SOCIAL SECURITY

MEMORANDUM 

Date: September 10, 2003 Refer To: TCC

To: Stephen C. Goss, Chief Actuary 

From: Chris Chaplain, Actuary 

Alice H. Wade, Deputy Chief Actuary 

Subject: Estimated Long-Range OASDI Financial Effect of a Proposal Developed by Representative 

Nick Smith--INFORMATION

This memorandum provides the estimated effect on the long-range OASDI financial status of a 

proposal developed by Representative Nick Smith. This proposal is closely related to the 

"Retirement Security Act" (H.R. 5734) which was introduced in the 107th Congress by 

Representative Nick Smith on November 14, 2002. Additional clarifications and modifications 

of H.R. 5734, which make up this proposal, were provided by Kurt Schmautz of Representative 

Smith’s staff. 

Proposal Summary

The proposal would (1) modify the OASDI benefit formula for most beneficiaries; (2) allow for 

voluntary investments through redirected payroll taxes in Personal Retirement Savings 

Accounts (PRSAs), which would reduce each participating worker's OASI benefits based on 

the value of the PRSA accumulated at a specified interest rate; and (3) transfer specified 

amounts from the General Fund of the Treasury to the OASDI Trust Funds in fiscal years 2007 

through 2013. 

This memorandum provides a detailed description of the provisions of the proposal and 

provides estimates of the financial effect due to changes in the OASDI program. Tables at the 

end of this memorandum present estimates of the financial operations of the combined Trust 

Funds of the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) 

programs, aggregate flows and accumulations for personal accounts, effects on annual Federal 

unified budget balances, and cash flows from the General Fund of the Treasury to the OASDI 

Trust Funds. Because participation in the PRSA program would be optional, estimates are 

presented in this memorandum for three different levels of participation--0 percent, 67 percent, 

and 100 percent. 

Initial participation in the personal accounts would be expected to be below 100 percent 

because the benefit offset for participants would exceed the annuity distribution from the 

accumulation in a conservatively invested personal account (for example, an account invested 

solely in long-term U.S. Treasury bonds). Workers would be expected to understand that there 

is a substantial possibility that they might realize a net real annual rate on PRSA holdings that 
 

 

2

is less than the rate used for benefit offset purposes (real rate provided by long-term Treasury 

bonds plus 0.7 percent). In this event, workers would receive lower total Social Security 

benefits and PRSA income, than they would have received from Social Security benefits 

without participation in the PRSA plan. Thus, we believe that 67 percent participation is the 

more likely scenario, especially in the near term. However, with the proposal's increasing 

reductions in the basic Social Security levels and the increasing portion of payroll taxes that 

can be redirected to the PRSA, even low yields on PRSAs will ultimately result in more 

retirement benefits for participants because offsets are limited by the size of the basic Social 

Security benefit. 

Taken as a whole, the proposal would improve the long-range actuarial balance by an estimated 

2.10 percent of taxable payroll for 100-percent participation in PRSAs, by an estimated 2.38 

percent of taxable payroll for the 67-percent participation level, and by an estimated 3.80 

percent of taxable payroll assuming no participation. In addition, all participation levels would 

be expected to result in sustainable solvency for the foreseeable future, as trust fund ratios are 

projected to be rising substantially at the end of the 75-year projection period. 

Estimates of the long-range actuarial balance above indicate that participation in the PRSA 

results in lower levels of OASDI Trust Fund assets through the projection period. This results 

from the fact that PRSA contributions redirected from the trust funds to the PRSAs are 

followed by offsets against OASI benefits with some delay. If the PRSAs and the OASDI Trust 

Funds are viewed as components of a larger "total system", then total system assets would 

include both the trust fund and the PRSA assets. As described later in this memorandum, and 

shown in attached tables, expected total system assets are larger with PRSA participation (or 

more participation). 

All estimates are based on the intermediate assumptions of the 2003 OASDI Trustees Report, 

as well as the additional assumptions noted in this memorandum. 

Personal Retirement Savings Accounts (PRSAs)

Specification of PRSAs

For those workers choosing to participate in the PRSA program, initial contributions (redirected 

payroll taxes) would be deposited in an Interim Investment Fund (IIF). Each worker chooses 

from one of the three investment accounts available in the IIF. These accounts have differing 

portfolio allocations of common stocks and corporate bonds. The default investment account is 

invested 60 percent in common stock and 40 percent in corporate bonds and the other two 

accounts are invested 40 percent stocks/60 percent bonds and 80 percent stocks/20 percent 

bonds. Common stock investments would replicate some broad stock index (such as the 

Wilshire 5000), while corporate bond investments would be held in a portfolio containing "a 

diverse range of corporate bonds, taking into full account the opposing considerations of risk 

and maximizing return." 

Once a worker's IIF account balance reaches $2,500 in 2005 dollars (with such amount adjusted 

in subsequent years by the same cost of living adjustment used for Social Security benefits), the 
 

 

3

worker can elect to have his account balance transferred into a PRSA. The PRSA offers a 

broad range of regulated investment-company mutual funds approved by the Secretary of the 

Treasury. Such mutual funds would be required to replicate a broad-based index of domestic 

stocks, domestic bonds (corporate or government), or foreign stocks, and would be determined 

"not to involve high risks to the investor". 

Account contributions would be collected using the existing structure for collecting OASDI 

payroll tax contributions. In addition, account contributions in both the IIF and the PRSA 

would be managed by a central authority in a manner similar to that of the Federal Employee 

Thrift Savings Plan. The central authority would maintain individual account records and 

would make account transactions in aggregate amounts when dealing with the private 

investment firms. 

While the IIF and PRSAs are distinct investment accounts, the proposal provisions with regard 

to distributions and Social Security benefit offset are the same. Therefore, we will use the term 

"PRSAs" throughout this memorandum to signify monies held in both the IIF and in PRSAs, 

unless specifically noted otherwise. 

Level and Financing of Contributions to PRSA

For each worker choosing to participate, the proposal would redirect portions of OASDI payroll 

tax contributions into a PRSA. For years 2005 through 2025, 2.5 percent of each participating 

worker's taxable earnings (or 20.16 percent of the worker's combined employee, employer, and 

self-employment payroll taxes at present-law tax rates) would be redirected. For years 2026 

through 2038, 2.75 percent of each participating worker's taxable earnings would be redirected. 

 For years after 2038, the portion redirected would be determined with the intent that the 

balance left in the OASDI Trust Funds should trend stably toward 15 percent of the estimated 

annual expenditures (that is, a 15 percent "trust fund ratio"). However, no more than 8 percent 

of each participating worker's taxable earnings (or 64.52 percent of the combined employee, 

employer, and self-employment tax at present-law tax rates) can be redirected in any year after 

2038. The portion of payroll tax redirected for each participating worker is intended to be 

stable or rising over time. In addition, certain low-earners who elect to participate in the PRSA 

could receive an additional credit (up to $300) to their PRSA. 

Redirected payroll taxes would be shared equally between married spouses. Any divorce 

would end future earnings sharing between the previously married couples. 

Each participating worker (and spouse) can make additional voluntary cash contributions, 

beyond that of the redirected payroll taxes, up to $2,000 yearly into the PRSAs. Workers can 

also transfer money into the PRSAs as specified rollover contributions from other designated 

trusts and from other eligible retirement plans.1

 

 

1

 These plans are defined in Section 402( c )(8) of the Internal Revenue Code, and include individual retirement accounts 

(IRAs) and other retirement annuity plans defined in the Code. 
 

 

4

PRSA Accumulations

PRSA portfolios are to be invested, both prior to retirement benefit entitlement and after benefit 

entitlement, in approved mutual funds. We assume that the aggregate investment portfolio of all 

PRSAs will on average be distributed in a manner about equivalent to 60 percent equities and 40 

percent high-grade corporate bonds. This average assumed investment portfolio is somewhat more 

aggressive than for some other proposals because of the relatively high specified offset yield rate 

(see next section). An annual administrative expense charge of 30 basis points is assumed on 

average. 

The long-term ultimate average real yield on stock investments made in the future is assumed to be 

6.5 percent, the same as used for other proposals over the past year. This assumed equity yield is 

somewhat less than the 7-percent real yield that was assumed for the 1994-96 Advisory Council. 

This reduction in expected average yield is consistent with both (1) a growing consensus among 

economists that the market may value equities at somewhat higher average price-to-earnings ratios 

in the future based on broader access and a reduction in the perceived level of risk, and (2) the 

Trustees’ increase in the assumed real yield on Treasury bonds from the level assumed in 1995. 

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

percent, or 0.5 percentage point higher than the 3.0 percent real yield for U.S. Government longterm securities assumed for the 2003 Trustees Report. This spread between corporate and U.S. 

Government bond yields is consistent with the spread experienced over the past 40 or 70 years, on 

average. It should be noted, however, the spread has been much smaller over the past 20 years. 

The expected ultimate average real portfolio yield for the base projection would thus be 5.00 

percent, net of administrative expense, 

 (0.6*6.5% + 0.4*3.5% - 0.3% = 5.0%). 
 

 

5

Account Distributions and Benefit Offset 

Under the proposal, workers could take life annuities or periodic regulated distributions, but not 

lump sums, from their PRSAs starting as early as age 59 1/2. However, CPI-indexed life 

annuities are required to be purchased from the PRSA to the extent needed, so that monthly 

annuity payments, when added to the Social Security benefit, provide for total payments that 

are not less than the monthly poverty level amount for the applicable year. Any remaining 

PRSA balances may be used either to purchase life annuities or to make periodic scheduled 

withdrawals designed to last at least through the beneficiary's expected remaining life. 

The proposal does not allow for distributions from the PRSAs in the event of disability. If the 

worker dies before OASI benefit entitlement, the proceeds of the PRSA go to the worker's 

estate, regardless of whether the worker is survived by a spouse. 

 

For each PRSA holder, OASI benefits payable to such individual will be reduced according to a 

hypothetical account accumulation and annuity computation using a specified "offset yield 

rate." The offset yield rate for each year for this plan is the actual realized yield from long-term 

U.S. bonds (the intermediate assumptions of the OASDI Trustees Report would be used for 

future years) plus 0.7 percent. 

The hypothetical account accumulation of an individual at entitlement to retired worker, aged 

spouse, or aged survivor benefits would be equal to the amount of contributions credited each 

year to that individual’s PRSA from redirected payroll taxes (and from 1⁄2 of the low-earner 

additional credit of up to $300), accumulated using the specified offset yield rate for each past 

year. The benefit offset for this individual would be computed as a CPI-indexed single life 

annuity purchased with this hypothetical accumulation. The offset annuity would be based on 

the expected future unisex mortality, inflation, and real interest rates used for the intermediate 

assumptions of the most recent OASDI Trustees Report. 

If this hypothetical offset annuity exceeds the OASI benefit, then no Social Security benefits 

are paid. It should be emphasized that no benefit offset is computed or applied for benefits 

from the DI Trust Fund. 

This provision provides a financial gain for workers who realize an actual net return on their 

PRSA amounts that is, on average, higher than the average offset rate. On the other hand, 

workers who realize an average net return that is lower than the offset rate can be 

disadvantaged by their participation in the PRSA, especially if the present value of expected 

OASI benefits exceeds the hypothetical accumulation of the PRSA amounts. In this scenario, 

a worker's combined PRSA and Social Security proceeds would be less than the Social Security 

benefit that would be payable without the PRSA participation. 
 

 

6

Taxation of PRSAs and Distributions 

Funds accumulate in the PRSAs (and in the IIF) on a tax-deferred basis. Workers also receive a 

Federal income tax deduction of 50 percent of their optional additional cash contributions of up 

to $2,000 yearly. 

Amounts actually distributed from PRSAs (excluding the amounts transferred into the PRSAs 

as specified rollover contributions from other designated trusts and from other eligible 

retirement plans) receive the same taxation treatment as Social Security benefits do under 

current law. Revenue from personal income tax on the distributions would be transferred to the 

OASI and HI Trust Funds in the same manner as for revenue from taxed OASDI benefits under 

current law. For workers who die before OASI entitlement, PRSA amounts that go to the estate 

of the deceased worker are not taxed. 

Benefit Provisions

Adjustments to Benefit Formula with Specified Minimum Benefits

The provisions of this proposal would modify the benefit formula in several ways. First, the 

proposal provides for a new third bend point, to be set initially at about $4,315 in 2004 (that is 

equal to about 116 percent of the second bend point). The 15-percent formula factor that 

initially would apply above the new third bend point would decline by 2 percentage points per 

year until reaching 5 percent in 2009. Second, the current law second bend point and the new 

third bend point described above would, starting for new eligibles in 2005 and later, be indexed 

by changes in the consumer price index rather than by changes in the Social Security average 

wage index. Third, starting with new eligibles in 2005, the proposal stipulates multiplying the 

32-percent formula factor by 0.98 per year and the 15-percent by 0.975 per year. Additionally, 

the 5-percent factor, that applies to amounts over the new third bend point and is applicable to 

new eligibles in 2009 and later, is reduced by multiplying the factor by 0.975 per year for new 

eligibles starting in 2010. Ultimately, the combined effect of reducing the benefit formula 

factors and increasing the bend points more slowly than under current law would be to 

gradually move toward a flat Social Security benefit based on 90 percent of the average 

indexed monthly earnings (AIME) below the current-law first bend point ($616 for individuals 

first eligible for benefits in 2004). 

The proposal does provide limits on reductions in the PIA for workers currently near retirement 

age, near-term survivor benefits, and for most disabled workers. For example, retired workers 

born before 1943 (and survivor accounts where the death of the worker was before 2005) are 

not affected by the above benefit formula adjustments. Retired workers, who were born 

between 1943 and 1956 and have annual average indexed earnings less than $25,000 in 2005 

nominal dollars, cannot have their PIA reduced below the "Maximum Percentage Reduction in 

PIA" specified in the following table. 
 

 

7

Maximum Percentage Reduction in PIA for Near-Term Retired Workers and 

Survivors Under a Proposal Developed by Representative Nick Smith 

 

Average Annual Career Earnings 

 5000 10000 15000 20000 21000 22000 23000 24000 25000

Eligibilit

y 

AIME (in 2005 wage-indexed dollars) 

Year 1 417 833 1250 1667 1750 1833 1917 2000 2083

 

2005 0.0 0.0 0.0 0.0 1.0 2.0 3.0 4.0 5.0

2006 0.0 0.0 0.0 0.0 1.0 2.0 3.0 4.0 5.0

2007 1.0 1.0 1.0 1.0 2.0 3.0 4.0 5.0 6.0

2008 2.0 2.0 2.0 2.0 3.0 4.0 5.0 6.0 7.0

2009 3.0 3.0 3.0 3.0 4.0 5.0 6.0 7.0 8.0

2010 4.0 4.0 4.0 4.0 5.0 6.0 7.0 8.0 9.0

2011 5.0 5.0 5.0 5.0 6.0 7.0 8.0 9.0 10.0

2012 6.0 6.0 6.0 6.0 7.0 8.0 9.0 10.0 11.0

2013 7.0 7.0 7.0 7.0 8.0 9.0 10.0 11.0 12.0

2014 8.0 8.0 8.0 8.0 9.0 10.0 11.0 12.0 13.0

2015 9.0 9.0 9.0 9.0 10.0 11.0 12.0 13.0 14.0

2016 10.0 10.0 10.0 10.0 11.0 12.0 13.0 14.0 15.0

2017 11.0 11.0 11.0 11.0 12.0 13.0 14.0 15.0 16.0

2018 12.0 12.0 12.0 12.0 13.0 14.0 15.0 16.0 17.0

 1

 In general, the eligibility year is the year of attainment of age 62 for retired worker benefits and the year of 

death of the deceased worker for survivor benefits. 

The proposal contains two benefit "guarantees" for disability beneficiaries. For a disabled 

worker with an AIME below $1,667 (in 2004 nominal dollars), the proposal would not change 

the benefit formula from current law. For a disabled worker with an AIME above $1,667, the 

proposal stipulates a minimum benefit based on using an AIME of $1,667 in the current-law 

benefit formula. The $1,667 threshold would be indexed in years after 2004 to changes in 

SSA's average wage index. These benefit "guarantees" depend upon passage of Appropriation 

Acts by Congress that would provide reimbursement to the Disability Trust Fund for the cost of 

these guarantees. For the estimates in this memorandum, Appropriation Acts covering the cost 

of these guarantees are assumed to be passed in a timely manner. 

Upon conversion from disability benefits to retirement benefits at normal retirement age 

(NRA), the proposal would compute benefits based on a weighted average computation of the 

prior disability benefit level and retirement-only benefit level. The weights in the weighted 

average computation would be based on the proportion of years during ages 22 through 61 in 

which the worker was disabled. For workers disabled at a relatively early age, their PIA upon 

attaining retirement age would be very close to the PIA they were receiving as a disability 

beneficiary just before retirement. For workers disabled close to normal retirement age, their 
 

 

8

PIA upon attaining NRA would be closer to the retired worker PIA under the proposal without 

the disability benefit "guarantees." 

The combined effect of these benefit-level provisions is an estimated improvement in the 

actuarial balance of 3.12 percent of taxable payroll. 

Increase in Normal Retirement Age

The normal retirement age would be increased at the rate of two months per year for 2000 

through 2011, when it would reach age 67 for persons attaining age 62 in 2011 (thus 

eliminating the hiatus under current law). After 2011, the normal retirement age would be 

increased one month every two years. The estimated long-range financial effect of this 

provision alone is an improvement in the actuarial balance of 0.64 percent of taxable payroll. 

Cover All Newly Hired State and Local Government Employees

This provision would require that State and local government employees, newly hired in 2004 

and later, be covered under the Social Security program beginning in 2005. This provision 

alone would improve the OASDI long-range actuarial balance by an estimated 0.20 percent of 

taxable payroll. 

Increase Benefits for Widowed Individuals

This provision would provide a 10-percent increase in the benefits of individuals who are in a 

“widowed state” and receiving aged surviving spouse benefits or retired worker benefits. This 

provision is applicable to all qualifying “widowed” individuals receiving benefits in 2004 or 

later. The long-range OASDI actuarial balance would decrease by an estimated 0.31 percent of 

taxable payroll under this provision alone. 

Accelerate the Delayed Retirement Credit (DRC)

Under current law, the delayed retirement credit gradually increases to a high of 8 percent per 

year, for workers attaining age 66 in 2009 or later. This provision would raise the current-law 

DRC to 8 percent per year for workers who attain normal retirement age after 2004. This 

provision alone is estimated to have a negligible effect on the OASDI actuarial balance--in this 

case, a decrease in the actuarial balance of less than 0.005 percent of taxable payroll. 

Credit Up to 5 Child Care Dropout Years

Under this provision, workers could have up to 5 additional years excluded in determining their 

AIME, for years in which they lived substantially throughout the year with a child under the 

age of 13. In order to qualify for this provision, the year must be includable in the worker's 
 

 

9

computation base years (without regard to this provision), and the worker must have no 

earnings for that year. Both parents could claim a dropout year for the same child in the same 

year. However, a year cannot be a child care dropout year if the number of benefit computation 

years falls below two. The provision is effective for computation base years 2004 and later; it 

is not retroactive to years before 2004. The long-range OASDI actuarial balance under this 

provision alone would decrease by an estimated 0.08 percent of taxable payroll. 

Eliminate the Family Maximum for Disabled Children Aged 18 or Older

Under current law, disabled adult children aged 18 or older can qualify for OASDI benefits if 

they are children of an entitled retired worker, entitled disabled worker, or an otherwise eligible 

survivor of a deceased, insured worker. However, such benefits may be reduced if more than 

one dependent on an account exists because of the family maximum provision, which sets a 

maximum total benefit that can be paid from a given worker's account. 

Under this provision, disabled children aged 18 or older would have their benefits computed 

without regard to the family maximum. The provision would apply with respect to benefits in 

2004 and later. This provision alone would decrease the long-range OASDI actuarial balance 

by an estimated 0.01 percent of taxable payroll. 

Additional Specified Transfers to and from the General Fund of the Treasury

Several provisions of this proposal call for additional specified or conditional transfers between 

the General Fund of the Treasury and the OASDI Trust Funds, as follows: 

• Require transfers from the General Fund to the trust funds for fiscal years 2007 through 

2013. Amounts indicated in the law are $21 billion for 2007, $47 billion for 2008, $78 

billion for 2009, $106 billion for 2010, $147 billion for 2011, $184 billion for 2012, and 

$283 billion for 2013. 

• Subject to passage of Appropriation Act, provide annual reimbursements from the General 

Fund to the Disability Insurance Trust Fund for the cost increase resulting from establishing 

minimum benefit guarantees for disability beneficiaries. For the estimates provided in this 

memorandum, annual Appropriation Acts covering this additional cost are assumed to be 

passed in a timely manner. As stated earlier in the "Adjustments to Benefit Formula with 

Specified Minimum Benefits" section, individuals with AIMEs below $1,667 (in 2004 

dollars) would receive benefits based on the present-law benefit formula. In addition, 

individuals with AIMEs at $1,667 or higher (in 2004 dollars) would receive no lower than 

the PIA computed using an AIME of $1,667 (in 2004 dollars) in the present-law benefit 

formula. 

• Provide for transfers from the trust funds to the General Fund in any year after 2018 where 

the annual aggregate amount of redirected payroll taxes to PRSAs is greater than 5 percent 

of Social Security taxable payroll, subject to certain conditions. The transfer amount would 

be (if positive): payroll tax revenues to the trust funds for the year (excluding amounts 
 

 

10

redirected to PRSAs) minus 50 percent of projected benefits for the year minus 5 percent of 

taxable payroll. If this amount is negative, no transfers would occur. The total amounts 

transferred to the General Fund under this provision (in present value) are limited to the 

present value of the total transfers from the General Fund to the trust funds in years 2007 

through 2013. 

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

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

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

referenced throughout this memorandum. For a more detailed description of tables 1 through 

3d, please see our January 31, 2002 memorandum (pp. 21-26) on financial effects of the three 

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

memorandum is available on the Internet at 

http://www.ssa.gov/OACT/solvency/PresComm_20020131.pdf. 

The attached tables 1 through 3 provide projected OASDI financial effects of this proposal 

under each of the following three different assumed participation levels: 

• 0-percent worker participation in the PRSA program (tables 1, 1a, 1b, and 1c ), 

• 67-percent worker participation in the PRSA program (tables 2, 2a, 2b, and 2c), and 

• 100-percent worker participation in the PRSA program (tables 3, 3a, 3b, and 3c). 

Estimates for the basic provisions (0-percent participation) represent the aggregate financial 

effects assuming no voluntary participation in personal accounts. Estimates presented for 67-

percent participation are based on the assumption that two-thirds of all potential personal 

account contributions are made by two-thirds of the workers at every level of earnings. If more 

than two-thirds of high earners participated and less than two-thirds of the remaining earners 

participated, results would be different. Due to the nature of the personal account contributions 

and the benefit offset provisions, aggregate financial estimates are sensitive to the precise 

distribution of participation rates by earnings level. As discussed in the “Proposal Summary” 

section, we believe that 67 percent participation in personal accounts is the more likely 

scenario. 

OASDI Trust Fund Operations

Table A provides a brief description of the plan provisions and provides estimates of the effect 

of each provision, as well as the effect of all provisions combined, on the long-range actuarial 

balance assuming a 100-percent participation level. Table B provides similar information 

assuming a 67-percent participation rate. Tables A and B show that for the basic provisions (0-

percent participation), the combined effect of enacting the benefit provisions would improve 

the long-range OASDI actuarial balance by an estimated 3.80 percent of taxable payroll. In 

addition, table A shows that the long-range OASDI actuarial balance under the proposal, 

assuming 100-percent worker participation, would improve by an estimated 2.10 percent of 

taxable payroll. Table B, assuming 67-percent worker participation, displays that the longrange actuarial balance would improve by an estimated 2.38 percent of taxable payroll. 
 

 

11

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

balances under the proposal assuming the different participation levels. In addition, the tables 

show the trust fund ratio for each year, as well as changes in contribution rates to the OASDI 

Trust Funds. 

Additional Aggregate Values for Trust Funds and Personal Accounts

Tables 1a, 2a, and 3a show estimated trust fund balances at the end of each year under current 

law and under the proposal. The "IA/Annuity Assets EOY" column shows the total PRSA and 

annuity account assets at the end of each year, assuming that the accounts accumulate at the 

assumed average net yield rate (5.00 percent real). The final two columns show aggregate 

PRSA contributions and disbursements for each year. All of these amounts appear on a present 

value basis as of January 1, 2003. 

Annual dollar flows and accumulations of the personal accounts are presented in the last three 

columns of these tables. These estimates are based on very specific assumptions that all 

personal account assets are converted to CPI-indexed life annuities at retirement (see 

description in the section on assumptions above). In practice, many individuals would likely 

annuitize only part of their personal account accumulation so estimated annuity assets are 

overstated to some degree. Total personal account and annuity assets (referred to as 

"IA/Annuity Assets EOY" in the tables) include both the assets of personal accounts held prior 

to retirement, and the assets held by the annuity provider after retirement. If the personal 

accounts are considered as a part of “Social Security”, it is reasonable to combine the amounts 

of trust fund assets and personal accounts for a representation of total system assets. 

The first three columns of tables 2a1 and 3a1 display the total PRSA and annuity account 

assets, annual PRSA contributions, and annual PRSA disbursements that are shown in tables 2a 

and 3a, respectively. The amounts listed in these three columns are used in determining 

estimates of income from taxation of benefits. For the accumulation phase of the individual 

accounts, workers are assumed to maintain PRSAs that would have an average distribution of 

60 percent in equities and 40 percent in corporate bonds. Based on the rates of return assumed 

for stocks and bonds, this implies an average annual real yield rate of 5.0 percent, after 

deducting 0.3 percent assumed for administrative expense. During the distribution or annuity 

phase, the net real yield is assumed to be the same as long-term U.S. Treasury bonds (3 

percent). 

Due to the large degree of uncertainty associated with both the average portfolio distribution 

and future returns on equity and corporate bonds, tables 2a1 and 3a1 display estimates of 

individual account assets for two alternative variations on the expected account yield during the 

accumulation phase. The low yield reflects an account yield equal to the assumed real return 

on long-term government bonds (3 percent), less the administration expense factor both before 

and after annuitization. This illustration is consistent with assuming that individuals will: 

• Invest more conservatively (100 percent in Treasury bonds), 

• Realize lower-than-expected returns on account assets (by 2.3 percentage points), or 

• View accounts on a “risk-adjusted” basis where all assets are assumed to have an 

ultimate real risk-adjusted return of 3 percent. 
 

 

12

The second variation of the yield assumption is referred to as high yield and is consistent with 

assuming that individuals will: 

• Invest more heavily in equity (70 percent rather than 60 percent) and less in bonds, or 

• Realize higher-than-expected returns on account assets (0.3 percentage point higher on 

all assets or 0.5 percentage point higher on equities for an ultimate real equity yield of 7 

percent). 

For the second variation, the net real yield during the distribution or annuity phase is assumed 

to be the same as long-term U.S. Treasury bonds (3 percent). 

Effects on Annual Federal Unified Budget Balances 

Tables 1b, 2b, and 3b provide a rough estimate of the effects of the proposal on the annual 

Federal unified budget balance for each calendar year through 2078. All amounts in this table 

appear in constant 2003 dollars (that is, dollar amounts that are indexed back to 2003 based on 

the consumer price index (CPI)). The first three columns in these tables include sources of 

changes to the unified budget balance, as follows: 

• Annual aggregate OASDI payroll taxes plus credits for low-earners funded by General 

Fund transfers that are redirected to PRSAs -- these amounts result in a reduction to the 

unified budget balance because the monies go into personal accounts; 

• Estimated annual amounts of OASDI benefit offset based on hypothetical 

accumulations of earlier deposits to personal accounts (including accumulations of half 

of the credits for low-earners)-- an increase to the unified budget balance because these 

proceeds reduce Social Security benefit payments; and 

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

provisions (but not from transfers between the General Fund and the Trust Fund). 

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

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

of unified budget balance changes identified above; 

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

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

earned by the Trust Funds); and 

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

budget cash flow and in interest on the publicly held debt. 

These unified-budget estimates are based on the intermediate assumptions of the 2003 Trustees 

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

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

in payroll and benefit estimates are not large during the first 10 projection years so these values 

can be viewed as very rough approximations of the magnitude of effects on the unified budget 

balances through this period. 
 

 

13

Annual Cash Flows from the General Fund of the Treasury to the OASDI Trust Fund

A fourth set of tables (tables 1c, 2c, and 3c) provide the estimated annual net cash flow from 

the General Fund of the Treasury to the OASDI Trust Funds. All values in these tables are 

expressed in constant 2003 dollars (i.e., dollar amounts that are indexed back to 2003 based on 

the CPI). 

For comparison purposes, cash flow estimates are provided in tables 1c, 2c, and 3c for three 

different cases: 

• The proposal described in this memorandum, including the General Fund transfers in 2007 

through 2013 as well as General Fund reimbursement to protect current-law disability 

benefits in some cases, as discussed earlier; 

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

benefits; and 

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

(no General Fund borrowing). 

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

amount of borrowing needed from the General Fund to pay benefits or estimates of the amount 

of transfers from the General Fund as appropriate to the plan. The second column is the 

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

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

with 2003 through the end of the given year, including accumulated interest cash flows for the 

period. 

 /s/ 

 Chris Chaplain 

 

 /s/ 

 

 Alice H. Wade 

Attachments 
 

 Table A--Estimated Long-Range OASDI Financial Effect of a Proposal Developed by 

Representative Nick Smith 

(Assumes 100% worker participation in establishing Personal Retirement Savings Accounts) 

Provision

Estimated Change in 

 Long-Range OASDI 

Actuarial Balance 1/ 

(as a percent of payroll)

Raise the normal retirement age by two months per year for those age 62 through 2011, then increase 

by one month every two years thereafter......................................................................................................... 0.64 

Provide a third bend point in 2004 with a factor declining 2 percentage points per year until reaching 5 

percent in 2009; index the second and third bend points by the CPI, and gradually phase down the 32, 

15 and 5 percent factors. Limit reduction for older OASI workers and near term survivor benefits. 

Provide for no change from present law for lower-earner disability cases and a minimum benefit for 

higher-earner disability cases ........................................................................................................................... 3.12 

Reimburse the DI Trust Fund annually for additional payments resulting from guaranteeing presentlaw benefits for lower earner disabled workers and a specified minimum benefit for higher-earner 

disabled workers............................................................................................................................................... 0.10 

Transfer the following amounts from the Treasury to the OASDI Trust Funds in fiscal years 2007-

2013: $21 billion in 2007, $47 billion in 2008, $78 billion in 2009, $106 billion in 2010, $147 billion 

in 2011, $184 billion in 2012, and $283 billion in 2013................................................................................... 0.26 

Beginning in 2005, cover state and local government employees newly hired in 2004 or later....................... 0.20 

Increase benefit payable to all widowed individuals by 10 percent beginning in 2004.................................... -0.31 

Set the delayed retirement credit to 8 percent for all months after 2004 ......................................................... 2/ 

Provide up to 5 child care dropout years for workers with no earnings who are living with a child 

under age 13--effective for computation base years after 2004....................................................................... -0.08 

Beginning in 2003, eliminate the family maximum for disabled children aged 18 or older............................ -0.01

Subtotal, benefit provisions (including interaction) ........................................................................................ 3.80 

 Establish personal retirement savings accounts and specific General Fund transfers: 

• Redirect 2.5 percentage points of taxable payroll in 2005-25, 2.75 percentage points in 2026-2038. 

After 2038, redirect OASDI income in excess of the amount needed to cover annual program costs 

and maintain a minimal contingency reserve in the trust funds (15% trust fund ratio) 

• Reduce OASI benefit levels by the value of PRSA contributions accumulated at an assumed annual 

rate of the yield on trust fund assets plus 0.7 percentage points. -1.70

Total for proposal 2.10 

Note: All estimates are based on the intermediate assumptions of the 2003 OASDI Trustees Report. 

1/ Totals for individual provisions exclude interaction. 

2/ Decrease in actuarial balance that is negligible, i.e., less then 0.005 percent of taxable payroll. 

Social Security Administration 

Office of the Chief Actuary 

September 10, 2003 
 

Table B--Estimated Long-Range OASDI Financial Effect of a Proposal Developed by 

Representative Nick Smith 

(Assumes 67% worker participation in establishing Personal Retirement Savings Accounts) 

Provision

Estimated Change in 

 Long-Range OASDI 

Actuarial Balance 1/ 

(as a percent of payroll)

Raise the normal retirement age by two months per year for those age 62 through 2011, then increase 

by one month every two years thereafter......................................................................................................... 0.64 

Provide a third bend point in 2004 with a factor declining 2 percentage points per year until reaching 5 

percent in 2009; index the second and third bend points by the CPI, and gradually phase down the 32, 

15 and 5 percent factors. Limit reduction for older OASI workers and near term survivor benefits. 

Provide for no change from present law for lower-earner disability cases and a minimum benefit for 

higher-earner disability cases ........................................................................................................................... 3.12 

Reimburse the DI Trust Fund annually for additional payments resulting from guaranteeing presentlaw benefits for lower earner disabled workers and a specified minimum benefit for higher-earner 

disabled workers............................................................................................................................................... 0.10 

Transfer the following amounts from the Treasury to the OASDI Trust Funds in fiscal years 2007-

2013: $21 billion in 2007, $47 billion in 2008, $78 billion in 2009, $106 billion in 2010, $147 billion 

in 2011, $184 billion in 2012, and $283 billion in 2013................................................................................... 0.26 

Beginning in 2005, cover state and local government employees newly hired in 2004 or later....................... 0.20 

Increase benefit payable to all widowed individuals by 10 percent beginning in 2004.................................... -0.31 

Set the delayed retirement credit to 8 percent for all months after 2004 ......................................................... 2/ 

Provide up to 5 child care dropout years for workers with no earnings who are living with a child 

under age 13--effective for computation base years after 2004....................................................................... -0.08 

Beginning in 2003, eliminate the family maximum for disabled children aged 18 or older............................ -0.01

Subtotal, benefit provisions (including interaction) ........................................................................................ 3.80 

 Establish personal retirement savings accounts and specific General Fund transfers: 

• Redirect 2.5 percentage points of taxable payroll in 2005-25, 2.75 percentage points in 2026-2038. 

After 2038, redirect OASDI income in excess of the amount needed to cover annual program costs 

and maintain a minimal contingency reserve in the trust funds (15% trust fund ratio) 

• Reduce OASI benefit levels by the value of PRSA contributions accumulated at an assumed annual 

rate of the yield on trust fund assets plus 0.7 percentage points -1.42

Total for proposal 2.38 

Note: All estimates are based on the intermediate assumptions of the 2003 OASDI Trustees Report. 

1/ Totals for individual provisions exclude interaction. 

2/ Decrease in actuarial balance that is negligible, i.e., less then 0.005 percent of taxable payroll. 

Social Security Administration 

Office of the Chief Actuary 

September 10, 2003 
Table 1--Financial Effects of the Representative Nick Smith Proposal--Basic Plan

PRSA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 0%

Marginal Change in OASDI Contribution Rate Net PRSA Average

OASDI Reimbursement Specified OASDI Contribution IA

Cost Income Annual TFR Redirection for Minimum General Fund Contribution from Contribution

Year Rate Rate Balance 1-1-yr Total to PRSAs DI Benefits Transfers Rate 1/ Trust Funds Rate

2003 10.90 12.71 1.80 288 0.000 12.40

2004 10.83 12.69 1.86 309 12.40 0.00

2005 10.99 12.72 1.72 320 0.005 0.005 12.40 0.00

2006 10.85 12.83 1.98 340 0.112 0.010 0.102 12.52 0.00

2007 10.80 13.25 2.45 361 0.409 0.003 0.405 12.93 0.00

2008 10.80 13.71 2.91 386 0.450 -0.002 0.453 13.38 0.00

2009 10.83 14.18 3.35 414 0.456 -0.002 0.458 13.83 0.00

2010 10.87 14.62 3.75 446 0.428 -0.001 0.429 14.26 0.00

2011 10.93 15.17 4.25 482 0.520 0.000 0.520 14.78 0.00

2012 11.01 15.84 4.84 522 0.653 0.000 0.653 15.43 0.00

2013 11.11 15.77 4.66 566 -0.088 0.000 -0.088 15.35 0.00

2014 11.22 12.85 1.62 608 -2.933 -0.001 -2.932 12.41 0.00

2015 11.35 12.86 1.51 623 0.000 0.000 12.41 0.00

2016 11.50 12.87 1.37 636 0.000 0.000 12.41 0.00

2017 11.66 12.88 1.22 648 0.001 0.001 12.41 0.00

2018 11.84 12.90 1.06 657 0.001 0.001 12.41 0.00

2019 12.01 12.91 0.90 666 0.001 0.001 12.42 0.00

2020 12.19 12.93 0.73 673 0.001 0.001 12.42 0.00

2021 12.39 12.94 0.55 677 0.002 0.002 12.42 0.00

2022 12.57 12.96 0.39 682 0.002 0.002 12.42 0.00

2023 12.72 12.97 0.25 687 0.002 0.002 12.42 0.00

2024 12.86 12.98 0.12 692 0.002 0.002 12.42 0.00

2025 12.99 13.00 0.00 696 0.003 0.003 12.43 0.00

2026 13.10 13.01 -0.09 701 0.003 0.003 12.43 0.00

2027 13.20 13.02 -0.18 705 0.003 0.003 12.43 0.00

2028 13.28 13.03 -0.25 710 0.003 0.003 12.44 0.00

2029 13.34 13.04 -0.30 715 0.003 0.003 12.44 0.00

2030 13.39 13.05 -0.34 721 0.003 0.003 12.44 0.00

2031 13.41 13.06 -0.35 728 0.003 0.003 12.45 0.00

2032 13.40 13.07 -0.34 736 0.003 0.003 12.45 0.00

2033 13.37 13.07 -0.30 746 0.003 0.003 12.45 0.00

2034 13.33 13.08 -0.26 758 0.004 0.004 12.46 0.00

2035 13.29 13.08 -0.21 770 0.004 0.004 12.46 0.00

2036 13.23 13.08 -0.15 783 0.004 0.004 12.46 0.00

2037 13.16 13.09 -0.07 798 0.004 0.004 12.47 0.00

2038 13.08 13.09 0.01 815 0.004 0.004 12.47 0.00

2039 12.99 13.09 0.10 833 0.005 0.005 12.48 0.00

2040 12.91 13.09 0.19 852 0.005 0.005 12.48 0.00

2041 12.82 13.10 0.28 873 0.005 0.005 12.49 0.00

2042 12.73 13.10 0.37 896 0.005 0.005 12.49 0.00

2043 12.63 13.10 0.47 920 0.006 0.006 12.50 0.00

2044 12.54 13.10 0.56 945 0.006 0.006 12.50 0.00

2045 12.47 13.11 0.64 971 0.007 0.007 12.51 0.00

2046 12.39 13.11 0.73 998 0.007 0.007 12.52 0.00

2047 12.31 13.12 0.81 1,027 0.008 0.008 12.53 0.00

2048 12.23 13.12 0.89 1,057 0.008 0.008 12.53 0.00

2049 12.16 13.13 0.97 1,088 0.009 0.009 12.54 0.00

2050 12.09 13.14 1.04 1,120 0.010 0.010 12.55 0.00

2051 12.03 13.14 1.11 1,153 0.010 0.010 12.56 0.00

2052 11.98 13.15 1.18 1,186 0.011 0.011 12.57 0.00

2053 11.92 13.16 1.24 1,221 0.011 0.011 12.58 0.00

2054 11.87 13.17 1.30 1,257 0.011 0.011 12.60 0.00

2055 11.82 13.18 1.36 1,294 0.012 0.012 12.61 0.00

2056 11.77 13.19 1.42 1,332 0.012 0.012 12.62 0.00

2057 11.73 13.20 1.47 1,372 0.012 0.012 12.63 0.00

2058 11.68 13.21 1.53 1,413 0.012 0.012 12.64 0.00

2059 11.62 13.22 1.60 1,456 0.012 0.012 12.65 0.00

2060 11.57 13.23 1.66 1,500 0.012 0.012 12.67 0.00

2061 11.52 13.24 1.72 1,546 0.012 0.012 12.68 0.00

2062 11.47 13.25 1.78 1,594 0.012 0.012 12.69 0.00

2063 11.42 13.26 1.84 1,642 0.012 0.012 12.70 0.00

2064 11.37 13.27 1.90 1,692 0.013 0.013 12.72 0.00

2065 11.33 13.28 1.95 1,744 0.013 0.013 12.73 0.00

2066 11.28 13.29 2.01 1,797 0.013 0.013 12.74 0.00

2067 11.24 13.30 2.06 1,852 0.012 0.012 12.75 0.00

2068 11.20 13.31 2.11 1,908 0.012 0.012 12.77 0.00

2069 11.16 13.32 2.16 1,965 0.012 0.012 12.78 0.00

2070 11.14 13.33 2.19 2,021 0.011 0.011 12.79 0.00

2071 11.12 13.34 2.22 2,079 0.011 0.011 12.80 0.00

2072 11.10 13.35 2.25 2,138 0.011 0.011 12.81 0.00

2073 11.08 13.36 2.28 2,198 0.011 0.011 12.82 0.00

2074 11.06 13.37 2.31 2,260 0.010 0.010 12.83 0.00

2075 11.04 13.38 2.34 2,323 0.010 0.010 12.84 0.00

2076 11.02 13.39 2.37 2,388 0.010 0.010 12.85 0.00

2077 11.00 13.40 2.40 2,454 0.010 0.010 12.86 0.00

2078 10.98 13.41 2.42 2,522 0.009 0.009 12.87 0.00

 Summarized

Cost Income Actuarial Change in

2003 Rate Rate Balance Actuarial Balance

2077 12.05 13.93 1.89 3.80

Based on Intermediate Assumptions of the 2003 Trustees Report. Office of the Chief Actuary

1/ Includes payroll tax contributions plus reimbursement for minimum DI benefits plus specified General Fund transfers. Social Security Administration

September 9, 2003
Table 1a--Trust Fund Asset Comparison and PRSA Information for the Representative Nick Smith Proposal

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 0%

Present Law Proposal

Trust Fund Trust Fund IA/Annuity PRSA PRSA

Assets, Assets, Assets, Contributions Disbursements

Year End of Year End of Year End of Year in Year in Year 1/

(In Billions of Present Value Dollars as of 1/1/2003)

2003 1,453 1,453

2004 1,529 1,528 0 0.0 0.0

2005 1,611 1,600 0 0.0 0.0

2006 1,695 1,682 0 0.0 0.0

2007 1,779 1,783 0 0.0 0.0

2008 1,861 1,903 0 0.0 0.0

2009 1,937 2,039 0 0.0 0.0

2010 2,007 2,189 0 0.0 0.0

2011 2,071 2,358 0 0.0 0.0

2012 2,128 2,548 0 0.0 0.0

2013 2,174 2,729 0 0.0 0.0

2014 2,211 2,792 0 0.0 0.0

2015 2,237 2,850 0 0.0 0.0

2016 2,251 2,901 0 0.0 0.0

2017 2,254 2,946 0 0.0 0.0

2018 2,245 2,985 0 0.0 0.0

2019 2,224 3,018 0 0.0 0.0

2020 2,191 3,044 0 0.0 0.0

2021 2,147 3,063 0 0.0 0.0

2022 2,092 3,076 0 0.0 0.0

2023 2,027 3,085 0 0.0 0.0

2024 1,954 3,089 0 0.0 0.0

2025 1,873 3,089 0 0.0 0.0

2026 1,785 3,085 0 0.0 0.0

2027 1,690 3,080 0 0.0 0.0

2028 1,589 3,072 0 0.0 0.0

2029 1,483 3,062 0 0.0 0.0

2030 1,372 3,052 0 0.0 0.0

2031 1,259 3,041 0 0.0 0.0

2032 1,144 3,031 0 0.0 0.0

2033 1,026 3,022 0 0.0 0.0

2034 908 3,014 0 0.0 0.0

2035 789 3,008 0 0.0 0.0

2036 671 3,004 0 0.0 0.0

2037 552 3,002 0 0.0 0.0

2038 435 3,002 0 0.0 0.0

2039 319 3,005 0 0.0 0.0

2040 204 3,010 0 0.0 0.0

2041 91 3,017 0 0.0 0.0

2042 ----- 3,026 0 0.0 0.0

2043 ----- 3,038 0 0.0 0.0

2044 ----- 3,052 0 0.0 0.0

2045 ----- 3,068 0 0.0 0.0

2046 ----- 3,085 0 0.0 0.0

2047 ----- 3,104 0 0.0 0.0

2048 ----- 3,125 0 0.0 0.0

2049 ----- 3,147 0 0.0 0.0

2050 ----- 3,171 0 0.0 0.0

2051 ----- 3,195 0 0.0 0.0

2052 ----- 3,221 0 0.0 0.0

2053 ----- 3,247 0 0.0 0.0

2054 ----- 3,275 0 0.0 0.0

2055 ----- 3,303 0 0.0 0.0

2056 ----- 3,332 0 0.0 0.0

2057 ----- 3,361 0 0.0 0.0

2058 ----- 3,392 0 0.0 0.0

2059 ----- 3,423 0 0.0 0.0

2060 ----- 3,454 0 0.0 0.0

2061 ----- 3,487 0 0.0 0.0

2062 ----- 3,520 0 0.0 0.0

2063 ----- 3,553 0 0.0 0.0

2064 ----- 3,587 0 0.0 0.0

2065 ----- 3,621 0 0.0 0.0

2066 ----- 3,656 0 0.0 0.0

2067 ----- 3,691 0 0.0 0.0

2068 ----- 3,727 0 0.0 0.0

2069 ----- 3,762 0 0.0 0.0

2070 ----- 3,798 0 0.0 0.0

2071 ----- 3,833 0 0.0 0.0

2072 ----- 3,868 0 0.0 0.0

2073 ----- 3,903 0 0.0 0.0

2074 ----- 3,938 0 0.0 0.0

2075 ----- 3,973 0 0.0 0.0

2076 ----- 4,008 0 0.0 0.0

2077 ----- 4,042 0 0.0 0.0

Based on Intermediate Assumptions of the 2003 Trustees Report. Office of the Actuary

1/ Excludes proceeds of PRSAs that go to the worker's estate if the worker dies before entitlement. Social Security Administration

September 9, 2003
Table 1b--PRSA Contributions, Offsets to OASDI Trust Funds from PRSAs, and Budget Effects 

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 0%

Contributions to Offsets to Change Change in Change in 

PRSA by Federal OASDI Other Changes in Annual Debt Held Annual

Government Trust Funds in OASDI Unified Budget by Public Unified Budget

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

(In Billions of Constant 2003 Dollars)

2004 0.0 0.0 -0.7 -0.7 0.7 -0.7

2005 0.0 0.0 -11.2 -11.2 12.3 -11.6

2006 0.0 0.0 -8.4 -8.4 21.3 -9.4

2007 0.0 0.0 -5.5 -5.5 27.6 -6.9

2008 0.0 0.0 -2.3 -2.3 30.8 -4.1

2009 0.0 0.0 1.8 1.8 30.0 0.0

2010 0.0 0.0 7.0 7.0 23.7 5.4

2011 0.0 0.0 13.3 13.3 10.7 12.3

2012 0.0 0.0 20.5 20.5 -10.1 20.5

2013 0.0 0.0 28.6 28.6 -39.9 30.1

2014 0.0 0.0 37.3 37.3 -79.5 40.8

2015 0.0 0.0 46.5 46.5 -129.9 52.7

2016 0.0 0.0 56.4 56.4 -191.9 65.8

2017 0.0 0.0 66.9 66.9 -266.6 80.2

2018 0.0 0.0 77.9 77.9 -354.8 96.0

2019 0.0 0.0 89.2 89.2 -457.2 112.8

2020 0.0 0.0 100.8 100.8 -574.8 130.8

2021 0.0 0.0 112.7 112.7 -708.1 150.1

2022 0.0 0.0 124.7 124.7 -857.8 170.3

2023 0.0 0.0 136.7 136.7 -1,024.3 191.5

2024 0.0 0.0 149.2 149.2 -1,208.7 214.2

2025 0.0 0.0 161.7 161.7 -1,411.5 238.0

2026 0.0 0.0 174.8 174.8 -1,633.9 263.5

2027 0.0 0.0 188.5 188.5 -1,877.1 290.8

2028 0.0 0.0 202.4 202.4 -2,141.9 319.4

2029 0.0 0.0 215.9 215.9 -2,428.5 349.0

2030 0.0 0.0 229.2 229.2 -2,737.4 379.6

2031 0.0 0.0 243.3 243.3 -3,070.1 412.4

2032 0.0 0.0 257.7 257.7 -3,427.6 446.9

2033 0.0 0.0 272.3 272.3 -3,810.9 483.1

2034 0.0 0.0 286.6 286.6 -4,220.5 520.6

2035 0.0 0.0 300.2 300.2 -4,656.3 558.7

2036 0.0 0.0 313.9 313.9 -5,119.3 598.7

2037 0.0 0.0 327.7 327.7 -5,610.5 640.3

2038 0.0 0.0 341.6 341.6 -6,130.6 683.6

2039 0.0 0.0 355.4 355.4 -6,680.6 728.6

2040 0.0 0.0 368.5 368.5 -7,260.6 774.6

2041 0.0 0.0 382.6 382.6 -7,872.6 823.4

2042 0.0 0.0 397.3 397.3 -8,517.9 874.7

2043 0.0 0.0 412.5 412.5 -9,198.3 928.5

2044 0.0 0.0 428.3 428.3 -9,915.4 985.0

2045 0.0 0.0 443.8 443.8 -10,670.0 1,043.4

2046 0.0 0.0 460.5 460.5 -11,464.4 1,105.2

2047 0.0 0.0 477.7 477.7 -12,300.4 1,169.9

2048 0.0 0.0 495.3 495.3 -13,179.6 1,237.5

2049 0.0 0.0 513.5 513.5 -14,103.9 1,308.1

2050 0.0 0.0 531.5 531.5 -15,074.5 1,381.4

2051 0.0 0.0 550.3 550.3 -16,093.5 1,458.1

2052 0.0 0.0 569.4 569.4 -17,162.8 1,538.1

2053 0.0 0.0 588.8 588.8 -18,284.2 1,621.3

2054 0.0 0.0 608.5 608.5 -19,459.4 1,707.8

2055 0.0 0.0 628.1 628.1 -20,690.1 1,797.5

2056 0.0 0.0 647.8 647.8 -21,978.0 1,890.5

2057 0.0 0.0 667.6 667.6 -23,325.0 1,987.1

2058 0.0 0.0 687.4 687.4 -24,732.7 2,087.1

2059 0.0 0.0 707.2 707.2 -26,203.2 2,190.8

2060 0.0 0.0 727.1 727.1 -27,738.2 2,298.2

2061 0.0 0.0 747.2 747.2 -29,340.0 2,409.7

2062 0.0 0.0 767.6 767.6 -31,010.8 2,525.4

2063 0.0 0.0 788.5 788.5 -32,753.3 2,645.7

2064 0.0 0.0 809.6 809.6 -34,569.7 2,770.4

2065 0.0 0.0 831.2 831.2 -36,462.9 2,900.1

2066 0.0 0.0 853.1 853.1 -38,435.5 3,034.6

2067 0.0 0.0 875.4 875.4 -40,490.2 3,174.3

2068 0.0 0.0 898.3 898.3 -42,630.2 3,319.3

2069 0.0 0.0 921.6 921.6 -44,858.4 3,469.8

2070 0.0 0.0 943.3 943.3 -47,175.7 3,623.9

2071 0.0 0.0 965.2 965.2 -49,585.2 3,783.5

2072 0.0 0.0 987.5 987.5 -52,089.8 3,948.9

2073 0.0 0.0 1,010.0 1,010.0 -54,692.8 4,120.1

2074 0.0 0.0 1,032.9 1,032.9 -57,397.4 4,297.6

2075 0.0 0.0 1,056.0 1,056.0 -60,207.0 4,481.4

2076 0.0 0.0 1,079.4 1,079.4 -63,125.0 4,671.6

2077 0.0 0.0 1,103.1 1,103.1 -66,155.0 4,868.5

2078 0.0 0.0 1,127.0 1,127.0 -69,300.4 5,072.3

Office of the Actuary

1/ Excluding the effect of general fund transfers to the Trust Funds, which do not affect the unified budget. Social Security Administration

Based on Intermediate Assumptions of the 2003 Trustees Report. September 9, 2003
Table 1c--Cash Flow from the General Fund of the Treasury to the OASDI Trust Funds--Constant 2003 Dollars 1/

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 0%

Estimate for Modified Present Law Estimate for Present Law

Estimate for Nick Smith Proposal with Borrowing to Pay Scheduled Benefits with Only Payable Benefits

Additional Cash Flow Net Annual Net Annual

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

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

Transfers 2/ Trust Funds with Interest In Year 3/ Fund with Interest In Year 3/ Fund with Interest

Year (billions of Constant 2003$) (billions of Constant 2003$) (billions of Constant 2003$)

2003 0 -79 -82 0 -79 -82 0 -79 -82

2004 0 -84 -171 0 -84 -172 0 -84 -172

2005 0 -80 -259 0 -91 -271 0 -91 -271

2006 6 -89 -358 0 -97 -380 0 -97 -380

2007 26 -94 -467 0 -100 -494 0 -100 -494

2008 49 -97 -581 0 -99 -612 0 -99 -612

2009 74 -98 -701 0 -96 -731 0 -96 -731

2010 98 -99 -824 0 -92 -848 0 -92 -848

2011 127 -100 -952 0 -86 -963 0 -86 -963

2012 165 -98 -1,082 0 -77 -1,072 0 -77 -1,072

2013 163 -95 -1,213 0 -66 -1,173 0 -66 -1,173

2014 1 -91 -1,343 0 -54 -1,264 0 -54 -1,264

2015 1 -86 -1,472 0 -39 -1,343 0 -39 -1,343

2016 1 -79 -1,598 0 -23 -1,406 0 -23 -1,406

2017 1 -71 -1,720 0 -5 -1,453 0 -5 -1,453

2018 1 -63 -1,836 0 15 -1,482 0 15 -1,482

2019 1 -54 -1,947 0 35 -1,490 0 35 -1,490

2020 1 -44 -2,051 0 56 -1,477 0 56 -1,477

2021 1 -34 -2,147 0 79 -1,440 0 79 -1,440

2022 1 -23 -2,236 0 101 -1,379 0 101 -1,379

2023 1 -15 -2,318 0 122 -1,295 0 122 -1,295

2024 2 -6 -2,394 0 142 -1,187 0 142 -1,187

2025 2 1 -2,465 0 163 -1,055 0 163 -1,055

2026 2 8 -2,530 0 183 -899 0 183 -899

2027 2 14 -2,591 0 203 -717 0 203 -717

2028 3 20 -2,648 0 222 -510 0 222 -510

2029 3 24 -2,703 0 240 -279 0 240 -279

2030 3 28 -2,756 0 256 -23 0 256 -23

2031 3 29 -2,809 0 272 256 0 272 256

2032 4 28 -2,864 0 286 558 0 286 558

2033 4 27 -2,922 0 298 882 0 298 882

2034 4 24 -2,985 0 310 1,228 0 310 1,228

2035 5 21 -3,053 0 320 1,595 0 320 1,595

2036 5 17 -3,128 0 330 1,982 0 330 1,982

2037 5 11 -3,210 0 338 2,390 0 338 2,390

2038 6 5 -3,302 0 346 2,818 0 346 2,818

2039 6 -2 -3,403 0 353 3,265 0 353 3,265

2040 7 -9 -3,514 0 359 3,733 0 359 3,733

2041 7 -16 -3,636 0 366 4,222 0 366 4,222

2042 8 -24 -3,770 74 373 4,732 0 298 4,656

2043 8 -32 -3,916 380 380 5,265 0 0 4,796

2044 9 -40 -4,075 387 387 5,822 0 0 4,940

2045 10 -47 -4,246 396 396 6,405 0 0 5,088

2046 11 -55 -4,429 405 405 7,014 0 0 5,240

2047 11 -62 -4,627 414 414 7,651 0 0 5,398

2048 12 -70 -4,838 424 424 8,317 0 0 5,560

2049 13 -78 -5,063 435 435 9,015 0 0 5,726

2050 14 -85 -5,302 446 446 9,744 0 0 5,898

2051 16 -91 -5,555 458 458 10,508 0 0 6,075

2052 17 -98 -5,822 471 471 11,308 0 0 6,257

2053 18 -104 -6,104 484 484 12,146 0 0 6,445

2054 20 -110 -6,401 497 497 13,022 0 0 6,638

2055 21 -117 -6,713 510 510 13,938 0 0 6,838

2056 22 -123 -7,041 524 524 14,895 0 0 7,043

2057 24 -129 -7,386 537 537 15,895 0 0 7,254

2058 26 -136 -7,748 550 550 16,938 0 0 7,472

2059 27 -143 -8,128 563 563 18,026 0 0 7,696

2060 29 -151 -8,526 575 575 19,159 0 0 7,927

2061 31 -158 -8,945 588 588 20,339 0 0 8,164

2062 32 -166 -9,384 601 601 21,568 0 0 8,409

2063 34 -173 -9,843 614 614 22,848 0 0 8,662

2064 36 -180 -10,324 628 628 24,180 0 0 8,921

2065 38 -188 -10,827 642 642 25,566 0 0 9,189

2066 40 -195 -11,353 657 657 27,009 0 0 9,465

2067 42 -202 -11,901 672 672 28,512 0 0 9,749

2068 44 -209 -12,474 687 687 30,075 0 0 10,041

2069 46 -217 -13,071 703 703 31,701 0 0 10,342

2070 48 -222 -13,692 719 719 33,393 0 0 10,653

2071 50 -227 -14,337 736 736 35,153 0 0 10,972

2072 52 -233 -15,007 753 753 36,983 0 0 11,301

2073 54 -238 -15,702 770 770 38,885 0 0 11,640

2074 56 -244 -16,424 787 787 40,863 0 0 11,990

2075 58 -249 -17,174 805 805 42,918 0 0 12,349

2076 60 -255 -17,951 823 823 45,052 0 0 12,720

2077 62 -260 -18,758 840 840 47,270 0 0 13,101

1/ Including redemption of Trust Fund assets as of 1-1-2003. Office of the Actuary

2/ Includes reimbursement for minimum DI benefits and specified transfers from FY 2007-2013. Social Security Administration

3/ Trust Funds are assumed to borrow from the General Fund of the Treasury. September 9, 2003
Table 2--Financial Effects of the Representative Nick Smith Proposal Assuming a 67% PRSA Participation Rate

PRSA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 67%

Marginal Change in OASDI Contribution Rate Net PRSA Contribution Rate Average

OASDI Reimbursement Specified OASDI Refundable PRSA

Cost Income Annual TFR Redirection for Minimum General Fund Contribution From Credit from Contribution

Year Rate 1/ Rate Balance 1-1-yr Total to PRSAs DI Benefits Transfers Rate 2/Trust Funds General Fund Rate

2003 10.90 12.71 1.80 288 12.40

2004 10.83 12.69 1.86 309 12.40

2005 10.99 11.05 0.06 320 -1.662 -1.667 0.005 10.74 1.67 0.23 1.89

2006 10.85 11.16 0.31 326 0.112 0.010 0.102 10.85 1.67 0.23 1.89

2007 10.80 11.58 0.79 331 0.409 0.003 0.405 11.26 1.67 0.23 1.89

2008 10.79 12.05 1.26 341 0.450 -0.002 0.453 11.71 1.67 0.23 1.89

2009 10.81 12.51 1.70 354 0.456 -0.002 0.458 12.17 1.67 0.23 1.89

2010 10.84 12.95 2.11 371 0.428 -0.001 0.429 12.59 1.67 0.23 1.89

2011 10.89 13.51 2.62 393 0.520 0.000 0.520 13.11 1.67 0.23 1.89

2012 10.95 14.18 3.23 418 0.653 0.000 0.653 13.77 1.67 0.23 1.89

2013 11.03 14.10 3.07 448 -0.088 0.000 -0.088 13.68 1.67 0.23 1.89

2014 11.13 11.18 0.05 477 -2.933 -0.001 -2.932 10.75 1.67 0.23 1.89

2015 11.23 11.19 -0.04 479 0.000 0.000 10.75 1.67 0.23 1.89

2016 11.36 11.20 -0.16 480 0.000 0.000 10.75 1.67 0.23 1.89

2017 11.50 11.22 -0.29 479 0.001 0.001 10.75 1.67 0.23 1.89

2018 11.65 11.23 -0.42 478 0.001 0.001 10.75 1.67 0.23 1.89

2019 11.78 11.24 -0.54 475 0.001 0.001 10.75 1.67 0.23 1.89

2020 11.94 11.26 -0.68 471 0.001 0.001 10.75 1.67 0.23 1.89

2021 12.10 11.27 -0.82 466 0.002 0.002 10.75 1.67 0.23 1.89

2022 12.24 11.29 -0.95 461 0.002 0.002 10.75 1.67 0.23 1.89

2023 12.35 11.30 -1.05 456 0.002 0.002 10.76 1.67 0.23 1.89

2024 12.45 11.32 -1.13 451 0.002 0.002 10.76 1.67 0.23 1.89

2025 12.53 11.33 -1.20 446 0.003 0.003 10.76 1.67 0.23 1.89

2026 12.59 11.18 -1.42 441 -0.164 -0.167 0.003 10.60 1.83 0.23 2.06

2027 12.63 11.19 -1.45 436 0.003 0.003 10.60 1.83 0.23 2.06

2028 12.66 11.20 -1.46 430 0.003 0.003 10.60 1.83 0.23 2.06

2029 12.67 11.21 -1.46 424 0.003 0.003 10.61 1.83 0.23 2.06

2030 12.66 11.22 -1.44 420 0.003 0.003 10.61 1.83 0.23 2.06

2031 12.61 11.23 -1.39 416 0.003 0.003 10.61 1.83 0.23 2.06

2032 12.54 11.24 -1.31 414 0.003 0.003 10.62 1.83 0.23 2.06

2033 12.45 11.24 -1.21 413 0.003 0.003 10.62 1.83 0.23 2.06

2034 12.34 11.25 -1.09 413 0.004 0.004 10.62 1.83 0.23 2.06

2035 12.22 11.25 -0.97 414 0.004 0.004 10.63 1.83 0.23 2.06

2036 12.08 11.26 -0.83 417 0.004 0.004 10.63 1.83 0.23 2.06

2037 11.93 11.26 -0.67 422 0.004 0.004 10.63 1.83 0.23 2.06

2038 11.77 11.26 -0.51 429 0.004 0.004 10.64 1.83 0.23 2.06

2039 11.60 10.77 -0.83 438 -0.495 -0.500 0.005 10.14 2.33 0.23 2.56

2040 11.43 10.44 -1.00 444 -0.329 -0.333 0.005 9.82 2.67 0.23 2.89

2041 11.25 10.11 -1.15 449 -0.328 -0.333 0.005 9.49 3.00 0.23 3.23

2042 11.07 9.61 -1.46 454 -0.495 -0.500 0.005 8.99 3.50 0.23 3.73

2043 10.88 9.11 -1.76 456 -0.494 -0.500 0.006 8.50 4.00 0.23 4.23

2044 10.68 8.62 -2.06 455 -0.494 -0.500 0.006 8.00 4.50 0.23 4.73

2045 10.50 8.12 -2.38 451 -0.493 -0.500 0.007 7.51 5.00 0.23 5.23

2046 10.32 7.80 -2.52 444 -0.326 -0.333 0.007 7.18 5.33 0.23 5.56

2047 10.13 7.80 -2.33 435 0.008 0.008 7.19 5.33 0.23 5.56

2048 9.94 7.81 -2.13 428 0.008 0.008 7.20 5.33 0.23 5.56

2049 9.76 7.82 -1.94 421 0.009 0.009 7.21 5.33 0.23 5.56

2050 9.58 7.83 -1.75 416 0.010 0.010 7.22 5.33 0.23 5.56

2051 9.40 7.84 -1.56 413 0.010 0.010 7.23 5.33 0.23 5.56

2052 9.23 7.85 -1.38 411 0.011 0.011 7.24 5.33 0.23 5.56

2053 9.06 7.86 -1.20 410 0.011 0.011 7.25 5.33 0.23 5.56

2054 8.89 7.87 -1.01 412 0.011 0.011 7.26 5.33 0.23 5.56

2055 8.74 7.89 -0.85 414 0.012 0.012 7.27 5.33 0.23 5.56

2056 8.59 7.90 -0.69 419 0.012 0.012 7.29 5.33 0.23 5.56

2057 8.44 7.92 -0.52 425 0.012 0.012 7.30 5.33 0.23 5.56

2058 8.29 7.93 -0.36 434 0.012 0.012 7.31 5.33 0.23 5.56

2059 8.14 7.94 -0.19 445 0.012 0.012 7.32 5.33 0.23 5.56

2060 7.99 7.96 -0.03 458 0.012 0.012 7.33 5.33 0.23 5.56

2061 7.83 7.97 0.14 475 0.012 0.012 7.35 5.33 0.23 5.56

2062 7.68 7.99 0.30 494 0.012 0.012 7.36 5.33 0.23 5.56

2063 7.54 8.00 0.47 516 0.012 0.012 7.37 5.33 0.23 5.56

2064 7.39 8.02 0.63 541 0.013 0.013 7.38 5.33 0.23 5.56

2065 7.27 8.04 0.77 568 0.013 0.013 7.40 5.33 0.23 5.56

2066 7.15 8.05 0.91 597 0.013 0.013 7.41 5.33 0.23 5.56

2067 7.03 8.07 1.04 630 0.012 0.012 7.42 5.33 0.23 5.56

2068 6.92 8.09 1.17 666 0.012 0.012 7.43 5.33 0.23 5.56

2069 6.81 8.11 1.30 705 0.012 0.012 7.44 5.33 0.23 5.56

2070 6.72 8.13 1.41 746 0.011 0.011 7.46 5.33 0.23 5.56

2071 6.63 8.15 1.51 789 0.011 0.011 7.47 5.33 0.23 5.56

2072 6.55 8.16 1.62 836 0.011 0.011 7.48 5.33 0.23 5.56

2073 6.47 8.18 1.72 885 0.011 0.011 7.49 5.33 0.23 5.56

2074 6.39 8.20 1.82 938 0.010 0.010 7.50 5.33 0.23 5.56

2075 6.31 8.22 1.91 994 0.010 0.010 7.51 5.33 0.23 5.56

2076 6.24 8.24 2.01 1053 0.010 0.010 7.52 5.33 0.23 5.56

2077 6.16 8.26 2.10 1116 0.010 0.010 7.53 5.33 0.23 5.56

2078 6.10 8.28 2.19 1182 0.009 0.009 7.54 5.33 0.23 5.56

 Summarized

Cost Income Actuarial Change in

2003 Rate Rate Balance Actuarial Balance

2077 10.62 11.09 0.47 2.38

Based on Intermediate Assumptions of the 2003 Trustees Report.

1/ Net of Benefit Cost Reductions from PRSA Offsets. Office of the Chief Actuary

2/ Includes payroll tax contributions plus reimbursement for minimum DI benefits plus specified General Fund transfers Social Security Administration

 (expressed as a percent of taxable payroll) September 9, 2003
Table 2a--Trust Fund Asset Comparison and PRSA Information of the Representative Nick Smith Proposal

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 67%

Present Law Proposal

Trust Fund Trust Fund IA/Annuity PRSA PRSA

Assets, Assets, Assets, Contributions Disbursements

Year End of Year End of Year End of Year in Year in Year 1/

(In Billions of Present Value Dollars as of 1/1/2003)

2003 1,453 1,453

2004 1,529 1,528 0 0.0 0.0

2005 1,611 1,530 80 79.8 0.0

2006 1,695 1,541 162 79.6 0.1

2007 1,779 1,573 245 79.2 0.2

2008 1,861 1,624 328 78.6 0.4

2009 1,937 1,692 411 77.9 0.7

2010 2,007 1,776 495 77.2 1.1

2011 2,071 1,880 579 76.3 1.5

2012 2,128 2,006 662 75.4 2.0

2013 2,174 2,124 746 74.5 2.6

2014 2,211 2,126 829 73.6 3.2

2015 2,237 2,124 912 72.6 3.9

2016 2,251 2,117 994 71.6 4.7

2017 2,254 2,106 1,076 70.6 5.6

2018 2,245 2,091 1,157 69.6 6.5

2019 2,224 2,071 1,237 68.6 7.5

2020 2,191 2,047 1,316 67.6 8.6

2021 2,147 2,018 1,394 66.7 9.8

2022 2,092 1,984 1,471 65.7 11.0

2023 2,027 1,949 1,547 64.7 12.3

2024 1,954 1,910 1,621 63.7 13.6

2025 1,873 1,870 1,694 62.8 15.1

2026 1,785 1,824 1,770 67.3 16.6

2027 1,690 1,777 1,845 66.3 18.1

2028 1,589 1,731 1,918 65.3 19.8

2029 1,483 1,685 1,990 64.4 21.4

2030 1,372 1,641 2,059 63.4 23.2

2031 1,259 1,599 2,126 62.5 25.0

2032 1,144 1,559 2,191 61.6 26.9

2033 1,026 1,524 2,254 60.7 28.8

2034 908 1,492 2,314 59.8 30.8

2035 789 1,464 2,372 58.9 32.9

2036 671 1,441 2,427 58.0 35.0

2037 552 1,422 2,480 57.2 37.1

2038 435 1,408 2,529 56.3 39.3

2039 319 1,385 2,589 68.9 41.5

2040 204 1,359 2,655 76.7 43.8

2041 91 1,329 2,726 84.2 46.1

2042 ----- 1,291 2,807 95.7 48.5

2043 ----- 1,247 2,896 106.9 51.0

2044 ----- 1,195 2,994 117.6 53.5

2045 ----- 1,137 3,100 128.0 56.2

2046 ----- 1,076 3,211 134.0 58.8

2047 ----- 1,021 3,318 131.8 61.4

2048 ----- 971 3,421 129.7 64.0

2049 ----- 927 3,521 127.6 66.5

2050 ----- 887 3,617 125.5 69.0

2051 ----- 853 3,710 123.4 71.5

2052 ----- 822 3,799 121.4 74.0

2053 ----- 797 3,884 119.4 76.4

2054 ----- 775 3,966 117.4 78.8

2055 ----- 757 4,045 115.5 81.1

2056 ----- 743 4,120 113.6 83.4

2057 ----- 733 4,192 111.8 85.7

2058 ----- 725 4,261 110.0 87.9

2059 ----- 722 4,326 108.2 90.1

2060 ----- 721 4,387 106.4 92.3

2061 ----- 724 4,446 104.7 94.4

2062 ----- 729 4,501 103.0 96.5

2063 ----- 738 4,553 101.3 98.5

2064 ----- 749 4,602 99.6 100.5

2065 ----- 762 4,652 98.0 102.5

2066 ----- 778 4,699 96.4 104.5

2067 ----- 796 4,743 94.8 106.3

2068 ----- 815 4,783 93.2 108.2

2069 ----- 837 4,821 91.7 110.0

2070 ----- 860 4,856 90.2 111.8

2071 ----- 884 4,888 88.7 113.5

2072 ----- 909 4,916 87.2 115.2

2073 ----- 936 4,942 85.7 116.9

2074 ----- 963 4,965 84.3 118.6

2075 ----- 992 4,984 82.9 120.2

2076 ----- 1,021 5,001 81.5 121.8

2077 ----- 1,051 5,014 80.1 123.4

Based on Intermediate Assumptions of the 2003 Trustees Report. Office of the Actuary

1/ Excludes proceeds of PRSAs that go to the worker's estate if the worker dies before entitlement. Social Security Administration

September 9, 2003
Table 2a1--IA/Annuity Assets, PRSA Contributions and PRSA Disbursement Under Three Sensitivity Illustrations

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 67%

Invest 60% Stocks, 40% Corporate Bonds 1/ Invest All in Govt Bonds (2.7% Net Yield) Invest 70% Stocks, 30% Corporate Bonds

IA/Annuity PRSA PRSA IA/Annuity PRSA PRSA IA/Annuity PRSA PRSA

Assets, Contributions Disbursements Assets, Contributions Disbursements Assets, Contributions Disbursements

Year End of Year in Year in Year 2/ End of Year in Year in Year 2/ End of Year in Year in Year 2/

(In Billions of Present Value Dollars as of 1/1/2003)

2003

2004 0 0.0 0.0 0 0.0 0.0 0 0.0 0.0

2005 80 79.8 0.0 80 79.8 0.0 81 79.8 0.0

2006 162 79.6 0.1 159 79.6 0.1 163 79.6 0.1

2007 245 79.2 0.2 237 79.2 0.2 245 79.2 0.2

2008 328 78.6 0.4 314 78.6 0.4 329 78.6 0.4

2009 411 77.9 0.7 391 77.9 0.7 414 77.9 0.7

2010 495 77.2 1.1 465 77.2 1.1 499 77.2 1.1

2011 579 76.3 1.5 538 76.3 1.5 584 76.3 1.5

2012 662 75.4 2.0 610 75.4 2.0 670 75.4 2.0

2013 746 74.5 2.6 680 74.5 2.6 755 74.5 2.6

2014 829 73.6 3.2 748 73.6 3.2 841 73.6 3.2

2015 912 72.6 3.9 814 72.6 3.9 926 72.6 3.9

2016 994 71.6 4.7 878 71.6 4.7 1,011 71.6 4.7

2017 1,076 70.6 5.6 940 70.6 5.6 1,096 70.6 5.6

2018 1,157 69.6 6.5 1,000 69.6 6.4 1,180 69.6 6.5

2019 1,237 68.6 7.5 1,058 68.6 7.3 1,263 68.6 7.6

2020 1,316 67.6 8.6 1,114 67.6 8.3 1,346 67.6 8.7

2021 1,394 66.7 9.8 1,167 66.7 9.2 1,428 66.7 9.8

2022 1,471 65.7 11.0 1,218 65.7 10.2 1,509 65.7 11.1

2023 1,547 64.7 12.3 1,267 64.7 11.3 1,589 64.7 12.4

2024 1,621 63.7 13.6 1,314 63.7 12.3 1,668 63.7 13.8

2025 1,694 62.8 15.1 1,359 62.8 13.4 1,745 62.8 15.3

2026 1,770 67.3 16.6 1,406 67.3 14.5 1,827 67.3 16.8

2027 1,845 66.3 18.1 1,452 66.3 15.6 1,906 66.3 18.5

2028 1,918 65.3 19.8 1,495 65.3 16.8 1,985 65.3 20.2

2029 1,990 64.4 21.4 1,535 64.4 18.0 2,061 64.4 22.0

2030 2,059 63.4 23.2 1,573 63.4 19.2 2,136 63.4 23.8

2031 2,126 62.5 25.0 1,609 62.5 20.4 2,209 62.5 25.7

2032 2,191 61.6 26.9 1,642 61.6 21.6 2,279 61.6 27.7

2033 2,254 60.7 28.8 1,673 60.7 22.8 2,348 60.7 29.8

2034 2,314 59.8 30.8 1,702 59.8 24.0 2,414 59.8 31.9

2035 2,372 58.9 32.9 1,728 58.9 25.2 2,478 58.9 34.1

2036 2,427 58.0 35.0 1,752 58.0 26.4 2,539 58.0 36.3

2037 2,480 57.2 37.1 1,774 57.2 27.7 2,598 57.2 38.6

2038 2,529 56.3 39.3 1,794 56.3 28.9 2,653 56.3 40.9

2039 2,589 68.9 41.5 1,824 68.9 30.1 2,719 68.9 43.3

2040 2,655 76.7 43.8 1,861 76.7 31.3 2,791 76.7 45.8

2041 2,726 84.2 46.1 1,904 84.2 32.5 2,868 84.2 48.3

2042 2,807 95.7 48.5 1,957 95.7 33.7 2,954 95.7 50.9

2043 2,896 106.9 51.0 2,019 106.9 35.0 3,049 106.9 53.6

2044 2,994 117.6 53.5 2,090 117.6 36.3 3,152 117.6 56.4

2045 3,100 128.0 56.2 2,170 128.0 37.6 3,264 128.0 59.3

2046 3,211 134.0 58.8 2,255 134.0 39.0 3,380 134.0 62.2

2047 3,318 131.8 61.4 2,335 131.8 40.3 3,492 131.8 65.0

2048 3,421 129.7 64.0 2,411 129.7 41.7 3,601 129.7 67.9

2049 3,521 127.6 66.5 2,484 127.6 43.0 3,707 127.6 70.6

2050 3,617 125.5 69.0 2,552 125.5 44.3 3,809 125.5 73.4

2051 3,710 123.4 71.5 2,617 123.4 45.7 3,907 123.4 76.1

2052 3,799 121.4 74.0 2,678 121.4 47.0 4,002 121.4 78.8

2053 3,884 119.4 76.4 2,736 119.4 48.3 4,093 119.4 81.5

2054 3,966 117.4 78.8 2,790 117.4 49.6 4,181 117.4 84.1

2055 4,045 115.5 81.1 2,840 115.5 50.8 4,265 115.5 86.6

2056 4,120 113.6 83.4 2,887 113.6 52.1 4,346 113.6 89.2

2057 4,192 111.8 85.7 2,931 111.8 53.4 4,423 111.8 91.6

2058 4,261 110.0 87.9 2,971 110.0 54.6 4,497 110.0 94.1

2059 4,326 108.2 90.1 3,008 108.2 55.8 4,568 108.2 96.5

2060 4,387 106.4 92.3 3,041 106.4 57.0 4,635 106.4 98.9

2061 4,446 104.7 94.4 3,072 104.7 58.1 4,699 104.7 101.2

2062 4,501 103.0 96.5 3,099 103.0 59.3 4,760 103.0 103.5

2063 4,553 101.3 98.5 3,123 101.3 60.4 4,817 101.3 105.7

2064 4,602 99.6 100.5 3,145 99.6 61.5 4,872 99.6 107.9

2065 4,652 98.0 102.5 3,163 98.0 62.6 4,928 98.0 110.0

2066 4,699 96.4 104.5 3,179 96.4 63.6 4,982 96.4 112.1

2067 4,743 94.8 106.3 3,191 94.8 64.7 5,032 94.8 114.2

2068 4,783 93.2 108.2 3,201 93.2 65.6 5,079 93.2 116.2

2069 4,821 91.7 110.0 3,209 91.7 66.6 5,124 91.7 118.2

2070 4,856 90.2 111.8 3,214 90.2 67.5 5,165 90.2 120.2

2071 4,888 88.7 113.5 3,216 88.7 68.4 5,203 88.7 122.1

2072 4,916 87.2 115.2 3,215 87.2 69.3 5,238 87.2 123.9

2073 4,942 85.7 116.9 3,213 85.7 70.1 5,270 85.7 125.8

2074 4,965 84.3 118.6 3,208 84.3 71.0 5,299 84.3 127.6

2075 4,984 82.9 120.2 3,200 82.9 71.7 5,325 82.9 129.4

2076 5,001 81.5 121.8 3,191 81.5 72.5 5,348 81.5 131.1

2077 5,014 80.1 123.4 3,179 80.1 73.2 5,368 80.1 132.9

Based on Intermediate Assumptions of the 2003 Trustees Report. Office of the Actuary

1/ Reflects the assumed actual yield rate for PRSA accounts under the proposal. Social Security Administration

2/ Excludes proceeds of PRSAs that go to the worker's estate if the worker dies before entitlement. September 9, 2003
Table 2b--PRSA Contributions, Offsets to OASDI Trust Funds from PRSAs, and Budget Effects 

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 67%

Contributions to Offsets to Change Change in Change in 

PRSA by Federal OASDI Other Changes in Annual Debt Held Annual

Government Trust Funds in OASDI Unified Budget by Public Unified Budget

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

(In Billions of Constant 2003 Dollars)

2004 0.0 0.0 -0.7 -0.7 0.7 -0.7

2005 88.1 0.0 -11.2 -99.3 103.0 -102.4

2006 90.6 0.1 -8.4 -98.9 208.2 -108.1

2007 93.0 0.3 -5.5 -98.2 315.9 -113.8

2008 95.2 0.6 -2.3 -96.9 425.7 -119.0

2009 97.3 1.0 1.8 -94.5 536.4 -123.1

2010 99.4 1.6 7.0 -90.8 646.7 -125.9

2011 101.4 2.3 13.3 -85.8 755.1 -127.2

2012 103.2 3.1 20.5 -79.6 860.3 -127.2

2013 105.1 4.1 28.6 -72.4 961.2 -126.0

2014 106.9 5.2 37.3 -64.5 1,056.9 -123.6

2015 108.7 6.5 46.5 -55.7 1,146.3 -120.1

2016 110.5 8.0 56.4 -46.0 1,228.2 -115.4

2017 112.2 9.7 66.9 -35.7 1,301.8 -109.4

2018 114.0 11.5 77.9 -24.6 1,366.2 -102.3

2019 115.7 13.6 89.2 -13.0 1,420.5 -94.2

2020 117.5 15.9 100.8 -0.8 1,464.0 -84.9

2021 119.3 18.4 112.7 11.8 1,495.8 -74.4

2022 121.0 21.1 124.7 24.8 1,515.1 -62.9

2023 122.8 24.1 136.8 38.0 1,521.4 -50.4

2024 124.6 27.3 149.2 51.9 1,513.6 -36.5

2025 126.4 30.8 161.8 66.1 1,490.8 -21.4

2026 139.6 34.6 174.9 69.9 1,463.6 -16.1

2027 141.6 38.6 188.7 85.7 1,419.2 1.7

2028 143.7 43.0 202.5 101.8 1,356.9 21.0

2029 145.9 47.7 216.1 118.0 1,276.1 41.3

2030 148.0 52.7 229.4 134.1 1,176.3 62.6

2031 150.3 58.0 243.6 151.3 1,055.7 86.3

2032 152.6 63.7 258.0 169.2 913.1 111.9

2033 154.9 69.8 272.7 187.6 747.3 139.3

2034 157.2 76.2 287.1 206.2 557.3 168.2

2035 159.5 83.0 300.8 224.3 343.0 198.1

2036 161.8 90.1 314.6 242.9 103.1 229.9

2037 164.2 97.7 328.5 262.0 -163.7 263.8

2038 166.6 105.6 342.5 281.5 -458.5 299.6

2039 210.0 113.9 356.4 260.4 -740.5 295.3

2040 240.6 122.7 369.7 251.8 -1,022.0 303.1

2041 272.1 132.0 384.0 243.9 -1,303.9 311.6

2042 318.7 141.9 398.8 222.0 -1,571.7 305.8

2043 366.4 152.4 414.2 200.2 -1,825.0 299.1

2044 415.3 163.6 430.2 178.4 -2,063.5 291.7

2045 465.5 175.0 445.9 155.4 -2,285.5 282.1

2046 501.9 186.9 462.9 147.9 -2,506.4 287.5

2047 508.6 199.2 480.4 171.0 -2,757.8 324.3

2048 515.3 212.0 498.2 195.0 -3,041.3 363.9

2049 522.2 225.3 516.7 219.8 -3,359.0 406.3

2050 529.1 239.0 535.1 245.1 -3,712.1 451.0

2051 536.0 253.3 554.1 271.4 -4,103.0 499.0

2052 543.0 268.0 573.6 298.6 -4,533.7 550.1

2053 550.1 283.2 593.4 326.4 -5,005.9 604.3

2054 557.4 298.9 613.4 354.9 -5,521.6 661.5

2055 564.7 313.1 633.5 381.9 -6,080.6 719.8

2056 572.1 327.7 653.7 409.2 -6,684.6 781.0

2057 579.7 342.5 674.1 436.9 -7,335.1 845.2

2058 587.4 357.7 694.4 464.7 -8,033.9 912.4

2059 595.2 373.1 714.9 492.9 -8,782.5 982.7

2060 603.0 388.9 735.4 521.3 -9,582.9 1,056.2

2061 611.0 405.0 756.2 550.2 -10,437.1 1,133.3

2062 619.0 421.3 777.3 579.6 -11,347.2 1,214.1

2063 627.2 438.0 798.9 609.7 -12,315.7 1,298.9

2064 635.4 455.0 820.8 640.4 -13,344.8 1,387.8

2065 643.7 470.1 843.3 669.7 -14,434.9 1,478.8

2066 652.2 485.3 866.2 699.3 -15,588.3 1,573.8

2067 660.7 500.5 889.7 729.5 -16,807.3 1,673.0

2068 669.3 515.7 913.7 760.1 -18,094.4 1,776.7

2069 678.0 531.0 938.1 791.1 -19,452.1 1,884.7

2070 686.7 546.2 961.0 820.6 -20,880.9 1,995.3

2071 695.5 561.5 984.3 850.3 -22,383.1 2,110.4

2072 704.4 576.8 1,007.9 880.3 -23,961.3 2,230.1

2073 713.4 592.1 1,031.8 910.5 -25,617.9 2,354.6

2074 722.5 607.4 1,056.2 941.1 -27,355.8 2,484.0

2075 731.7 622.7 1,081.0 971.9 -29,177.6 2,618.5

2076 741.0 637.9 1,106.1 1,003.0 -31,086.0 2,758.2

2077 750.5 653.1 1,131.6 1,034.2 -33,083.8 2,903.2

2078 760.0 668.2 1,157.3 1,065.5 -35,173.7 3,053.6

Office of the Actuary

1/ Excluding the effect of general fund transfers to the Trust Funds, which do not affect the unified budget. Social Security Administration

Based on Intermediate Assumptions of the 2003 Trustees Report. September 9, 2003
Table 2c--Cash Flow from the General Fund of the Treasury to the OASDI Trust Funds--Constant 2003 Dollars 1/

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 67%

Estimate for Modified Present Law Estimate for Present Law

Estimate for Nick Smith Proposal with Borrowing to Pay Scheduled Benefits with Only Payable Benefits

Additional Net Annual Net Annual Net Annual

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

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

Transfers 2/ Fund with Interest In Year 3/ Fund with Interest In Year 3/ Fund with Interest

Year (billions of Constant 2003$) (billions of Constant 2003$) (billions of Constant 2003$)

2003 0 -79 -82 0 -79 -82 0 -79 -82

2004 0 -84 -171 0 -84 -172 0 -84 -172

2005 0 -2 -179 0 -91 -271 0 -91 -271

2006 6 -9 -194 0 -97 -380 0 -97 -380

2007 26 -13 -213 0 -100 -494 0 -100 -494

2008 49 -14 -235 0 -99 -612 0 -99 -612

2009 74 -14 -256 0 -96 -731 0 -96 -731

2010 98 -13 -277 0 -92 -848 0 -92 -848

2011 127 -13 -299 0 -86 -963 0 -86 -963

2012 165 -10 -318 0 -77 -1,072 0 -77 -1,072

2013 163 -6 -334 0 -66 -1,173 0 -66 -1,173

2014 1 -1 -346 0 -54 -1,264 0 -54 -1,264

2015 1 4 -352 0 -39 -1,343 0 -39 -1,343

2016 1 11 -352 0 -23 -1,406 0 -23 -1,406

2017 1 19 -343 0 -5 -1,453 0 -5 -1,453

2018 1 27 -325 0 15 -1,482 0 15 -1,482

2019 1 36 -298 0 35 -1,490 0 35 -1,490

2020 1 45 -261 0 56 -1,477 0 56 -1,477

2021 1 55 -212 0 79 -1,440 0 79 -1,440

2022 1 64 -152 0 101 -1,379 0 101 -1,379

2023 1 72 -82 0 122 -1,295 0 122 -1,295

2024 2 79 -3 0 142 -1,187 0 142 -1,187

2025 2 86 85 0 163 -1,055 0 163 -1,055

2026 2 91 181 0 183 -899 0 183 -899

2027 2 95 284 0 203 -717 0 203 -717

2028 3 110 406 0 222 -510 0 222 -510

2029 3 112 533 0 240 -279 0 240 -279

2030 3 113 665 0 256 -23 0 256 -23

2031 3 111 800 0 272 256 0 272 256

2032 4 108 935 0 286 558 0 286 558

2033 4 103 1,069 0 298 882 0 298 882

2034 4 97 1,201 0 310 1,228 0 310 1,228

2035 5 90 1,329 0 320 1,595 0 320 1,595

2036 5 81 1,453 0 330 1,982 0 330 1,982

2037 5 71 1,570 0 338 2,390 0 338 2,390

2038 6 60 1,678 0 346 2,818 0 346 2,818

2039 6 48 1,778 0 353 3,265 0 353 3,265

2040 7 35 1,868 0 359 3,733 0 359 3,733

2041 7 120 2,047 0 366 4,222 0 366 4,222

2042 8 150 2,263 74 373 4,732 0 298 4,656

2043 8 180 2,516 380 380 5,265 0 0 4,796

2044 9 211 2,809 387 387 5,822 0 0 4,940

2045 10 243 3,143 396 396 6,405 0 0 5,088

2046 11 261 3,506 405 405 7,014 0 0 5,240

2047 11 248 3,867 414 414 7,651 0 0 5,398

2048 12 236 4,226 424 424 8,317 0 0 5,560

2049 13 222 4,582 435 435 9,015 0 0 5,726

2050 14 210 4,935 446 446 9,744 0 0 5,898

2051 16 197 5,285 458 458 10,508 0 0 6,075

2052 17 183 5,633 471 471 11,308 0 0 6,257

2053 18 170 5,977 484 484 12,146 0 0 6,445

2054 20 156 6,317 497 497 13,022 0 0 6,638

2055 21 143 6,654 510 510 13,938 0 0 6,838

2056 22 130 6,987 524 524 14,895 0 0 7,043

2057 24 117 7,317 537 537 15,895 0 0 7,254

2058 26 103 7,642 550 550 16,938 0 0 7,472

2059 27 88 7,962 563 563 18,026 0 0 7,696

2060 29 73 8,276 575 575 19,159 0 0 7,927

2061 31 57 8,583 588 588 20,339 0 0 8,164

2062 32 41 8,883 601 601 21,568 0 0 8,409

2063 34 25 9,175 614 614 22,848 0 0 8,662

2064 36 8 9,459 628 628 24,180 0 0 8,921

2065 38 -6 9,736 642 642 25,566 0 0 9,189

2066 40 -21 10,006 657 657 27,009 0 0 9,465

2067 42 -36 10,268 672 672 28,512 0 0 9,749

2068 44 -51 10,523 687 687 30,075 0 0 10,041

2069 46 -67 10,770 703 703 31,701 0 0 10,342

2070 48 -80 11,011 719 719 33,393 0 0 10,653

2071 50 -94 11,244 736 736 35,153 0 0 10,972

2072 52 -108 11,471 753 753 36,983 0 0 11,301

2073 54 -121 11,690 770 770 38,885 0 0 11,640

2074 56 -135 11,901 787 787 40,863 0 0 11,990

2075 58 -149 12,104 805 805 42,918 0 0 12,349

2076 60 -164 12,299 823 823 45,052 0 0 12,720

2077 62 -178 12,485 840 840 47,270 0 0 13,101

1/ Including redemption of Trust Fund assets as of 1-1-2003. Office of the Actuary

2/ Includes reimbursement for minimum DI benefits and specified transfers from FY 2007-2013. Social Security Administration

3/ Trust Funds are assumed to borrow from the General Fund of the Treasury. September 9, 2003
Table 3--Financial Effects of the Representative Nick Smith Proposal Assuming a 100% PRSA Participation Rate

PRSA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 100%

Marginal Change in OASDI Contribution Rate Net PRSA Contribution Rate Average

OASDI Reimbursement Specified OASDI Refundable PRSA

Cost Income Annual TFR Redirection for Minimum General Fund Contribution From Credit from Contribution

Year Rate 1/ Rate Balance 1-1-yr Total to PRSAs DI Benefits Transfers Rate 2/ Trust Funds General Fund Rate

2003 10.90 12.71 1.80 288 12.40

2004 10.83 12.69 1.86 309 12.40

2005 10.99 10.22 -0.78 320 -2.495 -2.500 0.005 9.90 2.50 0.34 2.84

2006 10.85 10.33 -0.52 318 0.112 0.010 0.102 10.02 2.50 0.34 2.84

2007 10.79 10.75 -0.04 316 0.409 0.003 0.405 10.43 2.50 0.34 2.84

2008 10.78 11.21 0.43 318 0.450 -0.002 0.453 10.88 2.50 0.34 2.84

2009 10.80 11.68 0.88 324 0.456 -0.002 0.458 11.33 2.50 0.34 2.84

2010 10.83 12.12 1.29 334 0.428 -0.001 0.429 11.76 2.50 0.34 2.84

2011 10.86 12.67 1.81 348 0.520 0.000 0.520 12.28 2.50 0.34 2.84

2012 10.92 13.34 2.42 366 0.653 0.000 0.653 12.93 2.50 0.34 2.84

2013 11.00 13.27 2.27 389 -0.088 0.000 -0.088 12.85 2.50 0.34 2.84

2014 11.08 10.35 -0.74 411 -2.933 -0.001 -2.932 9.91 2.50 0.34 2.84

2015 11.18 10.36 -0.82 406 0.000 0.000 9.91 2.50 0.34 2.84

2016 11.29 10.37 -0.93 400 0.000 0.000 9.91 2.50 0.34 2.84

2017 11.42 10.38 -1.04 393 0.001 0.001 9.91 2.50 0.34 2.84

2018 11.55 10.40 -1.15 386 0.001 0.001 9.91 2.50 0.34 2.84

2019 11.67 10.41 -1.26 377 0.001 0.001 9.92 2.50 0.34 2.84

2020 11.81 10.43 -1.38 368 0.001 0.001 9.92 2.50 0.34 2.84

2021 11.95 10.44 -1.51 357 0.002 0.002 9.92 2.50 0.34 2.84

2022 12.07 10.46 -1.62 346 0.002 0.002 9.92 2.50 0.34 2.84

2023 12.16 10.47 -1.69 336 0.002 0.002 9.92 2.50 0.34 2.84

2024 12.24 10.48 -1.76 325 0.002 0.002 9.92 2.50 0.34 2.84

2025 12.30 10.50 -1.80 314 0.003 0.003 9.93 2.50 0.34 2.84

2026 12.34 10.26 -2.08 304 -0.247 -0.250 0.003 9.68 2.75 0.34 3.09

2027 12.35 10.27 -2.08 291 0.003 0.003 9.68 2.75 0.34 3.09

2028 12.35 10.28 -2.07 279 0.003 0.003 9.69 2.75 0.34 3.09

2029 12.33 10.29 -2.04 267 0.003 0.003 9.69 2.75 0.34 3.09

2030 12.29 10.30 -1.99 256 0.003 0.003 9.69 2.75 0.34 3.09

2031 12.22 10.31 -1.90 245 0.003 0.003 9.70 2.75 0.34 3.09

2032 12.11 10.32 -1.79 235 0.003 0.003 9.70 2.75 0.34 3.09

2033 11.98 10.33 -1.66 226 0.003 0.003 9.70 2.75 0.34 3.09

2034 11.84 10.33 -1.51 219 0.004 0.004 9.71 2.75 0.34 3.09

2035 11.68 10.34 -1.35 212 0.004 0.004 9.71 2.75 0.34 3.09

2036 11.51 10.34 -1.17 207 0.004 0.004 9.71 2.75 0.34 3.09

2037 11.32 10.35 -0.97 204 0.004 0.004 9.72 2.75 0.34 3.09

2038 11.12 10.35 -0.77 202 0.004 0.004 9.72 2.75 0.34 3.09

2039 10.90 10.10 -0.80 202 -0.245 -0.250 0.005 9.48 3.00 0.34 3.34

2040 10.70 9.91 -0.79 202 -0.195 -0.200 0.005 9.28 3.20 0.34 3.54

2041 10.47 9.71 -0.76 202 -0.195 -0.200 0.005 9.09 3.40 0.34 3.74

2042 10.24 9.52 -0.72 202 -0.195 -0.200 0.005 8.89 3.60 0.34 3.94

2043 10.01 9.32 -0.68 203 -0.194 -0.200 0.006 8.70 3.80 0.34 4.14

2044 9.77 9.13 -0.64 205 -0.194 -0.200 0.006 8.50 4.00 0.34 4.34

2045 9.54 8.93 -0.61 206 -0.193 -0.200 0.007 8.31 4.20 0.34 4.54

2046 9.31 8.74 -0.57 208 -0.193 -0.200 0.007 8.12 4.40 0.34 4.74

2047 9.08 8.55 -0.53 211 -0.192 -0.200 0.008 7.93 4.60 0.34 4.94

2048 8.86 8.36 -0.50 214 -0.192 -0.200 0.008 7.73 4.80 0.34 5.14

2049 8.63 8.17 -0.46 217 -0.191 -0.200 0.009 7.54 5.00 0.34 5.34

2050 8.42 7.98 -0.44 221 -0.190 -0.200 0.010 7.35 5.20 0.34 5.54

2051 8.21 7.79 -0.42 225 -0.190 -0.200 0.010 7.16 5.40 0.34 5.74

2052 8.01 7.61 -0.40 229 -0.189 -0.200 0.011 6.97 5.60 0.34 5.94

2053 7.81 7.42 -0.39 234 -0.189 -0.200 0.011 6.78 5.80 0.34 6.14

2054 7.61 7.24 -0.37 239 -0.189 -0.200 0.011 6.60 6.00 0.34 6.34

2055 7.43 7.06 -0.38 244 -0.188 -0.200 0.012 6.41 6.20 0.34 6.54

2056 7.26 6.87 -0.39 249 -0.188 -0.200 0.012 6.22 6.40 0.34 6.74

2057 7.08 6.69 -0.39 254 -0.188 -0.200 0.012 6.03 6.60 0.34 6.94

2058 6.90 6.51 -0.40 259 -0.188 -0.200 0.012 5.84 6.80 0.34 7.14

2059 6.73 6.33 -0.40 264 -0.188 -0.200 0.012 5.65 7.00 0.34 7.34

2060 6.55 6.14 -0.40 270 -0.188 -0.200 0.012 5.47 7.20 0.34 7.54

2061 6.37 5.96 -0.41 276 -0.188 -0.200 0.012 5.28 7.40 0.34 7.74

2062 6.19 5.78 -0.41 282 -0.188 -0.200 0.012 5.09 7.60 0.34 7.94

2063 6.02 5.60 -0.42 288 -0.188 -0.200 0.012 4.90 7.80 0.34 8.14

2064 5.84 5.42 -0.42 295 -0.187 -0.200 0.013 4.72 8.00 0.34 8.34

2065 5.70 5.44 -0.26 300 0.013 0.013 4.73 8.00 0.34 8.34

2066 5.55 5.46 -0.09 308 0.013 0.013 4.74 8.00 0.34 8.34

2067 5.41 5.48 0.07 320 0.012 0.012 4.75 8.00 0.34 8.34

2068 5.28 5.51 0.23 335 0.012 0.012 4.77 8.00 0.34 8.34

2069 5.14 5.53 0.39 354 0.012 0.012 4.78 8.00 0.34 8.34

2070 5.03 5.55 0.53 376 0.011 0.011 4.79 8.00 0.34 8.34

2071 4.91 5.58 0.67 402 0.011 0.011 4.80 8.00 0.34 8.34

2072 4.80 5.60 0.80 432 0.011 0.011 4.81 8.00 0.34 8.34

2073 4.68 5.62 0.94 467 0.011 0.011 4.82 8.00 0.34 8.34

2074 4.57 5.65 1.08 507 0.010 0.010 4.83 8.00 0.34 8.34

2075 4.46 5.67 1.21 552 0.010 0.010 4.84 8.00 0.34 8.34

2076 4.35 5.70 1.35 604 0.010 0.010 4.85 8.00 0.34 8.34

2077 4.23 5.72 1.49 662 0.010 0.010 4.86 8.00 0.34 8.34

2078 4.12 5.75 1.63 727 0.009 0.009 4.87 8.00 0.34 8.34

 Summarized

Cost Income Actuarial Change in

2003 Rate Rate Balance Actuarial Balance

2077 10.00 10.19 0.18 2.10

Based on Intermediate Assumptions of the 2003 Trustees Report.

1/ Net of Benefit Cost Reductions from PRSA Offsets. Office of the Chief Actuary

2/ Includes payroll tax contributions plus reimbursement for minimum DI benefits plus specified General Fund transfers Social Security Administration

 (expressed as a percent of taxable payroll). September 9, 2003
Table 3a--Trust Fund Asset Comparison and PRSA Information for the Representative Nick Smith Proposal

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 100%

Present Law Proposal

Trust Fund Trust Fund IA/Annuity PRSA PRSA

Assets, Assets, Assets, Contributions Disbursements

Year End of Year End of Year End of Year in Year in Year 1/

(In Billions of Present Value Dollars as of 1/1/2003)

2003 1,453 1,453

2004 1,529 1,528 0 0.0 0.0

2005 1,611 1,495 121 119.7 0.0

2006 1,695 1,471 243 119.4 0.1

2007 1,779 1,469 367 118.7 0.3

2008 1,861 1,485 491 117.9 0.6

2009 1,937 1,519 617 116.9 1.1

2010 2,007 1,570 742 115.8 1.6

2011 2,071 1,641 868 114.5 2.2

2012 2,128 1,735 994 113.1 3.0

2013 2,174 1,821 1,119 111.7 3.9

2014 2,211 1,792 1,244 110.3 4.8

2015 2,237 1,761 1,368 108.9 5.9

2016 2,251 1,725 1,492 107.4 7.1

2017 2,254 1,686 1,614 105.9 8.4

2018 2,245 1,644 1,736 104.4 9.8

2019 2,224 1,598 1,856 102.9 11.3

2020 2,191 1,548 1,974 101.4 12.9

2021 2,147 1,495 2,092 100.0 14.7

2022 2,092 1,439 2,207 98.5 16.5

2023 2,027 1,381 2,320 97.0 18.4

2024 1,954 1,321 2,432 95.6 20.5

2025 1,873 1,261 2,541 94.2 22.6

2026 1,785 1,193 2,656 100.9 24.8

2027 1,690 1,126 2,768 99.4 27.2

2028 1,589 1,060 2,877 98.0 29.6

2029 1,483 997 2,984 96.5 32.2

2030 1,372 935 3,088 95.1 34.8

2031 1,259 877 3,189 93.7 37.5

2032 1,144 824 3,286 92.4 40.4

2033 1,026 775 3,380 91.1 43.3

2034 908 731 3,471 89.7 46.3

2035 789 692 3,558 88.4 49.3

2036 671 659 3,641 87.1 52.5

2037 552 632 3,719 85.8 55.7

2038 435 611 3,794 84.5 58.9

2039 319 589 3,871 89.9 62.3

2040 204 568 3,949 93.8 65.7

2041 91 548 4,027 97.6 69.1

2042 ----- 530 4,105 101.2 72.7

2043 ----- 512 4,183 104.7 76.3

2044 ----- 496 4,261 108.0 79.9

2045 ----- 481 4,339 111.2 83.7

2046 ----- 468 4,416 114.2 87.3

2047 ----- 455 4,492 117.1 90.8

2048 ----- 443 4,568 119.9 94.2

2049 ----- 433 4,644 122.5 97.5

2050 ----- 423 4,719 125.0 100.7

2051 ----- 413 4,794 127.4 103.7

2052 ----- 405 4,869 129.7 106.7

2053 ----- 396 4,943 131.9 109.5

2054 ----- 388 5,017 133.9 112.2

2055 ----- 380 5,091 135.9 114.9

2056 ----- 372 5,164 137.8 117.4

2057 ----- 364 5,238 139.5 119.8

2058 ----- 356 5,311 141.2 122.1

2059 ----- 349 5,384 142.8 124.4

2060 ----- 341 5,457 144.3 126.5

2061 ----- 333 5,530 145.7 128.6

2062 ----- 326 5,603 147.1 130.6

2063 ----- 318 5,677 148.3 132.5

2064 ----- 310 5,750 149.4 134.4

2065 ----- 306 5,825 147.0 136.2

2066 ----- 304 5,897 144.6 138.0

2067 ----- 305 5,967 142.2 139.7

2068 ----- 309 6,033 139.9 141.3

2069 ----- 315 6,096 137.5 142.9

2070 ----- 324 6,156 135.3 144.4

2071 ----- 335 6,213 133.0 145.9

2072 ----- 347 6,268 130.8 147.3

2073 ----- 362 6,319 128.6 148.8

2074 ----- 378 6,368 126.4 150.2

2075 ----- 396 6,414 124.3 151.5

2076 ----- 416 6,456 122.2 152.9

2077 ----- 437 6,496 120.2 154.3

Based on Intermediate Assumptions of the 2003 Trustees Report. Office of the Actuary

1/ Excludes proceeds of PRSAs that go to the worker's estate if the worker dies before entitlement. Social Security Administration

September 9, 2003
Table 3a1--IA/Annuity Assets, PRSA Contributions and PRSA Disbursement Under Three Sensitivity Illustrations

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 100%

Invest 60% Stocks, 40% Corporate Bonds 1/ Invest All in Govt Bonds (2.7% Net Yield) Invest 70% Stocks, 30% Corporate Bonds

IA/Annuity PRSA PRSA IA/Annuity PRSA PRSA IA/Annuity PRSA PRSA

Assets, Contributions Disbursements Assets, Contributions Disbursements Assets, Contributions Disbursements

Year End of Year in Year in Year 2/ End of Year in Year in Year 2/ End of Year in Year in Year 2/

(In Billions of Present Value Dollars as of 1/1/2003)

2003

2004 0 0.0 0.0 0 0.0 0.0 0 0.0 0.0

2005 121 119.7 0.0 120 119.7 0.0 121 119.7 0.0

2006 243 119.4 0.1 238 119.4 0.1 244 119.4 0.1

2007 367 118.7 0.3 356 118.7 0.3 368 118.7 0.3

2008 491 117.9 0.6 472 117.9 0.6 494 117.9 0.6

2009 617 116.9 1.1 586 116.9 1.1 621 116.9 1.1

2010 742 115.8 1.6 698 115.8 1.6 748 115.8 1.6

2011 868 114.5 2.2 808 114.5 2.2 876 114.5 2.2

2012 994 113.1 3.0 915 113.1 3.0 1,004 113.1 3.0

2013 1,119 111.7 3.9 1,020 111.7 3.9 1,133 111.7 3.9

2014 1,244 110.3 4.8 1,122 110.3 4.8 1,261 110.3 4.8

2015 1,368 108.9 5.9 1,221 108.9 5.9 1,389 108.9 5.9

2016 1,492 107.4 7.1 1,317 107.4 7.1 1,517 107.4 7.1

2017 1,614 105.9 8.4 1,410 105.9 8.4 1,644 105.9 8.4

2018 1,736 104.4 9.8 1,500 104.4 9.7 1,770 104.4 9.8

2019 1,856 102.9 11.3 1,587 102.9 11.0 1,895 102.9 11.3

2020 1,974 101.4 12.9 1,670 101.4 12.4 2,019 101.4 13.0

2021 2,092 100.0 14.7 1,751 100.0 13.8 2,142 100.0 14.8

2022 2,207 98.5 16.5 1,828 98.5 15.3 2,264 98.5 16.6

2023 2,320 97.0 18.4 1,901 97.0 16.9 2,384 97.0 18.6

2024 2,432 95.6 20.5 1,971 95.6 18.5 2,502 95.6 20.7

2025 2,541 94.2 22.6 2,038 94.2 20.1 2,618 94.2 22.9

2026 2,656 100.9 24.8 2,110 100.9 21.8 2,740 100.9 25.3

2027 2,768 99.4 27.2 2,178 99.4 23.5 2,860 99.4 27.7

2028 2,877 98.0 29.6 2,242 98.0 25.2 2,977 98.0 30.3

2029 2,984 96.5 32.2 2,303 96.5 26.9 3,092 96.5 32.9

2030 3,088 95.1 34.8 2,360 95.1 28.7 3,204 95.1 35.7

2031 3,189 93.7 37.5 2,414 93.7 30.5 3,313 93.7 38.6

2032 3,286 92.4 40.4 2,464 92.4 32.4 3,419 92.4 41.6

2033 3,380 91.1 43.3 2,510 91.1 34.2 3,522 91.1 44.7

2034 3,471 89.7 46.3 2,553 89.7 36.0 3,621 89.7 47.8

2035 3,558 88.4 49.3 2,593 88.4 37.8 3,717 88.4 51.1

2036 3,641 87.1 52.5 2,629 87.1 39.7 3,809 87.1 54.5

2037 3,719 85.8 55.7 2,661 85.8 41.5 3,896 85.8 57.9

2038 3,794 84.5 58.9 2,690 84.5 43.3 3,980 84.5 61.4

2039 3,871 89.9 62.3 2,723 89.9 45.1 4,066 89.9 65.0

2040 3,949 93.8 65.7 2,757 93.8 46.9 4,152 93.8 68.7

2041 4,027 97.6 69.1 2,793 97.6 48.7 4,239 97.6 72.5

2042 4,105 101.2 72.7 2,830 101.2 50.4 4,325 101.2 76.3

2043 4,183 104.7 76.3 2,868 104.7 52.2 4,412 104.7 80.3

2044 4,261 108.0 79.9 2,908 108.0 54.0 4,498 108.0 84.3

2045 4,339 111.2 83.7 2,949 111.2 55.8 4,584 111.2 88.4

2046 4,416 114.2 87.3 2,990 114.2 57.5 4,668 114.2 92.4

2047 4,492 117.1 90.8 3,033 117.1 59.1 4,752 117.1 96.3

2048 4,568 119.9 94.2 3,076 119.9 60.6 4,836 119.9 100.1

2049 4,644 122.5 97.5 3,121 122.5 62.1 4,919 122.5 103.7

2050 4,719 125.0 100.7 3,166 125.0 63.5 5,001 125.0 107.2

2051 4,794 127.4 103.7 3,211 127.4 64.8 5,082 127.4 110.7

2052 4,869 129.7 106.7 3,258 129.7 66.1 5,163 129.7 113.9

2053 4,943 131.9 109.5 3,305 131.9 67.3 5,244 131.9 117.1

2054 5,017 133.9 112.2 3,352 133.9 68.5 5,324 133.9 120.2

2055 5,091 135.9 114.9 3,401 135.9 69.6 5,403 135.9 123.1

2056 5,164 137.8 117.4 3,449 137.8 70.7 5,483 137.8 125.9

2057 5,238 139.5 119.8 3,498 139.5 71.8 5,562 139.5 128.6

2058 5,311 141.2 122.1 3,547 141.2 72.8 5,640 141.2 131.3

2059 5,384 142.8 124.4 3,597 142.8 73.8 5,719 142.8 133.8

2060 5,457 144.3 126.5 3,647 144.3 74.8 5,797 144.3 136.2

2061 5,530 145.7 128.6 3,697 145.7 75.7 5,876 145.7 138.5

2062 5,603 147.1 130.6 3,747 147.1 76.7 5,954 147.1 140.8

2063 5,677 148.3 132.5 3,797 148.3 77.7 6,032 148.3 142.9

2064 5,750 149.4 134.4 3,847 149.4 78.6 6,111 149.4 145.0

2065 5,825 147.0 136.2 3,893 147.0 79.5 6,192 147.0 147.0

2066 5,897 144.6 138.0 3,935 144.6 80.5 6,271 144.6 149.0

2067 5,967 142.2 139.7 3,975 142.2 81.4 6,347 142.2 150.8

2068 6,033 139.9 141.3 4,010 139.9 82.3 6,420 139.9 152.6

2069 6,096 137.5 142.9 4,042 137.5 83.2 6,490 137.5 154.3

2070 6,156 135.3 144.4 4,071 135.3 84.1 6,557 135.3 156.0

2071 6,213 133.0 145.9 4,096 133.0 85.0 6,621 133.0 157.6

2072 6,268 130.8 147.3 4,118 130.8 85.9 6,683 130.8 159.2

2073 6,319 128.6 148.8 4,137 128.6 86.7 6,742 128.6 160.7

2074 6,368 126.4 150.2 4,153 126.4 87.6 6,798 126.4 162.2

2075 6,414 124.3 151.5 4,165 124.3 88.4 6,851 124.3 163.7

2076 6,456 122.2 152.9 4,175 122.2 89.3 6,901 122.2 165.2

2077 6,496 120.2 154.3 4,181 120.2 90.1 6,949 120.2 166.7

Based on Intermediate Assumptions of the 2003 Trustees Report. Office of the Actuary

1/ Reflects the assumed actual yield rate for PRSA accounts under the proposal. Social Security Administration

2/ Excludes proceeds of PRSAs that go to the worker's estate if the worker dies before entitlement. September 9, 2003
Table 3b--PRSA Contributions, Offsets to OASDI Trust Funds from PRSAs, and Budget Effects 

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 100%

Contributions to Offsets to Change Change in Change in 

PRSA by Federal OASDI Other Changes in Annual Debt Held Annual

Government Trust Funds in OASDI Unified Budget by Public Unified Budget

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

(In Billions of Constant 2003 Dollars)

2004 0.0 0.0 -0.7 -0.7 0.7 -0.7

2005 132.1 0.0 -11.2 -143.4 148.4 -147.8

2006 136.0 0.1 -8.4 -144.2 301.7 -157.5

2007 139.5 0.4 -5.5 -144.5 460.1 -167.2

2008 142.8 0.9 -2.3 -144.2 623.2 -176.5

2009 146.0 1.5 1.8 -142.7 789.7 -184.7

2010 149.1 2.4 7.0 -139.8 958.3 -191.6

2011 152.1 3.4 13.3 -135.4 1,127.3 -197.0

2012 154.8 4.6 20.5 -129.7 1,295.5 -201.1

2013 157.7 6.1 28.6 -123.0 1,461.8 -204.0

2014 160.4 7.8 37.3 -115.3 1,625.1 -205.9

2015 163.1 9.8 46.5 -106.8 1,784.3 -206.6

2016 165.7 12.0 56.4 -97.3 1,938.3 -206.0

2017 168.3 14.5 66.9 -86.9 2,086.0 -204.2

2018 170.9 17.3 77.9 -75.8 2,226.6 -201.4

2019 173.6 20.4 89.2 -64.1 2,359.4 -197.6

2020 176.2 23.8 100.8 -51.7 2,483.4 -192.7

2021 178.9 27.5 112.7 -38.6 2,597.7 -186.6

2022 181.5 31.6 124.7 -25.2 2,701.6 -179.5

2023 184.2 36.1 136.8 -11.3 2,794.3 -171.4

2024 186.9 41.0 149.3 3.3 2,874.7 -161.8

2025 189.6 46.2 161.8 18.4 2,942.0 -151.0

2026 209.3 51.8 174.9 17.5 3,012.3 -156.0

2027 212.4 57.9 188.7 34.2 3,067.4 -142.8

2028 215.6 64.5 202.6 51.5 3,106.3 -128.3

2029 218.8 71.5 216.2 69.0 3,128.5 -112.6

2030 222.1 79.0 229.5 86.5 3,133.2 -95.9

2031 225.4 87.1 243.7 105.4 3,118.7 -76.7

2032 228.8 95.6 258.2 125.0 3,083.5 -55.7

2033 232.3 104.7 272.9 145.3 3,026.4 -32.7

2034 235.7 114.3 287.4 166.0 2,946.2 -8.0

2035 239.2 124.5 301.1 186.3 2,842.7 17.7

2036 242.7 135.2 314.9 207.4 2,714.3 45.6

2037 246.3 146.5 328.9 229.1 2,559.7 75.5

2038 249.9 158.4 343.0 251.5 2,377.4 107.7

2039 273.9 170.9 357.0 254.0 2,187.1 121.0

2040 294.4 184.1 370.3 260.0 1,985.0 138.5

2041 315.4 198.0 384.6 267.2 1,769.3 157.9

2042 336.9 212.5 399.5 275.2 1,538.9 178.8

2043 358.9 227.9 415.0 284.0 1,292.5 201.6

2044 381.3 244.1 431.1 293.8 1,028.7 226.2

2045 404.3 260.7 447.0 303.4 747.0 251.7

2046 427.8 277.7 464.0 313.9 446.1 279.2

2047 451.8 295.1 481.6 324.9 124.9 308.2

2048 476.4 312.8 499.6 336.0 -217.5 338.7

2049 501.5 330.8 518.2 347.5 -581.9 370.8

2050 527.1 349.2 536.7 358.7 -968.9 403.9

2051 553.3 368.0 555.8 370.5 -1,379.5 438.9

2052 580.1 387.2 575.5 382.5 -1,814.9 475.6

2053 607.5 406.8 595.3 394.6 -2,275.8 513.7

2054 635.5 426.8 615.4 406.7 -2,763.0 553.5

2055 664.2 445.6 635.6 417.1 -3,275.5 592.9

2056 693.5 464.8 655.9 427.2 -3,813.7 633.6

2057 723.6 484.3 676.4 437.1 -4,378.3 675.7

2058 754.3 504.1 696.8 446.6 -4,969.7 718.9

2059 785.7 524.3 717.3 456.0 -5,588.5 763.5

2060 817.8 545.0 737.9 465.1 -6,235.2 809.5

2061 850.5 566.1 758.7 474.2 -6,910.7 857.1

2062 884.0 587.7 779.8 483.5 -7,616.0 906.6

2063 918.2 609.7 801.4 492.9 -8,352.1 958.0

2064 953.1 632.4 823.3 502.5 -9,120.3 1,011.4

2065 965.6 652.1 845.8 532.4 -9,942.2 1,087.6

2066 978.2 672.2 868.8 562.8 -10,820.1 1,167.5

2067 991.0 692.6 892.2 593.8 -11,756.4 1,251.4

2068 1,003.9 713.2 916.2 625.5 -12,753.4 1,339.4

2069 1,016.9 734.1 940.7 657.8 -13,813.5 1,431.6

2070 1,030.1 755.3 963.6 688.8 -14,937.4 1,526.2

2071 1,043.3 776.8 986.8 720.3 -16,127.5 1,625.1

2072 1,056.7 798.7 1,010.3 752.4 -17,386.2 1,728.5

2073 1,070.2 820.9 1,034.2 784.9 -18,716.3 1,836.4

2074 1,083.8 843.5 1,058.5 818.2 -20,120.5 1,949.4

2075 1,097.6 866.5 1,083.2 852.1 -21,601.7 2,067.3

2076 1,111.5 889.9 1,108.2 886.5 -23,162.9 2,190.4

2077 1,125.7 913.8 1,133.5 921.6 -24,807.1 2,318.8

2078 1,140.0 938.2 1,159.1 957.2 -26,537.2 2,452.7

Office of the Actuary

1/ Excluding the effect of general fund transfers to the Trust Funds, which do not affect the unified budget. Social Security Administration

Based on Intermediate Assumptions of the 2003 Trustees Report. September 9, 2003
Table 3c--Cash Flow from the General Fund of the Treasury to the OASDI Trust Funds--Constant 2003 Dollars 1/

IA proceeds go to estate if worker dies before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real PRSA Rate for Offset 3.70 Assumed PRSA Participation Rate 100%

Estimate for Modified Present Law Estimate for Present Law

Estimate for Nick Smith Proposal with Borrowing to Pay Scheduled Benefits with Only Payable Benefits

Additional Net Annual Net Annual Net Annual

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

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

Transfers 2/ Fund with Interest In Year 3/ Fund with Interest In Year 3/ Fund with Interest

Year (billions of Constant 2003$) (billions of Constant 2003$) (billions of Constant 2003$)

2003 0 -79 -82 0 -79 -82 0 -79 -82

2004 0 -84 -171 0 -84 -172 0 -84 -172

2005 0 36 -139 0 -91 -271 0 -91 -271

2006 6 30 -112 0 -97 -380 0 -97 -380

2007 26 28 -87 0 -100 -494 0 -100 -494

2008 49 28 -61 0 -99 -612 0 -99 -612

2009 74 29 -33 0 -96 -731 0 -96 -731

2010 98 30 -3 0 -92 -848 0 -92 -848

2011 127 31 29 0 -86 -963 0 -86 -963

2012 165 34 64 0 -77 -1,072 0 -77 -1,072

2013 163 38 105 0 -66 -1,173 0 -66 -1,173

2014 1 43 153 0 -54 -1,264 0 -54 -1,264

2015 1 48 207 0 -39 -1,343 0 -39 -1,343

2016 1 55 271 0 -23 -1,406 0 -23 -1,406

2017 1 63 344 0 -5 -1,453 0 -5 -1,453

2018 1 71 428 0 15 -1,482 0 15 -1,482

2019 1 79 522 0 35 -1,490 0 35 -1,490

2020 1 88 629 0 56 -1,477 0 56 -1,477

2021 1 98 748 0 79 -1,440 0 79 -1,440

2022 1 107 880 0 101 -1,379 0 101 -1,379

2023 1 113 1,024 0 122 -1,295 0 122 -1,295

2024 2 120 1,178 0 142 -1,187 0 142 -1,187

2025 2 125 1,342 0 163 -1,055 0 163 -1,055

2026 2 146 1,532 0 183 -899 0 183 -899

2027 2 149 1,732 0 203 -717 0 203 -717

2028 3 151 1,939 0 222 -510 0 222 -510

2029 3 152 2,154 0 240 -279 0 240 -279

2030 3 151 2,374 0 256 -23 0 256 -23

2031 3 148 2,597 0 272 256 0 272 256

2032 4 143 2,822 0 286 558 0 286 558

2033 4 135 3,046 0 298 882 0 298 882

2034 4 127 3,268 0 310 1,228 0 310 1,228

2035 5 117 3,487 0 320 1,595 0 320 1,595

2036 5 106 3,700 0 330 1,982 0 330 1,982

2037 5 93 3,907 0 338 2,390 0 338 2,390

2038 6 79 4,105 0 346 2,818 0 346 2,818

2039 6 84 4,315 0 353 3,265 0 353 3,265

2040 7 85 4,532 0 359 3,733 0 359 3,733

2041 7 85 4,756 0 366 4,222 0 366 4,222

2042 8 85 4,985 74 373 4,732 0 298 4,656

2043 8 84 5,221 380 380 5,265 0 0 4,796

2044 9 83 5,463 387 387 5,822 0 0 4,940

2045 10 82 5,712 396 396 6,405 0 0 5,088

2046 11 82 5,967 405 405 7,014 0 0 5,240

2047 11 81 6,230 414 414 7,651 0 0 5,398

2048 12 81 6,500 424 424 8,317 0 0 5,560

2049 13 81 6,778 435 435 9,015 0 0 5,726

2050 14 81 7,065 446 446 9,744 0 0 5,898

2051 16 83 7,362 458 458 10,508 0 0 6,075

2052 17 84 7,670 471 471 11,308 0 0 6,257

2053 18 86 7,989 484 484 12,146 0 0 6,445

2054 20 88 8,319 497 497 13,022 0 0 6,638

2055 21 92 8,663 510 510 13,938 0 0 6,838

2056 22 96 9,022 524 524 14,895 0 0 7,043

2057 24 100 9,395 537 537 15,895 0 0 7,254

2058 26 103 9,783 550 550 16,938 0 0 7,472

2059 27 107 10,187 563 563 18,026 0 0 7,696

2060 29 111 10,607 575 575 19,159 0 0 7,927

2061 31 115 11,044 588 588 20,339 0 0 8,164

2062 32 119 11,497 601 601 21,568 0 0 8,409

2063 34 123 11,969 614 614 22,848 0 0 8,662

2064 36 127 12,459 628 628 24,180 0 0 8,921

2065 38 112 12,948 642 642 25,566 0 0 9,189

2066 40 96 13,435 657 657 27,009 0 0 9,465

2067 42 80 13,921 672 672 28,512 0 0 9,749

2068 44 64 14,404 687 687 30,075 0 0 10,041

2069 46 47 14,884 703 703 31,701 0 0 10,342

2070 48 32 15,364 719 719 33,393 0 0 10,653

2071 50 16 15,842 736 736 35,153 0 0 10,972

2072 52 1 16,318 753 753 36,983 0 0 11,301

2073 54 -15 16,792 770 770 38,885 0 0 11,640

2074 56 -32 17,263 787 787 40,863 0 0 11,990

2075 58 -49 17,730 805 805 42,918 0 0 12,349

2076 60 -66 18,194 823 823 45,052 0 0 12,720

2077 62 -84 18,653 840 840 47,270 0 0 13,101

1/ Including redemption of Trust Fund assets as of 1-1-2003. Office of the Actuary

2/ Includes reimbursement for minimum DI benefits and specified transfers from FY 2007-2013. Social Security Administration

3/ Trust Funds are assumed to borrow from the General Fund of the Treasury. September 9, 2003