SOCIAL SECURITY

MEMORANDUM 

Date: February 15, 2005 Refer To: TCA

To: Representative Sam Johnson 

From: Stephen C. Goss, Chief Actuary 

Alice H. Wade, Deputy Chief Actuary 

Subject: Estimated Long-Range OASDI Financial Effects of a Proposal for Individual Social Security 

Investment -- INFORMATION

This memorandum presents long-range estimates of the financial effects of the plan you have 

developed for individual investment accounts that would provide retirement income under the 

Social Security program. This memorandum includes a description of the plan, reflecting the 

intent of and specifications for the plan, as provided by Kathleen Black of your staff. While the 

provisions of the plan described in this memorandum are consistent with the intent of your 

recently introduced bill Individual Social Security Investment Program Act of 2005 (H.R. 530), 

some of the effective dates in the plan description below are based on your earlier bill (H.R. 

4895 submitted to the 108th Congress). Some of these effective dates differ by one or two years 

from those now specified in HR 530. In the interest of providing timely analysis, we are 

providing estimates with these qualifications. The estimates should be regarded as preliminary, 

but provide a good indication of the nature of the plan and its potential effects. All estimates are 

based on the intermediate assumptions of the 2004 Trustees Report, as well as additional 

assumptions described below. 

The plan would offer to workers under age 55 on January 1, 2005 a combination of recognition 

bonds based on accrued benefit obligations plus an individual account contribution of 6.2 percent 

of future taxable earnings redirected from the OASDI payroll tax. For those who do not choose 

this option, current law benefits will continue, but will be based on a price indexed benefit 

formula. Older workers will remain in the current program without change, and future workers 

will be automatically enrolled in the individual account program. A minimum benefit financed 

with general revenue would be available to those participating in the individual account program. 

In addition, disability and young survivor benefits for these participants would continue 

unchanged. General revenue transfers would be provided as needed to maintain trust fund 

solvency during the period of transition. Enactment of this plan would eliminate the Social 

Security long-range actuarial deficit and meet the criteria for sustainable solvency. The program 

would be expected to remain solvent throughout the 75-year projection period and for the 

foreseeable future beyond. 
2

Estimates for this proposal reflect the development of several innovations in our methods and 

substantial work by Chris Chaplain, Jason Schultz, and others from the Office of the Chief 

Actuary. Further development and refinement of these methods will allow for improvements in 

the estimates in the future. 

1. Description of Proposal 

Individual Account (IA) Program – Participation

Beginning January 1, 2005, the proposal specifies that: 

• Individuals born in 1949 and earlier (those 55 or older as of January 1, 2005) would stay 

in the current system and receive full scheduled benefits. 

• All individuals eligible for disabled worker and young survivor benefits as of January 1, 

2005 would stay in the current system and receive full scheduled benefits. 

• Individuals born in years 1950 through 1982, who are not eligible for disabled worker or 

young survivor benefits as of January 1, 2005, would be offered the following choice: 

a. Stay with the current OASDI program, subject to a CPI-indexed PIA formula starting 

with those eligible for benefits in 2012, or 

b. Participate in the IA program. For these individuals, a recognition bond would be 

granted for the accrued retired worker benefit obligation earned as of January 1, 2005 

and an individual account (IA) would be established, with contributions of 6.2 percent 

of OASDI taxable earnings starting in 2005. 

• All individuals born in 1983 and later (those 21 or younger as of January 1, 2005) would 

participate in the IA program, with contributions of 6.2 percent of OASDI taxable 

earnings starting in 2005. 

IA Program – Recognition bonds 

Recognition bonds will be issued on January 1, 2005, for those individuals born in years 1950 

through 1982 who choose to participate in the IA plan. The recognition bond will be a zerocoupon Treasury bond maturing on the date of attaining the normal retirement age (NRA)1

 for 

the original recipient of the bond. The redemption value of the bond at maturity will be 

explicitly stated on the bond in dollars. It will be calculated using the present value (discounted 

at the trust fund yield rate to the redemption date or NRA) of expected retired worker benefit 

obligations accrued prior to January 1, 2005 assuming the worker will survive to the NRA and 

retire at that time. The accrued benefit obligation would be based on a computation of the 

Primary Insurance Amount (PIA) that would be payable for entitlement to a disabled-worker 

benefit as of January 1, 2005, increased by assumed growth in the average wage thereafter up to 

the redemption date. To reflect the fact that the worker would have only contributed for a 

 

1

 The normal retirement age is the age that full benefits are payable. This age is 66 for those born in 1950 to 1954; 

is 66 and 2 months for those born in 1955; is 66 and 4 months for those born in 1956; is 66 and 6 months for those 

born in 1957; is 66 and 8 months for those born in 1958; is 66 and 10 months for those born in 1959; and is 67 for 

those born in 1960 and later. 
3

portion of the potential full career as of January 1, 2005, the PIA used for computing the 

recognition bond value would be multiplied by: 

(Worker’s age at the beginning of 2005 minus 22) / 45. 

The actual redemption value of the recognition bond would be set equal to the expected amount 

(present value as of NRA) of future retired worker benefits based on this adjusted PIA assuming 

the worker survives to NRA with certainty, using unisex mortality, wage and CPI increases, and 

trust-fund yields at the levels projected for the current Trustees Report at bond issuance. 

Three specifications for the calculation of the recognition bond redemption value described 

above are particularly notable. First, the recognition bond value will be based on potential 

retired worker benefits only. Spouse, widow(er) and child benefits that may be payable based on 

the worker’s earnings under current law would not be reflected in the recognition bond 

redemption value. Second, the redemption value of the recognition bonds will be fixed on 

January 1, 2005 assuming all workers at that time will survive to reach their NRA and receive 

retirement benefits starting at that time. Some workers who would receive a recognition bond in 

2005 will die before attaining their NRA, but the bond will retain its full redemption value in any 

case. Third, the redemption value will be set in 2005 based on the then current assumptions for 

future wage growth and future mortality rates after reaching NRA. Actual wage growth (and 

interest rates) may turn out to be substantially different from what is assumed in 2005, and the 

life span of individuals will vary considerably. Thus, the redemption bond value will only 

approximate the actual value of specified benefits based on earnings prior to January 1, 2005 and 

the difference will vary significantly. 

Recognition bonds would, upon issuance, be deposited in the worker’s individual account. The 

recognition bond would be marketable in a regulated secondary market; the proceeds of sale of 

the bond would be required to be retained in the individual account. No payment would be made 

by the Federal Government prior to the redemption date of each bond. The value of redemption 

bonds in the secondary market would be determined by market forces with a full understanding 

that precisely the face value of the bond would be paid to the holder upon maturity. The bonds 

would not be indexed in any way to reflect actual wage growth, CPI changes, or interest rates 

between issuance and redemption. 

IA Program –Financing & IA accounts

The OASDI combined payroll tax rate would remain at 12.4 percent. However, for those who 

choose to participate in the IA program (and all workers born after 1982), 6.2 percent of OASDI 

taxable earnings (the employee portion) would be deposited in an IA beginning in 2005. The 

portion not directed to an IA would be retained for the trust funds to cover recognition bond 

redemptions and OASDI benefits. Transfers from the General Fund of the Treasury would be 

provided to reimburse the trust funds for the cost of providing a minimum benefit (described 

below) starting in 2012. Additional revenue needed for the OASDI Trust Funds in the early 

decades after implementation would be provided in the form of transfers from the General Fund 

of the Treasury, on an as needed basis. The amount transferred from the General Fund of the 

Treasury to the OASDI Trust Funds in any year would be determined as the amount needed to 
4

ensure that the combined trust fund assets do not at any time within the year fall below 100 

percent of annual OASDI program cost. 

Individual account contributions redirected for any year to the IAs of a married couple, both of 

whom are participating, would be combined, and then divided equally between them for deposit 

in their separate individual accounts. Allocations during marriage would be unaffected by 

divorce; divorce would terminate all connection between the future IA contributions of 

previously married couples. 

IA accumulations are assumed to be held in accounts with record-keeping by a central 

administrative authority (CAA) that will offer options for investment, maintain individual 

records, interface with account holders, and combine assets of all accounts for the purpose of 

making investments with private investment companies (such as Fidelity, Vanguard, etc.). This 

approach is important for the purpose of keeping the cost of administering the accounts as low as 

possible. 

The default portfolio allocation for accounts would be 60 percent in broad indexed equity funds 

and 40 percent in corporate bond funds. However, given the uncertainty and volatility of 

investments in equity and bond markets, we assume that many workers will choose an 

investment portfolio that is less heavily weighted toward equities (see assumptions below). A 

variety of index funds would be offered by the CAA with annual options by the account holder 

to alter the portfolio. 

IA Program – IA disbursement & benefit payments 

For those participating in the IA program, a minimum monthly annuity/benefit equal to a 

specified percent of poverty (before any reduction for retirement before normal retirement age, 

NRA) would apply for all workers becoming eligible for benefits after 2004. The specified 

percent of poverty would equal 100 percent for workers with 35 years or more of work (quarters 

of coverage equal to at least 3.5 times the number of elapsed years), decreasing to 0 percent for 

workers with 10 years of work (quarters of coverage equal to the number of elapsed years). The 

poverty level is that for aged individuals, increased by the CPI thereafter. The annual poverty 

level for aged individuals is $8,825 in 2003. This minimum guarantee, referred to as a minimum 

PIA, would require purchase of a CPI-indexed life annuity at retirement with all IA assets, 

including any recognition bond. If an individual’s IA assets are not enough to provide the 

minimum monthly annuity/benefit, then the difference would be provided by the OASDI Trust 

Funds. However, the General Fund of the Treasury would reimburse the OASDI Trust Funds for 

the cost of this payment. 

The minimum targeted life annuity is 100 percent of poverty. IA accumulations in excess of 

what is needed to purchase a life annuity equal to 100 percent of poverty would be available to 

the retiree for any desired purpose. IA contributions are accumulated tax free. Upon 

distribution, IA balances, including recognition bond amounts, are exempt from taxation. In 

addition, if at any age, the CPI-indexed life annuity that could be purchased at age 62 with the 

current assets in an individual’s IA account is expected to be greater than 100 percent of poverty 

(assuming the IA assets were thereafter invested solely in Treasury bonds), then the individual 
5

would no longer be required to contribute 6.2 percent of taxable earnings to the IA. At that point 

the individual would no longer contribute to the OASDI program, but the employer would 

continue to contribute 6.2 percent of the employee’s taxable earnings. Self employed workers 

would pay one half of the tax rate. Additionally at this point in time, the individual would be 

required to purchase an annuity equal to 100 percent of poverty or to invest the cost of this level 

annuity in a fixed-income portfolio of assets, i.e. bonds. 

For those in the IA plan, present law scheduled disabled worker benefits would be payable up to 

NRA, with the minimum PIA applying to those who become eligible for benefits in 2012 and 

later. Auxiliary benefits to children and spouses with child in care would be paid on the account 

of a disabled worker. Young survivor benefits (child and spouse with child in care) would also 

be payable based on present law scheduled benefits, with the minimum PIA applying for those 

who become eligible for benefits in 2012 and later. However, no spouse or non-disabled child 

benefits would be payable on the accounts of retired worker beneficiaries or accounts of 

deceased workers (except for the young survivor benefits mentioned above). 

At attainment of NRA, disabled worker beneficiaries would convert to retired worker status. 

Those participating in the IA plan would then be required to purchase a CPI-indexed life annuity 

not less than the value of the continuation of the disabled-worker benefit (disability benefit prior 

to conversion with cost-of-living adjustment). If the individual’s IA accumulations, including 

any recognition bond, are insufficient for the purpose, then the OASDI Trust Funds would 

provide the difference. The OASDI Trust Funds would be reimbursed from the General Fund of 

the Treasury for the portion of any individual’s benefit attributed to providing the minimum PIA. 

IA accumulations including any recognition bonds are transferred to the individual account of 

the surviving spouse (if any) upon death of a worker. A portion of this transfer will be reserved 

to pay for any potential young survivor benefits. If there is no surviving spouse, then the IA 

accumulation, less any reserve for potential child survivor benefits, goes to the worker’s estate. 

CPI-indexed life annuities purchased with IA accumulations (including recognition bonds) are 

assumed to be provided through the CAA. 

 

Individuals not in the IA program 

All individuals born in 1949 and earlier (those 55 or older as of January 1, 2005), as well as 

those currently entitled to disabled worker or young survivor benefits on January 1, 2005, would 

remain in the current OASDI program and receive full scheduled benefits in current law. For 

those individuals born in 1950 through 1982 who remain in the current OASDI program (do not 

choose to participate in the IA program), all benefit payments (including disability and young 

survivors) would be subject to a CPI-indexed PIA formula starting for those eligible for benefits 

in 2012. The benefit formula would modify the primary insurance amount (PIA) formula 

factors (90, 32, and 15) starting in 2012, reducing them successively by the measured real wage 

growth in the second prior year. Modified PIA factors would be applicable for OASDI 

beneficiaries becoming eligible for benefits in 2012 and later. This provision would result in 

increasing benefit levels for individuals with equivalent lifetime earnings across generations 

(relative to the average wage level) at the rate of price growth (increase in the CPI), rather than at 
6

the rate of growth in the average wage level as in current law. Calculation of the average 

indexed monthly earnings (AIME) used in computing the PIA would be unaffected by this 

provision. In addition, the minimum PIA would not apply to these individuals. 

2. Assumptions Used for Financial Estimates 

The estimates presented in this memorandum are based on the intermediate assumptions of the 

2004 Trustees Report plus several additional assumptions relating to specific provisions of this 

proposal. 

Participation in the Individual Account Program 

Workers who are at ages 22 through 54 and are not disabled on January 1, 2005 will have the 

option of choosing to participate in the individual-account/recognition-bond plan. The default 

option is to remain in the current OASDI program. For the oldest of these workers, most will 

receive more total benefits from staying in the current system than from switching to the IA plan. 

This is particularly true for those who are in good health and have potential family members who 

may become eligible for an auxiliary benefit based on the workers earnings record. The 

recognition bond reflects an expected accrued benefit for the worker only after reaching NRA 

and does not include any amount corresponding to potential auxiliary benefits. Moreover, the 

recognition bond amount is computed with a factor to diminish the normal PIA computation by 

approximately 11 percent to recognize a longer potential work history than under the current 

system. Thus, even workers with no family members who are relatively healthy (as will be most 

of this group as the disabled are not included) and relatively old would expect more benefits 

from the current system for past contributions than from the recognition bonds. 

These factors suggest that workers at age 54 on January 1, 2005 will be relatively unlikely to 

select the IA/recognition-bond option. We assume that 10 percent of those at this age will opt 

for the IA plan. For younger workers, however, recognition bonds will represent a smaller and 

smaller portion of their expected future benefit; the CPI-indexed benefit formula will present a 

smaller and smaller potential benefit from the current system; and potential IA contributions will 

have longer and longer to accumulate. Thus, we assume that younger workers will be 

increasingly likely to opt for the IA plan and that 100 percent participation will occur for those 

under age 41 on January 1, 2005. Participation rates for workers between ages 40 and 54 are 

assumed to be decline linearly from 100 to 10 percent. 

Individual Account Investments 

As indicated above, the default portfolio allocation for individual accounts would be 60 percent 

in broad indexed equity funds and 40 percent in corporate bond funds. However, given the 

uncertainty and volatility of investments in equity and bond markets, we assume that many 

workers will choose an investment portfolio that is less heavily weighted toward equities. 
7

This proposal would replace retirement and aged survivor benefits from the current system 

completely with the IA and recognition bond accumulations. For many workers this account will 

represent their primary or only potential source of income in retirement. As a result we expect 

that workers participating in the IA plan will invest somewhat more conservatively on average 

than indicated in the default portfolio. We assume that the average portfolio will be 50 percent 

in equity funds, 30 percent in corporate bond funds, and 20 percent in government (Treasury) 

bonds. Due to the relatively large size of IAs under this proposal and the specification that 

accounts and annuities will be managed through a central administrative authority, we assume 

that administrative expenses will be relatively low, ultimately averaging about 0.25 percent of 

assets per year. The “expected” average annual real yield on IA investments before retirement is 

assumed to be 4.65 percent (6.5 X 0.5 + 3.5 X 0.3 + 3.0 X 0.2 – 0.25). 

Note that for estimates reflecting a low-yield assumption we assume that all investments will 

have an average real yield equal to that expected for long-term treasury bonds, or 3 percent in 

real terms. Therefore, the assumed net real yield after administrative expenses would be 2.75 

percent. These estimates provide projections on a “risk-adjusted” basis. Risk-adjusted returns 

omit any expected return in excess of that for Treasury bonds, because the excess reflects the 

premium demanded by the market for taking on the increased volatility associated with equities 

and corporate bonds. 

CPI-indexed life annuities purchased from the central administrative authority are assumed to 

provide an average annual expected real return of 3 percent net of administrative expenses. For 

the low yield assumption, the net real yield is assumed to be 2.75 percent. For the purpose of 

illustrations of individual account and annuity assets in this memorandum, we assume that all IA 

assets will be used to purchase annuities. While the proposal allows for much of the account to 

be disbursed in other ways for many workers, this variation would not affect the financial 

estimates presented in this memorandum. 

Future returns on IA assets will vary considerably depending both on individual portfolio choices 

and variation in future returns on specific investments. The average annual real return on long 

term Treasury bonds is assumed to be 3 percent, consistent with the 2004 Trustees Report. 

Corporate bonds are assumed to have an average real yield that is about 3.5 percent. 

The expected long-term ultimate average annual real yield for equities is assumed to be 6.5 

percent. This is somewhat lower than the historical real equity yield over the last several 

decades. A consensus exists among economists that equity pricing, as indicated by price-toearnings ratios, may average somewhat higher in the long-term future than in the long-term past. 

This is consistent with broader access to equity markets and the belief that equities may be 

viewed as somewhat less “risky” in the future than in the past. Equity pricing will vary in the 

future as in the past. Price-to-earnings ratios were very high through 1999, and are now lower. 

The average ultimate real equity yield assumed for estimates in this memorandum is consistent 

with an average ultimate level of equity pricing somewhat above the average level of the past. 

The assumption for an ultimate real equity yield of 7 percent that was used by the Office of the 

Chief Actuary until 2001 was developed in 1995 with the 1994-6 Advisory Council. At that 

time, the Trustees assumption for the ultimate average real yield on long-term Treasury bonds 
8

was 2.3 percent. Real yields on corporate bonds are believed to bear a close relationship to 

Treasury bond yields of similar duration. The 2004 Trustees Report includes the assumption that 

the ultimate real yield on long-term Treasury bonds will average 3 percent, or 0.7 percentage 

point higher than assumed in 1995. This increase in the assumed bond yield is consistent with a 

reduction in the perceived risk associated with equity investments. 

It should be noted that the precise effects on the yields of equities and corporate bonds is not 

clear when implementing a plan that would result in a large demand for these securities. This 

demand would likely be at least partially offset by reductions in demand for other investment 

mechanisms. For the purpose of these estimates, it is assumed that there will be no net dynamic 

feedback effects on the economy or on the financial markets. 

 

3. Benefit Levels under the Proposal 

Tables B1 and B2 show projected potential benefits under the proposal for two-earner and oneearner married couples, respectively. While a range of potential benefit levels is shown, actual 

investment returns and total benefit levels could vary considerably, reaching levels both well 

above and below the range presented. 

Table B1 presents monthly benefit levels for one spouse of a two-earner couple. Table B2, 

however, presents monthly benefit levels for the total married one-earner couple. Effects for 

single workers (never married) would be more similar to those of the two–earner couples. 

Potential benefits include both OASDI benefit payments and potential annuity payments based 

on IA accumulations (including recognition bond values). For these illustrations, it is assumed 

that workers will retain their recognition bonds essentially until maturity, although some may be 

expected to sell the bonds on a secondary market even at a relatively young age and invest the 

proceeds in some other financial security. For simplicity, recognition bonds are assumed to be 

available for annuitization at age 65. In fact this would be possible by selling the bonds on the 

secondary market. 

Benefits are illustrated for workers retiring at age 65 with various lifetime earnings patterns. 

These patterns include average career indexed earnings at about 45 percent of the level of the 

SSA economy wide average wage for the scaled low earner, 100 percent of this level for the 

scaled medium earner, 160 percent for the scaled high earner, and earnings steadily at the level 

of the OASDI taxable maximum for the maximum earner2

. 

The first three columns provide projected benefits scheduled under current law (column 1), 

payable under current law (column 2), and scheduled under the proposal for those who do not 

participate in the IA plan (column 3). In 2045, the CPI-indexed benefit under the proposal for 

non-IA participants would be close to the level payable under current law for two-earner couples. 

 

2

 Actuarial note 2004.3 provides details about the calculation of the scaled earner factors. Actuarial note 2004.3 is 

located at the following internet site: http://www.ssa.gov/OACT/NOTES/ran3/an2004-3.pdf. 
9

The next 5 columns develop the expected total retirement payment under the proposal prior to 

application of the guaranteed minimum for those in the IA plan. The projected annuity based on 

the recognition bond would be progressively smaller for subsequent generations who would have 

had fewer potential work years prior to 2005. Potential IA annuities assuming full annuitization 

are shown with both an IA accumulation at a low (risk-adjusted) yield and the expected yield for 

the expected average portfolio. These amounts are summed to show total payments prior to 

application of the minimum benefit under both investment return assumptions. 

The final three columns show the available minimum benefit payment (100 percent of poverty), 

and the total potential payments under the proposal expressed as a percentage of the current-law 

scheduled benefit level. For the scaled low earner, the proposal minimum benefit would be 

expected to provide an increment for retirees at age 65 through 2035. Proposal expected total 

benefits for the scaled low two-earner couple would decline from 94 percent of current-law 

scheduled benefits for those retiring at age 65 in 2015, to 72 percent for those retiring at age 65 

in 2055. For the low-earner one-earner couple, proposal expected benefits would decline from 

90 to 66 percent of the present-law scheduled level. 

Medium and higher two-earner couples with expected IA returns would fall short of the CPIindexed PIA initially, but would exceed that level starting with those retiring in 2035. Older 

workers would be expected to strongly consider staying in the current program, consistent with 

our assumption of low participation by the older eligible workers. 

While benefits for a scaled medium earner who experienced the low yields consistent with risk 

adjusted returns would fare little if any better than the CPI-indexed alternative benefit, the scaled 

high earner retiring in 2045 and later and experiencing the low yields would beat the CPIindexed benefit. In addition, by 2055 the maximum earner retiree would even beat the presentlaw scheduled benefit. 

Table B2 shows that benefit levels for the one-earner couple would be considerably lower than 

those for the two earner couple. Only for the one-earner steady maximum couple retiring at 65 

in 2055 would expected returns exceed the present-law scheduled benefit. 

 

4. Financial Effects of the Proposal 

Tables 1, 1a, 1b, 1b.c, 1c, and 1d illustrate the expected financial implications of enactment of 

the proposal under the assumptions described above. These effects are described briefly below. 

Additional tables 2, 2a, 2b, 2b.c, 2c, and 2d provide similar estimates using the low-yield (riskadjusted) returns on individual account assets described above. 

The proposal would replace OASDI retirement and aged survivor benefits with an individual 

account that would be financed with one half of the payroll tax rate (6.2 percent). This change 

would apply to all workers under age 22 on January 1, 2005, and to others under age 55 on that 

date who choose to accept a recognition bond in place of the benefit obligation based on past 

contributions. Disability and young survivor benefits would be retained as in current law 

through the normal retirement age. A minimum benefit (PIA) guarantee equal to a specified 
10

percent of the poverty level (100 percent for those with at least 35 years of work) would be 

financed through reimbursements from the General Fund of the Treasury. Those, who do not 

choose to participate in the IA program, would remain in the current program and be subject to a 

CPI-indexed PIA formula that provides slower growth in benefits across generations than does 

the current wage-indexed benefit formula. 

Cash Flow and Solvency 

In part because the recognition bonds for voluntary participants would mature on the date each 

worker would attain their normal retirement age, substantial general revenue transfers would be 

needed to maintain solvency of the OASDI Trust Fund. Table 1 indicates that transfers are 

expected to be needed from 2013 through 2045, peaking at 9.7 percent of payroll in 2028, and 

totaling $6.8 trillion in present value (see table 1a.) 

After 2045, the OASDI program would be expected to operate with substantial annual positive 

cash flow (see annual balance on table 1 and the first four columns of table 1c). Table 1 shows 

that the OASDI Trust Fund would grow at an increasing rate as a percentage of annual program 

cost after 2045. The large and rising trust fund ratios3

 reflect both the small residual amount of 

payments made from the OASDI program, and the increasing size of trust fund assets. The 

OASDI program would clearly satisfy the criteria for sustainable solvency under the proposal. 

Relative to current law, net cash flow from the OASDI Trust Fund to the General Fund of the 

Treasury would be substantially diminished through 2038. After 2038, however, cash flow from 

the trust funds to the Treasury would be increased over the current program modified to permit 

borrowing.4 The proposal is expected to produce positive cash flow from the trust funds 

beginning 2046. 

Total System Assets 

Table 1a provides estimates of expected OASDI Trust Fund assets under the proposal in column 

5, and estimated individual account (and annuity) assets in column 6. All IA assets are assumed 

to be fully annuitized in a CPI-indexed life annuity for the purpose of these illustrations. For the 

purpose of these illustrations, married individuals are assumed to choose a joint & 2/3 survivor 

annuity5

. The sum of these amounts may be referred to as total system assets under this 

proposal. By 2078, expected total system assets are expected to reach over $70 trillion in 

constant 2004 dollars, or more than double the size of the OASDI Trust Fund ($27 trillion), if all 

transfers expected under the proposal were provided to current OASDI program (see column 9). 

Table 2a, with low-yield assumptions (risk-adjusted) shows that total system assets under the 

proposal would be over $50 trillion. This amount is still higher than the assets under the current 

 

3

 The trust fund ratio for a year is calculated as (1) the level of assets at the beginning of the year divided by (2) 

program cost during the year, excluding recognition bonds. 

4

 Without this modification to permit borrowing, the current program would presumably operate with reduced 

benefits based on available tax revenue after the OASDI Trust Funds exhaust in 2042. 

5

 Two-thirds of the benefit level continues to the survivor. 
11

OASDI program with the same general revenue transfers as under the proposal ($28 trillion). 

This is because of the gradual reduction and eventual elimination under the proposal of 

retirement benefits other than the individual account annuities. 

Recognition Bonds and Effects on the Unified Budget 

Tables 1b, 1b.c, 2b, and 2b.c show expected effects on the unified budget of the Federal 

Government from enactment of this proposal. It should be noted that these effects are not 

comparable to the effects that would be estimated by the Office of Management and Budget 

(OMB) and the Congressional Budget Office (CBO), at least in part because the Trustees 

assumptions used for estimates presented here differ from those of OMB and CBO. 

Column 1 shows the projected IA contributions redirected from the trust funds starting in 2005. 

These contributions, along with distributions upon maturity of recognition bonds starting in 2016 

(column 2) represent increased expenditures from the unified budget. Generally lower benefit 

payments from the OASDI program are reflected in column 3 and would be reductions in 

expenditures. These changes are combined to produce the net change in unified budget annual 

cash flow in column 4. 

The implications for the size of the federal debt held by the public are shown in column 5. Debt 

would be increased substantially through the 75-year period, but the increment would be 

decreasing toward the end of the period. 

The net effect on annual unified budget balances, including the debt service from prior year 

effects on cash flow, is shown in column 6. Negative effects on unified budget balances would 

gradually decline and reverse to positive changes starting in 2070 under the expected yield 

scenario and starting in 2072 under the low yield scenario. 

Change in Long-Range Trust Fund Assets/Unfunded Obligation 

Tables 1d and 2d provide estimates of the amount of assets in the combined OASI and 

DI Trust Funds at the end of each year, in present discounted value. Negative values do 

not indicate levels of trust fund assets as the program does not have borrowing 

authority. Instead, negative values reflect the magnitude of the unfunded obligation of 

the program through the end of the year. The first column presents these estimates 

under present law, where the unfunded obligation is $3.7 trillion through 2078, the end 

of the 75-year long-range period. 

Columns 2 through 5 show the annual effects of the components of the proposal that 

move the OASDI program to elimination of the unfunded obligation. These include: 

• The change in the OASDI basic benefits, 

• IA contributions redirected from the trust funds to the individual accounts, 

• Recognition bond payments from the trust funds to the individual accounts, and 

• General Fund transfers needed to reimburse the trust funds for providing the 

minimum benefit level and to maintain solvency in 2013 through 2045. 
12

The combination of the annual effects in columns 2 through 5 is accumulated in column 

6, showing effect on projected trust fund assets, or on the unfunded obligation, through 

the end of each year. Column 7 shows the resulting trust fund asset levels projected 

under the proposal. The overall effect of the proposal is to transform the projected $3.7 

trillion long-range unfunded obligation for the program under current law into an 

expected positive trust fund balance of $1.8 trillion at the end of the period. 

 Stephen C. Goss 

 Alice H. Wade 
Table 1 Johnson Proposal: IA for <55 on 1-1-2005. RB for 21-54 on 1-1-2005

Phased Participation Ult Real TF Int Rate of 3.00 Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

No Taxation Ult Real IA Yld Rate of 4.65 General "Effective"

of RB or IA Annuity Net Real Yld Rate of 3.00 Revenue Change "Effective" General Individual

Distributions Reimbursement in OASDI OASDI Revenue Account

Cost Income Annual TFR1 for Minimum Contribution Contribution Transfer Contribution

Year Rate Rate Balance 1-1-yr Benefit Rate Rate Solvency Rate

2004 11.07 12.71 1.64 306 12.40 0.00

2005 10.87 8.72 -2.15 325 0.00 -4.005 8.40 4.00

2006 10.77 8.36 -2.41 310 0.00 -0.373 8.02 4.38

2007 10.75 8.23 -2.51 290 0.00 -0.142 7.88 4.52

2008 10.80 8.14 -2.65 267 0.00 -0.127 7.75 4.65

2009 10.95 8.01 -2.94 241 0.00 -0.125 7.63 4.77

2010 11.08 7.91 -3.18 214 0.00 -0.122 7.51 4.89

2011 11.25 7.83 -3.41 184 0.00 -0.126 7.38 5.02

2012 11.43 7.75 -3.68 154 0.00 -0.110 7.27 5.13

2013 11.67 9.18 -2.50 121 0.00 1.403 8.67 1.5 5.23

2014 11.89 11.98 0.09 100 0.00 2.787 11.46 4.4 5.34

2015 12.12 12.21 0.08 100 0.01 0.212 11.67 4.7 5.43

2016 13.12 13.03 -0.09 100 0.01 0.809 12.48 5.6 5.53

2017 13.77 13.65 -0.12 100 0.01 0.618 13.10 6.3 5.61

2018 14.41 14.28 -0.13 100 0.01 0.624 13.72 7.0 5.69

2019 15.03 14.82 -0.21 100 0.01 0.537 14.26 7.6 5.75

2020 15.59 15.36 -0.23 100 0.01 0.541 14.80 8.2 5.81

2021 15.54 15.25 -0.30 100 0.02 -0.121 14.68 8.1 5.88

2022 15.80 15.45 -0.36 100 0.02 0.207 14.89 8.4 5.93

2023 16.00 15.60 -0.40 100 0.02 0.157 15.04 8.6 5.97

2024 16.06 15.65 -0.40 100 0.02 0.061 15.10 8.7 6.02

2025 16.02 15.61 -0.41 100 0.02 -0.029 15.08 8.7 6.05

2026 15.98 15.37 -0.61 100 0.02 -0.229 14.85 8.5 6.08

2027 16.94 16.43 -0.51 100 0.03 1.077 15.92 9.6 6.10

2028 17.06 16.49 -0.56 100 0.03 0.083 16.01 9.7 6.12

2029 16.95 16.36 -0.59 100 0.03 -0.114 15.89 9.6 6.14

2030 16.74 16.13 -0.61 100 0.03 -0.210 15.68 9.4 6.15

2031 16.63 16.00 -0.63 100 0.03 -0.108 15.58 9.3 6.16

2032 15.74 15.17 -0.57 100 0.03 -0.805 14.77 8.5 6.16

2033 14.95 14.45 -0.50 100 0.04 -0.704 14.07 7.8 6.17

2034 14.15 13.63 -0.53 100 0.04 -0.804 13.26 7.0 6.17

2035 13.41 12.90 -0.51 100 0.04 -0.704 12.56 6.3 6.18

2036 12.69 12.18 -0.51 100 0.04 -0.706 11.85 5.6 6.19

2037 11.94 11.45 -0.49 100 0.04 -0.705 11.15 4.9 6.19

2038 11.22 10.83 -0.39 100 0.04 -0.605 10.54 4.3 6.20

2039 10.50 10.04 -0.45 100 0.04 -0.769 9.77 3.5 6.20

2040 9.81 9.43 -0.38 100 0.04 -0.599 9.17 2.9 6.20

2041 9.14 8.81 -0.33 100 0.04 -0.600 8.57 2.3 6.20

2042 8.50 8.17 -0.34 100 0.04 -0.630 7.94 1.7 6.20

2043 7.92 7.58 -0.34 100 0.05 -0.570 7.38 1.1 6.20

2044 7.36 6.96 -0.41 100 0.05 -0.610 6.77 0.5 6.20

2045 6.74 6.47 -0.27 100 0.05 -0.470 6.30 0.1 6.20

2046 6.23 6.41 0.18 100 0.05 -0.050 6.25 6.20

2047 5.75 6.40 0.66 109 0.04 0.000 6.24 6.20

2048 5.30 6.39 1.09 130 0.04 0.000 6.24 6.20

2049 4.89 6.39 1.50 163 0.04 -0.001 6.24 6.20

2050 3.85 6.38 2.54 209 0.04 -0.001 6.24 6.20

2051 3.73 6.38 2.64 286 0.04 -0.001 6.24 6.20

2052 3.64 6.37 2.73 369 0.04 -0.001 6.24 6.20

2053 3.56 6.36 2.81 460 0.04 -0.001 6.24 6.20

2054 3.49 6.36 2.87 556 0.04 -0.001 6.24 6.20

2055 3.43 6.36 2.92 657 0.04 -0.001 6.24 6.20

2056 3.38 6.35 2.97 763 0.04 -0.001 6.24 6.20

2057 3.34 6.35 3.01 873 0.04 -0.001 6.24 6.20

2058 3.30 6.35 3.04 987 0.04 -0.001 6.24 6.20

2059 3.27 6.34 3.07 1,105 0.03 -0.001 6.23 6.20

2060 3.22 6.34 3.12 1,235 0.03 -0.001 6.23 6.20

2061 3.21 6.34 3.13 1,355 0.03 -0.001 6.23 6.20

2062 3.21 6.34 3.13 1,476 0.03 -0.001 6.23 6.20

2063 3.20 6.34 3.13 1,599 0.03 -0.001 6.23 6.20

2064 3.20 6.33 3.13 1,722 0.03 -0.001 6.23 6.20

2065 3.20 6.33 3.13 1,847 0.03 -0.001 6.23 6.20

2066 3.20 6.33 3.13 1,975 0.03 -0.001 6.23 6.20

2067 3.20 6.33 3.13 2,106 0.03 -0.001 6.23 6.20

2068 3.19 6.33 3.14 2,242 0.02 -0.001 6.22 6.20

2069 3.19 6.33 3.14 2,378 0.02 -0.001 6.22 6.20

2070 3.19 6.33 3.14 2,514 0.02 -0.001 6.22 6.20

2071 3.19 6.33 3.13 2,652 0.02 -0.001 6.22 6.20

2072 3.19 6.33 3.13 2,792 0.02 -0.001 6.22 6.20

2073 3.20 6.32 3.13 2,934 0.02 -0.001 6.22 6.20

2074 3.20 6.32 3.13 3,077 0.02 -0.001 6.22 6.20

2075 3.20 6.32 3.12 3,223 0.02 -0.001 6.22 6.20

2076 3.20 6.32 3.12 3,371 0.02 -0.001 6.22 6.20

2077 3.20 6.32 3.12 3,522 0.02 -0.001 6.22 6.20

2078 3.21 6.32 3.11 3,676 0.02 -0.001 6.22 6.20

2079 3.21 6.32 3.11 3,832 0.01 -0.001 6.21 6.20

Summarized OASDI

Actuarial Change in 

Cost Rate Income Rate Balance Actuarial Balance

2004 - 2078 10.15 10.99 0.84 2.73 Office of the Actuary 1

TFR computed as TF assets divided by annual cost excluding RB payments Social Security Administration

Based on Intermediate Assumptions of the 2004 Trustees Report With Ultimate Real Trust Fund Interest Rate of 3.00 February 11, 2005
Table 1a Proposal GF Transfers, OASDI Trust Fund Assets, Individual Account Assets, and Theoretical OASDI Assets

Expected Theoretical Social Security 2

Proposal General Fund Transfer(GF)/Reimburse Total OASDI Individual with Borrowing Authority:

Transfers Reimburse Total in Accumulated Trust Fund Account Net OASDI TF Assets End of Year

for Minimum Constant as of Assets Assets 1 Without GF With GF Transfer

Solvency Benefit 2004$ End of Year at End of Year at End of Year GDP Transfer (amount for Prop)

Calendar (1) (2) (3) (4) (5) (6) (7) (8) (9)

Year Billions PV as of 1-1-2004 Billions of Constant 2004$ Billions of Constant 2004 Dollars

2004 0.0 0.0 0.0 0 1,684 0 11,544 1,684 1,684

2005 0.0 0.0 0.0 0 1,647 195 11,911 1,840 1,840

2006 0.0 0.0 0.0 0 1,581 423 12,246 1,998 1,998

2007 0.0 0.0 0.0 0 1,498 673 12,562 2,156 2,156

2008 0.0 0.0 0.0 0 1,399 943 12,870 2,315 2,315

2009 0.0 0.0 0.0 0 1,279 1,237 13,171 2,473 2,473

2010 0.0 0.0 0.0 0 1,141 1,555 13,466 2,631 2,631

2011 0.0 0.0 0.0 0 983 1,899 13,752 2,790 2,790

2012 0.0 0.0 0.0 0 804 2,266 14,024 2,944 2,944

2013 62.0 0.1 82.9 83 684 2,656 14,285 3,091 3,174

2014 179.9 0.1 247.1 332 708 3,072 14,547 3,230 3,563

2015 189.8 0.2 268.3 610 732 3,514 14,804 3,360 3,970

2016 223.3 0.3 324.7 952 747 3,983 15,061 3,478 4,431

2017 247.8 0.4 371.0 1,351 761 4,479 15,322 3,584 4,935

2018 271.5 0.4 418.7 1,810 775 5,003 15,586 3,675 5,486

2019 290.4 0.5 461.3 2,326 785 5,552 15,842 3,750 6,076

2020 308.6 0.5 505.0 2,901 793 6,128 16,100 3,805 6,706

2021 301.6 0.6 508.4 3,496 797 6,730 16,354 3,841 7,337

2022 306.4 0.6 532.0 4,133 797 7,357 16,610 3,857 7,990

2023 308.6 0.7 552.0 4,809 794 8,010 16,861 3,851 8,660

2024 307.1 0.7 565.9 5,519 790 8,689 17,117 3,823 9,342

2025 302.1 0.8 573.5 6,258 786 9,392 17,372 3,773 10,031

2026 290.3 0.8 567.9 7,014 766 10,119 17,634 3,700 10,714

2027 322.6 0.9 649.9 7,874 753 10,871 17,903 3,604 11,478

2028 320.7 0.9 665.4 8,776 736 11,647 18,174 3,486 12,262

2029 312.2 1.0 667.5 9,707 715 12,446 18,451 3,346 13,053

2030 300.8 1.0 662.6 10,661 691 13,267 18,733 3,184 13,845

2031 292.9 1.0 664.6 11,645 666 14,110 19,022 3,000 14,646

2032 263.5 1.1 616.1 12,611 643 14,974 19,319 2,796 15,406

2033 237.9 1.1 573.5 13,562 624 15,859 19,622 2,570 16,133

2034 210.2 1.1 522.2 14,491 601 16,764 19,929 2,325 16,817

2035 186.2 1.1 476.9 15,403 579 17,687 20,243 2,062 17,465

2036 163.0 1.2 430.3 16,295 556 18,629 20,564 1,780 18,075

2037 140.4 1.2 382.3 17,166 532 19,588 20,892 1,481 18,647

2038 121.3 1.2 340.7 18,022 516 20,562 21,226 1,165 19,187

2039 98.1 1.2 284.3 18,847 493 21,551 21,562 833 19,680

2040 80.1 1.2 239.9 19,652 475 22,552 21,904 485 20,137

2041 62.7 1.2 194.3 20,436 461 23,564 22,252 120 20,556

2042 45.1 1.2 144.8 21,194 445 24,585 22,605 -262 20,932

2043 29.5 1.2 98.9 21,929 428 25,613 22,961 -662 21,267

2044 13.4 1.2 48.2 22,635 405 26,647 23,322 -1,080 21,555

2045 1.3 1.1 8.2 23,322 392 27,682 23,687 -1,516 21,806

2046 0.0 1.1 4.0 24,026 419 28,719 24,055 -1,972 22,053

2047 0.0 1.1 4.0 24,751 491 29,755 24,426 -2,449 22,302

2048 0.0 1.1 4.0 25,497 606 30,788 24,799 -2,946 22,551

2049 0.0 1.0 4.0 26,266 763 31,812 25,174 -3,465 22,801

2050 0.0 1.0 4.0 27,058 1,027 32,822 25,552 -4,008 23,050

2051 0.0 1.0 4.0 27,874 1,311 33,817 25,936 -4,577 23,297

2052 0.0 0.9 4.0 28,714 1,616 34,797 26,324 -5,172 23,542

2053 0.0 0.9 3.9 29,579 1,941 35,768 26,721 -5,795 23,785

2054 0.0 0.9 3.9 30,470 2,286 36,730 27,123 -6,447 24,024

2055 0.0 0.8 3.8 31,388 2,651 37,683 27,528 -7,130 24,259

2056 0.0 0.8 3.8 32,334 3,035 38,625 27,939 -7,845 24,489

2057 0.0 0.8 3.7 33,308 3,438 39,556 28,354 -8,594 24,714

2058 0.0 0.7 3.7 34,311 3,862 40,476 28,775 -9,378 24,933

2059 0.0 0.7 3.6 35,343 4,305 41,383 29,204 -10,196 25,147

2060 0.0 0.7 3.5 36,407 4,771 42,279 29,639 -11,052 25,355

2061 0.0 0.6 3.5 37,503 5,256 43,162 30,078 -11,946 25,557

2062 0.0 0.6 3.4 38,631 5,760 44,032 30,526 -12,880 25,751

2063 0.0 0.6 3.3 39,794 6,285 44,890 30,978 -13,857 25,937

2064 0.0 0.5 3.2 40,991 6,829 45,736 31,438 -14,876 26,114

2065 0.0 0.5 3.1 42,224 7,394 46,570 31,906 -15,940 26,283

2066 0.0 0.5 3.0 43,493 7,981 47,431 32,379 -17,050 26,443

2067 0.0 0.5 3.0 44,801 8,590 48,284 32,861 -18,208 26,594

2068 0.0 0.4 2.9 46,148 9,224 49,127 33,359 -19,414 26,734

2069 0.0 0.4 2.8 47,535 9,881 49,962 33,859 -20,670 26,865

2070 0.0 0.4 2.7 48,964 10,563 50,790 34,366 -21,978 26,986

2071 0.0 0.4 2.6 50,435 11,270 51,612 34,882 -23,340 27,096

2072 0.0 0.3 2.5 51,951 12,003 52,427 35,404 -24,756 27,195

2073 0.0 0.3 2.4 53,512 12,762 53,238 35,931 -26,230 27,282

2074 0.0 0.3 2.3 55,120 13,550 54,044 36,464 -27,762 27,357

2075 0.0 0.3 2.2 56,775 14,365 54,848 37,006 -29,356 27,419

2076 0.0 0.3 2.2 58,481 15,210 55,649 37,555 -31,014 27,467

2077 0.0 0.2 2.1 60,237 16,086 56,450 38,112 -32,736 27,501

2078 0.0 0.2 2.0 62,047 16,993 57,249 38,677 -34,527 27,520

2079 0.0 0.2 1.9 63,910 17,932 58,049 39,245 -36,387 27,523

Total 2004-78 6,791.1 48.4

Based on Intermediate Assumptions of the 2004 Trustees Report Office of the Actuary 1

 Including annuity assets, assuming all annuitize fully. Social Security Administration 2

 Theoretical Social Security is the current Social Security program with the assumption February 11, 2005

 that the law is modified to permit borrowing from the General Fund of the Treasury.
Table 1b Proposal Effects on Unified Budget

Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

Amount(%) Other Change in 

Contributed to Recognition Changes Annual Debt Held Annual 

IA by Fed Gov: Bond in OASDI Unified Budget by Public Unified Budget

100 Distributions Cashflow1 Cashflow (EOY) Balance

(1) (2) (3) (4)=(3)-(1)-(2) (5) (6)

Year (Billions of $, Present Value on 1-1-2004)

2005 175.8 0.0 0.0 -175.8 175.8 -175.8

2006 191.2 0.0 0.0 -191.2 367.0 -200.2

2007 196.5 0.0 0.0 -196.5 563.4 -215.3

2008 201.0 0.0 0.0 -201.0 764.4 -230.2

2009 205.2 0.0 0.0 -205.2 969.6 -245.2

2010 208.9 0.0 0.0 -208.9 1,178.5 -260.1

2011 212.5 0.0 0.0 -212.5 1,391.0 -275.2

2012 214.8 0.0 2.6 -212.2 1,603.2 -286.6

2013 216.1 0.0 3.4 -212.8 1,815.9 -298.8

2014 218.4 0.0 4.7 -213.7 2,029.6 -311.8

2015 219.4 0.0 6.8 -212.6 2,242.2 -323.1

2016 220.3 33.9 12.6 -241.6 2,483.8 -364.4

2017 220.7 55.7 21.3 -255.0 2,738.8 -392.1

2018 220.6 77.9 31.2 -267.4 3,006.2 -419.6

2019 219.8 99.6 42.3 -277.2 3,283.4 -444.2

2020 218.8 120.1 54.6 -284.3 3,567.6 -466.7

2021 217.7 117.2 66.4 -268.5 3,836.1 -466.7

2022 216.3 128.5 80.3 -264.5 4,100.6 -477.7

2023 214.4 138.3 95.0 -257.7 4,358.3 -485.6

2024 212.3 144.9 110.4 -246.8 4,605.1 -489.0

2025 210.0 149.3 126.5 -232.7 4,837.8 -488.6

2026 207.6 154.8 142.7 -219.7 5,057.5 -488.5

2027 205.1 197.5 161.7 -240.9 5,298.4 -521.9

2028 202.3 210.6 178.8 -234.2 5,532.6 -528.6

2029 199.6 216.5 195.0 -221.1 5,753.7 -528.5

2030 196.7 220.4 211.5 -205.7 5,959.4 -525.5

2031 193.9 226.5 226.3 -194.1 6,153.5 -525.2

2032 191.0 210.0 241.6 -159.4 6,312.8 -501.3

2033 188.2 194.9 253.8 -129.2 6,442.1 -480.0

2034 185.4 180.2 264.7 -100.9 6,542.9 -458.9

2035 182.7 167.3 274.6 -75.4 6,618.4 -439.0

2036 180.1 154.9 283.0 -52.0 6,670.3 -419.8

2037 177.5 141.8 290.3 -29.0 6,699.4 -399.7

2038 174.9 129.5 296.4 -8.0 6,707.4 -380.3

2039 172.2 116.8 301.3 12.3 6,695.1 -360.4

2040 169.5 105.0 305.4 30.8 6,664.3 -341.2

2041 166.9 93.5 308.7 48.2 6,616.0 -322.1

2042 164.4 82.6 311.2 64.3 6,551.7 -303.3

2043 161.8 72.8 313.0 78.5 6,473.3 -285.6

2044 159.3 63.5 314.0 91.3 6,382.0 -268.4

2045 156.8 54.7 316.9 105.4 6,276.6 -249.3

2046 154.3 46.3 316.9 116.3 6,160.3 -232.5

2047 151.8 37.8 316.0 126.4 6,033.9 -216.0

2048 149.4 29.8 314.3 135.2 5,898.8 -200.1

2049 146.9 21.8 311.8 143.1 5,755.7 -184.7

2050 144.5 0.1 310.1 165.5 5,590.2 -154.3

2051 142.2 0.0 308.2 166.0 5,424.2 -144.7

2052 139.9 0.0 306.0 166.2 5,258.1 -135.3

2053 137.6 0.0 303.6 166.1 5,092.0 -126.1

2054 135.3 0.0 301.1 165.7 4,926.3 -117.2

2055 133.1 0.0 298.3 165.2 4,761.1 -108.5

2056 130.9 0.0 295.5 164.6 4,596.4 -100.0

2057 128.7 0.0 292.6 163.9 4,432.6 -91.6

2058 126.6 0.0 289.5 162.9 4,269.7 -83.4

2059 124.5 0.0 286.3 161.8 4,107.9 -75.5

2060 122.5 0.0 283.5 161.0 3,946.9 -67.3

2061 120.4 0.0 279.9 159.5 3,787.4 -59.9

2062 118.5 0.0 276.5 158.0 3,629.4 -52.5

2063 116.5 0.0 273.1 156.6 3,472.9 -45.1

2064 114.6 0.0 269.6 155.0 3,317.9 -38.0

2065 112.7 0.0 266.0 153.3 3,164.5 -31.0

2066 110.8 0.0 262.5 151.7 3,012.8 -24.1

2067 109.0 0.0 259.1 150.2 2,862.6 -17.2

2068 107.2 0.0 255.8 148.6 2,714.0 -10.4

2069 105.4 0.0 252.4 147.0 2,567.0 -3.8

2070 103.7 0.0 249.0 145.3 2,421.7 2.6

2071 102.0 0.0 245.5 143.5 2,278.2 9.0

2072 100.3 0.0 242.1 141.8 2,136.4 15.2

2073 98.7 0.0 238.8 140.1 1,996.3 21.4

2074 97.0 0.0 235.4 138.4 1,857.9 27.5

2075 95.4 0.0 232.1 136.7 1,721.2 33.5

2076 93.8 0.0 228.9 135.1 1,586.1 39.4

2077 92.3 0.0 225.7 133.4 1,452.7 45.3

2078 90.8 0.0 222.6 131.8 1,320.9 51.1

2079 89.2 0.0 219.5 130.2 1,190.6 56.8

 Based on the Intermediate Assumptions of the 2004 Trustees Report

 With Ultimate Real Trust Fund Interest Rate of 3.0%

Ultimate Real IA Yield Rate of 4.65% Office of the Actuary

Annuity Net Real Yield Rate of 3.0% Social Security Administration 1

 Excluding GF transfers and reimbursement February 11, 2005
Table 1b.c. Proposal Effects on Unified Budget

Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

Amount(%) Other Change in 

Contributed to Recognition Changes Annual Debt Held Annual 

IA by Fed Gov: Bond in OASDI Unified Budget by Public Unified Budget

100 Distributions Cashflow1 Cashflow (EOY) Balance

(1) (2) (3) (4)=(3)-(1)-(2) (5) (6)

Year (Billions of Constant 2004 $)

2005 188.0 0.0 0.0 -188.0 191.2 -193.1

2006 211.5 0.0 0.0 -211.5 411.7 -227.4

2007 223.6 0.0 0.0 -223.6 649.4 -251.6

2008 234.7 0.0 0.0 -234.7 904.1 -276.1

2009 245.9 0.0 0.0 -245.9 1,177.2 -301.9

2010 257.1 0.0 0.0 -257.1 1,469.5 -328.9

2011 268.5 0.0 0.0 -268.5 1,782.1 -357.5

2012 278.9 0.0 3.3 -275.6 2,110.9 -382.6

2013 288.5 0.0 4.5 -284.0 2,457.8 -410.0

2014 299.8 0.0 6.5 -293.3 2,824.9 -440.0

2015 309.7 0.0 9.6 -300.2 3,210.5 -469.0

2016 320.0 49.2 18.3 -350.9 3,660.1 -544.5

2017 329.9 83.3 31.9 -381.3 4,155.3 -603.2

2018 339.7 120.0 48.0 -411.7 4,697.8 -664.8

2019 348.6 158.0 67.0 -439.6 5,284.9 -725.0

2020 357.4 196.1 89.2 -464.4 5,914.7 -784.5

2021 366.3 197.2 111.8 -451.7 6,550.6 -808.1

2022 374.8 222.8 139.2 -458.4 7,212.3 -851.8

2023 382.7 246.9 169.5 -460.1 7,895.6 -892.0

2024 390.4 266.3 203.0 -453.8 8,593.0 -925.1

2025 397.6 282.7 239.6 -440.6 9,298.0 -952.1

2026 404.9 301.9 278.3 -428.5 10,011.9 -980.6

2027 412.0 396.8 324.9 -484.0 10,803.4 -1,079.0

2028 418.7 435.9 370.0 -484.6 11,619.3 -1,125.6

2029 425.4 461.5 415.7 -471.2 12,446.1 -1,159.2

2030 431.9 484.0 464.2 -451.7 13,277.9 -1,187.0

2031 438.5 512.1 511.8 -438.8 14,121.6 -1,222.1

2032 445.0 489.0 562.8 -371.2 14,921.9 -1,201.5

2033 451.5 467.5 608.9 -310.0 15,684.2 -1,185.0

2034 458.1 445.2 654.2 -249.2 16,407.7 -1,166.7

2035 465.0 425.8 698.8 -192.0 17,094.8 -1,149.7

2036 472.1 406.0 741.9 -136.2 17,745.9 -1,132.2

2037 479.2 383.0 783.8 -78.4 18,357.8 -1,110.5

2038 486.5 360.1 824.2 -22.4 18,931.3 -1,088.4

2039 493.3 334.6 863.2 35.3 19,463.4 -1,062.4

2040 500.2 309.8 901.0 91.0 19,955.0 -1,035.9

2041 507.3 284.2 938.0 146.5 20,404.9 -1,007.3

2042 514.4 258.4 974.2 201.4 20,812.7 -977.0

2043 521.6 234.7 1,009.2 252.9 21,180.4 -947.6

2044 528.9 210.8 1,042.8 303.1 21,508.2 -917.3

2045 536.2 187.3 1,083.8 360.4 21,787.7 -877.4

2046 543.5 163.0 1,116.3 409.8 22,025.4 -842.7

2047 550.9 137.3 1,146.7 458.6 22,220.8 -806.3

2048 558.3 111.2 1,174.7 505.2 22,374.7 -769.7

2049 565.7 83.8 1,200.3 550.7 22,487.0 -731.8

2050 573.1 0.2 1,229.6 656.2 22,495.6 -629.7

2051 580.7 0.0 1,258.6 677.8 22,482.6 -608.0

2052 588.3 0.0 1,287.3 699.0 22,447.7 -585.5

2053 596.1 0.0 1,315.6 719.5 22,390.9 -562.3

2054 603.9 0.0 1,343.5 739.6 22,312.0 -538.4

2055 611.8 0.0 1,371.3 759.5 22,210.6 -513.3

2056 619.8 0.0 1,399.2 779.4 22,085.9 -487.0

2057 627.8 0.0 1,426.9 799.1 21,937.5 -459.5

2058 636.0 0.0 1,454.2 818.2 21,765.3 -431.2

2059 644.3 0.0 1,481.2 837.0 21,568.8 -401.9

2060 652.6 0.0 1,510.5 857.8 21,345.3 -369.0

2061 661.1 0.0 1,536.4 875.3 21,097.3 -338.0

2062 669.7 0.0 1,562.9 893.3 20,823.6 -305.2

2063 678.3 0.0 1,590.1 911.7 20,523.0 -270.3

2064 687.1 0.0 1,616.7 929.6 20,195.3 -234.4

2065 696.0 0.0 1,643.2 947.2 19,839.8 -197.3

2066 705.0 0.0 1,670.5 965.4 19,455.2 -157.9

2067 714.2 0.0 1,698.4 984.2 19,040.0 -116.3

2068 723.6 0.0 1,726.9 1,003.3 18,593.0 -72.6

2069 733.1 0.0 1,755.2 1,022.1 18,113.5 -27.3

2070 742.7 0.0 1,783.0 1,040.3 17,601.1 19.3

2071 752.4 0.0 1,811.2 1,058.8 17,054.6 68.0

2072 762.2 0.0 1,839.6 1,077.4 16,472.8 118.9

2073 772.1 0.0 1,868.4 1,096.3 15,854.3 172.1

2074 782.1 0.0 1,897.6 1,115.5 15,197.8 227.8

2075 792.2 0.0 1,927.3 1,135.1 14,501.8 286.0

2076 802.5 0.0 1,957.4 1,154.9 13,764.7 346.8

2077 812.8 0.0 1,988.0 1,175.1 12,985.0 410.4

2078 823.3 0.0 2,019.0 1,195.7 12,161.0 476.8

2079 833.9 0.0 2,050.6 1,216.7 11,291.0 546.3

 Based on the Intermediate Assumptions of the 2004 Trustees Report

 With Ultimate Real Trust Fund Interest Rate of 3.0% Office of the Actuary

Ultimate Real IA Yield Rate of 4.65% Social Security Administration

Annuity Net Real Yield Rate of 3.0% February 11, 2005 1

 Excluding GF transfers and reimbursement
Table 1c OASDI Cash Flow to General Fund of the Treasury--- Proposal vs. Theoretical OASDI

Proposal Theoretical Social Security with PAYGO Transfers

Net Amount of Cash-Flow from the OASDI Net Amount of Cash-Flow from the OASDI

Trust Funds to the General Fund of the Trust Funds to the General Fund of the

Treasury During the Year 1 Treasury During the Year 1

Percent Billions of Dollars Percent Billions of Dollars

Year of Payroll Current $ 1/1/2004 PV Const 2004 $ of Payroll Current $ 1/1/2004 PV Const 2004 $

2004 1.4 65 63 65 1.4 65 63 65

2005 -2.1 -102 -94 -101 1.9 89 82 87

2006 -2.4 -122 -106 -118 1.9 97 85 94

2007 -2.5 -132 -110 -125 2.0 105 87 99

2008 -2.7 -147 -115 -135 2.0 109 86 100

2009 -3.0 -171 -127 -152 1.8 105 78 93

2010 -3.2 -193 -136 -168 1.7 103 73 89

2011 -3.4 -217 -145 -183 1.6 101 67 85

2012 -3.7 -244 -154 -200 1.4 91 58 75

2013 -4.0 -277 -166 -221 1.1 79 47 63

2014 -4.3 -312 -177 -243 0.9 65 37 50

2015 -4.6 -349 -187 -264 0.6 48 25 36

2016 -5.7 -450 -228 -331 0.3 27 14 20

2017 -6.4 -529 -253 -379 0.0 4 2 3

2018 -7.1 -613 -277 -427 -0.3 -22 -10 -15

2019 -7.8 -700 -299 -474 -0.6 -51 -22 -35

2020 -8.5 -789 -318 -520 -0.9 -84 -34 -55

2021 -8.5 -824 -314 -528 -1.2 -119 -45 -76

2022 -8.8 -890 -320 -555 -1.5 -155 -56 -97

2023 -9.0 -953 -324 -578 -1.8 -195 -66 -118

2024 -9.1 -1,005 -322 -593 -2.1 -236 -76 -139

2025 -9.1 -1,047 -317 -601 -2.4 -279 -85 -160

2026 -9.1 -1,092 -312 -609 -2.7 -324 -93 -181

2027 -10.1 -1,261 -341 -685 -3.0 -370 -100 -201

2028 -10.3 -1,334 -340 -705 -3.2 -416 -106 -220

2029 -10.2 -1,380 -333 -709 -3.4 -463 -112 -238

2030 -10.1 -1,413 -322 -706 -3.6 -510 -116 -255

2031 -10.0 -1,460 -314 -710 -3.8 -558 -120 -271

2032 -9.1 -1,390 -282 -658 -4.0 -606 -123 -287

2033 -8.3 -1,327 -254 -611 -4.1 -653 -125 -300

2034 -7.6 -1,256 -228 -562 -4.2 -699 -127 -313

2035 -6.9 -1,185 -203 -516 -4.3 -744 -127 -324

2036 -6.2 -1,110 -179 -470 -4.4 -788 -127 -334

2037 -5.4 -1,022 -156 -421 -4.4 -831 -127 -343

2038 -4.7 -929 -134 -372 -4.5 -873 -126 -350

2039 -4.0 -824 -112 -321 -4.5 -915 -124 -357

2040 -3.4 -716 -92 -272 -4.5 -956 -123 -363

2041 -2.7 -602 -73 -222 -4.5 -1,000 -121 -369

2042 -2.1 -484 -55 -174 -4.5 -1,045 -120 -375

2043 -1.5 -367 -40 -128 -4.5 -1,091 -118 -381

2044 -1.0 -246 -25 -84 -4.5 -1,139 -116 -387

2045 -0.4 -98 -9 -32 -4.5 -1,189 -115 -393

2046 0.1 34 3 11 -4.6 -1,241 -113 -399

2047 0.6 171 15 53 -4.6 -1,297 -112 -405

2048 1.0 307 25 93 -4.6 -1,355 -110 -412

2049 1.4 446 34 132 -4.6 -1,417 -109 -419

2050 2.5 798 58 230 -4.6 -1,483 -108 -427

2051 2.6 867 59 243 -4.6 -1,555 -107 -435

2052 2.7 934 60 254 -4.7 -1,634 -106 -445

2053 2.8 1,000 61 265 -4.7 -1,717 -105 -455

2054 2.8 1,066 62 275 -4.8 -1,805 -104 -465

2055 2.9 1,132 62 284 -4.8 -1,899 -104 -476

2056 2.9 1,198 62 292 -4.9 -1,999 -103 -487

2057 3.0 1,265 62 300 -4.9 -2,104 -102 -499

2058 3.0 1,333 61 308 -5.0 -2,214 -102 -511

2059 3.0 1,402 61 315 -5.0 -2,328 -101 -522

2060 3.1 1,483 61 324 -5.1 -2,447 -100 -534

2061 3.1 1,549 60 329 -5.1 -2,574 -100 -547

2062 3.1 1,615 59 334 -5.2 -2,709 -99 -560

2063 3.1 1,683 58 338 -5.2 -2,854 -98 -574

2064 3.1 1,753 57 343 -5.3 -3,003 -98 -587

2065 3.1 1,825 56 347 -5.3 -3,157 -97 -600

2066 3.1 1,901 55 352 -5.4 -3,319 -96 -614

2067 3.1 1,981 54 356 -5.4 -3,489 -96 -628

2068 3.1 2,068 54 362 -5.5 -3,665 -95 -641

2069 3.1 2,156 53 367 -5.5 -3,847 -94 -655

2070 3.1 2,245 52 372 -5.6 -4,037 -93 -669

2071 3.1 2,337 51 377 -5.6 -4,235 -92 -682

2072 3.1 2,433 50 381 -5.7 -4,442 -92 -696

2073 3.1 2,532 49 386 -5.7 -4,660 -91 -710

2074 3.1 2,634 48 391 -5.7 -4,888 -90 -725

2075 3.1 2,741 48 395 -5.8 -5,127 -89 -740

2076 3.1 2,853 47 400 -5.8 -5,377 -88 -755

2077 3.1 2,969 46 405 -5.9 -5,640 -87 -770

2078 3.1 3,090 45 410 -5.9 -5,915 -87 -785

2079 3.1 3,215 44 415 -6.0 -6,203 -86 -801

Total 2004-78 -6,545 -5,225

1 Equals net investment in special Treasury Bonds by the Trust Funds Office of the Actuary

less the Amount of General Fund transfers specified in the proposal or in the theoretical Social Security Administration

plan (PAYGO Transfers) February 11, 2005
Table 1d Change in Long-Range Trust Fund Assets / Unfunded Obligation

Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

Present Law OASDI

Trust Fund Assets Basic Amount(%) Proposal OASDI

or if Negative, Changes Contributed to Recognition Trust Fund Assets/

Unfunded Obligation in OASDI IA by Fed Gov: Bond General Total Change Unfunded Obligation

Through EOY Cash flow 100 Distributions Fund Transfers1 Through EOY Through EOY

(1) (2) (3) (4) (5) (6)=(2)-(3)-(4)+(5) (7)

Year (Billions of $, Present Value on 1-1-2004)

2005 1,674.6 0.0 175.8 0.0 0.0 -175.8 1,498.9

2006 1,759.0 0.0 191.2 0.0 0.0 -367.0 1,392.1

2007 1,845.5 0.0 196.5 0.0 0.0 -563.4 1,282.1

2008 1,930.8 0.0 201.0 0.0 0.0 -764.4 1,166.4

2009 2,008.4 0.0 205.2 0.0 0.0 -969.6 1,038.8

2010 2,080.8 0.0 208.9 0.0 0.0 -1,178.5 902.3

2011 2,148.0 0.0 212.5 0.0 0.0 -1,391.0 757.0

2012 2,205.6 2.6 214.8 0.0 0.0 -1,603.2 602.4

2013 2,252.4 3.4 216.1 0.0 62.1 -1,753.8 498.6

2014 2,289.0 4.7 218.4 0.0 180.0 -1,787.5 501.5

2015 2,314.3 6.8 219.4 0.0 190.0 -1,810.1 504.2

2016 2,327.9 12.6 220.3 33.9 223.6 -1,828.1 499.8

2017 2,329.7 21.3 220.7 55.7 248.2 -1,835.0 494.7

2018 2,319.7 31.2 220.6 77.9 271.9 -1,830.4 489.3

2019 2,297.6 42.3 219.8 99.6 290.9 -1,816.7 480.9

2020 2,263.7 54.6 218.8 120.1 309.1 -1,791.9 471.9

2021 2,218.5 66.4 217.7 117.2 302.2 -1,758.1 460.3

2022 2,162.6 80.3 216.3 128.5 307.0 -1,715.6 446.9

2023 2,096.4 95.0 214.4 138.3 309.2 -1,664.1 432.3

2024 2,020.7 110.4 212.3 144.9 307.8 -1,603.1 417.6

2025 1,936.1 126.5 210.0 149.3 302.8 -1,533.0 403.1

2026 1,843.3 142.7 207.6 154.8 291.1 -1,461.5 381.8

2027 1,743.3 161.7 205.1 197.5 323.5 -1,378.9 364.4

2028 1,637.0 178.8 202.3 210.6 321.6 -1,291.5 345.4

2029 1,525.4 195.0 199.6 216.5 313.2 -1,199.4 326.0

2030 1,409.4 211.5 196.7 220.4 301.8 -1,103.3 306.1

2031 1,289.5 226.3 193.9 226.5 293.9 -1,003.5 286.0

2032 1,166.5 241.6 191.0 210.0 264.5 -898.3 268.2

2033 1,041.2 253.8 188.2 194.9 239.0 -788.5 252.7

2034 914.6 264.7 185.4 180.2 211.3 -678.0 236.5

2035 787.2 274.6 182.7 167.3 187.4 -566.1 221.2

2036 659.9 283.0 180.1 154.9 164.1 -453.9 206.0

2037 533.0 290.3 177.5 141.8 141.6 -341.4 191.6

2038 407.2 296.4 174.9 129.5 122.5 -226.9 180.3

2039 282.7 301.3 172.2 116.8 99.2 -115.4 167.4

2040 159.8 305.4 169.5 105.0 81.3 -3.2 156.6

2041 38.4 308.7 166.9 93.5 63.9 109.0 147.4

2042 -81.4 311.2 164.4 82.6 46.2 219.6 138.2

2043 -199.5 313.0 161.8 72.8 30.7 328.7 129.1

2044 -316.0 314.0 159.3 63.5 14.5 434.5 118.5

2045 -430.8 316.9 156.8 54.7 2.4 542.3 111.4

2046 -544.1 316.9 154.3 46.3 1.1 659.7 115.6

2047 -655.8 316.0 151.8 37.8 1.1 787.2 131.4

2048 -766.0 314.3 149.4 29.8 1.1 923.4 157.5

2049 -874.8 311.8 146.9 21.8 1.0 1,067.6 192.7

2050 -982.4 310.1 144.5 0.1 1.0 1,234.1 251.6

2051 -1,089.0 308.2 142.2 0.0 1.0 1,401.0 312.0

2052 -1,194.8 306.0 139.9 0.0 0.9 1,568.2 373.4

2053 -1,299.7 303.6 137.6 0.0 0.9 1,735.1 435.4

2054 -1,403.9 301.1 135.3 0.0 0.9 1,901.7 497.9

2055 -1,507.4 298.3 133.1 0.0 0.8 2,067.8 560.4

2056 -1,610.3 295.5 130.9 0.0 0.8 2,233.2 622.9

2057 -1,712.7 292.6 128.7 0.0 0.8 2,397.9 685.2

2058 -1,814.4 289.5 126.6 0.0 0.7 2,561.5 747.2

2059 -1,915.3 286.3 124.5 0.0 0.7 2,724.0 808.7

2060 -2,015.6 283.5 122.5 0.0 0.7 2,885.6 870.1

2061 -2,115.1 279.9 120.4 0.0 0.6 3,045.8 930.6

2062 -2,214.1 276.5 118.5 0.0 0.6 3,204.4 990.2

2063 -2,312.6 273.1 116.5 0.0 0.6 3,361.5 1,048.9

2064 -2,410.5 269.6 114.6 0.0 0.5 3,517.1 1,106.6

2065 -2,507.7 266.0 112.7 0.0 0.5 3,670.9 1,163.3

2066 -2,604.1 262.5 110.8 0.0 0.5 3,823.1 1,219.0

2067 -2,699.9 259.1 109.0 0.0 0.5 3,973.8 1,273.8

2068 -2,794.9 255.8 107.2 0.0 0.4 4,122.8 1,327.9

2069 -2,889.1 252.4 105.4 0.0 0.4 4,270.2 1,381.1

2070 -2,982.5 249.0 103.7 0.0 0.4 4,415.9 1,433.4

2071 -3,075.0 245.5 102.0 0.0 0.4 4,559.8 1,484.8

2072 -3,166.6 242.1 100.3 0.0 0.3 4,701.9 1,535.3

2073 -3,257.4 238.8 98.7 0.0 0.3 4,842.3 1,584.9

2074 -3,347.3 235.4 97.0 0.0 0.3 4,981.0 1,633.7

2075 -3,436.4 232.1 95.4 0.0 0.3 5,118.0 1,681.6

2076 -3,524.7 228.9 93.8 0.0 0.3 5,253.3 1,728.6

2077 -3,612.1 225.7 92.3 0.0 0.2 5,387.0 1,774.9

2078 -3,698.7 222.6 90.8 0.0 0.2 5,519.0 1,820.3

Total 2004-2078 14,897.9 12,023.9 4,194.9 6,839.5

 Based on the Intermediate Assumptions of the 2004 Trustees Report

 With Ultimate Real Trust Fund Interest Rate of 3.0% Office of the Actuary

Ultimate Real IA Yield Rate of 4.65% Social Security Administration

Annuity Net Real Yield Rate of 3.0% February 11, 2005 1

 Include reimbursement for minimum benefit
Table 2 Johnson Proposal: Sensitivity Analysis--Low Yield=LT Treasury Bond

Phased Participation Ult Real TF Int Rate of 3.00 Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

No Taxation Ult Real IA Yld Rate of 2.70 General "Effective"

of RB or IA Annuity Net Real Yld Rate of 2.70 Revenue Change "Effective" General Individual

Distributions Reimbursement in OASDI OASDI Revenue Account

Cost Income Annual TFR1 for Minimum Contribution Contribution Transfer Contribution

Year Rate Rate Balance 1-1-yr Benefit Rate Rate Solvency Rate

2004 11.07 12.71 1.64 306 12.40 0.00

2005 10.87 8.72 -2.15 325 0.00 -4.005 8.40 4.00

2006 10.77 8.36 -2.41 310 0.00 -0.373 8.02 4.38

2007 10.75 8.23 -2.51 290 0.00 -0.142 7.88 4.52

2008 10.80 8.14 -2.65 267 0.00 -0.127 7.75 4.65

2009 10.95 8.01 -2.94 241 0.00 -0.125 7.63 4.77

2010 11.08 7.91 -3.18 214 0.00 -0.122 7.51 4.89

2011 11.25 7.83 -3.41 184 0.00 -0.126 7.38 5.02

2012 11.43 7.75 -3.68 154 0.00 -0.110 7.27 5.13

2013 11.67 9.18 -2.50 121 0.00 1.403 8.67 1.5 5.23

2014 11.89 11.98 0.09 100 0.00 2.787 11.46 4.4 5.34

2015 12.13 12.21 0.08 100 0.01 0.212 11.67 4.7 5.43

2016 13.12 13.03 -0.09 100 0.01 0.809 12.48 5.6 5.53

2017 13.77 13.65 -0.12 100 0.01 0.618 13.10 6.3 5.61

2018 14.41 14.28 -0.13 100 0.01 0.624 13.72 7.0 5.69

2019 15.03 14.82 -0.21 100 0.01 0.537 14.26 7.6 5.75

2020 15.59 15.37 -0.23 100 0.01 0.541 14.80 8.2 5.81

2021 15.55 15.25 -0.30 100 0.02 -0.120 14.68 8.1 5.88

2022 15.81 15.45 -0.36 100 0.02 0.208 14.89 8.4 5.93

2023 16.00 15.70 -0.30 100 0.02 0.257 15.15 8.7 5.97

2024 16.06 15.65 -0.41 100 0.02 -0.039 15.11 8.7 6.02

2025 16.02 15.52 -0.51 100 0.02 -0.129 14.98 8.6 6.05

2026 15.99 15.37 -0.62 100 0.03 -0.128 14.85 8.5 6.08

2027 16.95 16.43 -0.51 100 0.03 1.077 15.93 9.6 6.10

2028 17.07 16.50 -0.57 100 0.03 0.084 16.01 9.7 6.12

2029 16.96 16.37 -0.59 100 0.04 -0.113 15.90 9.6 6.14

2030 16.76 16.14 -0.62 100 0.04 -0.209 15.69 9.4 6.15

2031 16.65 16.11 -0.53 100 0.04 -0.006 15.68 9.4 6.16

2032 15.76 15.19 -0.58 100 0.04 -0.903 14.78 8.5 6.16

2033 14.97 14.40 -0.57 100 0.05 -0.762 14.02 7.7 6.17

2034 14.18 13.64 -0.54 100 0.05 -0.742 13.28 7.0 6.17

2035 13.44 13.02 -0.42 100 0.05 -0.602 12.67 6.4 6.18

2036 12.72 12.20 -0.53 100 0.06 -0.804 11.87 5.6 6.19

2037 11.98 11.50 -0.48 100 0.06 -0.673 11.20 4.9 6.19

2038 11.27 10.85 -0.41 100 0.07 -0.632 10.57 4.3 6.20

2039 10.55 10.14 -0.41 100 0.07 -0.696 9.87 3.6 6.20

2040 9.87 9.49 -0.38 100 0.07 -0.636 9.23 3.0 6.20

2041 9.21 8.85 -0.36 100 0.08 -0.626 8.61 2.3 6.20

2042 8.58 8.28 -0.30 100 0.08 -0.556 8.05 1.8 6.20

2043 8.00 7.66 -0.34 100 0.09 -0.606 7.45 1.2 6.20

2044 7.45 7.09 -0.37 100 0.09 -0.556 6.89 0.6 6.20

2045 6.84 6.58 -0.26 100 0.10 -0.495 6.40 0.1 6.20

2046 6.34 6.47 0.13 100 0.10 -0.095 6.30 6.20

2047 5.87 6.47 0.60 108 0.10 0.004 6.30 6.20

2048 5.43 6.46 1.03 127 0.11 0.004 6.31 6.20

2049 5.03 6.46 1.44 156 0.11 0.004 6.31 6.20

2050 3.99 6.46 2.47 199 0.12 0.004 6.32 6.20

2051 3.89 6.46 2.57 270 0.12 0.004 6.32 6.20

2052 3.80 6.46 2.66 347 0.12 0.004 6.32 6.20

2053 3.73 6.46 2.73 430 0.13 0.003 6.33 6.20

2054 3.67 6.46 2.79 518 0.13 0.003 6.33 6.20

2055 3.62 6.46 2.84 610 0.13 0.003 6.33 6.20

2056 3.58 6.46 2.88 705 0.13 0.002 6.33 6.20

2057 3.54 6.46 2.92 805 0.14 0.002 6.34 6.20

2058 3.51 6.46 2.95 908 0.14 0.002 6.34 6.20

2059 3.48 6.46 2.98 1,014 0.14 0.001 6.34 6.20

2060 3.43 6.46 3.02 1,130 0.14 0.001 6.34 6.20

2061 3.43 6.46 3.03 1,238 0.14 0.000 6.34 6.20

2062 3.42 6.46 3.03 1,347 0.14 0.000 6.34 6.20

2063 3.42 6.46 3.03 1,458 0.14 -0.001 6.34 6.20

2064 3.42 6.46 3.03 1,570 0.14 -0.001 6.34 6.20

2065 3.42 6.45 3.03 1,684 0.14 -0.002 6.34 6.20

2066 3.42 6.45 3.03 1,800 0.14 -0.002 6.34 6.20

2067 3.42 6.45 3.03 1,921 0.13 -0.002 6.33 6.20

2068 3.41 6.45 3.04 2,046 0.13 -0.003 6.33 6.20

2069 3.40 6.44 3.05 2,172 0.13 -0.003 6.33 6.20

2070 3.40 6.44 3.04 2,299 0.12 -0.003 6.32 6.20

2071 3.39 6.44 3.04 2,428 0.12 -0.003 6.32 6.20

2072 3.39 6.43 3.04 2,560 0.12 -0.004 6.32 6.20

2073 3.39 6.43 3.04 2,694 0.11 -0.004 6.31 6.20

2074 3.38 6.43 3.04 2,831 0.11 -0.004 6.31 6.20

2075 3.38 6.42 3.04 2,971 0.11 -0.004 6.31 6.20

2076 3.37 6.42 3.04 3,114 0.10 -0.004 6.30 6.20

2077 3.37 6.41 3.04 3,259 0.10 -0.004 6.30 6.20

2078 3.36 6.41 3.04 3,409 0.09 -0.004 6.29 6.20

2079 3.36 6.40 3.04 3,561 0.09 -0.004 6.29 6.20

Summarized OASDI

Actuarial Change in 

Cost Rate Income Rate Balance Actuarial Balance

2004 - 2078 10.21 11.03 0.82 2.70 Office of the Actuary 1

TFR computed as TF assets divided by annual cost excluding RB payments Social Security Administration

Based on Intermediate Assumptions of the 2004 Trustees Report With Ultimate Real Trust Fund Interest Rate of 3.00 February 11, 2005
Table 2a Proposal GF Transfers, OASDI Trust Fund Assets, Individual Account Assets, and Theoretical OASDI Assets

Low Yield Theoretical Social Security 2

Proposal General Fund Transfer(GF)/Reimburse Total OASDI Individual with Borrowing Authority:

Transfers Reimburse Total in Accumulated Trust Fund Account Net OASDI TF Assets End of Year

for Minimum Constant as of Assets Assets 1 Without GF With GF Transfer

Solvency Benefit 2004$ End of Year at End of Year at End of Year GDP Transfer (amount for Prop)

Calendar (1) (2) (3) (4) (5) (6) (7) (8) (9)

Year Billions PV as of 1-1-2004 Billions of Constant 2004$ Billions of Constant 2004 Dollars

2004 0.0 0.0 0.0 0 1,684 0 11,544 1,684 1,684

2005 0.0 0.0 0.0 0 1,647 193 11,911 1,840 1,840

2006 0.0 0.0 0.0 0 1,581 416 12,246 1,998 1,998

2007 0.0 0.0 0.0 0 1,498 656 12,562 2,156 2,156

2008 0.0 0.0 0.0 0 1,399 912 12,870 2,315 2,315

2009 0.0 0.0 0.0 0 1,279 1,185 13,171 2,473 2,473

2010 0.0 0.0 0.0 0 1,141 1,477 13,466 2,631 2,631

2011 0.0 0.0 0.0 0 983 1,789 13,752 2,790 2,790

2012 0.0 0.0 0.0 0 804 2,117 14,024 2,944 2,944

2013 62.0 0.1 82.9 83 684 2,461 14,285 3,091 3,174

2014 179.9 0.1 247.1 332 708 2,823 14,547 3,230 3,563

2015 189.8 0.2 268.3 610 732 3,203 14,804 3,360 3,970

2016 223.3 0.3 324.7 952 747 3,599 15,061 3,478 4,431

2017 247.8 0.4 371.1 1,352 761 4,014 15,322 3,584 4,935

2018 271.5 0.4 418.7 1,811 775 4,446 15,586 3,675 5,486

2019 290.4 0.5 461.3 2,326 785 4,894 15,842 3,750 6,076

2020 308.6 0.5 505.0 2,901 793 5,356 16,100 3,805 6,706

2021 301.6 0.6 508.5 3,496 797 5,833 16,354 3,841 7,337

2022 306.4 0.7 532.1 4,133 797 6,324 16,610 3,857 7,990

2023 312.1 0.7 558.5 4,816 800 6,828 16,861 3,851 8,667

2024 307.1 0.8 566.1 5,527 796 7,345 17,117 3,823 9,350

2025 298.6 0.9 567.1 6,259 785 7,874 17,372 3,773 10,032

2026 290.3 0.9 568.1 7,015 766 8,414 17,634 3,700 10,715

2027 322.6 1.0 650.2 7,876 752 8,964 17,903 3,604 11,480

2028 320.7 1.1 665.8 8,778 734 9,525 18,174 3,486 12,264

2029 312.2 1.2 667.9 9,709 713 10,094 18,451 3,346 13,055

2030 300.8 1.2 663.1 10,664 689 10,673 18,733 3,184 13,847

2031 296.0 1.3 672.3 11,656 670 11,259 19,022 3,000 14,656

2032 263.5 1.4 616.8 12,622 647 11,852 19,319 2,796 15,418

2033 236.1 1.5 569.9 13,571 622 12,452 19,622 2,570 16,141

2034 210.2 1.5 523.2 14,501 599 13,058 19,929 2,325 16,827

2035 189.2 1.6 485.6 15,422 583 13,669 20,243 2,062 17,484

2036 163.0 1.7 431.7 16,316 558 14,286 20,564 1,780 18,096

2037 141.3 1.8 386.2 17,192 536 14,906 20,892 1,481 18,673

2038 121.3 1.9 342.6 18,050 518 15,530 21,226 1,165 19,215

2039 100.0 1.9 292.0 18,884 499 16,157 21,562 833 19,717

2040 80.9 2.0 244.8 19,695 482 16,785 21,904 485 20,180

2041 62.7 2.1 197.0 20,483 465 17,414 22,252 120 20,603

2042 46.9 2.2 153.7 21,251 452 18,042 22,605 -262 20,989

2043 30.3 2.2 104.8 21,993 435 18,669 22,961 -662 21,331

2044 15.4 2.3 58.9 22,712 415 19,295 23,322 -1,080 21,632

2045 2.5 2.4 16.9 23,410 403 19,917 23,687 -1,516 21,894

2046 0.0 2.5 8.7 24,121 426 20,535 24,055 -1,972 22,149

2047 0.0 2.5 9.2 24,854 493 21,150 24,426 -2,449 22,406

2048 0.0 2.6 9.7 25,610 602 21,758 24,799 -2,946 22,664

2049 0.0 2.7 10.2 26,388 754 22,360 25,174 -3,465 22,923

2050 0.0 2.7 10.7 27,191 1,011 22,951 25,552 -4,008 23,182

2051 0.0 2.7 11.2 28,017 1,288 23,533 25,936 -4,577 23,441

2052 0.0 2.8 11.7 28,870 1,585 24,106 26,324 -5,172 23,698

2053 0.0 2.8 12.2 29,748 1,902 24,673 26,721 -5,795 23,953

2054 0.0 2.8 12.6 30,653 2,238 25,234 27,123 -6,447 24,206

2055 0.0 2.8 13.1 31,586 2,592 25,789 27,528 -7,130 24,456

2056 0.0 2.8 13.5 32,547 2,966 26,339 27,939 -7,845 24,701

2057 0.0 2.8 13.8 33,537 3,358 26,883 28,354 -8,594 24,943

2058 0.0 2.8 14.2 34,557 3,769 27,422 28,775 -9,378 25,180

2059 0.0 2.8 14.5 35,609 4,200 27,955 29,204 -10,196 25,412

2060 0.0 2.8 14.8 36,692 4,652 28,483 29,639 -11,052 25,640

2061 0.0 2.7 15.0 37,807 5,123 29,006 30,078 -11,946 25,861

2062 0.0 2.7 15.2 38,957 5,613 29,524 30,526 -12,880 26,077

2063 0.0 2.6 15.3 40,141 6,122 30,038 30,978 -13,857 26,284

2064 0.0 2.6 15.4 41,360 6,650 30,548 31,438 -14,876 26,484

2065 0.0 2.5 15.4 42,616 7,199 31,055 31,906 -15,940 26,676

2066 0.0 2.4 15.4 43,910 7,768 31,558 32,379 -17,050 26,860

2067 0.0 2.3 15.3 45,243 8,360 32,059 32,861 -18,208 27,035

2068 0.0 2.3 15.2 46,615 8,975 32,557 33,359 -19,414 27,202

2069 0.0 2.2 15.1 48,029 9,613 33,054 33,859 -20,670 27,359

2070 0.0 2.1 14.9 49,485 10,276 33,550 34,366 -21,978 27,507

2071 0.0 2.0 14.7 50,984 10,963 34,045 34,882 -23,340 27,645

2072 0.0 1.9 14.5 52,528 11,676 34,539 35,404 -24,756 27,772

2073 0.0 1.8 14.2 54,118 12,415 35,034 35,931 -26,230 27,888

2074 0.0 1.7 13.9 55,756 13,181 35,530 36,464 -27,762 27,993

2075 0.0 1.6 13.6 57,442 13,975 36,027 37,006 -29,356 28,085

2076 0.0 1.5 13.2 59,178 14,799 36,525 37,555 -31,014 28,165

2077 0.0 1.5 12.9 60,967 15,652 37,025 38,112 -32,736 28,230

2078 0.0 1.4 12.5 62,808 16,536 37,528 38,677 -34,527 28,281

2079 0.0 1.3 12.1 64,704 17,452 38,033 39,245 -36,387 28,317

Total 2004-78 6,805.1 118.3

Based on Intermediate Assumptions of the 2004 Trustees Report Office of the Actuary 1

 Including annuity assets, assuming all annuitize fully. Social Security Administration 2 Theoretical Social Security is the current Social Security program with the assumption February 11, 2005

 that the law is modified to permit borrowing from the General Fund of the Treasury.
Table 2b Proposal Effects on Unified Budget

Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

Amount(%) Other Change in 

Contributed to Recognition Changes Annual Debt Held Annual 

IA by Fed Gov: Bond in OASDI Unified Budget by Public Unified Budget

100 Distributions Cashflow1 Cashflow (EOY) Balance

(1) (2) (3) (4)=(3)-(1)-(2) (5) (6)

Year (Billions of $, Present Value on 1-1-2004)

2005 175.8 0.0 0.0 -175.8 175.8 -175.8

2006 191.2 0.0 0.0 -191.2 367.0 -200.2

2007 196.5 0.0 0.0 -196.5 563.4 -215.3

2008 201.0 0.0 0.0 -201.0 764.4 -230.2

2009 205.2 0.0 0.0 -205.2 969.6 -245.2

2010 208.9 0.0 0.0 -208.9 1,178.5 -260.1

2011 212.5 0.0 0.0 -212.5 1,391.0 -275.2

2012 214.8 0.0 2.6 -212.2 1,603.2 -286.6

2013 216.1 0.0 3.4 -212.8 1,815.9 -298.8

2014 218.4 0.0 4.7 -213.7 2,029.6 -311.8

2015 219.4 0.0 6.8 -212.6 2,242.3 -323.1

2016 220.3 33.9 12.6 -241.6 2,483.8 -364.5

2017 220.7 55.7 21.3 -255.0 2,738.9 -392.1

2018 220.6 77.9 31.1 -267.4 3,006.3 -419.6

2019 219.8 99.6 42.2 -277.2 3,283.5 -444.3

2020 218.8 120.1 54.5 -284.3 3,567.8 -466.8

2021 217.7 117.2 66.4 -268.5 3,836.3 -466.8

2022 216.3 128.5 80.2 -264.6 4,100.9 -477.8

2023 214.4 138.3 94.9 -257.8 4,358.7 -485.7

2024 212.3 144.9 110.3 -246.9 4,605.7 -489.2

2025 210.0 149.3 126.4 -232.8 4,838.5 -488.8

2026 207.6 154.8 142.5 -219.9 5,058.4 -488.8

2027 205.1 197.5 161.4 -241.2 5,299.6 -522.3

2028 202.3 210.6 178.5 -234.5 5,534.1 -529.0

2029 199.6 216.5 194.7 -221.4 5,755.5 -529.0

2030 196.7 220.4 211.0 -206.2 5,961.7 -526.0

2031 193.9 226.5 225.8 -194.6 6,156.3 -525.9

2032 191.0 210.0 241.0 -160.0 6,316.3 -502.1

2033 188.2 194.9 253.1 -129.9 6,446.2 -480.9

2034 185.4 180.2 263.9 -101.7 6,547.9 -459.9

2035 182.7 167.3 273.6 -76.4 6,624.3 -440.2

2036 180.1 154.9 282.0 -53.0 6,677.3 -421.1

2037 177.5 141.8 289.1 -30.2 6,707.5 -401.3

2038 174.9 129.5 295.1 -9.3 6,716.8 -382.1

2039 172.2 116.8 299.9 10.9 6,706.0 -362.4

2040 169.5 105.0 303.8 29.3 6,676.7 -343.4

2041 166.9 93.5 306.9 46.5 6,630.2 -324.5

2042 164.4 82.6 309.3 62.4 6,567.8 -306.0

2043 161.8 72.8 311.0 76.4 6,491.4 -288.6

2044 159.3 63.5 311.8 89.0 6,402.3 -271.7

2045 156.8 54.7 314.4 102.9 6,299.4 -252.8

2046 154.3 46.3 314.3 113.7 6,185.7 -236.4

2047 151.8 37.8 313.2 123.6 6,062.1 -220.2

2048 149.4 29.8 311.3 132.2 5,929.9 -204.7

2049 146.9 21.8 308.7 140.0 5,789.9 -189.6

2050 144.5 0.1 306.9 162.3 5,627.7 -159.5

2051 142.2 0.0 304.8 162.6 5,465.1 -150.1

2052 139.9 0.0 302.5 162.7 5,302.4 -141.0

2053 137.6 0.0 300.0 162.4 5,140.0 -132.2

2054 135.3 0.0 297.3 162.0 4,978.0 -123.6

2055 133.1 0.0 294.5 161.4 4,816.5 -115.2

2056 130.9 0.0 291.6 160.7 4,655.8 -106.9

2057 128.7 0.0 288.7 159.9 4,495.9 -98.8

2058 126.6 0.0 285.5 158.9 4,337.0 -90.9

2059 124.5 0.0 282.3 157.8 4,179.2 -83.2

2060 122.5 0.0 279.4 157.0 4,022.3 -75.3

2061 120.4 0.0 275.9 155.5 3,866.8 -68.0

2062 118.5 0.0 272.5 154.0 3,712.7 -60.8

2063 116.5 0.0 269.2 152.7 3,560.1 -53.7

2064 114.6 0.0 265.7 151.2 3,408.9 -46.7

2065 112.7 0.0 262.2 149.6 3,259.3 -39.9

2066 110.8 0.0 258.9 148.1 3,111.3 -33.1

2067 109.0 0.0 255.6 146.6 2,964.7 -26.3

2068 107.2 0.0 252.4 145.2 2,819.5 -19.6

2069 105.4 0.0 249.1 143.6 2,675.9 -13.0

2070 103.7 0.0 245.7 142.0 2,533.9 -6.7

2071 102.0 0.0 242.4 140.4 2,393.4 -0.4

2072 100.3 0.0 239.2 138.8 2,254.6 5.8

2073 98.7 0.0 235.9 137.2 2,117.4 12.0

2074 97.0 0.0 232.7 135.7 1,981.7 18.0

2075 95.4 0.0 229.6 134.1 1,847.6 24.0

2076 93.8 0.0 226.5 132.6 1,714.9 29.9

2077 92.3 0.0 223.4 131.1 1,583.8 35.8

2078 90.8 0.0 220.4 129.6 1,454.2 41.6

2079 89.2 0.0 217.4 128.2 1,326.1 47.3

 Based on the Intermediate Assumptions of the 2004 Trustees Report

 With Ultimate Real Trust Fund Interest Rate of 3.0%

Ultimate Real IA Yield Rate of 2.75% Office of the Actuary

Annuity Net Real Yield Rate of 2.75% Social Security Administration 1

 Excluding GF transfers and reimbursement February 11, 2005
Table 2 b.c. Proposal Effects on Unified Budget

Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

Amount(%) Other Change in 

Contributed to Recognition Changes Annual Debt Held Annual 

IA by Fed Gov: Bond in OASDI Unified Budget by Public Unified Budget

100 Distributions Cashflow1 Cashflow (EOY) Balance

(1) (2) (3) (4)=(3)-(1)-(2) (5) (6)

Year (Billions of Constant 2004 $)

2005 188.0 0.0 0.0 -188.0 191.2 -193.1

2006 211.5 0.0 0.0 -211.5 411.7 -227.4

2007 223.6 0.0 0.0 -223.6 649.4 -251.6

2008 234.7 0.0 0.0 -234.7 904.1 -276.1

2009 245.9 0.0 0.0 -245.9 1,177.2 -301.9

2010 257.1 0.0 0.0 -257.1 1,469.5 -328.9

2011 268.5 0.0 0.0 -268.5 1,782.1 -357.5

2012 278.9 0.0 3.3 -275.6 2,110.9 -382.6

2013 288.5 0.0 4.5 -284.0 2,457.8 -410.0

2014 299.8 0.0 6.5 -293.3 2,824.9 -440.0

2015 309.7 0.0 9.6 -300.2 3,210.6 -469.0

2016 320.0 49.2 18.3 -350.9 3,660.2 -544.5

2017 329.9 83.3 31.9 -381.4 4,155.4 -603.2

2018 339.7 120.0 48.0 -411.7 4,697.9 -664.8

2019 348.6 158.0 67.0 -439.7 5,285.1 -725.1

2020 357.4 196.1 89.1 -464.5 5,915.0 -784.6

2021 366.3 197.2 111.6 -451.8 6,551.0 -808.2

2022 374.8 222.8 139.0 -458.5 7,212.9 -852.0

2023 382.7 246.9 169.3 -460.2 7,896.4 -892.2

2024 390.4 266.3 202.7 -454.0 8,594.0 -925.4

2025 397.6 282.7 239.3 -440.9 9,299.4 -952.5

2026 404.9 301.9 277.9 -428.9 10,013.7 -981.1

2027 412.0 396.8 324.3 -484.5 10,805.8 -1,079.7

2028 418.7 435.9 369.3 -485.3 11,622.5 -1,126.4

2029 425.4 461.5 414.9 -472.0 12,450.2 -1,160.2

2030 431.9 484.0 463.2 -452.6 13,283.0 -1,188.3

2031 438.5 512.1 510.6 -440.0 14,128.1 -1,223.6

2032 445.0 489.0 561.3 -372.6 14,930.1 -1,203.3

2033 451.5 467.5 607.2 -311.7 15,694.4 -1,187.2

2034 458.1 445.2 652.1 -251.2 16,420.2 -1,169.3

2035 465.0 425.8 696.4 -194.3 17,110.0 -1,152.9

2036 472.1 406.0 739.2 -139.0 17,764.3 -1,135.9

2037 479.2 383.0 780.7 -81.6 18,380.0 -1,114.9

2038 486.5 360.1 820.6 -26.0 18,957.8 -1,093.4

2039 493.3 334.6 859.0 31.1 19,494.9 -1,068.1

2040 500.2 309.8 896.4 86.3 19,992.1 -1,042.5

2041 507.3 284.2 932.7 141.3 20,448.5 -1,014.8

2042 514.4 258.4 968.3 195.4 20,863.7 -985.6

2043 521.6 234.7 1,002.6 246.3 21,239.6 -957.4

2044 528.9 210.8 1,035.3 295.7 21,576.7 -928.4

2045 536.2 187.3 1,075.5 352.1 21,866.7 -889.9

2046 543.5 163.0 1,107.1 400.6 22,116.2 -856.8

2047 550.9 137.3 1,136.6 448.5 22,324.5 -822.0

2048 558.3 111.2 1,163.6 494.1 22,492.8 -787.1

2049 565.7 83.8 1,188.3 538.8 22,620.7 -750.9

2050 573.1 0.2 1,216.8 643.4 22,646.3 -650.7

2051 580.7 0.0 1,244.8 664.1 22,651.8 -630.9

2052 588.3 0.0 1,272.5 684.2 22,636.9 -610.5

2053 596.1 0.0 1,299.9 703.8 22,601.7 -589.5

2054 603.9 0.0 1,326.9 723.0 22,546.0 -567.7

2055 611.8 0.0 1,353.8 742.0 22,469.4 -544.9

2056 619.8 0.0 1,380.7 760.9 22,371.2 -521.0

2057 627.8 0.0 1,407.6 779.8 22,250.9 -495.8

2058 636.0 0.0 1,434.2 798.2 22,108.4 -469.9

2059 644.3 0.0 1,460.5 816.2 21,943.2 -443.1

2060 652.6 0.0 1,489.1 836.4 21,752.7 -412.8

2061 661.1 0.0 1,514.5 853.4 21,539.2 -384.3

2062 669.7 0.0 1,540.5 870.9 21,301.5 -353.9

2063 678.3 0.0 1,567.3 889.0 21,038.4 -321.5

2064 687.1 0.0 1,593.7 906.6 20,749.5 -288.1

2065 696.0 0.0 1,620.0 923.9 20,434.2 -253.4

2066 705.0 0.0 1,647.1 942.0 20,091.2 -216.5

2067 714.2 0.0 1,674.9 960.7 19,718.9 -177.4

2068 723.6 0.0 1,703.5 979.9 19,316.1 -136.1

2069 733.1 0.0 1,731.8 998.7 18,881.9 -93.3

2070 742.7 0.0 1,759.8 1,017.1 18,416.2 -49.2

2071 752.4 0.0 1,788.2 1,035.8 17,917.4 -2.9

2072 762.2 0.0 1,817.0 1,054.7 17,384.5 45.5

2073 772.1 0.0 1,846.1 1,074.0 16,816.0 96.3

2074 782.1 0.0 1,875.7 1,093.6 16,210.6 149.4

2075 792.2 0.0 1,905.8 1,113.6 15,566.8 205.1

2076 802.5 0.0 1,936.4 1,133.9 14,882.9 263.4

2077 812.8 0.0 1,967.5 1,154.7 14,157.5 324.5

2078 823.3 0.0 1,999.2 1,175.9 13,388.9 388.4

2079 833.9 0.0 2,031.4 1,197.5 12,575.2 455.2

 Based on the Intermediate Assumptions of the 2004 Trustees Report

 With Ultimate Real Trust Fund Interest Rate of 3.0% Office of the Actuary

Ultimate Real IA Yield Rate of 2.75% Social Security Administration

Annuity Net Real Yield Rate of 2.75% February 11, 2005 1

 Excluding GF transfers and reimbursement
Table 2c OASDI Cash Flow to General Fund of the Treasury--- Proposal vs. Theoretical OASDI

Proposal Theoretical Social Security with PAYGO Transfers

Net Amount of Cash-Flow from the OASDI Net Amount of Cash-Flow from the OASDI

Trust Funds to the General Fund of the Trust Funds to the General Fund of the

Treasury During the Year 1 Treasury During the Year 1

Percent Billions of Dollars Percent Billions of Dollars

Year of Payroll Current $ 1/1/2004 PV Const 2004 $ of Payroll Current $ 1/1/2004 PV Const 2004 $

2004 1.4 65 63 65 1.4 65 63 65

2005 -2.1 -102 -94 -101 1.9 89 82 87

2006 -2.4 -122 -106 -118 1.9 97 85 94

2007 -2.5 -132 -110 -125 2.0 105 87 99

2008 -2.7 -147 -115 -135 2.0 109 86 100

2009 -3.0 -171 -127 -152 1.8 105 78 93

2010 -3.2 -193 -136 -168 1.7 103 73 89

2011 -3.4 -217 -145 -183 1.6 101 67 85

2012 -3.7 -244 -154 -200 1.4 91 58 75

2013 -4.0 -277 -166 -221 1.1 79 47 63

2014 -4.3 -312 -177 -243 0.9 65 37 50

2015 -4.6 -349 -187 -264 0.6 48 25 36

2016 -5.7 -450 -228 -331 0.3 27 14 20

2017 -6.4 -529 -253 -379 0.0 4 2 3

2018 -7.1 -613 -277 -427 -0.3 -22 -10 -15

2019 -7.8 -701 -299 -474 -0.6 -51 -22 -35

2020 -8.5 -789 -318 -520 -0.9 -84 -34 -55

2021 -8.5 -824 -314 -528 -1.2 -119 -45 -76

2022 -8.8 -891 -320 -555 -1.5 -155 -56 -97

2023 -9.0 -953 -324 -578 -1.8 -195 -66 -118

2024 -9.1 -1,005 -323 -593 -2.1 -236 -76 -139

2025 -9.1 -1,048 -317 -601 -2.4 -279 -85 -160

2026 -9.2 -1,092 -313 -610 -2.7 -324 -93 -181

2027 -10.2 -1,262 -341 -685 -3.0 -370 -100 -201

2028 -10.3 -1,335 -341 -705 -3.2 -416 -106 -220

2029 -10.2 -1,381 -333 -710 -3.4 -463 -112 -238

2030 -10.1 -1,415 -322 -707 -3.6 -510 -116 -255

2031 -10.0 -1,462 -314 -711 -3.8 -558 -120 -271

2032 -9.1 -1,394 -283 -659 -4.0 -606 -123 -287

2033 -8.4 -1,331 -255 -612 -4.1 -653 -125 -300

2034 -7.6 -1,260 -228 -564 -4.2 -699 -127 -313

2035 -6.9 -1,191 -204 -518 -4.3 -744 -127 -324

2036 -6.2 -1,116 -180 -473 -4.4 -788 -127 -334

2037 -5.5 -1,029 -157 -424 -4.4 -831 -127 -343

2038 -4.8 -938 -135 -376 -4.5 -873 -126 -350

2039 -4.1 -835 -114 -325 -4.5 -915 -124 -357

2040 -3.4 -729 -94 -276 -4.5 -956 -123 -363

2041 -2.8 -617 -75 -227 -4.5 -1,000 -121 -369

2042 -2.2 -500 -57 -179 -4.5 -1,045 -120 -375

2043 -1.6 -386 -42 -135 -4.5 -1,091 -118 -381

2044 -1.1 -268 -27 -91 -4.5 -1,139 -116 -387

2045 -0.5 -123 -12 -41 -4.5 -1,189 -115 -393

2046 0.0 5 0 2 -4.6 -1,241 -113 -399

2047 0.5 138 12 43 -4.6 -1,297 -112 -405

2048 0.9 271 22 82 -4.6 -1,355 -110 -412

2049 1.3 405 31 120 -4.6 -1,417 -109 -419

2050 2.3 754 55 217 -4.6 -1,483 -108 -427

2051 2.4 818 56 229 -4.6 -1,555 -107 -435

2052 2.5 880 57 240 -4.7 -1,634 -106 -445

2053 2.6 941 58 249 -4.7 -1,717 -105 -455

2054 2.6 1,002 58 258 -4.8 -1,805 -104 -465

2055 2.7 1,062 58 266 -4.8 -1,899 -104 -476

2056 2.7 1,123 58 274 -4.9 -1,999 -103 -487

2057 2.8 1,185 58 281 -4.9 -2,104 -102 -499

2058 2.8 1,247 57 288 -5.0 -2,214 -102 -511

2059 2.8 1,310 57 294 -5.0 -2,328 -101 -522

2060 2.9 1,385 57 302 -5.1 -2,447 -100 -534

2061 2.9 1,446 56 307 -5.1 -2,574 -100 -547

2062 2.9 1,507 55 311 -5.2 -2,709 -99 -560

2063 2.9 1,571 54 316 -5.2 -2,854 -98 -574

2064 2.9 1,635 53 320 -5.3 -3,003 -98 -587

2065 2.9 1,703 52 324 -5.3 -3,157 -97 -600

2066 2.9 1,775 52 328 -5.4 -3,319 -96 -614

2067 2.9 1,851 51 333 -5.4 -3,489 -96 -628

2068 2.9 1,934 50 339 -5.5 -3,665 -95 -641

2069 2.9 2,019 49 344 -5.5 -3,847 -94 -655

2070 2.9 2,105 49 349 -5.6 -4,037 -93 -669

2071 2.9 2,195 48 354 -5.6 -4,235 -92 -682

2072 2.9 2,288 47 359 -5.7 -4,442 -92 -696

2073 2.9 2,386 46 364 -5.7 -4,660 -91 -710

2074 2.9 2,487 46 369 -5.7 -4,888 -90 -725

2075 2.9 2,593 45 374 -5.8 -5,127 -89 -740

2076 2.9 2,703 44 379 -5.8 -5,377 -88 -755

2077 2.9 2,819 44 385 -5.9 -5,640 -87 -770

2078 2.9 2,940 43 390 -5.9 -5,915 -87 -785

2079 2.9 3,066 42 396 -6.0 -6,203 -86 -801

Total 2004-78 -6,678 -5,225

1 Equals net investment in special Treasury Bonds by the Trust Funds Office of the Actuary

less the Amount of General Fund transfers specified in the proposal or in the theoretical Social Security Administration

plan (PAYGO Transfers) February 11, 2005
Table 2d Change in Long-Range Trust Fund Assets / Unfunded Obligation

Individual Account Contribution Rate: 6.2% Benefit Offset: 0.0%

Present Law OASDI

Trust Fund Assets Basic Amount(%) Proposal OASDI

or if Negative, Changes Contributed to Recognition Trust Fund Assets/

Unfunded Obligation in OASDI IA by Fed Gov: Bond General Total Change Unfunded Obligation

Through EOY Cash flow 100 Distributions Fund Transfers1 Through EOY Through EOY

(1) (2) (3) (4) (5) (6)=(2)-(3)-(4)+(5) (7)

Year (Billions of $, Present Value on 1-1-2004)

2005 1,674.6 0.0 175.8 0.0 0.0 -175.8 1,498.9

2006 1,759.0 0.0 191.2 0.0 0.0 -367.0 1,392.1

2007 1,845.5 0.0 196.5 0.0 0.0 -563.4 1,282.1

2008 1,930.8 0.0 201.0 0.0 0.0 -764.4 1,166.4

2009 2,008.4 0.0 205.2 0.0 0.0 -969.6 1,038.8

2010 2,080.8 0.0 208.9 0.0 0.0 -1,178.5 902.3

2011 2,148.0 0.0 212.5 0.0 0.0 -1,391.0 757.0

2012 2,205.6 2.6 214.8 0.0 0.0 -1,603.2 602.4

2013 2,252.4 3.4 216.1 0.0 62.1 -1,753.8 498.6

2014 2,289.0 4.7 218.4 0.0 180.0 -1,787.5 501.5

2015 2,314.3 6.8 219.4 0.0 190.0 -1,810.1 504.2

2016 2,327.9 12.6 220.3 33.9 223.6 -1,828.1 499.8

2017 2,329.7 21.3 220.7 55.7 248.2 -1,835.0 494.7

2018 2,319.7 31.1 220.6 77.9 271.9 -1,830.4 489.2

2019 2,297.6 42.2 219.8 99.6 290.9 -1,816.8 480.9

2020 2,263.7 54.5 218.8 120.1 309.2 -1,791.9 471.8

2021 2,218.5 66.4 217.7 117.2 302.2 -1,758.2 460.2

2022 2,162.6 80.2 216.3 128.5 307.0 -1,715.8 446.8

2023 2,096.4 94.9 214.4 138.3 312.9 -1,660.7 435.7

2024 2,020.7 110.3 212.3 144.9 307.9 -1,599.8 420.9

2025 1,936.1 126.4 210.0 149.3 299.5 -1,533.2 402.9

2026 1,843.3 142.5 207.6 154.8 291.3 -1,461.8 381.5

2027 1,743.3 161.4 205.1 197.5 323.6 -1,379.4 363.9

2028 1,637.0 178.5 202.3 210.6 321.7 -1,292.1 344.9

2029 1,525.4 194.7 199.6 216.5 313.4 -1,200.2 325.2

2030 1,409.4 211.0 196.7 220.4 302.0 -1,104.3 305.1

2031 1,289.5 225.8 193.9 226.5 297.3 -1,001.6 288.0

2032 1,166.5 241.0 191.0 210.0 264.8 -896.7 269.8

2033 1,041.2 253.1 188.2 194.9 237.6 -789.1 252.2

2034 914.6 263.9 185.4 180.2 211.7 -679.0 235.6

2035 787.2 273.6 182.7 167.3 190.8 -564.5 222.7

2036 659.9 282.0 180.1 154.9 164.7 -452.8 207.0

2037 533.0 289.1 177.5 141.8 143.0 -340.0 193.0

2038 407.2 295.1 174.9 129.5 123.2 -226.2 181.0

2039 282.7 299.9 172.2 116.8 101.9 -113.3 169.4

2040 159.8 303.8 169.5 105.0 83.0 -1.1 158.7

2041 38.4 306.9 166.9 93.5 64.8 110.2 148.6

2042 -81.4 309.3 164.4 82.6 49.1 221.8 140.4

2043 -199.5 311.0 161.8 72.8 32.5 330.7 131.1

2044 -316.0 311.8 159.3 63.5 17.7 437.5 121.4

2045 -430.8 314.4 156.8 54.7 4.9 545.3 114.5

2046 -544.1 314.3 154.3 46.3 2.5 661.6 117.5

2047 -655.8 313.2 151.8 37.8 2.5 787.7 131.9

2048 -766.0 311.3 149.4 29.8 2.6 922.5 156.6

2049 -874.8 308.7 146.9 21.8 2.7 1,065.2 190.4

2050 -982.4 306.9 144.5 0.1 2.7 1,230.2 247.8

2051 -1,089.0 304.8 142.2 0.0 2.7 1,395.6 306.5

2052 -1,194.8 302.5 139.9 0.0 2.8 1,561.0 366.3

2053 -1,299.7 300.0 137.6 0.0 2.8 1,726.3 426.6

2054 -1,403.9 297.3 135.3 0.0 2.8 1,891.2 487.3

2055 -1,507.4 294.5 133.1 0.0 2.8 2,055.5 548.1

2056 -1,610.3 291.6 130.9 0.0 2.8 2,219.1 608.7

2057 -1,712.7 288.7 128.7 0.0 2.8 2,381.9 669.2

2058 -1,814.4 285.5 126.6 0.0 2.8 2,543.6 729.3

2059 -1,915.3 282.3 124.5 0.0 2.8 2,704.2 788.9

2060 -2,015.6 279.4 122.5 0.0 2.8 2,864.0 848.4

2061 -2,115.1 275.9 120.4 0.0 2.7 3,022.2 907.1

2062 -2,214.1 272.5 118.5 0.0 2.7 3,179.0 964.9

2063 -2,312.6 269.2 116.5 0.0 2.6 3,334.3 1,021.7

2064 -2,410.5 265.7 114.6 0.0 2.6 3,488.0 1,077.5

2065 -2,507.7 262.2 112.7 0.0 2.5 3,640.1 1,132.5

2066 -2,604.1 258.9 110.8 0.0 2.4 3,790.6 1,186.5

2067 -2,699.9 255.6 109.0 0.0 2.3 3,939.6 1,239.6

2068 -2,794.9 252.4 107.2 0.0 2.3 4,087.0 1,292.1

2069 -2,889.1 249.1 105.4 0.0 2.2 4,232.8 1,343.7

2070 -2,982.5 245.7 103.7 0.0 2.1 4,376.9 1,394.4

2071 -3,075.0 242.4 102.0 0.0 2.0 4,519.4 1,444.4

2072 -3,166.6 239.2 100.3 0.0 1.9 4,660.1 1,493.5

2073 -3,257.4 235.9 98.7 0.0 1.8 4,799.2 1,541.8

2074 -3,347.3 232.7 97.0 0.0 1.7 4,936.6 1,589.3

2075 -3,436.4 229.6 95.4 0.0 1.6 5,072.4 1,635.9

2076 -3,524.7 226.5 93.8 0.0 1.5 5,206.5 1,681.9

2077 -3,612.1 223.4 92.3 0.0 1.5 5,339.1 1,727.0

2078 -3,698.7 220.4 90.8 0.0 1.4 5,470.1 1,771.4

Total 2004-78 14,764.5 12,023.9 4,194.9 6,923.4

 Based on the Intermediate Assumptions of the 2004 Trustees Report

 With Ultimate Real Trust Fund Interest Rate of 3.0% Office of the Actuary

Ultimate Real IA Yield Rate of 2.75% Social Security Administration

Annuity Net Real Yield Rate of 2.75% February 11, 2005 1

 Include reimbursement for minimum benefit
Table B1. Monthly Retirement Benefits at Age 65 Under Sam Johnson Proposal

Benefits for one spouse of a two-earner couple -- Spouse same age with similar earnings

Proposa

 Constant 2004 Dollars Proposal Total Annuity Worke

Proposal IA Annuity IA Annuity Without Minimum Minimum 

Present Present without IA Proposal with Low with with Low with Annuity

Year Law Law CPI- Recognition (risk adj) Expected (risk adj) Expected Up to 100% Attain Scheduled "Payable" Indexed Bond IA Yield IA Yield IA Yield IA Yield of PovertAge 65 Benefit Benefit Benefit Annuity (2.75 real) (4.65 real) (2.75 real) (4.65 real) at NRA

Scaled Low Earner

2015 772 772 764 560 58 64 618 624 722025 796 796 708 362 158 195 520 557 672035 885 885 708 204 289 397 493 602 672045 986 710 709 47 435 661 482 708 672055 1,099 769 710 NA 0 507 791 507 791 67

Scaled Medium Earner

2015 1,272 1,272 1,259 923 129 142 1,051 1,065 722025 1,311 1,311 1,167 596 351 434 947 1,030 672035 1,458 1,458 1,166 337 641 883 978 1,220 672045 1,625 1,170 1,168 78 966 1,469 1,044 1,546 672055 1,810 1,267 1,170 NA 0 1,127 1,757 1,127 1,757 67

Scaled High Earner

2015 1,687 1,687 1,669 1,224 206 228 1,430 1,452 722025 1,739 1,739 1,547 791 562 695 1,352 1,485 672035 1,933 1,933 1,546 447 1,026 1,413 1,472 1,860 672045 2,155 1,551 1,549 103 1,546 2,350 1,649 2,453 672055 2,400 1,680 1,551 NA 0 1,803 2,812 1,803 2,812 67

Steady Maximum Earner

2015 2,042 2,042 2,020 1,481 369 405 1,850 1,887 722025 2,124 2,124 1,889 966 871 1,062 1,837 2,028 672035 2,365 2,365 1,891 546 1,550 2,111 2,096 2,658 672045 2,634 1,896 1,894 126 2,462 3,773 2,588 3,899 672055 2,928 2,050 1,893 NA 0 2,972 4,724 2,972 4,724 67Based on the intermediate assumptions of the 2004 Trustees ReportIA is assumed to be invested 50% in equity index fund, 30% in Corporate Bond fund, 20% Treasury Bonds, 25 basis points annu Expected equity yield is 6.5 percent real, Corporate bond yield 3.5 percent real, Treasury Bond yield 3 percent realIA annuities are assumed to be joint and 2/3 survivor life annuities, CPI indexed, 3% net expected real yield (2.75% net risk adjusRecognition Bonds are assumed to be equivalent to the present value at NRA of the retired worker benefit times (age on 1-1-200

1 For 35-year (140 QC) workers. Scales to 0 for 40 QCs. Assume 140 QCs for example. OCACT/S
Table B2. Monthly Retirement Benefits at Age 65 Under Sam Johnson Proposal

Total benefits for one-earner married couple 

Proposa

 Constant 2004 Dollars Proposal Total Annuity Worke

Proposal IA Annuity IA Annuity Without Minimum Minimum 

Present Present without IA Proposal with Low with with Low with Annuity

Year Law Law CPI- Recognition (risk adj) Expected (risk adj) Expected Up to 100% Attain Scheduled "Payable" Indexed Bond IA Yield IA Yield IA Yield IA Yield of PovertAge 65 Benefit Benefit Benefit Annuity (2.75 real) (4.65 real) (2.75 real) (4.65 real) at NRA

Scaled Low Earner

2015 1,152 1,152 1,139 560 58 64 618 624 722025 1,195 1,195 1,063 362 158 195 520 557 672035 1,310 1,310 1,048 204 289 397 493 602 672045 1,460 1,051 1,050 47 435 661 482 708 672055 1,627 1,139 1,051 NA 0 507 791 507 791 67

Scaled Medium Earner

2015 1,897 1,897 1,877 923 129 142 1,051 1,065 722025 1,969 1,969 1,752 596 351 434 947 1,030 672035 2,159 2,159 1,727 337 641 883 978 1,220 672045 2,406 1,732 1,730 78 966 1,469 1,044 1,546 672055 2,680 1,876 1,732 NA 0 1,127 1,757 1,127 1,757 67

Scaled High Earner

2015 2,516 2,516 2,489 1,224 206 228 1,430 1,452 722025 2,612 2,612 2,323 791 562 695 1,352 1,485 672035 2,862 2,862 2,289 447 1,026 1,413 1,472 1,860 672045 3,190 2,297 2,294 103 1,546 2,350 1,649 2,453 672055 3,553 2,487 2,297 NA 0 1,803 2,812 1,803 2,812 67

Steady Maximum Earner

2015 3,044 3,044 3,012 1,481 369 405 1,850 1,887 722025 3,190 3,190 2,837 966 871 1,062 1,837 2,028 672035 3,502 3,502 2,801 546 1,550 2,111 2,096 2,658 672045 3,900 2,808 2,804 126 2,462 3,773 2,588 3,899 672055 4,336 3,035 2,803 NA 0 2,972 4,724 2,972 4,724 67Based on the intermediate assumptions of the 2004 Trustees ReportIA is assumed to be invested 50% in equity index fund, 30% in Corporate Bond fund, 20% Treasury Bonds, 25 basis points annu Expected equity yield is 6.5 percent real, Corporate bond yield 3.5 percent real, Treasury Bond yield 3 percent realIA annuities are assumed to be joint and 2/3 survivor life annuities, CPI indexed, 3% net expected real yield (2.75% net risk adjusRecognition Bonds are assumed to be equivalent to the present value at NRA of the retired worker benefit times (age on 1-1-200

1 For 35-year (140 QC) workers. Scales to 0 for 40 QCs. Assume 140 QCs for example. OCACT/S