Daniel Nickerson Social Security daniel.e.nickerson@ssa.gov

Provisions and 

Proposals:

What Analysis 

Do We Provide?

1

Anna Kirjusina

anna.kirjusina@ssa.gov

Katie Sutton

katie.sutton@ssa.gov
Daniel Nickerson

daniel.e.nickerson@ssa.gov

Provisions to 

Change Social 

Security

2
2019 Trustees Report Highlights

■ The OASI fund alone is projected to be depleted in 2034

■ The DI fund alone is projected to be depleted in 2052

■ The hypothetical combined OASDI fund is projected to be depleted 

in 2035

■ As of December 31, 2018, the trust funds hold about $2.89 trillion 

in asset reserves

■ The OASDI Summarized 75-year actuarial deficit is 2.78% of payroll

■ Both total outgo from and total income into the combined OASDI 

trust funds exceeded one trillion dollars in 2018 for the first time 

ever

3
4

0%

5%

10%

15%

20%

25%

2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar year

Cost: Scheduled and 

payable benefits

Non-interest Income

Payable benefits as percent

of scheduled benefits:

2018-34: 100%

2035: 80%

2093: 75%

Cost: Scheduled but not 

fully payable benefits

Expenditures: Payable benefits = income 

after trust fund depletion in 2035

Historical Estimated

OASDI Annual Cost and Non-Interest Income as % of Taxable Payroll 

Persistent negative annual cash-flow balance starting in 2010 

80% of scheduled benefits still payable at trust fund reserve depletion
Provisions to Change the Social Security Program

5

Source: https://www.ssa.gov/oact/solvency/provisions/index.html
What Kind of Provisions Do We See In Solvency 

Packages?

Raise Scheduled Revenue • Increase payroll tax

• Increase or eliminate the taxable maximum

• Increase revenue from taxation of benefits

• Find other sources of revenue

Lower Scheduled Benefits • Change benefit formula

• Reduce cost of living adjustments

• Increase retirement age

• Reduce benefits for dependents

Restructure System • Individual accounts

Benefit “Enhancements” • Targeted benefit increases

• Increase cost of living adjustments

• Raise thresholds for taxation of benefits

6
Benefit Provisions

7

2019TR 

Provision #

Description Change in 

Actuarial Balance

A3 Calculate COLA using chained CPI-W December 2020+ 0.58

A6 Calculate COLA using CPI-E December 2021+ -0.40

B1.2 Progressive Price Indexing 2026+ 1.57

B3.11 Increase the first PIA factor from 90 percent to 93 percent for all beneficiaries 2021+ -0.24

B5.2 Reconfigure the Special Minimum Benefit -0.17

B6.3 Uniform benefit bump at age 85 equal to 5% of the average retired-worker PIA -0.14

C1.3 Index the normal retirement age (NRA) to life-expectancy after the NRA reaches 67 0.58

D1 Expand student benefits for children of disabled or deceased workers to age 22 -0.06
Benefit Provisions

8

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Chained CPI-W CPI-E PPI 90 to 93 MinBen Age 85 Bump NRA Students

Percent of Actuarial Deficit Eliminated
Revenue Provisions

9

2019TR 

Provision #

Description Change in Actuarial 

Balance

E1.4 Increase the payroll tax rate by 0.1 ppt annually from 2025-2044 to 14.4% in 2044+. 1.47

E2.1 Eliminate the taxable maximum in years 2020. No benefit credit. 2.35

E2.2 Eliminate the taxable maximum in years 2020. Full benefit credit. 1.80

E2.6 Apply a 3% payroll tax above the current-law taxable maximum 2020+. No benefit credit. 0.61

E3.1

Increase the taxable maximum to achieve 90% taxable ratio (phased in 2020-2029). 

Full benefit credit. 0.73

F7

Return to 2009 thresholds for the estate tax, gift tax, and GST tax and redirect all 

revenue to the combined OASDI Trust Fund. 0.58

G1 Invest 40 percent of reserves in equities (phased in 2020-2034). 0.50
Revenue Provisions

10

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

14.4% Tax Elim TaxMax

w/o Benefit

Credit

Elim TaxMax

w/ Benefit

Credit

3% Tax Above

TaxMax

90% Taxable

Ratio

Estate Tax to

OASDI

Percent of Actuarial Deficit Eliminated
Recent Non-Solvency Proposals

 Change to Windfall Elimination Provision

 Representative Neal, September 2019

 Representative Brady, July 2019 

 Elimination of the Retirement Earnings Test

 Representative Walorski, May 2019

 Parental leave benefits in exchange for an increase in individual 

normal retirement age

 Senator Rubio and Representative Wagner, April 2019

 Senators Lee and Ernst, March 2019

11
PROPOSALS

12

Anna 

Kirjusina

anna.kirjusina@ssa.gov
Actuarial Estimates

■ New proposed concepts 

■ Existing proposals 

– 150 provisions published online 

Policymakers develop proposals and options

■ financial effects on the OASDI Trust Funds

■ address long-term solvency 

■ revise specific aspects of law 

– no significant long-term effects on solvency

• Parental Leave Benefit 

13
Proposed Acts for Social Security

– Committee on Ways and Means

 The Social Security 2100 Act

o introduced on January 30, 2019

• Congressman Larson

 Social Security Reform Act of 2016 

o Introduced on December 8, 2016

• Representative Sam Johnson

– Bipartisan Policy Center (BPC) 

 BPC Commission on Retirement Security and Personal 

Savings Plan 

o Introduced on June 9, 2016

14
Sustainable Solvency

75-year actuarial balance under intermediate assumptions

 Key measure of the actuarial status of the trust funds

 =PV(future projected program income) – PV(program cost) 

Actuarial Deficit – Negative Actuarial Balance

 expressed as a percentage of taxable payroll

 increase payroll tax by just over 2.78% to be solvent for 75 years

15
The Social Security 2100 Act

■ Increase benefits and the special minimum PIA

■ Use CPI-E increase rather than CPI-W increase to calculate COLA

• CPI-E (Consumer Price Index for the Elderly)

• CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers)

• COLA (Cost-Of-Living Adjustment)

– COLA increase by an average of 0.2 percentage point per year.

■ Replace current-law thresholds for federal income taxation of OASDI benefits with a 

single set of thresholds 

– at $50k/$100k for single/joint filers 

– up to 85 percent of OASDI benefits, effective for tax year 2020

■ Payroll tax on earnings above $400,000

– While no tax on earnings between $132,900 and $400,000 (donut)

■ 2.4% gradual increase in payroll tax rate to 14.8% (phased in 2020-2043)

■ New Social Security Trust Fund

– combines the reserves of OASI and DI Trust Funds

16
Current Law versus 2100 Act

CURRENT LAW

- 80% of scheduled benefits are projected to be payable on a timely 

basis in 2035 after depletion of the combined trust fund reserves 

- Declining to 75% for 2093. 

- 2.78% long-range OASDI actuarial deficit

PROPOSAL

- 75-year solvency projected for OASDI program 

- 100% of scheduled benefits paid for the foreseeable future

- 0.39% positive OASDI actuarial balance

17
Trust Fund Ratio (CL vs 2100 Act) 

18
19

“Social Security 2100 Act”, 

introduced as H.R. 860 and S.269 on 1/30/2019

Provision

** Based on intermediate assumptions of the 2019 Trustees Report

Estimated Change in

OASDI Actuarial Balance

(as a % of payroll)

Benefit Changes

Increase the first PIA formula factor from 90-93% -0.24

Use CPI-E rather than current CPI for COLA increases -0.41

Expand the current-law minimum benefit -0.15

Increase income threshold amounts for taxation of 

benefits -0.14

Revenue Changes

Apply payroll tax rate on earnings over $400,000 initially 

and eventually on all earnings 1.93

Increase the combined OASDI payroll tax rate to 14.8% 1.87

Total for all provisions, including interaction 3.18
Social Security Reform Act of 2016 

 75-year solvency

 Benefit cuts rather than revenue increases

• Changes in the benefit formula

• Expand benefits for long term low-wage earners

• Reduction or elimination of COLA for all beneficiaries

• Eventually eliminate income taxation of Social Security benefits

20
Chairman Johnson Bill

21
22

“Social Security Reform Act of 2016”, 

introduced as H.R. 6489 on 12/8/2016

Provision

** Based on intermediate assumptions of the 2016 Trustees Report

Estimated Change in

OASDI Actuarial Balance

(as a % of payroll)

Revise benefit formula to include factors of 95%/27.5%/5%/2% instead of current-law 

90%/32%/15%, on indexed earnings. Revise current law bend points 0.85

Use a “mini-PIA” approach rather than aggregating all earnings for computing the PIA 0.34

Alternative Windfall Elimination Provision approach using covered and non-covered earnings levels 0.03

Increase normal retirement age to 69 0.84

Use chained CPI-U (estimated to be 0.3pp lower than current law) for COLA if below certain income 

levels, no COLA if above those thresholds 1.25

Require full times school enrollment at age 15 and higher for child benefits 0.01

Expand the current-law minimum benefit -0.23

Eliminate the retirement earnings test at earliest eligibility age 0.01

Eliminate taxation of Social Security benefits, phased in 2045-54 -0.40

Provide additional benefit if at least 20 years eligibility and below certain income thresholds -0.07

Total for all provisions, including interaction 2.67
BPC Commission on Retirement 

Security and Personal Savings Plan

 Annualized “mini-PIA” formula for beneficiaries newly eligible in 2023 

 Limit the spousal benefit 

 Specified joint-and-survivor annuity approach. 

 New PIA benefit formula 

• adding new and changing current bend points

 Increase taxable maximum 

 Increase the total OASDI payroll tax rate gradually

 Retirement age increase 

• 1 mo / 2 yrs until the NRA = 69 for those attaining age 62 in 2070

 C-CPI-U is used to calculate COLA

 Extend student benefits to age 22 

• for children of disabled or deceased workers

 Additional federal personal income tax credited to the OASI and DI Trust Funds. 

 New Social Security Basic Minimum Benefit (BMB)

23
24

BPC Commission on Retirement 

Security and Personal Savings Plan
25

Bipartisan Policy Center’s Commission on Retirement Security and Personal Savings Plan, 

released on June 9, 2016

Provision

** Based on intermediate assumptions of the 2016 Trustees Report

Estimated Change in

OASDI Actuarial Balance

(as a % of payroll)

Benefit Changes

Use a “mini-PIA” approach rather than aggregating all earnings for computing the PIA 0.23

Alternative Windfall Elimination and Government Pension Offset using covered & non-covered earnings levels 0.06

Limit spouse benefit to that received for worker at the 75th percentile of PIA 0.11

Convert couple benefit to a “joint & 75% survivor” annuity approach, equivalent in aggregate to current law 0.02

Revise benefit formula by adding bend point and factors of 95/32/15/5 rather than 90/32/15 0.04

Increase normal retirement age to 69 in a gradual manner 0.50

Use chained CPI-U (0.3pp lower than current) for COLA for benefits paid out of OASI Fund only 0.47

Extend student benefits to age 22 -0.06

Create a new basic minimum benefit for those with income below specific thresholds -0.19

Revenue Changes

Continually increase the contribution and benefit base beyond the current-law level (~99% in 75th year) 0.56

Increase payroll tax rate to 13.4 percent over a 10-year period 0.88

Total for all provisions, including interaction 2.77
SUPPLEMENTARY

TABLES

26

Katie 

Sutton

katie.sutton@ssa.gov
Effects on Beneficiaries

■ Policymakers do not solely focus on solving long-range solvency.

– Need to consider the effect of their proposal on beneficiaries 

with regards to changes in benefit levels and payroll taxes.

■ OCACT provides policymakers with tables to illustrate these effects.

– B Tables - Changes in Benefit Levels

■ Effect of individual provisions

■ Comparison of the scheduled and payable benefits under the 

proposal to current law

– T Table – Changes in Payroll Tax Contributions

■ Percent change in scheduled payroll taxes

■ Comparison scheduled payroll taxes under the proposal to 

current law

27
Benefit Illustrations

28

■ Structure of benefit tables highlight various effects of the proposal 

provisions

■ We provide projected changes in benefit levels for:

– Workers retiring and beginning benefit receipt at age 65

– Workers reaching age 65 in 2030, 2050, 2080 and the current year

– Hypothetical workers at six selected earnings levels with selected 

numbers of years of work.

■ Show the proposal benefit as a percent of the current law benefit at ages 

65, 75, 85 and 95
Hypothetical Workers

29

■ Present hypothetical workers with different earnings levels based on career average 

earnings levels.

– Career average earnings are defined as the average of highest 35 years of 

earnings indexed for growth in average wages to the year prior to benefit 

entitlement. 

■ Six categories of hypothetical workers:

– Very-Low-AIME scaled earner, $13,466 for 2019

– Low-AIME scaled earner, $24,239 for 2019

– Medium-AIME scaled earner, $53,864 for 2019

– High-AIME scaled earner, $86,182 for 2019

– Maximum-Current-Law-AIME steady earner, $132,900 for 2019

– Twice Maximum-Current-Law AIME steady earner, $265,800 for 2019

■ Reflect the average career-earnings patterns of workers who began receiving retirement 

benefits under Social Security in recent years.

■ The very-low, low and medium hypothetical workers are further broken down by the 

number of years of non-zero earnings.
Who are the Hypothetical Workers?

30

0

10

20

30

40

50

60

70

80

90

100

Very-Low-AIME

14-Year Scaled

Earner (5.3% of

Retirees)

Very-Low-AIME

20-Year Scaled

Earner (5.8% of

Retirees)

Very-Low-AIME

30-Year Scaled

Earner (9.3% of

Retirees)

Low-AIME 20-

Year Scaled

Earner (3.1% of

Retirees)

Low-AIME 30-

Year Scaled

Earner (5.9% of

Retirees)

Low-AMIE 44-

Year Scaled

Earner (13.1% of

Retirees)

Medium-AIME

30-Year Scaled

Earner (4.4% of

Retirees)

Medium-AIME

44-Year Scaled

Earner (23.0% of

Retirees)

High-AIME 44-

Year Scaled

Earner (20.5% of

Retirees)

MaximumCurrent-LawAIME Steady

Earner

(9.4% of

Retirees)

Percent of Beneficiaries Within Each Category

Category of Worker

Important Characteristics of Hypothetical Workers in 2007

Dually Entitled WEP Foreign Born All Others
Benefit Illustrations - Table B1

31

Proposal Proposal Proposal

Year Scheduled to Scheduled to Payable to

Attain Benefit Minimum Current Law Current Law Current Law

Age 65 (Wage-Indexed (CPI-Indexed COLA5 Formula6 Benefit7 Total Scheduled Payable Payable

2019 Dollars) 2019 Dollars)

 

2019 793 793 0.0 0.0 0.0 0.0 100 100 100

2030 719 851 0.6 3.2 39.1 44.4 144 144 144

2050 726 1,094 0.6 3.2 39.1 44.4 144 181 181

2080 729 1,563 0.6 3.2 39.1 44.4 144 192 192

 

2019 793 793 0.0 0.0 0.0 0.0 100 100 100

2030 719 851 0.6 3.2 0.0 3.8 104 104 104

2050 726 1,094 0.6 3.2 0.0 3.8 104 130 130

2080 729 1,563 0.6 3.2 0.0 3.8 104 138 138

 

2019 793 793 0.0 0.0 0.0 0.0 100 100 100

2030 719 851 0.6 3.2 0.0 3.8 104 104 104

2050 726 1,094 0.6 3.2 0.0 3.8 104 130 130

2080 729 1,563 0.6 3.2 0.0 3.8 104 138 138

 Very-Low-AIME ($13,466 for 20191) 14-Year Scaled Earner (4.0% of Retirees2)

Monthly Benefits4

(Percent change) (Percents)

 Very-Low-AIME ($13,466 for 20191) 30-Year Scaled Earner (11.2% of Retirees2)

 Very-Low-AIME ($13,466 for 20191) 20-Year Scaled Earner (5.3% of Retirees2)

Table B1. Changes in Benefits for Hypothetical Workers Beginning Benefit Receipt at age 65 

"Social Security 2100 Act," Introduced by Chairman Larson, Senator Blumenthal, and Senator Van Hollen

Benefit Ratios

Scheduled Benefit Level Percent Change at age 65

Current Law Scheduled
Social Security 2100 Act

32

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Very-LowAIME 30-Year

Scaled Earner

Very-LowAIME 20-Year

Scaled Earner

Very-LowAIME 14-Year

Scaled Earner

Low-AIME 44-

Year Scaled

Earner

 Low-AIME 30-

Year Scaled

Earner

 Low-AIME 20-

Year Scaled

Earner

 Medium-AIME

44-Year Scaled

Earner

Medium-AIME

30-Year Scaled

Earner

High-AIME 44-

Year Scaled

Earner

MaximumCurrent-LawAIMETwice

MaximumCurrent-LawAIME

Scheduled Benefit Level Percent Change at Age 65

COLA Provision

2030 2050 2080
Social Security 2100 Act

33

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Very-LowAIME 30-Year

Scaled Earner

Very-LowAIME 20-Year

Scaled Earner

Very-LowAIME 14-Year

Scaled Earner

Low-AIME 44-

Year Scaled

Earner

 Low-AIME 30-

Year Scaled

Earner

 Low-AIME 20-

Year Scaled

Earner

 Medium-AIME

44-Year Scaled

Earner

Medium-AIME

30-Year Scaled

Earner

High-AIME 44-

Year Scaled

Earner

MaximumCurrent-LawAIMETwice

MaximumCurrent-LawAIME

Scheduled Benefit Level Percent Change at Age 65

Benefit Formula Provision

2030 2050 2080
Social Security 2100 Act

34

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Very-LowAIME 30-Year

Scaled Earner

Very-LowAIME 20-Year

Scaled Earner

Very-LowAIME 14-Year

Scaled Earner

Low-AIME 44-

Year Scaled

Earner

 Low-AIME 30-

Year Scaled

Earner

 Low-AIME 20-

Year Scaled

Earner

 Medium-AIME

44-Year Scaled

Earner

Medium-AIME

30-Year Scaled

Earner

High-AIME 44-

Year Scaled

Earner

MaximumCurrent-LawAIMETwice

MaximumCurrent-LawAIME

Scheduled Benefit Level Percent Change at Age 65

Minimum Benefit Provision

2030 2050 2080
Social Security 2100 Act

35

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Very-Low-AIME

30-Year Scaled

Earner

Very-Low-AIME

20-Year Scaled

Earner

Very-Low-AIME

14-Year Scaled

Earner

Low-AIME 44-

Year Scaled

Earner

 Low-AIME 30-

Year Scaled

Earner

 Low-AIME 20-

Year Scaled

Earner

 Medium-AIME

44-Year Scaled

Earner

Medium-AIME

30-Year Scaled

Earner

High-AIME 44-

Year Scaled

Earner

MaximumCurrent-LawAIMETwice

MaximumCurrent-LawAIME

Scheduled Benefit Level Percent Change at Age 65

Total

2030 2050 2080
Benefit Illustrations - Table B2

36

Year 

Attain

Age 65 Age 65 Age 75 Age 85 Age 95 Age 65 Age 75 Age 85 Age 95

2019 100.0 102.0 104.0 106.0 100.0 102.0 132.0 132.7

2030 144.4 147.2 150.1 153.0 144.4 186.9 187.7 194.2

2050 144.4 147.2 150.1 153.1 180.5 186.9 196.9 203.8

2080 144.4 147.2 150.1 153.1 192.3 194.9 4 4

2019 100.0 102.0 104.0 106.0 100.0 102.0 132.0 132.7

2030 103.8 105.8 107.9 110.0 103.8 134.4 134.9 139.6

2050 103.8 105.8 107.9 110.0 129.8 134.3 141.5 146.5

2080 103.8 105.8 107.9 110.0 138.2 140.0 4 4

2019 100.0 102.0 104.0 106.0 100.0 102.0 132.0 132.7

2030 103.8 105.8 107.9 110.0 103.8 134.4 134.9 139.6

2050 103.8 105.8 107.9 110.0 129.8 134.3 141.5 146.5

2080 103.8 105.8 107.9 110.0 138.2 140.0 4 4

(Percent)

 Very-Low-AIME ($13,466 for 20191) 30-Year Scaled Earner (11.2% of Retirees2

)

 Very-Low-AIME ($13,466 for 20191) 20-Year Scaled Earner (5.3% of Retirees2)

 Very-Low-AIME ($13,466 for 20191) 14-Year Scaled Earner (4.0% of Retirees2)

Table B2. Changes in Benefits for Hypothetical Workers Beginning Benefit Receipt at age 65 

"Social Security 2100 Act," Introduced by Chairman Larson, Senator Blumenthal, and Senator Van Hollen

Proposal Scheduled Benefit as Percent of Proposal Payable Benefit as Percent of 

Current Law Scheduled Benefit Current Law Payable Benefit
Payroll Tax Effects

37

■ The payroll tax effects table shows the changes in payroll tax 

contributions for workers with OASDI Covered Earnings

■ We show percent change in scheduled payroll taxes due to changes in 

the payroll tax rate and taxable maximum.

■ We provide the effects on workers with earnings in the year shown in the 

26th, 40th, 69th, 85th, 94th and 99th percentile.
Payroll Tax Effects – Table T

38

Proposal Scheduled Payroll Taxes

Earnings Payroll Taxable Percent of Current Law

in Year (Wage-Indexed (CPI-Indexed Tax Rate2 Maximum3 Total

2019 Dollars) 2019 Dollars) (Percents)

2019 139 139 0.0 0.0 0.0 100

2030 139 165 8.9 0.0 8.9 109

2050 139 210 19.4 0.0 19.4 119

2080 139 298 19.4 0.0 19.4 119

2019 1,373 1,373 0.0 0.0 0.0 100

2030 1,373 1,627 8.9 0.0 8.9 109

2050 1,373 2,069 19.4 0.0 19.4 119

2080 1,373 2,945 19.4 0.0 19.4 119

2019 1,373 1,373 0.0 0.0 0.0 100

2030 1,373 1,627 8.9 7.0 16.5 117

2050 1,373 2,069 19.4 100.0 138.7 239

2080 1,373 2,945 19.4 100.0 138.7 239

26th Percentile Earner1

 in Year ($13,466 in 2019)

94th Percentile Earner1

 in Year ($132,900 in 2019) Current-Law Maximum Earnings Level

99th Percentile Earner1 in Year ($265,800 in 2019) Twice Current-Law Maximum Earnings Level

Table T. Changes in Payroll Tax Contributions (Employee + Employer) for Workers with OASDI Covered Earnings in the Year

"Social Security 2100 Act," Introduced by Chairman Larson, Senator Blumenthal, and Senator Van Hollen

Scheduled Payroll Taxes Percent Change 

Current Law Scheduled

Monthly Total Payroll Taxes

(Percent change) 
Additional Information

39

■ 2019 OASDI Trustees Report: 

https://www.ssa.gov/oact/TR/2019/index.html

■ Memoranda for proposals to change Social Security: 

https://www.ssa.gov/oact/solvency/index.html

■ Estimates of Individual Changes Modifying Social Security: 

https://www.ssa.gov/oact/solvency/provisions/index.html

■ Scaled Factors for Hypothetical Earnings Examples: 

https://www.ssa.gov/oact/NOTES/ran3/an2019-3.pdf
40