SOCIAL SECURITY 

February 5, 2015 

The Honorable Shaun Donovan 

Director, Office of Management and Budget 

Washington, D.C. 20503 

Dear Director Donovan: 

The Board of Trustees of the Federal Old-Age and Survivors Insurance (OASI) and Federal 

Disability Insurance (DI) Trust Funds released the 2014 Annual Report on July 28, 2014. Under 

the intermediate assumptions, the Trustees project that the OASI Trust Fund reserves will become 

depleted and unable to pay scheduled benefits in full on a timely basis starting in 2034. However, 

the Trustees project that the DI Trust Fund reserves will become depleted much sooner, in the 

fourth quarter of 2016. The reserves of the combined OASI and DI Trust Funds are projected to 

become depleted in 2033 under the intermediate assumptions of the 2014 Trustees Report. 

This letter presents our estimates of the effects on the OASI and DI Trust Funds of enacting the 

temporary reallocation of the payroll tax rate proposed in the President’s Fiscal Year 2016 Budget. 

We estimate this reallocation will equalize the projected years of reserve depletion for the two trust 

funds to 2033. We base these estimates on the intermediate assumptions of the 2014 Trustees 

Report. 

The President’s proposal would increase the total (employee plus employer) payroll tax rate for the 

DI Trust Fund by 0.9 percentage points, from 1.8 to 2.7 percent, for calendar years 2016 through 

2020. The payroll tax rate for the OASI Trust Fund would be reduced by an equal amount so that 

the total OASDI payroll tax rate for these years would be unchanged. 

The table below shows Social Security payroll tax rates for years 2015 and later under present law 

and under the President’s proposal. 

Social Security Payroll Tax Rates

Calendar 

Years

Employees and employers 

each

Self-employed

OASDI OASI DI OASDI OASI DI

Rates scheduled under present law

2015+ 6.2% 5.3% 0.9% 12.4% 10.6% 1.8%

Rates proposed in the President’s FY2016 Budget

2015 6.2% 5.3% 0.9% 12.4% 10.6% 1.8%

2016-20 6.2 4.85 1.35 12.4 9.7 2.7

2021+ 6.2 5.3 0.9 12.4 10.6 1.8

Note: Rates for 2015 and years after 2020 are unchanged under the proposal. 
2

Under the President’s proposed reallocation of tax rates, we project the following:

 The financial status of the combined OASI and DI Trust Funds is essentially the same as 

under present law. The combined asset reserves of the OASI and DI Trust Funds would 

become depleted in 2033. After reserve depletion in 2033, tax income would be sufficient 

to cover 77 percent of cost. This percent drops to 72 by 2088. 

 The asset reserves of the OASI Trust Fund would become depleted in 2033. After reserve 

depletion in 2033, tax income would cover 75 percent of cost. This percent drops to 70 by

2088.

 The asset reserves of the DI Trust Fund would become depleted in 2033. After reserve 

depletion in 2033, non-interest income would cover 88 percent of cost. This percent drops 

to 80 by 2088.

The table below shows Trust Fund ratios (the amount of trust fund asset reserves at the beginning 

of the year expressed as a percent of annual program cost for the year) for the OASI and DI Trust 

funds under current law and under the President’s proposed reallocation schedule, as well as those 

of the combined OASDI Trust Fund.

Calendar 

Year

Trust Fund Ratios

OASI DI OASDI

Current Law Proposal Current Law Proposal Combined

2014 373 373 62 62 320

2015 359 359 39 39 306

2016 345 345 18 18 292

2017 329 322 --- 37 277

2018 313 299 --- 61 262

2019 297 276 --- 88 248

2020 281 254 --- 117 233

2021 265 232 --- 147 219

2022 249 216 --- 138 203

2023 232 199 --- 127 187

2024 214 182 --- 115 171

2025 196 165 --- 103 154

2026 178 147 --- 91 137

2027 159 129 --- 78 119

2028 140 110 --- 66 101

2029 120 90 --- 55 83

2030 100 70 --- 43 64

2031 79 48 --- 32 44

2032 57 26 --- 21 23

2033 34 4 --- 11 2

2034 11 --- --- --- ---

2035 --- --- --- --- ---

 
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We hope these estimates will be helpful. Please let us know if we may provide further assistance.

Sincerely,

 

Stephen C. Goss, Chief Actuary

 

Alice H. Wade, Deputy Chief Actuary

 

 Chris Chaplain, Supervisory Actuary