SOCIAL SECURITY

MEMORANDUM

Date: January 7, 2003 Refer To: TCA

To: Representative E. Clay Shaw, Jr., Chairman 

Subcommittee on Social Security

From: Stephen C. Goss, Chief Actuary 

Alice H. Wade, Deputy Chief Actuary

Chris Chaplain, Actuary

Subject: OASDI Financial Effects of the Social Security Guarantee Plus Act of 2003 (H.R. 75) --

INFORMATION

This memorandum provides long-range estimates of the financial effects on the Social Security 

(OASDI) program assuming enactment of the Social Security Guarantee Plus Act of 2003

(H.R. 75), which was introduced today. These estimates were requested by Kim Hildred and 

Sophia Wright of your staff and are based on the intermediate assumptions of the 2002 Trustees 

Report, as well as additional assumptions described below. H.R.75 states that several provisions 

would become effective starting one or more calendar years following the year of enactment. 

For the estimates in this memorandum, we have assumed enactment in 2003.

Proposal Summary

The Social Security Guarantee Plus (SSGP) Plan would allow workers who have attained age 

18 to voluntarily participate in the Social Security Guarantee (SSG) Accounts beginning in 2003. 

The SSG Account of each worker who elects to participate would be credited with an annual 

contribution from the General Fund of the Treasury. The annual contribution would equal 4 

percent of each worker’s OASDI taxable earnings for the year, up to $1,000 (value for 2003 and 

wage-indexed thereafter). Even though participation would be voluntary, we assume universal 

participation for these estimates. Universal participation is expected because the plan would 

guarantee a larger total benefit for SSG-account participants than for non-participants. In 

addition to regular monthly benefits, participants would receive a lump sum payment at initial 

benefit entitlement equal to 5 percent of their account balance at that time. Participants who 

work after initial benefit entitlement would also receive additional lump sum payments equal to 5 

percent of the resulting contributions (including deemed interest) to their SSG Accounts. 

Under the plan, assuming universal participation, regular monthly benefits are expected to be at 

least as large as the current-law scheduled Social Security benefit amount for all beneficiaries. 

SSG Account balances (less the 5-percent lump sum payment) would, commencing at the 

worker’s retirement (or disability) benefit entitlement, be gradually withdrawn and transferred to 
2

the OASDI Trust Funds. The beneficiary would receive monthly benefits from the OASDI Trust 

Funds. Monthly benefits under the proposal would be scheduled as the higher of:

• The beneficiary 's monthly benefit amount scheduled under current law, and

• The computed SSG monthly withdrawal amount, based on a CPI-indexed, unisex lifeannuity calculation.

The life-annuity calculation would be made on a joint and two-thirds survivor basis for married 

workers. Further details on SSG Account distributions are provided in the section below, 

entitled The Proposal: SSG Accounts. 

Under the proposal, if at some point in the future the Trustees Report intermediate projection of 

the financial status of the OASDI program indicates a current and sustained level of OASDI 

income in excess of what is needed to meet net program cost (and maintain a stable trust fund 

ratio of at least 100 percent), then the Managing Trustee would be authorized to make 

recommendations to the Congress indicating the extent to which the Trust Funds are expected to 

be able to finance the contributions to the SSG Accounts, in lieu of financing from the General 

Fund of the Treasury. The Congress would decide whether or not to act on such 

recommendations at that time. 

The proposal would also include a number of specific changes in OASDI benefits. These 

changes include:

• The gradual elimination (between 2004 and 2009) of the Social Security retirement earnings 

test for beneficiaries who have attained age 62 but not their NRA;

• Increasing the benefits of widow and widowers, whose benefits are generally lower than 

average, to as much as 75 percent of the benefit that the couple would have been receiving if 

both were still alive;

• Extending eligibility to some disabled widows and widowers;

• Providing child care credits for up to 5 years; and 

• Reducing government pension offset from two-thirds to one-third of the government 

pension.

Details of each of these provisions are provided in the section below, entitled The Proposal: 

Additional Changes to OASDI Benefits.

Enactment of this proposal, as specified, would eliminate the estimated long-range OASDI 

actuarial deficit (1.87 percent of taxable payroll under present law) based on “intermediate” 

assumptions described below, and would result in sustainable solvency for the foreseeable future. 

Under these assumptions, revenue transferred from the SSG Accounts to the Trust Funds would 

be expected to be sufficient to allow a reduction in the combined OASDI payroll tax rate of 0.4 

percentage point in 2040 (from 12.4 to 12.0 percent). After 2040, further reductions would be 

expected, reaching a level equal to the cost of SSG Account contributions by 2060. However, 

the financial status of the OASDI program would be very sensitive to the actual yields realized 

on SSG Accounts, particularly yields on equities (see sensitivity analysis below). 
3

The Proposal: SSG Accounts

Contributions and Investment Up To Benefit Entitlement

The proposal would provide Social Security covered workers with refundable tax credits equal to 

4 percent of their OASDI taxable earnings (up to a specified dollar limit) starting with earnings 

for calendar year 2003. The dollar limit for 2003 would be $1,000. For subsequent years, the 

dollar limit would be increased by the growth in the average wage indexing series. Credits 

would be increased with interest from July 1 of the year of taxable earnings until deposited in the 

SSG Account, at the market yield provided for securities newly issued to the OASI and DI Trust 

Funds. Credits would be transferred from the General Fund of the Treasury to SSG Accounts as 

soon as practicable in the following calendar year (expected to be generally by October 15 for 

wages and salaries and by December 1 for self-employment earnings). 

Accounts would be established as soon as practicable. For the purpose of these estimates, it is 

assumed that accounts would be established by the end of 2003. Delay to 2004 would not 

materially affect the results. Account balances would be collectively invested in qualified 

mutual funds, managed by certified account managers under contract with and regulation by the 

Social Security Guarantee (SSG) Board. The Board would initially consist of the six individuals 

appointed by the Board of Trustees of the OASDI Trust Funds to 3, 6, or 9-year terms.

Individuals would be required to hold all SSG Account assets in a single fund and could change 

funds at most once per year. Annual SSG credits would be pooled and transmitted to the mutual 

fund managers under regulations prescribed by the Treasury in consultation with the SSG Board. 

Account holders would receive annual notices of assets, investment performance, and 

administrative costs in their Social Security statements.

The proposal specifies three investment options. The default option would require that account 

balances be invested in qualified mutual funds maintained with a portfolio allocation of 60 

percent stock index funds and 40 percent high-grade corporate bond index funds. The other two 

options are similar, differing only in the portfolio allocation percentages (65 percent stock / 35 

percent bonds and 70 percent stock / 30 percent bonds). Switching among options would be 

allowed once per year. The charge for annual administrative expenses would be limited to 25 

basis points after the first 5 years of operation. Allowance for administrative expense approved 

by the Board in excess of 25 basis points would be made for the first 5 years (2003-7) and would 

be payable from the General Fund of the Treasury. Withdrawals prior to reaching retirement (or 

disability) would not be permitted.

We assume that many investors will pick the investment option with the highest percentage 

allocation in stocks i.e., 70 percent stock and 30 percent corporate bonds, in order to maximize 

their expected rate of return (based on historical experience). Many individuals would be 

expected to prefer this option because the proposal provides a 5-percent SSG account lump-sum 

payment at benefit entitlement plus a guarantee that regular monthly benefits will not be reduced 

as a result of SSG-account participation, regardless of the investment outcome. However, many 

other individuals would remain with the default portfolio allocation of 60 percent stock and 40 

percent corporate bonds. Therefore, we assume that the aggregate average portfolio for SSG 
4

accounts will be halfway between these two allocations—i.e., an average portfolio of 65 percent 

stock and 35 percent corporate bonds.

Upon divorce before benefit entitlement from a marriage that lasted 1 year or longer, the 

amounts attributable to contributions during the marriage (including earnings on those 

contributions) in each spouse’s SSG Account would be reallocated evenly between the SSG 

Accounts of the spouses.

SSG Account Distributions

Under the plan, workers would receive 5 percent of the SSG Account balance as a lump sum 

distribution upon benefit entitlement. The remainder of the SSG Account balance for workers 

who become entitled to OASDI retirement or disability benefits would be gradually withdrawn 

and transferred to the OASDI Trust Funds. Upon entitlement for Social Security retirement or 

disability benefits, the Social Security Administration would compute the monthly SSG 

withdrawal amount, the monthly payment that could be provided from a life annuity purchased 

with the holdings in the SSG Account remaining after the lump sum payment. The annuity 

calculation would reflect the anticipated yield on the SSG account (under the specified postentitlement investment of 65 percent stocks and 35 percent corporate bonds, less 25 basis points 

for administration) and indexing of annuity payments for price inflation (using the present-law 

Social Security COLA). The annuity calculation would also roughly reflect the expected 

payment of aged spouse and aged survivor benefits if the worker has a current spouse, by using a 

joint annuity with two-thirds of the base payment payable when either (1) only the worker is 

eligible, or (2) either spouse is a survivor. 

The Social Security Administration would schedule payments from the Trust Funds for life equal 

to the larger of (a) the computed monthly annuity amount and (b) the current-law scheduled 

OASDI benefit. Each month after benefit entitlement the computed annuity amount based on 

entitlement of the worker and any aged spouse(s) would be transferred from the SSG Account to 

the OASDI Trust Funds.

Because the computed annuity amount is based on a life annuity calculation, the SSG Account 

would be expected to be depleted at the point where the beneficiary(ies) reach their life 

expectancy, as estimated at the time of benefit entitlement. Thus, for about half of the SSG 

Accounts, benefits will be payable after exhaustion of the SSG Account entirely at the expense 

of the OASDI Trust Funds. For the other half, death before life expectancy will leave remaining 

SSG balances that are transferred to the Trust Funds (to assist in the payment of benefits to those 

who live beyond life expectancy). 

For married workers who die after becoming entitled to OASDI retirement or disability benefits, 

SSG Account withdrawals will continue to be paid to the OASI Trust Fund in the amount of the 

survivor portion of the annuity calculation. When an unmarried person dies after benefit 

entitlement, the remaining balance in the SSG Account is transferred to the OASDI Trust Funds. 

For workers who die before becoming entitled to OASDI retirement or disability benefits, the 

SSG Account balance is transferred to the estate of the deceased worker. For individuals who 
5

have reached their normal retirement age and are not eligible for a retired-worker benefit under 

current law, their SSG Account balance would be transferred to them in a lump sum.

Taxation of SSG Accounts and Distributions

All yields on account balances would accumulate tax-free. Annuitized distributions would be 

transferred to the Trust Funds to finance the payment of OASDI benefits that would be taxable as 

under current law. In cases where the annuity proceeds exceed the Social Security benefit 

amounts, the excess annuity proceeds are also taxable in the same manner as Social Security 

benefits. 

Lump sum distributions at benefit entitlement would be taxed as OASDI benefits. However, the 

percentage of the lump sum to be included as taxable would be equal to the percentage of 

OASDI monthly benefits for the year that are included in taxable income without including the 

lump sum payment in the calculation. 

Distributions of account balances to the estates of workers who die before benefit entitlement 

would not be taxable as benefits, nor would they be subject to estate tax. 

The Proposal: Additional Changes to OASDI Benefits

1) Increased Benefit for Widow(er)s 

Surviving spouses who are eligible for aged or disabled widow(er) benefit would receive 

75 percent of the benefit that the couple would have been receiving if both were still alive, if 

advantageous. This alternative benefit, however, would be limited by a benefit cap. The initial 

benefit cap for a surviving spouse would equal:

• The average PIA for all retired worker beneficiaries in the December of the year prior to 

entitlement to the surviving spouse benefit times

• The actuarial reduction factor that would apply as a retired worker1 (based on the survivor’s 

age at entitlement to a surviving spouse benefit). 

The benefit cap would subsequently be increased by the same cost-of-living increases that apply 

to benefits (COLA). For surviving spouses with entitlement prior to the effective date of this 

provision, we assume that the benefit cap would be determined as of the December before the 

effective date.

The couple benefit reflects any actuarial reductions (or DRC) that apply to either spouse. If the 

deceased spouse had not become entitled to a benefit, then the deceased spouse would be deemed 

to have become entitled at the date of death, or the attainment of age 62, whichever would occur 

later. The deceased spouse's benefit would subsequently be increased by the COLA from the 

deemed date of entitlement until the month of the survivor's entitlement to surviving spouse 

benefits. 

 

1

 If the surviving spouse is under age 62, the actuarial reduction is equal to the worker's actuarial reduction that 

would apply if the surviving spouse were age 62.
6

This provision is effective for all benefit entitlement for months beginning with December of the 

calendar year of enactment. Implementation of this provision alone would increase the size of 

the long-range OASDI actuarial deficit by an amount estimated at 0.08 percent of taxable 

payroll.

2) Extend Benefits to Disabled Surviving Spouses Who are Under Age 50

For benefit entitlement for December of the calendar year of enactment and later, allow disabled 

widows of any age to be eligible for disabled surviving spouse benefits. Remarriage before age 

50 would terminate eligibility for the disabled surviving spouse benefit. Implementation of this 

provision alone would increase the size of the OASDI actuarial deficit by a negligible amount 

(i.e., less than 0.005 percent of taxable payroll).

3) Eliminate the 7-Year Limitation for Disabled Surviving Spouses

For benefit entitlement for December of the calendar year of enactment and later, eliminate the 

requirement for disabled widow(er) benefits that disability must occur no later than 7 years after 

the worker’s death, or after surviving spouse with child-in-care benefits were payable. 

Implementation of this provision alone would increase the size of the OASDI actuarial deficit by 

a negligible amount (i.e., less than 0.005 percent of taxable payroll).

4) Waive the Two-Year Duration of Divorce Requirement

For benefit entitlement for December of the calendar year of enactment and later, waive the twoyear duration of divorce requirement for divorced spouse benefit eligibility, in cases where the 

worker remarries someone other than the claimant before the two-year period has elapsed. 

Implementation of this provision alone would increase the size of the OASDI actuarial deficit by 

a negligible amount (i.e., less than 0.005 percent of taxable payroll).

5) Provide Child-Care Credits

For benefit entitlement for months beginning with December of the calendar year of enactment, 

provide child-care credits for up to 5 years during which the worker was living with and 

providing care for his/her own child (or spouse's child) under the age of 7. The child-care credit 

would raise reported earnings for a qualifying year up to 25 percent of the AIME that would 

have been determined if the worker had become entitled for disabled worker benefits in January 

of the qualifying year (disability insured status is not required for the credit). The amount of the 

credit for any qualifying year would not be less than the credit for any prior qualifying year. We 

assume that child-care credits would not be used to establish insured status not already earned by 

the worker through actual earnings in covered employment. Implementation of this provision 

alone would increase the size of the OASDI actuarial deficit by an amount estimated at 0.02 

percent of taxable payroll.
7

6) Reduce Government Pension Offset 

The present-law GPO provision reduces OASDI auxiliary benefits for spouses and surviving 

spouses by two-thirds of any non-covered government pension that they receive. For benefit 

entitlement for months beginning with December of the calendar year of enactment, this 

provision would change this reduction to one-third of any non-covered government pension. 

Implementation of this provision alone would increase the size of the OASDI actuarial deficit by 

an amount estimated at 0.02 percent of taxable payroll.

7) Earnings Test Elimination at Ages 62 to NRA

The Social Security earnings test annual exempt amounts for ages 62 to NRA would be raised 

according to a specified schedule through 2008, and the test would be eliminated starting 2009 

for all beneficiaries at ages 62 to NRA. For beneficiaries under age 62, the current test would 

remain unchanged. The exempt amounts would be specified for the test applicable at ages 62 up 

to the year of attainment of NRA as $15,000, $20,000, $25,000, $30,000, and $35,000, for years 

2004 through 2008, respectively. This provision alone would increase the size of the present law 

OASDI actuarial deficit by an estimated 0.01 percent of taxable payroll.

Assumptions

For years after 2002, all workers who have attained age 18 and have OASDI taxable earnings are 

assumed to participate in SSG accounts. Under the plan, any worker who did not participate 

would receive Social Security benefits scheduled under current law. By participating, workers 

would be guaranteed to receive more than if they did not participate on the basis of one or more 

of the following: 

• A lump sum payment of 5 percent of the account balance is payable upon the worker's 

benefit entitlement,

• The entire account balance goes to the estate at death before benefit entitlement, and 

• In some cases the annuity calculation will produce monthly payments that are greater than 

the OASDI benefit that would otherwise be payable.

SSG Account Accumulation

SSG Account portfolios are required to be invested in qualified SSG funds. Prior to retirement 

(or disability) benefit entitlement workers would have three choices for the portfolio allocation: 

60, 65, or 70 percent in equity index funds with the balance invested in high-grade corporate 

bond index funds (40, 35, or 30 percent, respectively). After benefit entitlement all SSG 

Account assets would be invested in the fund with 65 percent equity and 35 percent corporate 

bonds. The total annual administrative expense charge would be 25 basis points. 

The long-term ultimate average real yield on stock (equity) investments made in the future is 

assumed to be 6.5 percent, somewhat less than the 7-percent real yield that was assumed for the 

1994-96 Advisory Council. This reduction in expected average yield is consistent with both 

(1) a growing consensus among economists that the market may value equities at somewhat 

higher average price-to-earnings ratios in the future based on broader access and a reduction in 
8

the perceived level of risk, and (2) the Trustees’ increase in the assumed real yield on Treasury 

bonds from the level assumed in 1995.

The ultimate real yield on long-term high-grade corporate bonds is assumed to average 3.5 

percent, or 0.5 percentage point higher than the 3.0 percent real yield for U.S. Government longterm securities, as assumed for the 2002 Trustees Report. This spread between corporate and 

U.S. Government bond yields is consistent with the spread experienced over the past 40 or 70 

years, on average. It should be noted, however, the spread has been much smaller over the past 

20 years. The expected ultimate real portfolio yield for the base projection would be based on a 

65 percent stocks/ 35 percent bonds allocation (Tables 1 and 2) and equal 5.20 percent, net of 

administrative expense, 

(0.65*6.5% + 0. 35*3.5% - 0.25% = 5.20). 

Due to the large degree of uncertainty associated with future returns on stock, sensitivity analysis 

provided below illustrates the effect of varying the yield on the SSG Account by plus and minus 

one percentage point. An illustration assuming that SSG Accounts achieve a yield no better than 

expected for government bonds is also included.

A range of administrative expense factors was assumed for individual accounts proposed by the 

1994-96 Advisory Council on Social Security. For the Individual Account (IA) plan, individual 

contributions were assumed to be collected and recorded by central institution, invested in large 

blocks with financial institutions, and invested in a limited number of indexed funds. Based on 

experience of the Teachers Insurance and Annuity Association (TIAA) and the Federal 

Employee Thrift Savings Plan (TSP) it was assumed that the IA plan could be administered with 

an expense of 10.5 basis points per year. For the Personal Security Accounts (PSAs), individual 

accounts were assumed to be invested on an individual basis, resulting in an annual 

administrative expense of 100 basis points. We believe that the description of SSG individual 

accounts is closer to the individual accounts for the IA plan than to the individual accounts for 

the PSA plan. Determination of SGA Account contributions would be made based on records 

currently maintained by the Social Security Administration. SGA Account records and actual 

investments (on a pooled basis) would be made by a central authority. Thus, the specified 

ultimate administrative-expense level of 25 basis points for SSG Accounts appears to be 

reasonable. 

Distribution of SSG Accounts

Upon the death of an individual who has not yet become entitled for OASDI benefits, the SSG 

Account goes to the estate of the deceased tax-free. If an individual reaches normal retirement 

age and is not eligible for any OASI benefit, the SSG Account balance is payable to the 

individual. Upon benefit entitlement, the worker receives a lump sum payment of 5 percent of 

the SSG Account balance at entitlement. The balance of this section describes how the 

remainder of the account is distributed after benefit entitlement.

Life annuity calculations for the purpose of determining the size of monthly transfers from SSG 

balances to the OASDI Trust Funds assume a real yield equal to the net expected real yield on 
9

SSG Accounts, as specified. Mortality estimates for these calculations are based on the 

intermediate projections of the 2002 Trustees Report. 

Annuity calculations at the time of future benefit entitlements are prescribed to be made on a 

unisex basis. For those with a current spouse at entitlement, annuity calculations would be on a 

joint and survivor basis intended to roughly match the expected payment of OASDI benefits. 

For the purpose of these calculations, a joint and 2/3 survivor annuity is assumed. Thus, the 

amounts transferred to OASDI from the SSG Account of a married beneficiary would be twothirds of the full joint payment level when either (1) only the worker is receiving a benefit or (2) 

upon the death of either the worker or the spouse.

With the yields assumed for these estimates, expected transfers from SSG Accounts after benefit

entitlement would generally be less than expected OASDI monthly benefits. However, single 

workers with above average earnings but who still contribute 4 percent (or nearly 4 percent) of 

their salaries to the SSG accounts throughout their careers, could have transfers from their SSG 

Accounts greater than current law benefits if the investment return during their working years 

exceeded the assumed long-range average return used for these estimates. Married workers with 

similar earnings levels would be less likely to have transfers that exceed current-law benefits 

because the joint-and-survivor annuity calculation would provide lower transfers than for single 

workers, and current law OASDI benefits for married workers would tend to be higher. 

Estimates for this proposal take into account the likely variability in account returns (see section 

below).

Effect of Variability in Account Returns on Cost Estimates

The plan provides that the total Social Security monthly benefit payment for SSG-Account 

participants would be no less than the benefit for non-participants. When the annuitized amount 

for a worker's SSG Account exceeds the scheduled monthly OASDI benefit, the excess is 

payable to the beneficiary. However, when the annuity payment from the SGA is less, then the 

full OASDI monthly benefit is still payable. Thus, variation across generations in the realized 

lifetime yield on SSG Accounts (both in accumulation and annuitization) would result in a 

greater degree of excess payments over time, than if yields were always consistent at the 

assumed average rates. The effect of this variability is modeled assuming a distribution of 

lifetime yields for future beneficiaries.

Estimated Effect On OASDI Financing

The combined effect of the seven additional changes to OASDI benefits listed above would 

reduce (worsen) of the long-range OASDI actuarial balance by about 0.13 percent of taxable 

payroll, from a balance of -1.87 percent of payroll under current law to an actuarial balance of 

-2.00 percent of payroll. However, because the monthly transfers from the SSG Accounts to the 

Trust Funds are expected to far exceed the additional benefit payments from the Trust Funds, the 

overall financial status of the OASDI program would greatly improve under this plan. 
10

The balance of this section presents estimates for this plan reflecting the expected future average 

yield on SSG Accounts as well as sensitivity analysis for a range of possible variation in average 

yields. For both present law and the SSGP plan, the table below provides the estimated OASDI 

actuarial balance, the estimated year of combined OASDI trust fund exhaustion, and the 

estimated annual percentage point change in the OASDI trust fund ratio at the end of the period 

(between 2076 and 2077). The OASDI program achieves sustainable solvency for the 

foreseeable future when the trust fund ratio is stable or rising at the end of 75 years. 

The base estimate for the SSGP Plan with full payroll taxes retained for the OASDI program 

(Table 1) indicates that the OASDI actuarial balance would be improved by 2.57 percent of 

effective taxable payroll, from a balance of –1.87 percent under current law to a balance of 0.70 

percent of payroll under the plan. The amount of assets in the OASDI Trust Funds as a percent 

of annual OASDI outgo (the trust fund ratio) would be expected to remain positive throughout 

the long-range 75-year projection period, thus allowing timely payment of benefits in full 

through 2076, and beyond. The trust fund ratio would be expected to decline to about 238 

percent at the beginning of 2042, and to increase thereafter, reaching 965 percent by the end of 

2076. The Trust Funds would be stable or rising by an estimated 28 percent of annual cost at the 

end of the period. 

Estimated Effects on OASDI Financial Status of 

the Social Security Guarantee Plus (SSGP) Plan

Estimated 

OASDI

Actuarial 

Balance 

(percent of

taxable payroll)

Year of 

Exhaustion 

of OASDI 

Trust Funds

Percentage 

Point Change 

in Trust Fund 

Ratio Between 

2076 and 2077

Present Law (No SSG) -1.87 2041 -24 2/

(1) SSGP Plan with Full Payroll Tax for OASDI

65% Stock, 35% Corporate Bond

Assess only 0.25% Administrative Cost +0.70 N/A 28

(2) SSGP Plan with Potential Financing of SSG 

Contributions from Payroll Tax 1/

65% Stock, 35% Corporate Bond

Assess only 0.25% Administrative Cost +0.17 N/A 1

1/ SSG contributions would be financed totally from the payroll tax starting 2060.

2/ Reduction in TFR in last year prior to Trust Fund exhaustion.

Based on intermediate assumptions of the 2002 Trustees Report and other assumptions described in the text of this 

memorandum.

The table above also includes an illustration of the potential financial effect of the SSGP Plan on 

Social Security if the SSG Account contributions are partially financed from the payroll tax 

during the period 2040-2059 and fully financed from the payroll tax beginning in 2060. The 
11

payroll tax that could be redirected from directly financing OASDI to financing SSG 

contributions is expected to be 0.4 percentage points in 2040-2044 and to increase thereafter 

reaching about 2.36 percentage points (reflecting the aggregate contribution rate as a percent of 

taxable payroll) by 2060. Under this illustration, the OASDI actuarial balance would be 

improved by 2.04 percent of taxable payroll, from a balance of -1.87 percent under current law to 

a positive balance of 0.17 percent of payroll. The OASDI trust fund ratio is estimated to be 

essentially stable at about 311 percent at the end of the long-range period. Thus, as of the end of 

2076, assets in the OASDI Trust Funds would be about 3.11 times the outgo for 2077. Trust 

Fund assets at this level are needed to generate interest sufficient to maintain the TFR with SSG 

contributions fully financed from the Trust Funds.

Sensitivity to SSG Account Investment Yields

The effect of the SSG Plan on the financial status of the OASDI program would depend greatly 

on the actual yield that is achieved for investments in the SSG Accounts. Returns on all 

investments are uncertain, and returns on stocks are particularly variable and uncertain over time. 

For this reason it is important to consider the sensitivity of the financial status of the OASDI 

program to possible variation in expected average long-term investment yield. Note that the 2002 

Trustees Report provides this sensitivity analysis for the OASDI program under current law on 

pages 152 through 153.

The table below provides the estimated OASDI actuarial balance, the estimated year of 

combined OASDI trust fund exhaustion, and the estimated annual percentage point change in the 

OASDI trust fund ratio at the end of the period (between 2076 and 2077, or in the last year prior 

to Trust Fund exhaustion, if earlier) for present law and for the SSGP Plan with three different 

SSG Account yield assumptions. The three different yield assumptions are presented in order to 

illustrate the sensitivity of the proposal to possible variation in the ultimate average returns on 

stock and corporate bonds. See earlier discussion of variation across generations around the 

long-term average return.

Under sensitivity illustration 3, the average long-term yield on SSG Accounts is assumed to be 

1 percentage point higher than expected for the accounts invested in 65 percent stock and 35

percent corporate bonds. Under this illustration, the OASDI trust fund ratio would be expected 

to reach a low of about 304 percent at the beginning of 2037, and to increase substantially 

thereafter. The trust fund ratio is rising by 91 percentage points per year at the end of the 75-

year period. OASDI would be substantially overfinanced and the SSG Account contributions 

could be paid entirely from the payroll tax rate as early as 2033 while still maintaining a positive 

long OASDI actuarial balance and a trust fund ratio of at least 100 percent for each year of the 

75-year period that is stable or rising at the end of the period.

Under sensitivity illustration 4, the average yield on SSG Accounts is assumed to be 

1 percentage point lower than expected for the accounts invested in 65 percent stock and 35 

percent corporate bonds. Under this illustration, the OASDI trust fund ratio would be expected 

to decline starting in 2017, reaching a low of 94 percent by the end of 2076. The OASDI 

actuarial balance would be improved by about 1.87 percent of taxable payroll under this 

assumption, leaving an actuarial deficit of 0.01 percent of payroll. However, the trust fund ratio 
12

would be declining by about 4 percentage points per year at the end of the 75-year period. Thus, 

the plan would not achieve sustainable solvency under this assumption.

Sensitivity Analysis: Effect of Variation in Expected SSG Account 

Investment Yield Rates on OASDI Financial Status 1/

Estimated 

OASDI

Actuarial 

Balance 

(percent of

taxable payroll)

Year of 

Exhaustion 

of OASDI 

Trust Funds

Percentage 

Point Change 

in Trust Fund 

Ratio Between 

2076 and 2077

Present Law (No SSG) -1.87 2041 -24 2/

(3) SSGP Plan with 1% Higher Than Expected 

Yield: 6.20% average net yield +1.61 N/A +91

(4) SSGP Plan with 1% Lower Than Expected 

Yield: 4.20% average net yield -0.01 N/A -4

(5) SSGP Plan with Yield Equal to Expected 

Yield on Government Bonds: 2.75% average 

net yield -0.69 2049 -14 2/

(6) SSGP Plan with All Investments at 60% 

Equity and 40% Corporate Bonds: 5.05% 

average net yield +0.59 N/A +22

1/ No payroll tax rate reduction

2/ Reduction in TFR in last year prior to Trust Fund exhaustion.

Based on intermediate assumptions of the 2002 Trustees Report and other assumptions described in the text of this 

memorandum.

Under sensitivity illustration 5, the average yield on SSG Accounts is assumed to be only 2.75 

percent above price inflation (the rate for government bonds less 25 basis points for 

administrative expense). Under this illustration, the OASDI Trust Funds would be expected to 

become exhausted in 2049, or 8 years later than projected to occur under current law. The 

OASDI actuarial balance would be improved by about 1.18 percent of taxable payroll under this 

assumption, leaving an actuarial deficit of 0.69 percent of payroll. 

Under sensitivity illustration 6, the SSG Accounts are assumed to be invested in 60 percent 

equity and 40 percent corporate bonds at all times (with the same allocation used for annuity 

transfer calculations). This assumption results in an expected 5.05 percent ultimate net real 

yield. Under this illustration, the OASDI Trust Funds would be more than adequately financed, 

with the Trust Fund Ratio rising after 2043, at a rate of 22 percent of annual outgo per year 

between 2076 and 2077. The OASDI actuarial balance would be improved by about 2.46
13

percent of taxable payroll under this assumption, leaving a positive actuarial balance of 0.59 

percent of payroll. 

Annual Estimates of Trust Fund Operations, Estimated Effects on the Unified Budget 

Balance, and Cash Flow Between the Trust Funds and the General Fund of the Treasury

Provided below are summarized descriptions of the attached tables, some of which have been 

referenced throughout this memorandum. For a more detailed description of these tables, please 

see our January 31, 2002 memorandum (pp. 21-26) on financial effects of the three models 

developed by the President's Commission to Strengthen Social Security. This memorandum is 

available on the Internet at www.csss.gov.

OASDI Trust Fund Operations

The attached tables 1 through 6 provide projected OASDI financial effects under each of the six 

following illustrations outlining future assumed yields on the SSG accounts:

1) an assumed SSG account yield of 5.20 percent real with SSG contributions funded by the 

General Fund indefinitely (expected yield with average 65 percent equity);

2) an assumed SSG account yield of 5.20 percent real with funding of the SSG accounts to 

be completely provided by redirection of OASDI payroll taxes by 2060;

3) an assumed 1-percent higher SSG account yield of 6.20 percent real with SSG 

contributions funded by the General Fund indefinitely;

4) an assumed 1-percent lower SSG account yield of 4.20 percent real with SSG 

contributions funded by the General Fund indefinitely; 

5) an assumed low-yield (or risk-adjusted) SSG account yield of 2.75 percent real (0.25 

percent less than the assumed yield rate for government bonds)-- with SSG contributions 

funded by the General Fund indefinitely; and 

6) an assumed SSG account yield of 5.05 percent real with SSG contributions funded by the 

General Fund indefinitely--all investments are assumed to be in the default portfolio (60 

percent equity). 

Tables 1, 2, 3, 4, 5, and 6 show estimated annual and summarized income rates, cost rates, and 

balances under each sensitivity illustration of the proposal. The tables also show the trust fund 

ratio for each year, as well as changes in contribution rates to the OASDI Trust Funds and 

taxable payroll under the proposal. 

SSG Accounts, Unified Budget, and Cash Flow

Additional attached tables described below provide further details of the financial projections, 

estimated unified budget effects, and estimated cash flow between the Trust Funds and the 

General Fund of the Treasury for the base illustration using the expected SSG account yield 

(consistent with Table 1 described above). Under the base illustration the SSG contributions are 

funded by the General Fund indefinitely. 

Table 1a shows estimated trust fund balances at the end of each year under current law and under 

the proposal. The "Net IA Accrual for Transfer" column shows the present value of the portion 
14

of SSG Account contributions, accumulated up to a given year, that is expected to be available 

for future transfers to the OASDI Trust Funds. The "IA/Annuity Assets EOY" column shows the 

total SSG and annuity account assets at the end of each year excluding payments made to a 

worker's estate for death before benefit entitlement, assuming that the accounts accumulate at the 

assumed average net yield rate. The final two columns show aggregate SSG contributions and 

disbursements for each year. All of these amounts appear on a present value basis as of January 

1, 2002.

Table 1b provides a rough estimate of the effects of the proposal on the annual Federal unified 

budget balance for each calendar year through 2076. All amounts in this table appear in constant 

2002 dollars (that is, dollar amounts that are indexed back to 2002 based on the consumer price 

index (CPI)). The first three columns in these tables include sources of changes to the unified 

budget balance, as follows:

• Annual aggregate contributions made to SSG accounts--a reduction to the unified budget 

balance because the monies go into personal accounts, funded by the General Fund of the 

Treasury;

• Transfers to OASDI Trust Funds from SSG account proceeds--an increase to the unified 

budget balance because these proceeds reduce Social Security benefit payments; and

• Other changes in OASDI cash flow (as compared to present law) from the other benefit 

provisions.

The last three columns present the aggregate effects on the unified budget:

• Change in the annual unified budget cash flow, which is simply the sum of the sources of 

unified budget balance changes identified above;

• Change in debt held by the public, as of the end of each year, which represents the 

cumulative change in the unified budget cash flows, with interest (at the assumed rates 

earned by the Trust Funds)

• Change in annual unified budget balance, which includes changes in both unified budget cash 

flow and in interest on the publicly held debt.

These unified-budget estimates are based on the intermediate assumptions of the 2002 Trustees 

Report, including the trust-fund interest assumption, and thus are not consistent with projections 

made by CBO and OMB (which use different assumptions). However, differences in payroll and 

benefit estimates are not large during the first 10 projection years so these values can be viewed 

as very rough approximations of the magnitude of effects on the unified budget balances through 

this period. 

Under the SSGP plan with the expected yield on the specified account portfolio (Table 1b), 

amounts transferred from the SSG Accounts to the OASDI Trust Funds would at first be small, 

but would exceed contributions to the SSG Accounts from the General Fund of the Treasury by 

about 2036. Including the relatively small effects of the additional benefit changes, the estimated 

change in the unified budget “cash flow” in Table 1b (excluding interest effects) would be 

negative until 2037. 

Including the cumulative effects of interest, the year in which the effect of the SSGP plan on the 

unified budget annual balance would be expected to become permanently positive is 2057 if the 
15

full payroll tax is retained for OASDI (table 1b). If the SSG contributions are financed with 

payroll tax revenue, partially beginning in 2040, and fully in 2060 and later, the effect on the 

unified budget is essentially the same as shown in table 1b, where the full payroll tax is retained 

for OASDI. This results because retaining the full payroll tax (12.4 percent) for OASDI has the 

essentially same effect on the unified budget as does redirecting a portion of the payroll tax to 

the General Fund of the Treasury for the purpose of financing SSG contributions.

Table 1c provides the estimated annual net cash flow from the General Fund of the Treasury to 

the OASDI Trust Funds and to SSG accounts under the proposal. All values in this table are 

expressed in constant 2002 dollars (i.e., dollar amounts that are indexed back to 2002 based on 

the CPI). 

For comparison purposes, cash flow estimates are provided in these tables for three different 

cases:

• The proposal (H.R. 75);

• Present Law OASDI modified to allow borrowing from the General Fund to pay scheduled 

benefits; and 

• Present Law OASDI where only benefits payable with current financing provisions are paid 

(no General Fund borrowing).

For each of these cases, three columns are provided. The first column shows estimates of the 

amount of borrowing needed from the General Fund to pay benefits. The second column is the 

estimated total net cash flow from the General Fund to the Trust Funds under the plan, including 

transfers and borrowing. The third column is the total net cash flow for years starting with 2002 

through the end of the given year, including accumulated interest cash flows for the period. 

Stephen C. Goss 

Alice H. Wade

Chris Chaplain

Attachments: 9
Table 1--Financial Effects of the SSGP Plan (H.R. 75)--IA Contributions from General Fund Indefinitely

with Average Investment at 65 Percent Equity

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 5.20 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 5.20

Marginal 

Change in Net SSGP Average

OASDI OASDI OASDI Contribution IA

Cost Income Annual TFR Contribution Contribution from Contribution

Year Rate 1/ Rate Balance 1-1-yr Rate Rate Trust Funds Rate

2002 10.84 12.73 1.88 261 12.40

2003 10.51 12.72 2.21 288 12.40 2.36

2004 10.59 12.73 2.14 309 12.40 2.36

2005 10.61 12.73 2.12 330 12.40 2.36

2006 10.65 12.73 2.08 351 12.40 2.36

2007 10.68 12.74 2.06 373 12.40 2.36

2008 10.78 12.75 1.97 393 12.40 2.36

2009 10.97 12.77 1.79 408 12.40 2.36

2010 11.15 12.79 1.64 423 12.40 2.36

2011 11.33 12.83 1.50 436 12.40 2.36

2012 11.54 12.85 1.31 447 12.40 2.36

2013 11.77 12.87 1.10 456 12.40 2.36

2014 12.02 12.89 0.86 462 12.40 2.36

2015 12.30 12.91 0.61 465 12.40 2.36

2016 12.60 12.93 0.33 466 12.40 2.36

2017 12.91 12.95 0.04 464 12.40 2.36

2018 13.24 12.97 -0.26 459 12.40 2.36

2019 13.57 13.00 -0.57 453 12.40 2.36

2020 13.89 13.02 -0.87 445 12.40 2.36

2021 14.21 13.04 -1.17 436 12.40 2.36

2022 14.51 13.07 -1.44 426 12.40 2.36

2023 14.79 13.09 -1.70 415 12.40 2.36

2024 15.04 13.11 -1.93 404 12.40 2.36

2025 15.26 13.13 -2.13 392 12.40 2.36

2026 15.46 13.15 -2.31 379 12.40 2.36

2027 15.63 13.17 -2.46 366 12.40 2.36

2028 15.76 13.18 -2.57 354 12.40 2.36

2029 15.85 13.20 -2.64 341 12.40 2.36

2030 15.90 13.21 -2.68 329 12.40 2.36

2031 15.91 13.23 -2.69 317 12.40 2.36

2032 15.91 13.24 -2.67 305 12.40 2.36

2033 15.87 13.25 -2.62 294 12.40 2.36

2034 15.78 13.26 -2.53 283 12.40 2.36

2035 15.67 13.26 -2.40 274 12.40 2.36

2036 15.52 13.27 -2.25 265 12.40 2.36

2037 15.35 13.27 -2.08 258 12.40 2.36

2038 15.16 13.28 -1.89 251 12.40 2.36

2039 14.96 13.28 -1.68 246 12.40 2.36

2040 14.74 13.28 -1.46 242 12.40 2.36

2041 14.53 13.28 -1.24 240 12.40 2.36

2042 14.31 13.29 -1.02 238 12.40 2.36

2043 14.09 13.29 -0.80 239 12.40 2.36

2044 13.88 13.29 -0.58 241 12.40 2.36

2045 13.67 13.30 -0.37 244 12.40 2.36

2046 13.47 13.30 -0.17 249 12.40 2.36

2047 13.28 13.31 0.03 255 12.40 2.36

2048 13.10 13.31 0.21 263 12.40 2.36

2049 12.92 13.32 0.40 272 12.40 2.36

2050 12.75 13.32 0.57 284 12.40 2.36

2051 12.60 13.33 0.73 296 12.40 2.36

2052 12.46 13.33 0.87 310 12.40 2.36

2053 12.34 13.34 1.00 325 12.40 2.36

2054 12.22 13.35 1.13 342 12.40 2.36

2055 12.11 13.35 1.24 360 12.40 2.36

2056 12.01 13.36 1.35 379 12.40 2.36

2057 11.91 13.37 1.46 400 12.40 2.36

2058 11.82 13.38 1.56 422 12.40 2.36

2059 11.73 13.38 1.65 445 12.40 2.36

2060 11.65 13.39 1.74 470 12.40 2.36

2061 11.58 13.40 1.82 496 12.40 2.36

2062 11.52 13.40 1.89 522 12.40 2.36

2063 11.47 13.41 1.94 549 12.40 2.36

2064 11.42 13.42 1.99 578 12.40 2.36

2065 11.39 13.42 2.03 606 12.40 2.36

2066 11.37 13.43 2.07 636 12.40 2.36

2067 11.35 13.44 2.09 665 12.40 2.36

2068 11.34 13.44 2.10 695 12.40 2.36

2069 11.34 13.45 2.11 725 12.40 2.36

2070 11.35 13.46 2.11 756 12.40 2.36

2071 11.36 13.46 2.10 786 12.40 2.36

2072 11.38 13.47 2.09 816 12.40 2.36

2073 11.41 13.47 2.07 847 12.40 2.36

2074 11.43 13.48 2.04 877 12.40 2.36

2075 11.47 13.48 2.01 907 12.40 2.36

2076 11.51 13.49 1.98 937 12.40 2.36

2077 11.57 13.49 1.93 965 12.40 2.36

 Summarized

Cost Income Actuarial Change in

2002 Rate Rate Balance Actuarial Balance

2076 13.04 13.74 0.70 2.57

Based on Intermediate Assumptions of the 2002 Trustees Report. Office of the Actuary

Social Security Administration

1/ Net of Benefit Cost Reductions from SSGP Transfers. January 7, 2003
Table 1a--Trust Fund Asset Comparison and SSGP Information--IA Contributions from General Fund Indefinitely

with Average Investment at 65 Percent Equity

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 Ultimate Average Real SSGP Rate--Actual 5.20

Ultimate Real SSGP Account Yield Rate 5.20 Ultimate Average SSGP Annuity Yield Rate--Actual 5.20

Ultimate Real SSGP Annuity Yield Rate 5.20 Assumed SSGP Participation Rate 100%

Present Law Proposal

Trust Fund Trust Fund Net IA IA/Annuity IA IA

Assets, Assets, Accrual for Assets, Contributions Disbursements

Year End of Year End of Year Transfer 1/ End of Year in Year in Year 2/

(In Billions of Present Value Dollars as of 1/1/2002)

2002 1,290 1,290

2003 1,380 1,380 94 99 97.5 0.0

2004 1,472 1,467 188 198 96.5 0.1

2005 1,563 1,552 284 299 95.6 0.3

2006 1,651 1,634 380 400 94.7 0.6

2007 1,736 1,715 477 502 93.7 1.1

2008 1,816 1,792 574 605 92.6 1.6

2009 1,890 1,861 671 708 91.4 2.2

2010 1,956 1,923 769 811 90.2 3.0

2011 2,015 1,979 866 914 88.9 3.9

2012 2,065 2,027 963 1,016 87.7 4.9

2013 2,105 2,067 1,060 1,119 86.4 6.0

2014 2,135 2,098 1,156 1,221 85.2 7.2

2015 2,154 2,119 1,252 1,323 83.9 8.5

2016 2,161 2,130 1,346 1,424 82.6 10.0

2017 2,156 2,131 1,440 1,524 81.4 11.5

2018 2,139 2,121 1,532 1,623 80.1 13.2

2019 2,110 2,102 1,624 1,721 78.9 15.0

2020 2,069 2,073 1,714 1,817 77.7 16.9

2021 2,018 2,035 1,803 1,912 76.5 19.0

2022 1,955 1,988 1,890 2,006 75.3 21.1

2023 1,884 1,935 1,975 2,098 74.1 23.4

2024 1,803 1,875 2,059 2,188 72.9 25.7

2025 1,715 1,810 2,140 2,276 71.7 28.2

2026 1,619 1,740 2,220 2,362 70.6 30.8

2027 1,518 1,667 2,297 2,446 69.5 33.5

2028 1,411 1,592 2,372 2,527 68.4 36.3

2029 1,300 1,516 2,444 2,605 67.4 39.2

2030 1,186 1,441 2,514 2,681 66.4 42.1

2031 1,070 1,366 2,581 2,754 65.4 45.2

2032 952 1,293 2,645 2,824 64.4 48.4

2033 833 1,222 2,705 2,891 63.4 51.6

2034 714 1,155 2,764 2,954 62.5 54.9

2035 596 1,092 2,820 3,015 61.6 58.3

2036 479 1,034 2,872 3,071 60.7 61.8

2037 363 981 2,920 3,124 59.8 65.3

2038 250 933 2,965 3,173 58.9 68.9

2039 138 892 3,006 3,218 58.0 72.5

2040 29 856 3,044 3,258 57.1 76.2

2041 ----- 826 3,077 3,295 56.3 80.0

2042 ----- 802 3,106 3,327 55.4 83.8

2043 ----- 784 3,130 3,354 54.5 87.7

2044 ----- 770 3,151 3,377 53.7 91.3

2045 ----- 762 3,167 3,395 52.8 94.8

2046 ----- 758 3,179 3,409 52.0 98.1

2047 ----- 758 3,188 3,419 51.2 101.2

2048 ----- 763 3,192 3,424 50.4 104.1

2049 ----- 771 3,193 3,426 49.5 106.8

2050 ----- 782 3,190 3,424 48.7 109.4

2051 ----- 797 3,184 3,419 47.9 111.7

2052 ----- 815 3,175 3,410 47.2 113.8

2053 ----- 834 3,163 3,397 46.4 115.8

2054 ----- 856 3,147 3,382 45.6 117.5

2055 ----- 880 3,129 3,363 44.9 119.1

2056 ----- 905 3,109 3,342 44.2 120.4

2057 ----- 932 3,086 3,318 43.4 121.6

2058 ----- 960 3,060 3,292 42.7 122.5

2059 ----- 989 3,033 3,263 42.0 123.3

2060 ----- 1,020 3,003 3,232 41.3 123.9

2061 ----- 1,051 2,972 3,200 40.6 124.3

2062 ----- 1,083 2,939 3,165 40.0 124.5

2063 ----- 1,115 2,905 3,129 39.3 124.5

2064 ----- 1,148 2,870 3,092 38.7 124.4

2065 ----- 1,181 2,833 3,054 38.0 124.1

2066 ----- 1,213 2,796 3,014 37.4 123.7

2067 ----- 1,246 2,758 2,974 36.7 123.2

2068 ----- 1,278 2,719 2,932 36.1 122.4

2069 ----- 1,309 2,679 2,891 35.5 121.6

2070 ----- 1,341 2,640 2,849 34.9 120.6

2071 ----- 1,371 2,600 2,806 34.3 119.5

2072 ----- 1,401 2,559 2,764 33.8 118.4

2073 ----- 1,430 2,519 2,721 33.2 117.1

2074 ----- 1,458 2,479 2,678 32.6 115.7

2075 ----- 1,486 2,439 2,636 32.1 114.3

2076 ----- 1,512 2,399 2,593 31.5 112.9

Based on Intermediate Assumptions of the 2002 Trustees Report.

1/ Amount accumulated to date expected to be available for future SSGP transfers. Office of the Actuary

2/ Excludes 5 percent lump-sum disbursements and proceeds to workers' estates in the case of Social Security Administration

 death before benefit entitement. January 7, 2003
Table 1b--SSGP Contributions, Transfers to OASDI Trust Funds from IAs, and Budget Effects (assuming IA contributions 

 are counted as expenditures) with IA Contributions from General Fund Indefinitely

Average investment is assumed to be 65 percent equity

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 5.20 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 5.20

Contributions to Transfers to Change Change in Change in 

SSGP by Federal OASDI Other Changes in Annual Debt Held Annual

Government Trust Funds in OASDI Unified Budget by Public Unified Budget

Year Based on Earnings 1/ from SSGPs Cash Flow Cash Flow (end of year) Balance

(In Billions of Constant 2002 Dollars)

2003 104.3 0.0 0.0 -104.3 107.5 -107.5

2004 106.7 0.1 -5.5 -112.1 226.7 -122.1

2005 109.2 0.4 -6.8 -115.6 353.2 -133.0

2006 111.5 0.7 -7.8 -118.6 486.7 -143.8

2007 113.8 1.3 -6.4 -118.9 625.0 -152.4

2008 116.1 2.0 -6.6 -120.7 769.3 -162.6

2009 118.3 2.9 -9.0 -124.4 921.9 -175.0

2010 120.4 4.0 -9.3 -125.6 1,080.2 -185.2

2011 122.4 5.3 -9.4 -126.5 1,244.1 -195.4

2012 124.4 6.9 -9.5 -127.0 1,413.4 -205.5

2013 126.4 8.7 -9.5 -127.2 1,587.7 -215.5

2014 128.4 10.8 -9.5 -127.0 1,766.8 -225.4

2015 130.3 13.2 -9.5 -126.5 1,950.5 -235.2

2016 132.2 16.0 -9.5 -125.7 2,138.5 -244.8

2017 134.1 19.0 -9.6 -124.6 2,331.1 -254.8

2018 136.0 22.4 -9.6 -123.2 2,527.9 -264.7

2019 137.9 26.2 -9.7 -121.4 2,728.8 -274.5

2020 139.9 30.5 -9.8 -119.1 2,933.3 -284.1

2021 141.8 35.2 -10.0 -116.6 3,141.5 -293.6

2022 143.8 40.3 -10.2 -113.6 3,352.7 -302.8

2023 145.7 46.0 -10.3 -110.1 3,566.7 -311.6

2024 147.7 52.1 -10.4 -106.0 3,782.9 -320.1

2025 149.8 58.9 -10.5 -101.4 4,000.9 -328.2

2026 151.8 66.2 -10.6 -96.3 4,220.1 -335.7

2027 153.9 74.1 -10.7 -90.5 4,439.9 -342.7

2028 156.1 82.7 -10.4 -83.8 4,659.4 -348.8

2029 158.3 92.0 -10.2 -76.5 4,878.0 -354.3

2030 160.6 102.0 -9.9 -68.5 5,094.9 -359.0

2031 162.9 112.7 -9.7 -59.9 5,309.4 -362.9

2032 165.3 124.2 -9.5 -50.6 5,520.8 -366.1

2033 167.7 136.5 -9.4 -40.6 5,728.3 -368.3

2034 170.2 149.6 -9.3 -29.9 5,931.0 -369.5

2035 172.7 163.6 -9.2 -18.3 6,127.8 -369.5

2036 175.3 178.5 -9.0 -5.8 6,317.6 -368.3

2037 177.8 194.3 -8.9 7.6 6,499.3 -365.7

2038 180.5 211.1 -8.7 22.0 6,671.7 -361.7

2039 183.1 229.0 -8.7 37.2 6,833.5 -356.1

2040 185.8 247.9 -8.7 53.4 6,983.5 -349.0

2041 188.4 267.9 -8.8 70.6 7,120.2 -340.2

2042 191.1 289.1 -9.0 89.0 7,242.2 -329.3

2043 193.8 311.5 -9.2 108.5 7,347.6 -316.4

2044 196.5 334.3 -9.3 128.4 7,435.8 -302.2

2045 199.2 357.4 -9.5 148.7 7,505.7 -286.5

2046 201.9 380.9 -9.6 169.4 7,556.5 -269.3

2047 204.7 404.7 -9.7 190.4 7,587.1 -250.7

2048 207.4 428.9 -9.8 211.7 7,596.7 -230.6

2049 210.2 453.3 -9.9 233.2 7,584.4 -209.0

2050 213.0 478.0 -10.0 254.9 7,549.3 -185.8

2051 215.8 502.8 -10.2 276.8 7,490.7 -161.3

2052 218.7 527.8 -10.3 298.8 7,407.7 -135.2

2053 221.6 552.9 -10.5 320.8 7,299.5 -107.6

2054 224.5 578.0 -10.7 342.9 7,165.4 -78.5

2055 227.4 603.2 -10.8 365.0 7,004.4 -47.8

2056 230.4 628.4 -10.9 387.1 6,815.9 -15.5

2057 233.4 653.4 -10.9 409.1 6,598.9 18.4

2058 236.5 678.4 -10.8 431.0 6,352.9 53.8

2059 239.6 703.1 -10.8 452.7 6,077.3 90.7

2060 242.7 727.6 -10.8 474.1 5,771.3 129.0

2061 245.9 751.8 -10.8 495.1 5,434.4 168.8

2062 249.1 775.7 -10.8 515.8 5,066.2 209.9

2063 252.3 799.1 -10.9 536.0 4,666.1 252.5

2064 255.5 822.5 -10.9 556.1 4,233.3 296.9

2065 258.8 845.4 -11.0 575.6 3,767.4 342.6

2066 262.1 867.8 -11.1 594.6 3,268.0 389.7

2067 265.5 889.7 -11.2 613.0 2,734.7 438.2

2068 268.8 911.0 -11.3 630.9 2,166.9 488.1

2069 272.3 931.9 -11.4 648.2 1,564.2 539.5

2070 275.7 952.2 -11.6 664.9 926.3 592.3

2071 279.2 972.0 -11.8 681.0 252.7 646.7

2072 282.7 991.2 -12.0 696.6 -457.2 702.5

2073 286.2 1,010.0 -12.2 711.6 -1,203.9 760.0

2074 289.8 1,028.4 -12.4 726.1 -1,987.9 819.1

2075 293.4 1,046.3 -12.6 740.3 -2,810.1 880.0

2076 297.1 1,064.0 -12.8 754.1 -3,671.1 942.8

2077 300.8 1,078.8 -13.0 765.0 -4,569.1 1,005.0

1/ Includes contributions from the General Fund of the Treasury. Office of the Actuary

Based on Intermediate Assumptions of the 2002 Trustees Report. Social Security Administration

January 7, 2003
Table 1c--Cash Flow from the General Fund of the Treasury to the OASDI Trust Funds--Constant 2002 Dollars 1/

with IA Contributions from General Fund Indefinitely

Average investment is assumed to be 65 percent equity

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 5.20 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 5.20

Estimate for Modified Present Law Estimate for Present Law

Estimate for H.R. 75 with Borrowing to Pay Scheduled Benefits with Only Payable Benefits

Cash Flow Net Annual Net Annual

Borrowing from General Total to Borrowing Cash Flow Total to Borrowing Cash Flow Total to

Needed Fund to End Of Year Needed from General End Of Year Needed from General End Of Year

In Year 2/ Trust Funds with Interest In Year 2/ Fund with Interest In Year 2/ Fund with Interest

Year (billions of Constant 2002$) (billions of Constant 2002$) (billions of Constant 2002$)

2002 0 -80 -82 0 -80 -82 0 -80 -82

2003 0 -98 -186 0 -96 -185 0 -96 -185

2004 0 -97 -292 0 -101 -295 0 -101 -295

2005 0 -98 -403 0 -104 -412 0 -104 -412

2006 0 -98 -518 0 -103 -532 0 -103 -532

2007 0 -99 -637 0 -103 -656 0 -103 -656

2008 0 -97 -758 0 -100 -781 0 -100 -781

2009 0 -90 -874 0 -95 -904 0 -95 -904

2010 0 -84 -988 0 -87 -1,022 0 -87 -1,022

2011 0 -78 -1,099 0 -81 -1,138 0 -81 -1,138

2012 0 -69 -1,204 0 -70 -1,246 0 -70 -1,246

2013 0 -59 -1,302 0 -58 -1,345 0 -58 -1,345

2014 0 -47 -1,390 0 -44 -1,432 0 -44 -1,432

2015 0 -33 -1,467 0 -28 -1,506 0 -28 -1,506

2016 0 -18 -1,530 0 -11 -1,563 0 -11 -1,563

2017 0 -2 -1,578 0 9 -1,601 0 9 -1,601

2018 0 15 -1,609 0 30 -1,620 0 30 -1,620

2019 0 33 -1,623 0 51 -1,616 0 51 -1,616

2020 0 52 -1,618 0 74 -1,589 0 74 -1,589

2021 0 70 -1,595 0 97 -1,538 0 97 -1,538

2022 0 88 -1,552 0 120 -1,462 0 120 -1,462

2023 0 105 -1,490 0 142 -1,360 0 142 -1,360

2024 0 121 -1,410 0 164 -1,233 0 164 -1,233

2025 0 136 -1,313 0 186 -1,079 0 186 -1,079

2026 0 149 -1,199 0 206 -900 0 206 -900

2027 0 161 -1,069 0 226 -696 0 226 -696

2028 0 171 -925 0 245 -466 0 245 -466

2029 0 178 -770 0 261 -212 0 261 -212

2030 0 183 -605 0 277 66 0 277 66

2031 0 186 -431 0 291 366 0 291 366

2032 0 187 -252 0 304 689 0 304 689

2033 0 186 -67 0 316 1,034 0 316 1,034

2034 0 183 119 0 325 1,398 0 325 1,398

2035 0 176 304 0 333 1,782 0 333 1,782

2036 0 168 486 0 339 2,184 0 339 2,184

2037 0 157 662 0 345 2,603 0 345 2,603

2038 0 145 831 0 349 3,040 0 349 3,040

2039 0 130 990 0 353 3,494 0 353 3,494

2040 0 115 1,138 0 357 3,965 0 357 3,965

2041 0 99 1,275 361 361 4,455 0 0 4,183

2042 0 83 1,398 366 366 4,964 0 0 4,309

2043 0 66 1,508 371 371 5,494 0 0 4,438

2044 0 49 1,603 377 377 6,046 0 0 4,571

2045 0 32 1,684 383 383 6,620 0 0 4,709

2046 0 15 1,750 390 390 7,219 0 0 4,850

2047 0 -2 1,800 397 397 7,842 0 0 4,995

2048 0 -19 1,834 404 404 8,493 0 0 5,145

2049 0 -35 1,853 412 412 9,171 0 0 5,300

2050 0 -52 1,855 421 421 9,878 0 0 5,459

2051 0 -67 1,842 431 431 10,616 0 0 5,622

2052 0 -81 1,814 441 441 11,387 0 0 5,791

2053 0 -95 1,771 453 453 12,194 0 0 5,965

2054 0 -108 1,714 465 465 13,038 0 0 6,144

2055 0 -120 1,641 478 478 13,919 0 0 6,328

2056 0 -133 1,554 491 491 14,841 0 0 6,518

2057 0 -145 1,451 504 504 15,804 0 0 6,713

2058 0 -157 1,334 518 518 16,810 0 0 6,915

2059 0 -168 1,200 531 531 17,859 0 0 7,122

2060 0 -179 1,052 545 545 18,954 0 0 7,336

2061 0 -190 887 559 559 20,096 0 0 7,556

2062 0 -200 708 573 573 21,288 0 0 7,783

2063 0 -208 515 588 588 22,531 0 0 8,016

2064 0 -216 308 604 604 23,827 0 0 8,256

2065 0 -223 87 620 620 25,178 0 0 8,504

2066 0 -230 -147 636 636 26,586 0 0 8,759

2067 0 -235 -394 653 653 28,054 0 0 9,022

2068 0 -240 -653 670 670 29,584 0 0 9,293

2069 0 -244 -923 687 687 31,177 0 0 9,572

2070 0 -247 -1,205 704 704 32,835 0 0 9,859

2071 0 -249 -1,497 722 722 34,562 0 0 10,154

2072 0 -250 -1,800 740 740 36,359 0 0 10,459

2073 0 -251 -2,113 757 757 38,228 0 0 10,773

2074 0 -251 -2,435 776 776 40,171 0 0 11,096

2075 0 -251 -2,767 794 794 42,193 0 0 11,429

2076 0 -250 -3,107 813 813 44,293 0 0 11,772

Office of the Actuary

1/ Including redemption of Trust Fund assets as of 1-1-2002. Social Security Administration

2/ Trust Funds are assumed to borrow from the General Fund of the Treasury. January 7, 2003
Table 2--Financial Effects of the SSGP Plan (H.R. 75)--with Average Investment at 65 Percent Equity

Assume Subsequent Legislation = Full IA Contributions from Trust Funds by 2060

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 5.20 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 5.20

Marginal 

Change in Net SSGP Average

OASDI OASDI OASDI Contribution IA

Cost Income Annual TFR Contribution Contribution from Contribution

Year Rate 1/ Rate Balance 1-1-yr Rate Rate Trust Funds Rate

2002 10.84 12.73 1.88 261 12.40

2003 10.51 12.72 2.21 288 12.40 2.36

2004 10.59 12.73 2.14 309 12.40 2.36

2005 10.61 12.73 2.12 330 12.40 2.36

2006 10.65 12.73 2.08 351 12.40 2.36

2007 10.68 12.74 2.06 373 12.40 2.36

2008 10.78 12.75 1.97 393 12.40 2.36

2009 10.97 12.77 1.79 408 12.40 2.36

2010 11.15 12.79 1.64 423 12.40 2.36

2011 11.33 12.83 1.50 436 12.40 2.36

2012 11.54 12.85 1.31 447 12.40 2.36

2013 11.77 12.87 1.10 456 12.40 2.36

2014 12.02 12.89 0.86 462 12.40 2.36

2015 12.30 12.91 0.61 465 12.40 2.36

2016 12.60 12.93 0.33 466 12.40 2.36

2017 12.91 12.95 0.04 464 12.40 2.36

2018 13.24 12.97 -0.26 459 12.40 2.36

2019 13.57 13.00 -0.57 453 12.40 2.36

2020 13.89 13.02 -0.87 445 12.40 2.36

2021 14.21 13.04 -1.17 436 12.40 2.36

2022 14.51 13.07 -1.44 426 12.40 2.36

2023 14.79 13.09 -1.70 415 12.40 2.36

2024 15.04 13.11 -1.93 404 12.40 2.36

2025 15.26 13.13 -2.13 392 12.40 2.36

2026 15.46 13.15 -2.31 379 12.40 2.36

2027 15.63 13.17 -2.46 366 12.40 2.36

2028 15.76 13.18 -2.57 354 12.40 2.36

2029 15.85 13.20 -2.64 341 12.40 2.36

2030 15.90 13.21 -2.68 329 12.40 2.36

2031 15.91 13.23 -2.69 317 12.40 2.36

2032 15.91 13.24 -2.67 305 12.40 2.36

2033 15.87 13.25 -2.62 294 12.40 2.36

2034 15.78 13.26 -2.53 283 12.40 2.36

2035 15.67 13.26 -2.40 274 12.40 2.36

2036 15.52 13.27 -2.25 265 12.40 2.36

2037 15.35 13.27 -2.08 258 12.40 2.36

2038 15.16 13.28 -1.89 251 12.40 2.36

2039 14.96 13.28 -1.68 246 12.40 2.36

2040 14.74 12.88 -1.86 242 -0.400 12.00 0.40 2.36

2041 14.53 12.88 -1.64 237 12.00 0.40 2.36

2042 14.31 12.89 -1.42 233 12.00 0.40 2.36

2043 14.09 12.89 -1.20 230 12.00 0.40 2.36

2044 13.88 12.89 -0.98 229 12.00 0.40 2.36

2045 13.67 12.60 -1.07 229 -0.300 11.70 0.70 2.36

2046 13.47 12.60 -0.87 228 11.70 0.70 2.36

2047 13.28 12.61 -0.67 229 11.70 0.70 2.36

2048 13.10 12.61 -0.49 231 11.70 0.70 2.36

2049 12.92 12.62 -0.30 234 11.70 0.70 2.36

2050 12.75 12.12 -0.63 238 -0.500 11.20 1.20 2.36

2051 12.60 12.13 -0.47 240 11.20 1.20 2.36

2052 12.46 12.13 -0.33 243 11.20 1.20 2.36

2053 12.34 12.14 -0.20 247 11.20 1.20 2.36

2054 12.22 12.15 -0.07 252 11.20 1.20 2.36

2055 12.11 11.55 -0.56 258 -0.600 10.60 1.80 2.36

2056 12.01 11.56 -0.45 260 10.60 1.80 2.36

2057 11.91 11.57 -0.34 262 10.60 1.80 2.36

2058 11.82 11.58 -0.24 266 10.60 1.80 2.36

2059 11.73 11.58 -0.15 270 10.60 1.80 2.36

2060 11.65 11.03 -0.61 276 -0.556 10.04 2.36 2.36

2061 11.58 11.04 -0.53 277 10.04 2.36 2.36

2062 11.52 11.05 -0.47 278 10.04 2.36 2.36

2063 11.47 11.06 -0.41 280 10.04 2.36 2.36

2064 11.42 11.06 -0.36 282 10.04 2.36 2.36

2065 11.39 11.07 -0.32 285 10.04 2.36 2.36

2066 11.37 11.08 -0.29 287 10.04 2.36 2.36

2067 11.35 11.08 -0.27 290 10.04 2.36 2.36

2068 11.34 11.09 -0.25 293 10.04 2.36 2.36

2069 11.34 11.09 -0.25 295 10.04 2.36 2.36

2070 11.35 11.10 -0.25 298 10.04 2.36 2.36

2071 11.36 11.11 -0.26 301 10.04 2.36 2.36

2072 11.38 11.11 -0.27 303 10.04 2.36 2.36

2073 11.41 11.12 -0.29 305 10.04 2.36 2.36

2074 11.43 11.12 -0.31 307 10.04 2.36 2.36

2075 11.47 11.13 -0.34 309 10.04 2.36 2.36

2076 11.51 11.13 -0.37 310 10.04 2.36 2.36

2077 11.57 11.14 -0.43 311 10.04 2.36 2.36

 Summarized

Cost Income Actuarial Change in

2002 Rate Rate Balance Actuarial Balance

2076 13.04 13.21 0.17 2.04

Based on Intermediate Assumptions of the 2002 Trustees Report. Office of the Actuary

Social Security Administration

1/ Net of Benefit Cost Reductions from SSGP Transfers. January 7, 2003
Table 3--Financial Effects of the SSGP Plan (H.R. 75)--IA Contributions from General Fund Indefinitely

with Average Investment at 65 Percent Equity: Sensitivity = 1 percent higher than expected yield

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 6.20 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 6.20

Marginal 

Change in Net SSGP Average

OASDI OASDI OASDI Contribution IA

Cost Income Annual TFR Contribution Contribution from Contribution

Year Rate 1/ Rate Balance 1-1-yr Rate Rate Trust Funds Rate

2002 10.84 12.73 1.88 261 12.40

2003 10.51 12.72 2.21 288 12.40 2.36

2004 10.59 12.73 2.14 309 12.40 2.36

2005 10.61 12.73 2.12 330 12.40 2.36

2006 10.65 12.73 2.08 351 12.40 2.36

2007 10.68 12.74 2.06 373 12.40 2.36

2008 10.77 12.75 1.98 393 12.40 2.36

2009 10.97 12.77 1.80 408 12.40 2.36

2010 11.14 12.79 1.64 423 12.40 2.36

2011 11.33 12.83 1.51 436 12.40 2.36

2012 11.53 12.85 1.32 448 12.40 2.36

2013 11.76 12.87 1.11 456 12.40 2.36

2014 12.01 12.89 0.88 462 12.40 2.36

2015 12.28 12.91 0.63 466 12.40 2.36

2016 12.57 12.93 0.35 467 12.40 2.36

2017 12.88 12.95 0.07 466 12.40 2.36

2018 13.20 12.97 -0.22 462 12.40 2.36

2019 13.51 13.00 -0.52 456 12.40 2.36

2020 13.83 13.02 -0.81 449 12.40 2.36

2021 14.14 13.04 -1.09 441 12.40 2.36

2022 14.42 13.07 -1.35 431 12.40 2.36

2023 14.68 13.09 -1.59 421 12.40 2.36

2024 14.91 13.11 -1.80 411 12.40 2.36

2025 15.11 13.13 -1.98 400 12.40 2.36

2026 15.29 13.15 -2.14 389 12.40 2.36

2027 15.43 13.17 -2.26 378 12.40 2.36

2028 15.53 13.19 -2.34 367 12.40 2.36

2029 15.58 13.20 -2.38 357 12.40 2.36

2030 15.60 13.22 -2.38 347 12.40 2.36

2031 15.57 13.23 -2.35 337 12.40 2.36

2032 15.52 13.24 -2.28 329 12.40 2.36

2033 15.43 13.25 -2.18 321 12.40 2.36

2034 15.30 13.26 -2.04 314 12.40 2.36

2035 15.13 13.27 -1.87 309 12.40 2.36

2036 14.93 13.27 -1.66 306 12.40 2.36

2037 14.70 13.28 -1.43 304 12.40 2.36

2038 14.45 13.28 -1.17 304 12.40 2.36

2039 14.18 13.29 -0.89 307 12.40 2.36

2040 13.89 13.29 -0.60 311 12.40 2.36

2041 13.59 13.29 -0.30 319 12.40 2.36

2042 13.29 13.30 0.01 329 12.40 2.36

2043 12.98 13.30 0.33 342 12.40 2.36

2044 12.68 13.31 0.63 358 12.40 2.36

2045 12.39 13.32 0.93 377 12.40 2.36

2046 12.11 13.33 1.22 400 12.40 2.36

2047 11.83 13.33 1.51 426 12.40 2.36

2048 11.56 13.34 1.79 456 12.40 2.36

2049 11.30 13.36 2.06 490 12.40 2.36

2050 11.04 13.37 2.32 527 12.40 2.36

2051 10.81 13.38 2.57 569 12.40 2.36

2052 10.59 13.40 2.81 614 12.40 2.36

2053 10.38 13.41 3.03 663 12.40 2.36

2054 10.18 13.43 3.25 717 12.40 2.36

2055 9.99 13.45 3.46 775 12.40 2.36

2056 9.81 13.47 3.66 838 12.40 2.36

2057 9.63 13.49 3.86 905 12.40 2.36

2058 9.46 13.51 4.05 976 12.40 2.36

2059 9.30 13.53 4.23 1,052 12.40 2.36

2060 9.15 13.55 4.40 1,133 12.40 2.36

2061 9.01 13.58 4.56 1,218 12.40 2.36

2062 8.89 13.60 4.71 1,306 12.40 2.36

2063 8.79 13.63 4.84 1,397 12.40 2.36

2064 8.68 13.65 4.98 1,493 12.40 2.36

2065 8.58 13.67 5.10 1,593 12.40 2.36

2066 8.49 13.70 5.20 1,696 12.40 2.36

2067 8.42 13.72 5.30 1,800 12.40 2.36

2068 8.36 13.74 5.38 1,906 12.40 2.36

2069 8.32 13.77 5.45 2,013 12.40 2.36

2070 8.28 13.79 5.50 2,120 12.40 2.36

2071 8.26 13.81 5.55 2,229 12.40 2.36

2072 8.25 13.83 5.58 2,336 12.40 2.36

2073 8.25 13.84 5.60 2,444 12.40 2.36

2074 8.26 13.86 5.60 2,551 12.40 2.36

2075 8.27 13.87 5.60 2,657 12.40 2.36

2076 8.29 13.89 5.60 2,763 12.40 2.36

2077 8.36 13.89 5.53 2,854 12.40 2.36

 Summarized

Cost Income Actuarial Change in

2002 Rate Rate Balance Actuarial Balance

2076 12.17 13.79 1.61 3.49

Based on Intermediate Assumptions of the 2002 Trustees Report. Office of the Actuary

Social Security Administration

1/ Net of Benefit Cost Reductions from SSGP Transfers. January 7, 2003
Table 4--Financial Effects of the SSGP Plan (H.R. 75)--IA Contributions from General Fund Indefinitely

with Average Investment at 65 Percent Equity: Sensitivity = 1 percent lower than expected yield

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 4.20 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 4.20

Marginal 

Change in Net SSGP Average

OASDI OASDI OASDI Contribution IA

Cost Income Annual TFR Contribution Contribution from Contribution

Year Rate 1/ Rate Balance 1-1-yr Rate Rate Trust Funds Rate

2002 10.84 12.73 1.88 261 12.40

2003 10.51 12.72 2.21 288 12.40 2.36

2004 10.59 12.73 2.14 309 12.40 2.36

2005 10.61 12.73 2.12 330 12.40 2.36

2006 10.65 12.73 2.08 351 12.40 2.36

2007 10.68 12.74 2.06 373 12.40 2.36

2008 10.78 12.75 1.97 393 12.40 2.36

2009 10.98 12.77 1.79 408 12.40 2.36

2010 11.15 12.79 1.64 423 12.40 2.36

2011 11.34 12.83 1.50 436 12.40 2.36

2012 11.55 12.85 1.30 447 12.40 2.36

2013 11.78 12.87 1.09 455 12.40 2.36

2014 12.04 12.89 0.85 461 12.40 2.36

2015 12.32 12.91 0.59 464 12.40 2.36

2016 12.62 12.93 0.30 464 12.40 2.36

2017 12.94 12.95 0.01 462 12.40 2.36

2018 13.28 12.97 -0.30 457 12.40 2.36

2019 13.61 13.00 -0.61 451 12.40 2.36

2020 13.95 13.02 -0.93 442 12.40 2.36

2021 14.28 13.04 -1.24 432 12.40 2.36

2022 14.59 13.07 -1.52 421 12.40 2.36

2023 14.88 13.09 -1.79 410 12.40 2.36

2024 15.15 13.11 -2.04 397 12.40 2.36

2025 15.39 13.13 -2.26 384 12.40 2.36

2026 15.61 13.15 -2.46 371 12.40 2.36

2027 15.80 13.17 -2.63 356 12.40 2.36

2028 15.95 13.18 -2.77 342 12.40 2.36

2029 16.06 13.20 -2.87 328 12.40 2.36

2030 16.14 13.21 -2.93 314 12.40 2.36

2031 16.19 13.23 -2.97 300 12.40 2.36

2032 16.22 13.24 -2.98 286 12.40 2.36

2033 16.22 13.25 -2.97 272 12.40 2.36

2034 16.17 13.26 -2.92 259 12.40 2.36

2035 16.10 13.26 -2.84 246 12.40 2.36

2036 16.00 13.27 -2.73 234 12.40 2.36

2037 15.87 13.27 -2.60 222 12.40 2.36

2038 15.74 13.27 -2.46 211 12.40 2.36

2039 15.59 13.28 -2.31 201 12.40 2.36

2040 15.43 13.28 -2.15 191 12.40 2.36

2041 15.27 13.28 -1.99 182 12.40 2.36

2042 15.12 13.28 -1.84 174 12.40 2.36

2043 14.97 13.29 -1.69 166 12.40 2.36

2044 14.83 13.29 -1.54 159 12.40 2.36

2045 14.69 13.29 -1.40 153 12.40 2.36

2046 14.57 13.29 -1.27 147 12.40 2.36

2047 14.44 13.30 -1.15 142 12.40 2.36

2048 14.33 13.30 -1.03 137 12.40 2.36

2049 14.22 13.31 -0.92 134 12.40 2.36

2050 14.13 13.31 -0.82 130 12.40 2.36

2051 14.05 13.31 -0.73 127 12.40 2.36

2052 13.98 13.32 -0.66 125 12.40 2.36

2053 13.92 13.32 -0.60 123 12.40 2.36

2054 13.87 13.33 -0.54 121 12.40 2.36

2055 13.83 13.34 -0.50 119 12.40 2.36

2056 13.80 13.34 -0.45 118 12.40 2.36

2057 13.76 13.35 -0.42 117 12.40 2.36

2058 13.73 13.35 -0.38 116 12.40 2.36

2059 13.71 13.36 -0.35 116 12.40 2.36

2060 13.68 13.36 -0.32 115 12.40 2.36

2061 13.67 13.37 -0.30 115 12.40 2.36

2062 13.66 13.37 -0.28 115 12.40 2.36

2063 13.66 13.38 -0.28 114 12.40 2.36

2064 13.67 13.39 -0.28 114 12.40 2.36

2065 13.68 13.39 -0.29 114 12.40 2.36

2066 13.70 13.40 -0.30 114 12.40 2.36

2067 13.72 13.40 -0.32 113 12.40 2.36

2068 13.75 13.41 -0.35 113 12.40 2.36

2069 13.79 13.41 -0.38 112 12.40 2.36

2070 13.83 13.42 -0.41 110 12.40 2.36

2071 13.87 13.42 -0.44 109 12.40 2.36

2072 13.91 13.43 -0.48 107 12.40 2.36

2073 13.96 13.43 -0.53 105 12.40 2.36

2074 14.01 13.44 -0.57 103 12.40 2.36

2075 14.06 13.44 -0.62 101 12.40 2.36

2076 14.11 13.44 -0.66 98 12.40 2.36

2077 14.17 13.45 -0.72 94 12.40 2.36

 Summarized

Cost Income Actuarial Change in

2002 Rate Rate Balance Actuarial Balance

2076 13.74 13.73 -0.01 1.87

Based on Intermediate Assumptions of the 2002 Trustees Report. Office of the Actuary

Social Security Administration

1/ Net of Benefit Cost Reductions from SSGP Transfers. January 7, 2003
Table 5--Financial Effects of the SSGP Plan (H.R. 75)--IA Contributions from General Fund Indefinitely

with Average Investment at 65 Percent Equity: Sensitivity = SSGP yield equal to government bond yield

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 2.75 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 2.75

Marginal 

Change in Net SSGP Average

OASDI OASDI OASDI Contribution IA

Cost Income Annual TFR Contribution Contribution from Contribution

Year Rate 1/ Rate Balance 1-1-yr Rate Rate Trust Funds Rate

2002 10.84 12.73 1.88 261 12.40

2003 10.51 12.72 2.21 288 12.40 2.36

2004 10.59 12.73 2.14 309 12.40 2.36

2005 10.61 12.73 2.12 330 12.40 2.36

2006 10.65 12.73 2.08 351 12.40 2.36

2007 10.68 12.74 2.05 373 12.40 2.36

2008 10.78 12.75 1.97 393 12.40 2.36

2009 10.98 12.77 1.79 408 12.40 2.36

2010 11.16 12.79 1.63 423 12.40 2.36

2011 11.35 12.83 1.49 435 12.40 2.36

2012 11.56 12.85 1.29 446 12.40 2.36

2013 11.80 12.87 1.07 454 12.40 2.36

2014 12.06 12.89 0.83 460 12.40 2.36

2015 12.34 12.91 0.56 462 12.40 2.36

2016 12.66 12.93 0.27 462 12.40 2.36

2017 12.98 12.95 -0.03 460 12.40 2.36

2018 13.32 12.97 -0.35 454 12.40 2.36

2019 13.67 13.00 -0.67 447 12.40 2.36

2020 14.02 13.02 -1.00 438 12.40 2.36

2021 14.36 13.04 -1.32 427 12.40 2.36

2022 14.69 13.07 -1.62 416 12.40 2.36

2023 14.99 13.09 -1.91 403 12.40 2.36

2024 15.28 13.11 -2.17 390 12.40 2.36

2025 15.54 13.13 -2.41 375 12.40 2.36

2026 15.78 13.15 -2.63 360 12.40 2.36

2027 16.00 13.17 -2.83 345 12.40 2.36

2028 16.18 13.18 -2.99 329 12.40 2.36

2029 16.32 13.20 -3.12 313 12.40 2.36

2030 16.43 13.21 -3.22 297 12.40 2.36

2031 16.51 13.23 -3.29 281 12.40 2.36

2032 16.57 13.24 -3.34 264 12.40 2.36

2033 16.61 13.25 -3.36 248 12.40 2.36

2034 16.61 13.25 -3.35 232 12.40 2.36

2035 16.57 13.26 -3.31 216 12.40 2.36

2036 16.52 13.26 -3.25 200 12.40 2.36

2037 16.44 13.27 -3.18 184 12.40 2.36

2038 16.36 13.27 -3.09 169 12.40 2.36

2039 16.26 13.27 -2.99 154 12.40 2.36

2040 16.16 13.28 -2.88 139 12.40 2.36

2041 16.06 13.28 -2.79 124 12.40 2.36

2042 15.97 13.28 -2.69 110 12.40 2.36

2043 15.89 13.28 -2.61 95 12.40 2.36

2044 15.81 13.28 -2.53 81 12.40 2.36

2045 15.74 13.29 -2.46 66 12.40 2.36

2046 15.68 13.29 -2.39 52 12.40 2.36

2047 15.63 13.29 -2.33 38 12.40 2.36

2048 15.58 13.30 -2.28 24 12.40 2.36

2049 15.54 13.30 -2.24 10 12.40 2.36

2050 15.50 13.30 -2.20 -- 12.40 2.36

2051 15.48 13.31 -2.18 -- 12.40 2.36

2052 15.48 13.31 -2.17 -- 12.40 2.36

2053 15.48 13.32 -2.17 -- 12.40 2.36

2054 15.50 13.32 -2.17 -- 12.40 2.36

2055 15.51 13.33 -2.19 -- 12.40 2.36

2056 15.53 13.33 -2.20 -- 12.40 2.36

2057 15.55 13.34 -2.22 -- 12.40 2.36

2058 15.58 13.34 -2.23 -- 12.40 2.36

2059 15.60 13.35 -2.25 -- 12.40 2.36

2060 15.63 13.35 -2.28 -- 12.40 2.36

2061 15.66 13.36 -2.30 -- 12.40 2.36

2062 15.69 13.36 -2.33 -- 12.40 2.36

2063 15.74 13.37 -2.37 -- 12.40 2.36

2064 15.78 13.37 -2.41 -- 12.40 2.36

2065 15.83 13.38 -2.46 -- 12.40 2.36

2066 15.89 13.38 -2.50 -- 12.40 2.36

2067 15.94 13.39 -2.56 -- 12.40 2.36

2068 16.00 13.39 -2.61 -- 12.40 2.36

2069 16.06 13.40 -2.66 -- 12.40 2.36

2070 16.12 13.40 -2.72 -- 12.40 2.36

2071 16.19 13.41 -2.78 -- 12.40 2.36

2072 16.25 13.41 -2.84 -- 12.40 2.36

2073 16.31 13.42 -2.90 -- 12.40 2.36

2074 16.38 13.42 -2.96 -- 12.40 2.36

2075 16.44 13.43 -3.01 -- 12.40 2.36

2076 16.50 13.43 -3.07 -- 12.40 2.36

2077 16.01 13.44 -2.57 -- 12.40 2.36

 Summarized

Cost Income Actuarial Change in

2002 Rate Rate Balance Actuarial Balance

2076 14.42 13.73 -0.69 1.18

Based on Intermediate Assumptions of the 2002 Trustees Report. Office of the Actuary

Social Security Administration

1/ Net of Benefit Cost Reductions from SSGP Transfers. January 7, 2003
Table 6--Financial Effects of the SSGP Plan (H.R. 75)--IA Contributions from General Fund Indefinitely

Sensitivity = All Investments at 60 Percent Equity, 40 Percent Corporate Bonds

Expected SSGP Yield IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 SSGP Transfer Rate to Trust Funds 95%

Ultimate Real SSGP Account Yield Rate 5.05 Assumed SSGP Participation Rate 100%

Ultimate Real SSGP Annuity Yield Rate 5.05

Marginal 

Change in Net SSGP Average

OASDI OASDI OASDI Contribution IA

Cost Income Annual TFR Contribution Contribution from Contribution

Year Rate 1/ Rate Balance 1-1-yr Rate Rate Trust Funds Rate

2002 10.84 12.73 1.88 261 12.40

2003 10.51 12.72 2.21 288 12.40 2.36

2004 10.59 12.73 2.14 309 12.40 2.36

2005 10.61 12.73 2.12 330 12.40 2.36

2006 10.65 12.73 2.08 351 12.40 2.36

2007 10.68 12.74 2.06 373 12.40 2.36

2008 10.78 12.75 1.97 393 12.40 2.36

2009 10.97 12.77 1.79 408 12.40 2.36

2010 11.15 12.79 1.64 423 12.40 2.36

2011 11.33 12.83 1.50 436 12.40 2.36

2012 11.54 12.85 1.31 447 12.40 2.36

2013 11.77 12.87 1.10 455 12.40 2.36

2014 12.03 12.89 0.86 461 12.40 2.36

2015 12.30 12.91 0.60 465 12.40 2.36

2016 12.60 12.93 0.32 465 12.40 2.36

2017 12.92 12.95 0.03 463 12.40 2.36

2018 13.24 12.97 -0.27 459 12.40 2.36

2019 13.57 13.00 -0.58 453 12.40 2.36

2020 13.90 13.02 -0.88 445 12.40 2.36

2021 14.22 13.04 -1.18 436 12.40 2.36

2022 14.52 13.07 -1.46 425 12.40 2.36

2023 14.80 13.09 -1.71 414 12.40 2.36

2024 15.06 13.11 -1.95 403 12.40 2.36

2025 15.28 13.13 -2.15 390 12.40 2.36

2026 15.48 13.15 -2.33 378 12.40 2.36

2027 15.66 13.17 -2.49 365 12.40 2.36

2028 15.79 13.18 -2.60 352 12.40 2.36

2029 15.88 13.20 -2.68 339 12.40 2.36

2030 15.94 13.21 -2.72 326 12.40 2.36

2031 15.96 13.23 -2.73 314 12.40 2.36

2032 15.96 13.24 -2.72 302 12.40 2.36

2033 15.92 13.25 -2.67 290 12.40 2.36

2034 15.85 13.26 -2.59 279 12.40 2.36

2035 15.74 13.26 -2.47 269 12.40 2.36

2036 15.60 13.27 -2.33 260 12.40 2.36

2037 15.44 13.27 -2.16 252 12.40 2.36

2038 15.26 13.28 -1.98 245 12.40 2.36

2039 15.06 13.28 -1.78 238 12.40 2.36

2040 14.86 13.28 -1.57 234 12.40 2.36

2041 14.65 13.28 -1.37 230 12.40 2.36

2042 14.44 13.29 -1.16 227 12.40 2.36

2043 14.23 13.29 -0.94 226 12.40 2.36

2044 14.03 13.29 -0.74 227 12.40 2.36

2045 13.84 13.30 -0.54 228 12.40 2.36

2046 13.65 13.30 -0.35 231 12.40 2.36

2047 13.47 13.30 -0.17 235 12.40 2.36

2048 13.30 13.31 0.01 241 12.40 2.36

2049 13.13 13.31 0.18 248 12.40 2.36

2050 12.97 13.32 0.35 256 12.40 2.36

2051 12.83 13.32 0.49 266 12.40 2.36

2052 12.70 13.33 0.63 277 12.40 2.36

2053 12.59 13.34 0.75 289 12.40 2.36

2054 12.48 13.34 0.86 302 12.40 2.36

2055 12.38 13.35 0.96 317 12.40 2.36

2056 12.29 13.35 1.06 332 12.40 2.36

2057 12.20 13.36 1.16 349 12.40 2.36

2058 12.12 13.37 1.25 366 12.40 2.36

2059 12.04 13.37 1.33 385 12.40 2.36

2060 11.97 13.38 1.41 405 12.40 2.36

2061 11.91 13.39 1.48 425 12.40 2.36

2062 11.85 13.39 1.54 447 12.40 2.36

2063 11.81 13.40 1.59 468 12.40 2.36

2064 11.78 13.41 1.63 491 12.40 2.36

2065 11.75 13.41 1.66 514 12.40 2.36

2066 11.73 13.42 1.68 538 12.40 2.36

2067 11.73 13.42 1.70 561 12.40 2.36

2068 11.72 13.43 1.71 585 12.40 2.36

2069 11.73 13.44 1.71 609 12.40 2.36

2070 11.74 13.44 1.70 633 12.40 2.36

2071 11.76 13.45 1.69 657 12.40 2.36

2072 11.78 13.45 1.67 682 12.40 2.36

2073 11.81 13.46 1.65 706 12.40 2.36

2074 11.84 13.46 1.62 730 12.40 2.36

2075 11.88 13.47 1.59 753 12.40 2.36

2076 11.92 13.47 1.56 777 12.40 2.36

2077 11.98 13.48 1.50 799 12.40 2.36

 Summarized

Cost Income Actuarial Change in

2002 Rate Rate Balance Actuarial Balance

2076 13.15 13.73 0.59 2.46

Based on Intermediate Assumptions of the 2002 Trustees Report. Office of the Actuary

Social Security Administration

1/ Net of Benefit Cost Reductions from SSGP Transfers. January 7, 2003