SOCIAL SECURITY

Office of the Chief Actuary

SOCIAL SECURITY ADMINISTRATION BALTIMORE MD 21235-0001

February 2, 2011

Mr. Erskine Bowles, Co-Chair

Mr. Alan Simpson, Co-Chair

National Commission on Fiscal Responsibility and Reform

1650 Pennsylvania Ave NW

Washington, DC 20504

Ms. Alice M. Rivlin, Co-Chair

Mr. Pete Domenici, Co-Chair

Debt Reduction Task Force

Bipartisan Policy Center

1225 Eye Street NW, Suite 1000

Washington, D.C. 20005

Dear Mr. Bowles, Mr. Simpson, Ms. Rivlin, and Mr. Domenici:

I am writing to you regarding updated illustrations of the effects on Social Security benefit levels 

for the proposals you recently developed that would improve the financial status of the OASI and 

DI Trust Funds. These illustrations augment those provided in the letter of December 1, 2010 for 

the President’s National Commission proposal, and those provided in the letter of November 17, 

2010 for the Bipartisan Policy Center’s Debt Reduction Task Force proposal. Due to the special 

provisions in each of these proposals that apply to individuals based on the number of years they 

worked in OASDI covered employment, the standard benefit examples we produced earlier 

provided an incomplete and potentially misleading picture of the effects of these proposals. The 

expanded benefit examples in the enclosed tables represent a new, more comprehensive 

approach that we will use for illustrating benefit effects in future proposals. 

The hypothetical worker examples that we have traditionally used for illustrating the effects of 

comprehensive Social Security reform proposals presume long and consistent careers with 

earnings each year at ages from the early 20’s to the mid 60’s. Some of these basic examples are 

also shown in the OASDI Trustees Report to illustrate present-law benefit levels. These basic 

examples include workers with “scaled” earnings through their careers at four different levels: 

scaled very low, scaled low, scaled medium, and scaled high. In addition, a worker with steady 

earnings at the present-law OASDI taxable maximum level is included. The scaled earners are 

well documented in Actuarial Note 2009.3, which is located on the internet at 

http://www.ssa.gov/OACT/NOTES/ran3/index.html.

While very useful for many proposals, and for present law, presenting benefit estimates only for 

these long-career hypothetical worker examples implies that provisions requiring a substantial 

number of years of work at a given career-average earnings level would apply for all such 
2

workers. In fact, we have determined that workers with very low or low career average earnings 

tend to have relatively short careers and are not well represented by the basic examples, which 

include earnings and covered employment at all ages from 21 through 64 in the case of a worker 

assumed to retire at 65. Through extensive work by Alice Wade, Tiffany Bosley, Michael 

Clingman, and Christopher Chaplain, we have subdivided the hypothetical worker examples for 

the very low, low, and medium career-average earners into two or three examples. These new 

examples vary by number of years of work, while retaining the same average earnings level over 

the 35 highest years of wage-indexed earnings (AIME). For those earners with fewer than 35 

years of work, the AIME includes years of zero earnings.

Specification of New Hypothetical Worker Examples

The traditional hypothetical worker examples are: 

(1) The very low scaled worker with 44 years of earnings and a career average annualized 

AIME earnings level of $10,771 (wage indexed to 2010 level), 

(2) The low scaled worker with 44 years of earnings and annualized AIME of $19,388 (wage 

indexed to 2010), 

(3) The medium scaled earner with 44 years of earnings and annualized AIME of $43,084 

(wage indexed to 2010), 

(4) The high scaled earner with 44 years of earnings and annualized AIME of $68,934 (wage 

indexed to 2010), and 

(5) The steady maximum worker with 43 years of earnings all at the OASDI taxable 

maximum amount ($106,800 for 2010). 

Scaled workers retiring at age 65 are all assumed to have earnings at each age from 21 through 

64, with the relative level of earnings starting low and rising to a peak around age 48 with 

gradual reduction to age 64. The steady maximum worker is assumed to have earnings equal to 

the present-law taxable maximum at each age from 22 through 64. The annualized AIME level 

for the medium earner is set equal to the national average wage index level (AWI). The 

annualized AIME levels for very low, low, and high earners are set at 25 percent, 45 percent, and 

160 percent of the AWI. 

For the very low, low, and medium scaled-worker examples, we have expanded our illustrations 

to provide multiple examples with varying numbers of years of earnings. The enclosed tables 

include an indication of the estimated percentage of all new retired workers in 2050 with AIME 

and number of years or work closest to the indicated levels. 

For the very low career average earner (annualized AIME of $10,771), we have developed three 

cases to better illustrate careers of retirees with AIME closest to this level. Very few workers 

with AIME closest to the very low level have consistent employment. The first example with 

AIME at this level is for a worker with 30 years of work, about the average number of years of 

work for those retiring in 2050 with an AIME closest to this level and with 25 or more years of 

work. The second example is for a worker with 20 years of work, about the average number for 

those closest to this AIME level with 18 to 24 years of work. The third example is for a worker 

with 14 years of work, about the average number for those closest to this AIME level with 10 to 

18 years of work. 
3

For the low career average earner (annualized AIME of $19,388), we have developed three cases 

to better illustrate careers of retirees with AIME closest to this level. Many workers with AIME 

closest to the low level have fairly consistent employment. The first example with AIME at this 

level is for a worker with 44 years of work, close to the average number of years of work for 

those retiring in 2050 with an AIME closest to this level and with 35 or more years of work. The 

second example is for a worker with 30 years of work, about the average number for those 

closest to this AIME level with 25 to 34 years of work. The third example is for a worker with 

20 years of work, about the average number for those closest to this AIME level with 10 to 24 

years of work. 

For the medium career average earner (annualized AIME of $43,084), we have developed two 

cases to better illustrate careers of retirees with AIME closest to this level. A large majority of 

workers with AIME closest to the medium level have very consistent employment. The first 

example with AIME at this level is for a worker with 44 years of work, close to the average 

number of years of work for those retiring in 2050 with an AIME closest to this level and with 

35 or more years of work. The second example is for a worker with 30 years of work, close to 

the average number for those with an AIME closest to this level and with 10 to 34 years of work. 

For the scaled high career average earner (annualized AIME of $68,934), the vast majority of 

new retirees in 2050 are expected to have over 35 years of earnings. We have retained the 44-

year earner example for the high career earner example. Similarly, retirees with annualized 

AIME closest to the present-law taxable maximum amount have extremely consistent earnings 

patterns, and so the steady earner case with 43 years of earnings has been retained.

For the new very low, low, and medium earner examples with less than 44 years of earnings, we 

have assumed that years of earnings would be distributed fairly evenly through the ages 21 to 64 

following the traditional earnings scale by age. This assumption preserves the relative level of 

earnings across ages for those years of non-zero earnings. Because we assume the same AIME 

level (the total indexed earnings in the highest 35 years), the earnings level in years with work is 

appropriately higher than for the 44-year earner case.

In addition, for all examples we are assuming two children born at parent’s age 25 and 28. This 

assumption allows estimates for these examples to reflect the effects of provisions that provide 

credit for years living with or caring for a child. For example, a provision that allows credit 

years for care of a child up to age 6 would be potentially applicable for the parent at ages 25 

through 33 in these examples. The minimum benefit provision under the Bipartisan Task Force 

plan includes credit for up to 8 years of child care.

Results

The proposal endorsed by a majority of members of the President’s National Commission on 

Fiscal Responsibility and Reform included two provisions that were dependent on the number of 

years in which a worker had earnings sufficient to earn four quarters of coverage (about $4,400 

wage indexed to 2010). The first provision allows some limitation on the increase in normal and 

early retirement age for workers with at least 25 years of earnings sufficient to earn four quarters 

of coverage and AIME less than four times the poverty level. The second provision is a
4

minimum benefit that scales up to 125 percent of the poverty level for workers with 30 years of 

earnings sufficient to earn four quarters of coverage. Details of these provisions and the 

complete proposal can be found in our letter of December 1, 2010 at

http://www.ssa.gov/OACT/solvency/index.html.

For each of the five AIME levels represented in the enclosed tables 1B1 and 1B2, the benefit 

levels shown for the top example (that with the most years of earnings) are the same as shown in 

the December 1, 2010 letter. However, for very low and low AIME workers with fewer years of 

work, the positive effects shown for the two provisions described above may be reduced. This 

range of effects provides an improved indication of the variation that would be found for workers 

in each of these AIME categories.

The proposal adopted by the members of the Bipartisan Policy Center’s Debt Reduction Task 

Force includes a minimum benefit level. This minimum benefit level scales up to 133 percent of 

the poverty level for workers with 30 years of earnings of at least about $16,000 (wage indexed 

to 2010), with credit for up to 8 years when caring for a child under age 6 and earning less than 

the $16,000 threshold. Details of this provision and the complete proposal can be found in our 

letter of November 17, 2010 at http://www.ssa.gov/OACT/solvency/index.html.

For each of the five AIME levels represented in the enclosed tables 2B1 and 2B2, the benefit 

levels shown for the top example (that with the most years of earnings) are the same as shown in 

the November 17, 2010 letter. However, for low AIME workers with fewer than 30 years of 

work, the positive effect of the minimum benefit provision described above may be reduced. 

This range of effects provides an improved indication of the variation that would be found for 

workers in each of these AIME categories.

Conclusion

We are glad for the opportunity to have worked with the members and staff of both the 

commission and the task force. We are pleased to enhance the original estimates provided for 

the proposals and hope that this enhancement will allow a fuller and more complete 

understanding of these proposals and their provisions, and in the development of further reform 

proposals for Social Security in the future. 

Sincerely,

Stephen C. Goss

Chief Actuary

Enclosures 
Year Longevity

Attain Index NRA Reduced Benefit Minimum

Age 65 (Wage Indexed (Constant 1 Mth/ 2 Yrs4 COLA5

Formula6 Benefit7 Total Scheduled Payable

2010 Dollars) 2010 Dollars)

 

2010 648 648

2030 579 758 0.0 -0.9 -0.1 39.8 38.5 138 138

2050 580 959 0.0 -0.9 -0.3 40.1 38.5 139 173

2080 580 1,341 0.0 -0.9 -0.3 40.1 38.5 138 183

 

2010 648 648

2030 579 758 -1.3 -0.9 -0.1 0.0 -2.2 98 98

2050 580 959 -7.7 -0.9 -0.3 0.0 -8.7 91 114

2080 580 1,341 -14.9 -0.9 -0.3 0.0 -15.9 84 111

 

2010 648 648

2030 579 758 -1.3 -0.9 -0.1 0.0 -2.2 98 98

2050 580 959 -7.7 -0.9 -0.3 0.0 -8.7 91 114

2080 580 1,341 -14.9 -0.9 -0.3 0.0 -15.9 84 111

2010 848 848

2030 758 992 0.0 -0.9 -0.5 7.4 5.9 106 106

2050 758 1,255 0.0 -0.9 -1.5 8.5 5.9 106 133

2080 758 1,754 0.0 -0.9 -1.7 8.6 5.9 106 140

2010 848 848

2030 758 992 0.0 -0.9 -0.5 7.4 5.9 106 106

2050 758 1,255 0.0 -0.9 -1.5 8.5 5.9 106 133

2080 758 1,754 0.0 -0.9 -1.7 8.6 5.9 106 140

2010 848 848

2030 758 992 -1.3 -0.9 -0.5 0.0 -2.7 97 97

2050 758 1,255 -7.7 -0.9 -1.5 0.0 -9.9 90 113

2080 758 1,754 -14.9 -0.9 -1.7 0.0 -17.1 83 109

2010 1,397 1,397

2030 1,248 1,634 -0.6 -0.9 -2.6 0.0 -4.0 96 96

2050 1,249 2,068 -5.8 -0.9 -7.2 0.0 -13.3 87 108

2080 1,249 2,889 -11.5 -0.9 -7.9 0.0 -19.2 81 107

2010 1,397 1,397

2030 1,248 1,634 -0.6 -0.9 -2.6 0.0 -4.0 96 96

2050 1,249 2,068 -5.8 -0.9 -7.2 0.0 -13.3 87 108

2080 1,249 2,889 -11.5 -0.9 -7.9 0.0 -19.2 81 107

2010 1,851 1,851

2030 1,654 2,166 -1.3 -0.9 -7.3 0.0 -9.3 91 91

2050 1,656 2,740 -7.7 -0.9 -20.7 0.0 -27.4 73 91

2080 1,656 3,829 -14.9 -0.9 -22.7 0.0 -34.8 65 86

2010 2,192 2,192

2030 2,021 2,646 -1.3 -0.9 -9.9 0.0 -11.9 88 88

2050 2,020 3,343 -7.7 -0.9 -27.9 0.0 -34.0 66 83

2080 2,019 4,668 -14.9 -0.9 -30.6 0.0 -41.5 59 77

1

Average of highest 35 years of earnings wage indexed to 2010. For workers with less than 35 years of earnings, zero years are included.

2

Projected percent of new retired worker awards in 2050 closest to AIME levels and years of work.

3

After trust fund exhaustion under present law continuing taxes are expected to be enough to pay about three fourths of scheduled benefits.

4

5

Starting Dec 2011, compute the COLA using a chained CPI-W, producing 0.3% lower annual COLAs on average.

6

7

The EEA increases under this proposal. For these illustrations, we assume the indexing year and the computation period remain as in current law - the indexing year is the year the worker reaches age 60

and the computation period is 35 years.

All estimates based on the intermediate assumptions of the 2010 Trustees Report.

Office of the Chief Actuary, Social Security Administration

Index the NRA to keep a constant ratio of life expectancy at NRA to (NRA-20) once the NRA reaches 67. Include hardship exemption with no EEA/NRA change if 25yrs with 4QCs and AIME <250% 

Federal poverty level; phased to no exemption with AIME >=400% of poverty level. The scaled very low and low earners meet the requirements for the hardship exemption. However, only about 42 

percent of earners with AIMEs closest to the scaled very low earner and 87 percent of earners closest to the scaled low earner would meet these requirements.

New bend point at 50th percentile of career-average earnings level; reduced PIA factors to 90/30/10/5 by 2050.

Increase the PIA to a level such that a worker with 30 years of earning 4 quarters of coverage would receive an adjusted PIA equal to 125% of monthly poverty level in 2009, CPI-index from 2009-

2017 then wage-indexed to year of eligibility. This provision would take full effect for all newly eligible workers in 2017. The Minimum Benefit Percent Reduction is calculated after all other 

proposals, so that the Proposed Benefit Amount is at least the Minimum Benefit.

Low-AIME ($19,388 for 20101) 30-Year Scaled Earner (7.1% of Retirees2)

Low-AIME ($19,388 for 20101) 20-Year Scaled Earner (2.9% of Retirees2)

Medium-AIME ($43,084 for 20101) 44-Year Scaled Earner (27.0% of Retirees2)

Medium-AIME ($43,084 for 20101) 30-Year Scaled Earner (4.4% of Retirees2)

High-AIME ($68,934 for 20101) 44-Year Scaled Earner (20.7% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 14-Year Scaled Earner (5.3% of Retirees2)

Table 1B1. Changes in Benefits for Hypothetical Workers Beginning Benefit Receipt at age 65 

Plan Proposed by the National Commission on Fiscal Responsibility and Reform, December 1, 2010

Basic Provisions Only -- Those with Direct Effects on Social Security Beneifts or Tax Revenue

Scheduled Benefit Level Percent Change at age 65

Present Law Scheduled Proposal Scheduled Benefit

Low-AIME ($19,388 for 20101) 44-Year Scaled Earner (13.0% of Retirees2)

Monthly Benefits3 Percent of Present Law:

February 2, 2011

(Percent change) (Percents)

Maximum-AIME ($106,800 for 20101) Steady Earner (5.4% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 30-Year Scaled Earner (8.1% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 20-Year Scaled Earner (6.0% of Retirees2)
Year 

Attain

Age 65 Age 65 Age 75 Age 853 Age 95

2010

2030 138.5 134.5 138.4 136.3

2050 138.5 134.5 137.7 135.4

2080 138.5 134.5 137.2 134.8

2010

2030 97.8 95.0 100.0 99.0

2050 91.3 88.6 91.4 92.2

2080 84.1 81.7 82.6 85.0

2010

2030 97.8 95.0 100.0 99.0

2050 91.3 88.6 91.4 92.2

2080 84.1 81.7 82.6 85.0

2010

2030 105.9 102.8 105.8 104.2

2050 105.9 102.8 105.2 103.5

2080 105.9 102.8 104.9 103.1

2010

2030 105.9 102.8 105.8 104.2

2050 105.9 102.8 105.2 103.5

2080 105.9 102.8 104.9 103.1

2010

2030 97.3 94.5 97.8 96.4

2050 90.1 87.5 89.0 89.1

2080 82.9 80.5 80.7 82.1

2010

2030 96.0 93.2 94.1 92.3

2050 86.7 84.2 85.0 83.4

2080 80.8 78.4 78.5 77.7

2010

2030 96.0 93.2 94.1 92.3

2050 86.7 84.2 85.0 83.4

2080 80.8 78.4 78.5 77.7

2010

2030 90.7 88.1 88.3 86.4

2050 72.6 70.5 70.3 69.5

2080 65.2 63.3 62.7 62.5

2010

2030 88.1 85.6 85.4 83.5

2050 66.0 64.1 63.7 62.9

2080 58.5 56.9 56.2 55.9

1 Average of highest 35 years of earnings wage indexed to 2010. For workers with less than 35 years of earnings, zero years are included.

2

Projected percent of new retired worker awards in 2050 closest to AIME levels and years of work.

3

Increase the benefit by 5% beginning 20 years after eligibility and phased in over five years starting in 2011.

Note: Starting Dec 2011, compute the COLA using a chained CPI-W, producing 0.3% lower annual COLAs on average.

Other Changes: 

-

-

-

The EEA increases under this proposal. For these illustrations, we assume the indexing year and the computation period remain as in current law - the indexing year is the year the worker reaches age 60

and the computation period is 35 years.

All estimates based on the intermediate assumptions of the 2010 Trustees Report.

Index the NRA to keep a constant ratio of life expectancy at NRA to (NRA-20) once the NRA reaches 67. Include hardship EEA/NRA change if 25yrs with 4QCs and AIME <250% Federal poverty level; 

phased to no exemption with AIME >=400% of poverty level. The scaled very low and low earners meet the requirements for the hardship exemption. However, only about 42 percent of earners with closest 

to the scaled very low earner and 87 percent of earners closest to the scaled low earner would meet these requirements.

Increase the PIA to a level such that a worker with 30 years of earning 4 quarters of coverage would receive an adjusted PIA equal to 125% of monthly poverty level in 2009, CPI-index from 2009-2017 then 

wage-indexed to year of eligibility. This provision would take full effect for all newly eligible workers in 2017. The Minimum Benefit Percent Reduction is calculated after all other proposals, so that the 

Proposed Benefit Amount is at least the Minimum Benefit.

Office of the Chief Actuary, Social Security Adminstration February 2, 2011

Table 1B2. Changes in Benefits for Hypothetical Workers Beginning Benefit Receipt at age 65 

Plan Proposed by the National Commission on Fiscal Responsibility and Reform, December 1, 2010

Basic Provisions Only -- Those with Direct Effects on Social Security Beneifts or Tax Revenue

New bend point at 50th percentile of career-average earnings level; reduced PIA factors to 90/30/10/5 by 2050.

Proposal Benefit as Percent of Present Law Scheduled

(Percents)

Low-AIME ($19,388 for 20101) 20-Year Scaled Earner (2.9% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 14-Year Scaled Earner (5.3% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 20-Year Scaled Earner (6.0% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 30-Year Scaled Earner (8.1% of Retirees2)

Low-AIME ($19,388 for 20101) 30-Year Scaled Earner (7.1% of Retirees2)

Medium-AIME ($43,084 for 20101) 30-Year Scaled Earner (4.4% of Retirees2)

High-AIME ($68,934 for 20101) 44-Year Scaled Earner (20.7% of Retirees2)

Maximum-AIME ($106,800 for 20101) Steady Earner (5.4% of Retirees2)

Low-AIME ($19,388 for 20101) 44-Year Scaled Earner (13.0% of Retirees2)

Medium-AIME ($43,084 for 20101) 44-Year Scaled Earner (27.0% of Retirees2)
Year 

Attain Reduced PIA Minimum

Age 65 (Wage Indexed (Constant COLA4

Longevity5Formula6 Benefit7 Total Scheduled Payable

2010 Dollars) 2010 Dollars)

 

2010 648 648

2030 579 758 -0.9 -1.7 0.0 0.0 -2.5 97 97

2050 580 959 -0.9 -8.0 0.0 0.0 -8.8 91 114

2080 580 1,341 -0.9 -15.1 0.0 0.0 -15.8 84 111

 

2010 648 648

2030 579 758 -0.9 -1.7 0.0 0.0 -2.5 97 97

2050 580 959 -0.9 -8.0 0.0 0.0 -8.8 91 114

2080 580 1,341 -0.9 -15.1 0.0 0.0 -15.8 84 111

 

2010 648 648

2030 579 758 -0.9 -1.7 0.0 0.0 -2.5 97 97

2050 580 959 -0.9 -8.0 0.0 0.0 -8.8 91 114

2080 580 1,341 -0.9 -15.1 0.0 0.0 -15.8 84 111

2010 848 848

2030 758 992 -0.9 -1.7 0.0 24.3 21.2 121 121

2050 758 1,255 -0.9 -8.0 0.0 32.8 21.2 121 152

2080 758 1,754 -0.9 -15.1 0.0 44.0 21.2 121 160

2010 848 848

2030 758 992 -0.9 -1.7 0.0 24.3 21.2 121 121

2050 758 1,255 -0.9 -8.0 0.0 32.8 21.2 121 152

2080 758 1,754 -0.9 -15.1 0.0 44.0 21.2 121 160

2010 848 848

2030 758 992 -0.9 -1.7 0.0 0.0 -2.5 97 97

2050 758 1,255 -0.9 -8.0 0.0 0.0 -8.8 91 114

2080 758 1,754 -0.9 -15.1 0.0 0.0 -15.8 84 111

2010 1,397 1,397

2030 1,248 1,634 -0.9 -1.7 0.0 0.0 -2.5 97 97

2050 1,249 2,068 -0.9 -8.0 0.0 0.0 -8.8 91 114

2080 1,249 2,889 -0.9 -15.1 0.0 0.0 -15.8 84 111

2010 1,397 1,397

2030 1,248 1,634 -0.9 -1.7 0.0 0.0 -2.5 97 97

2050 1,249 2,068 -0.9 -8.0 0.0 0.0 -8.8 91 114

2080 1,249 2,889 -0.9 -15.1 0.0 0.0 -15.8 84 111

2010 1,851 1,851

2030 1,654 2,166 -0.9 -1.7 -0.4 0.0 -2.9 97 97

2050 1,656 2,740 -0.9 -8.0 -1.9 0.0 -10.5 89 112

2080 1,656 3,829 -0.9 -15.1 -2.3 0.0 -17.8 82 108

2010 2,192 2,192

2030 2,021 2,646 -0.9 -1.7 -1.3 0.0 -3.8 96 96

2050 2,020 3,343 -0.9 -8.0 -6.6 0.0 -14.8 85 107

2080 2,019 4,668 -0.9 -15.1 -7.9 0.0 -22.5 78 102

1

Average of highest 35 years of earnings wage indexed to 2010. For workers with less than 35 years of earnings, zero years are included.

2

Projected percent of new retired worker awards in 2050 closest to AIME levels and years of work.

3

4

Starting Dec 2012, compute the COLA using a chained CPI-W, producing 0.3 percentage point lower annual COLAs on average.

5

6

7

Notes: The hypothetical worker's earnings patterns were not altered to reflect effects on wages and earnings as a result of any changes to tax provisions, including personal and 

corporate income tax, VAT, and taxing ESI premiums.

All estimates based on the intermediate assumptions of the 2010 Trustees Report.

Office of the Chief Actuary, Social Security Administration

After trust fund exhaustion under present law continuing taxes are expected to be enough to pay about three fourths of scheduled benefits.

Starting with those newly eligible in 2023, multiply by the ratio of life expectancy at 67 for 2018 to the life expectancy at age 67 for the 4th year prior to the year of benefit eligibilty.

Reduce the 15% PIA Factors to 10% phased in 2023 through 2052.

Low-AIME ($19,388 for 20101) 30-Year Scaled Earner (7.1% of Retirees2)

Low-AIME ($19,388 for 20101) 20-Year Scaled Earner (2.9% of Retirees2)

Medium-AIME ($43,084 for 20101) 44-Year Scaled Earner (27.0% of Retirees2)

Medium-AIME ($43,084 for 20101) 30-Year Scaled Earner (4.4% of Retirees2)

High-AIME ($68,934 for 20101) 44-Year Scaled Earner (20.7% of Retirees2)

Increase the PIA to a level such that a worker with 30 years of earnings equal to at least 20% of the "old law" tax max (including up to 8 child care years) would receive an adjusted PIA equal to 133% of 

2009 Federal Poverty level, wage-indexed after 2009 to 2 years prior to benefit eligibility. This provision would take full effect for all newly eligible workers in 2012. The Minimum Benefit Percent 

Reduction is calculated after all other proposals, so that the Proposed Benefit Amount is at least the Minimum Benefit.

Very-Low-AIME ($10,771 for 20101) 14-Year Scaled Earner (5.3% of Retirees2)

Table 2B1. Changes in Benefits for Hypothetical Workers Beginning Benefit Receipt at age 65 

Bipartisan Policy Center's Debt Reduction Task Force Plan of November 17, 2010

Scheduled Benefit Level Percent Change at age 65

Present Law Scheduled Proposal Scheduled Benefit

Low-AIME ($19,388 for 20101) 44-Year Scaled Earner (13.0% of Retirees2)

Monthly Benefits3 Percent of Present Law:

February 2, 2011

(Percent change) (Percents)

Maximum-AIME ($106,800 for 20101) Steady Earner (5.4% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 30-Year Scaled Earner (8.1% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 20-Year Scaled Earner (6.0% of Retirees2)
Year 

Attain

Age 65 Age 65 Age 75 Age 853 Age 95

2010

2030 97.5 94.6 102.5 99.5

2050 91.2 88.6 96.5 93.7

2080 84.2 81.7 89.9 87.3

2010

2030 97.5 94.6 102.5 99.5

2050 91.2 88.6 96.5 93.7

2080 84.2 81.7 89.9 87.3

2010

2030 97.5 94.6 102.5 99.5

2050 91.2 88.6 96.5 93.7

2080 84.2 81.7 89.9 87.3

2010

2030 121.2 117.7 122.4 118.9

2050 121.2 117.7 122.3 118.8

2080 121.2 117.7 122.3 118.8

2010

2030 121.2 117.7 122.4 118.9

2050 121.2 117.7 122.3 118.8

2080 121.2 117.7 122.3 118.8

2010

2030 97.5 94.7 100.0 97.1

2050 91.2 88.6 94.0 91.3

2080 84.2 81.7 87.4 84.9

2010

2030 97.5 94.6 96.8 94.0

2050 91.2 88.6 90.9 88.3

2080 84.2 81.7 84.2 81.8

2010

2030 97.5 94.6 96.8 94.0

2050 91.2 88.6 90.9 88.3

2080 84.2 81.7 84.2 81.8

2010

2030 97.1 94.3 95.3 92.5

2050 89.5 86.9 88.1 85.5

2080 82.2 79.9 81.2 78.9

2010

2030 96.2 93.4 93.7 91.0

2050 85.2 82.8 83.4 81.0

2080 77.5 75.3 76.1 74.0

1 Average of highest 35 years of earnings wage indexed to 2010. For workers with less than 35 years of earnings, zero years are included.

2

Projected percent of new retired worker awards in 2050 closest to AIME levels and years of work.

3

Beginning in 2012, increase the benefit at each age 81- 85 based on 1% of the average retired worker PIA in the prior year.

Note: Starting Dec 2012, compute the COLA using a chained CPI-W, producing 0.3 percentage point lower annual COLAs on average.

Other Changes: 

-

-

-

The hypothetical worker's earnings patterns were not altered to reflect effects on wages and earnings as a result of any changes to tax provisions, including personal and corporate income tax, VAT, 

and taxing ESI premiums.

All estimates based on the intermediate assumptions of the 2010 Trustees Report.

Starting with those newly eligible in 2023, multiply by the ratio of life expectancy at 67 for 2018 to the life expectancy age 67 for the 4th year prior to the year of benefit eligibilty.

Increase the PIA to a level such that a worker with 30 years of earnings equal to at least 20% of the "old law" tax max (including up to 8 child care years) would receive an adjusted PIA equal to 133% of 

2009 Federal Poverty level, wage-indexed after 2009 to 2 years prior to benefit eligibility. This provision would take full effect for all newly eligible workers in 2012. The Minimum Benefit Percent 

Reduction is calculated after all other proposals, so that the Proposed Benefit Amount is at least the Minimum Benefit.

Office of the Chief Actuary, Social Security Adminstration February 2, 2011

Table 2B2. Changes in Benefits for Hypothetical Workers Beginning Benefit Receipt at age 65 

Bipartisan Policy Center's Debt Reduction Task Force Plan of November 17, 2010

Reduce the 15% PIA Factors to 10% phased in 2023 through 2052.

Proposal Benefit as Percent of Present Law Scheduled

(Percents)

Low-AIME ($19,388 for 20101) 20-Year Scaled Earner (2.9% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 14-Year Scaled Earner (5.3% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 20-Year Scaled Earner (6.0% of Retirees2)

Very-Low-AIME ($10,771 for 20101) 30-Year Scaled Earner (8.1% of Retirees2)

Low-AIME ($19,388 for 20101) 30-Year Scaled Earner (7.1% of Retirees2)

Medium-AIME ($43,084 for 20101) 30-Year Scaled Earner (4.4% of Retirees2)

High-AIME ($68,934 for 20101) 44-Year Scaled Earner (20.7% of Retirees2)

Maximum-AIME ($106,800 for 20101) Steady Earner (5.4% of Retirees2)

Low-AIME ($19,388 for 20101) 44-Year Scaled Earner (13.0% of Retirees2)

Medium-AIME ($43,084 for 20101) 44-Year Scaled Earner (27.0% of Retirees2)