Thank you for your letter of April 12 regarding the implications for Social Security of increasing 

the rate at which disabled workers have their benefits terminated on the basis of returning to 

work. As you indicate, the annual rate of Social Security Disability Insurance (DI) benefit 

termination based on return to work has been about 0.5 percent overall for disabled workers in 

current payment status. Under the intermediate assumptions of the 2016 Trustees Report, this 

rate is assumed to remain roughly at this level in the future. Because the average DI beneficiary 

remains on the DI rolls for 10 to 11 years, the average new disabled worker beneficiary has about 

a 5 percent probability of leaving the DI rolls based on return to work. Increasing the annual rate 

of disabled worker benefit termination by 1 percentage point, from 0.5 to 1.5 percent, would 

require an increase in the percentage of new disabled worker beneficiaries that will terminate on 

the basis of work from the 5 percent expected under current law to about 15 percent. Note that 

termination based on return to work is limited for disabled worker beneficiaries, because most of 

them leave the DI rolls due to medical recovery, death, or conversion to retired worker benefits 

at normal retirement age (NRA), before they have worked long enough to complete the trial 

work period and the extended period of eligibility.

The estimates provided in this letter reflect the baseline intermediate assumptions of the 2016 

Trustees Report. If changes were made that would immediately increase the rate of work 

termination as described above for 2018 and all later years, we estimate that the long-range 

OASDI actuarial deficit would decrease from 2.66 percent of payroll under current law to 2.60 

percent of payroll. Please see the attached Table 1 that shows estimated annual effects on the 

OASDI program as a whole of achieving this change over the next 75 years. This net reduction 

in OASDI cost is due to a reduction in DI cost of 0.07 percent of payroll, with a partially 

offsetting increase in OASI cost of about 0.02 percent of payroll. The increase in OASI cost 

occurs because many of the disabled workers terminated for work would be expected to begin 

receiving OASI retirement benefits before NRA, earlier than if they had remained on the DI rolls 

until conversion to retirement benefits at NRA. In the near term, over the period 2018 through 

2027, the reduction in OASDI cost would average about 0.04 percent of payroll, for a net 

reduction in OASDI cost over that period of roughly $36 billion.
Page 2 – The Honorable Tom Cotton

In developing these estimates, we have assumed that the rate of disabled worker benefit

termination from work would be increased immediately for 2018 and later by the same 

proportion (to roughly triple our baseline assumption) for each age-sex-duration of benefit 

entitlement. In addition, we assume that the some of the additional beneficiaries terminated for 

work would return to the DI rolls in the years following termination, consistent with experience 

under current law. 

In your letter, you also requested estimates of the effects of increases of 2 and 3 percentage 

points in the annual rate of disabled worker benefit termination due to return to work. Such 

increases would reduce OASDI cost by roughly 2 times and 3 times, respectively, the values 

provided above and in the attached table.

We have enjoyed working with Alex Hanson and Matt Shannon of your staff in developing the 

requested estimates. Development of these estimates reflects the efforts of many in our office, 

but particularly Karen Glenn, Tiffany Bosley, Johanna Maleh, Chris Chaplain, and Anna 

Kirjusina. Please let me know if we may be of any further assistance on this or any other matter 

related to Social Security.

Sincerely,

 

Stephen C. Goss, ASA, MAAA

Chief Actuary

Enclosures
Year Cost Rate

Income

Rate

Annual

Balance Cost Rate

Income

Rate

Annual

Balance

2016 14.05 12.94 -1.10 303 0.00 0.00 0.00

2017 13.72 12.92 -0.80 293 0.00 0.00 0.00

2018 13.85 12.96 -0.89 277 -0.01 0.00 0.01

2019 13.97 12.97 -1.00 262 -0.02 0.00 0.02

2020 14.11 12.98 -1.13 247 -0.03 0.00 0.03

2021 14.24 13.00 -1.24 232 -0.03 0.00 0.03

2022 14.45 13.03 -1.42 217 -0.04 0.00 0.04

2023 14.72 13.06 -1.66 201 -0.04 0.00 0.04

2024 14.98 13.09 -1.89 184 -0.05 0.00 0.05

2025 15.24 13.11 -2.13 167 -0.05 0.00 0.05

2026 15.42 13.13 -2.29 151 -0.05 0.00 0.05

2027 15.59 13.14 -2.45 134 -0.06 0.00 0.05

2028 15.76 13.16 -2.60 118 -0.06 0.00 0.06

2029 15.91 13.17 -2.74 101 -0.06 0.00 0.06

2030 16.04 13.18 -2.86 84 -0.06 0.00 0.06

2031 16.16 13.19 -2.97 67 -0.06 0.00 0.06

2032 16.26 13.20 -3.06 50 -0.07 0.00 0.06

2033 16.34 13.21 -3.14 31 -0.07 0.00 0.07

2034 16.40 13.21 -3.19 13 -0.07 0.00 0.07

2035 16.43 13.21 -3.21 ---- -0.07 0.00 0.07

2036 16.49 13.22 -3.27 ---- -0.07 0.00 0.07

2037 16.53 13.23 -3.30 ---- -0.07 0.00 0.07

2038 16.54 13.23 -3.32 ---- -0.07 0.00 0.07

2039 16.54 13.23 -3.31 ---- -0.07 0.00 0.07

2040 16.52 13.23 -3.29 ---- -0.07 0.00 0.07

2041 16.49 13.23 -3.26 ---- -0.07 0.00 0.07

2042 16.46 13.23 -3.23 ---- -0.07 0.00 0.07

2043 16.43 13.23 -3.20 ---- -0.07 0.00 0.07

2044 16.40 13.23 -3.17 ---- -0.07 0.00 0.07

2045 16.38 13.23 -3.15 ---- -0.07 0.00 0.07

2046 16.36 13.23 -3.13 ---- -0.07 0.00 0.07

2047 16.34 13.23 -3.11 ---- -0.07 0.00 0.06

2048 16.32 13.23 -3.09 ---- -0.07 0.00 0.06

2049 16.30 13.23 -3.07 ---- -0.06 0.00 0.06

2050 16.29 13.23 -3.06 ---- -0.06 0.00 0.06

2051 16.30 13.23 -3.06 ---- -0.06 0.00 0.06

2052 16.31 13.23 -3.08 ---- -0.06 0.00 0.06

2053 16.33 13.24 -3.10 ---- -0.06 0.00 0.06

2054 16.36 13.24 -3.12 ---- -0.06 0.00 0.06

2055 16.40 13.24 -3.16 ---- -0.06 0.00 0.06

2056 16.45 13.25 -3.20 ---- -0.06 0.00 0.06

2057 16.50 13.25 -3.25 ---- -0.06 0.00 0.06

2058 16.55 13.25 -3.30 ---- -0.06 0.00 0.06

2059 16.60 13.26 -3.34 ---- -0.06 0.00 0.06

2060 16.65 13.26 -3.39 ---- -0.06 0.00 0.06

2061 16.70 13.27 -3.44 ---- -0.06 0.00 0.06

2062 16.75 13.27 -3.48 ---- -0.06 0.00 0.06

2063 16.80 13.27 -3.53 ---- -0.06 0.00 0.05

2064 16.85 13.28 -3.57 ---- -0.05 0.00 0.05

2065 16.90 13.28 -3.62 ---- -0.05 0.00 0.05

2066 16.95 13.28 -3.67 ---- -0.05 0.00 0.05

2067 17.01 13.29 -3.72 ---- -0.05 0.00 0.05

2068 17.06 13.29 -3.77 ---- -0.05 0.00 0.05

2069 17.11 13.29 -3.82 ---- -0.05 0.00 0.05

2070 17.16 13.30 -3.87 ---- -0.05 0.00 0.05

2071 17.21 13.30 -3.91 ---- -0.05 0.00 0.05

2072 17.25 13.30 -3.95 ---- -0.05 0.00 0.05

2073 17.29 13.31 -3.98 ---- -0.05 0.00 0.05

2074 17.32 13.31 -4.01 ---- -0.05 0.00 0.05

2075 17.34 13.31 -4.03 ---- -0.05 0.00 0.05

2076 17.35 13.31 -4.04 ---- -0.05 0.00 0.05

2077 17.36 13.31 -4.05 ---- -0.05 0.00 0.05

2078 17.36 13.31 -4.05 ---- -0.05 0.00 0.05

2079 17.35 13.31 -4.04 ---- -0.05 0.00 0.05

2080 17.35 13.31 -4.04 ---- -0.05 0.00 0.05

2081 17.35 13.31 -4.04 ---- -0.05 0.00 0.05

2082 17.36 13.31 -4.04 ---- -0.05 0.00 0.05

2083 17.37 13.31 -4.06 ---- -0.05 0.00 0.05

2084 17.39 13.31 -4.08 ---- -0.05 0.00 0.05

2085 17.42 13.32 -4.10 ---- -0.05 0.00 0.05

2086 17.45 13.32 -4.14 ---- -0.05 0.00 0.05

2087 17.49 13.32 -4.17 ---- -0.05 0.00 0.05

2088 17.54 13.32 -4.21 ---- -0.05 0.00 0.05

2089 17.58 13.33 -4.25 ---- -0.05 0.00 0.05

2090 17.63 13.33 -4.30 ---- -0.05 0.00 0.05

2091 17.67 13.33 -4.34 ---- -0.05 0.00 0.05

Cost Rate Income Rate

Actuarial 

Balance

Change in 

Cost rate

Change in 

Income Rate

Change in 

Actuarial

Balance

16.45% 13.84% -2.60% 2034 -0.05% 0.00% 0.05%

Office of the Chief Actuary

Based on Intermediate Assumptions of the 2016 Trustees Report. Social Security Administration

1 Under present law the year of combined Trust Fund reserve depletion is 2034.

Summarized Rates: OASDI

Year of reserve 

depletion1

Summarized Rates: OASDI

2016 - 2090

June 1, 2017

Expressed as a percentage of present-law

taxable payroll Trust Fund

Ratio

1-1-year

Expressed as a percentage of present-law

taxable payroll

Table 1 - OASDI Cost Rate, Income Rate, Annual Balance, and Trust Fund Ratio

Effect of a 1-percentage-point increase in the overall annual disabled-worker termination rate for return to work, effective for 2018 and 

later.

Proposal Change from Present Law