Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Longrange 

actuarial 

balance

Annual 

balance in 

75th year

-1.70 -4.20

A1 Beginning December 2009, reduce cost-of-living adjustment for OASDI benefits by 

1 percentage point.

1.43 2.04 -0.27 -2.16

A2 Beginning December 2009, reduce cost-of-living adjustment for OASDI benefits by 

0.5 percentage point.

0.75 1.07 -0.95 -3.13

A3 Beginning December 2009, use the "superlative" (or "chained") CPI for COLAs, 

estimated to reduce the COLA by 0.3 percentage point.

0.45 0.65 -1.24 -3.55

B1 Increase the number of years used to calculate benefits for retirees and survivors 

(but not for disabled workers) from 35 to 38, phased in 2009-2013.

0.31 0.44 -1.39 -3.76

B2 Increase the number of years used to calculate benefits for retirees and survivors 

(but not for disabled workers) from 35 to 40, phased in 2009-2017.

0.49 0.75 -1.20 -3.45

B3 For each year from 2009-2039, multiply the 32 and 15 percent formula factors by 

0.987, reducing the factors to 21 percent and 10 percent respectively, for new 

eligibles in 2039 and later.

1.55 2.98 -0.15 -1.22

B4 Reduce benefits by 3 percent for those newly eligible for benefits in 2009 and later. 0.36 0.50 -1.34 -3.70

B5 Reduce benefits by 5 percent for those newly eligible for benefits in 2009 and later. 0.60 0.83 -1.09 -3.37

B6 Beginning with those newly eligible for OASDI benefits in 2015 and later, reduce 

PIA formula factors so that benefits grow by inflation rather than by increases in 

real wages.

2.30 7.18 0.60 2.97

B7 Progressive price indexing of PIA formula factors beginning with individuals newly 

eligible for OASDI benefits in 2015. Create new bend point at the 30th percentile of 

earners. Maintain current-law benefits for earners at the 30th percentile and below 

and reduce upper 2 formula factors (32% and 15%) such that maximum worker 

benefit grows by inflation rather than the growth in average wages.

1.36 4.13 -0.34 -0.08

B8 Progressive price indexing of PIA formula factors beginning with individuals newly 

eligible for OASDI benefits in 2015. Create new bend point at the 40th percentile of 

earners. Maintain current-law benefits for earners at the 40th percentile and below 

and reduce upper 2 formula factors (32% and 15%) such that maximum worker 

benefit grows by inflation rather than the growth in average wages.

1.15 3.47 -0.55 -0.73

B9 Progressive price indexing of PIA formula factors beginning with individuals newly 

eligible for OASDI benefits in 2015. Create new bend point at the 50th percentile of 

earners. Maintain current-law benefits for earners at the 50th percentile and below 

and reduce upper 2 formula factors (32% and 15%) such that maximum worker 

benefit grows by inflation rather than the growth in average wages.

0.93 2.65 -0.77 -1.55

B10 Progressive price indexing of PIA formula factors beginning with individuals newly 

eligible for OASDI benefits in 2015. Create new bend point at the 60th percentile of 

earners. Maintain current-law benefits for earners at the 60th percentile and below 

and reduce upper 2 formula factors (32% and 15%) such that maximum worker 

benefit grows by inflation rather than the growth in average wages.

0.68 1.69 -1.02 -2.51

Present Law, Alternative II.

Category: Provisions Affecting Level of Monthly Benefits (PIA) 

Summary of Provisions That Would Change the Social Security Program

Change from 

present law

Result with this 

provision

Category: Cost of Living Adjustment

Estimates based on the intermediate assumptions of the 2008 Trustees Report

December 1, 2008

Office of the Chief Actuary

Social Security Administration
Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Present Law, Alternative II. -1.70 -4.20

Summary of Provisions That Would Change the Social Security Program

Change from 

present law

Result with this 

provision

B11 Beginning with those newly eligible in 2016, multiply the 90 and 32 PIA factors 

each year by 0.9925 and 0.982, respectively. Stop reductions in 2053. Beginning 

with those newly eligible in 2011, multiply the 15 factor by 0.982. Stop reduction of 

the 15 factor in 2048. DI will have present law scheduled benefit and proportional 

reduction at conversion to retired worker benefits at normal retirement age, based 

on years of disability.

2.06 5.33 0.36 1.13

B12 Progressive price indexing of PIA formula factors beginning with individuals newly 

eligible for OASI benefits in 2015. Create new bend point at the 30th percentile of 

earners. Maintain current-law benefits for earners at the 30th percentile and below 

and reduce upper 2 formula factors (32% and 15%) such that maximum worker 

benefit grows by inflation rather than the growth in average wages. Disability 

benefits are not affected by the proposal. Disabled worker beneficiaries, upon 

attaining normal retirement age, would be subject to a proportional reduction in 

benefits based on the worker's years of disability.

1.18 3.61 -0.52 -0.59

B12.1 Progressive price indexing of PIA formula factors beginning with individuals newly 

eligible for OASI benefits in 2012. Create new bend point at the 30th percentile of 

earners. Maintain current-law benefits for earners at the 30th percentile and below 

and reduce upper 2 formula factors (32% and 15%) such that maximum worker 

benefit grows by inflation rather than the growth in average wages. Disability 

benefits are not effected by the proposal. Disabled worker beneficiaries, upon 

attaining normal retirement age, would be subject to a proportional reduction in 

benefits based on the worker's years of disability. In addition the reduction of the 

upper 2 formula factors is suspended for any year in which sustainable solvency 

over the next 75 years is expected. With this provision taken alone, suspension is 

not expected within the next 75 years.

1.31 3.71 -0.39 -0.49

B13 For OASI beneficiaries becoming eligible for benefits in 2021 and later, multiply the 

PIA factors by the ratio of life expectancy at 67 for 2016 to the life expectancy at 

age 67 for the 4th year prior to the year of benefit eligibility. Unisex life 

expectancies, based on period life tables, would be used as projected by SSA's 

Office of the Chief Actuary. Disability benefits are not affected by the proposal. 

Disabled worker beneficiaries, upon attaining normal retirement age, would be 

subject to a proportional reduction in benefits based on the worker's years of 

disability.

0.47 1.71 -1.23 -2.49

B13.1 For OASI beneficiaries becoming eligible for benefits in 2018 and later, multiply the 

PIA factors by the ratio of life expectancy at 67 for 2013 to the life expectancy at 

age 67 for the 4th year prior to the year of benefit eligibility. Unisex life 

expectancies, based on period life tables, would be used as projected by SSA's 

Office of the Chief Actuary. Disability benefits are not affected by the proposal. 

Disabled worker beneficiaries, upon attaining normal retirement age, would be 

subject to a proportional reduction in benefits based on the worker's years of 

disability.

0.52 1.80 -1.17 -2.40

Estimates based on the intermediate assumptions of the 2008 Trustees Report

December 1, 2008

Office of the Chief Actuary

Social Security Administration
Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Present Law, Alternative II. -1.70 -4.20

Summary of Provisions That Would Change the Social Security Program

Change from 

present law

Result with this 

provision

B14 Progressive price indexing of PIA formula factors beginning with individuals newly 

eligible for OASI benefits in 2016. Create new bend point at the 30th percentile of 

earners. Maintain current-law benefits for earners at the 30th percentile and below 

and reduce upper 2 formula factors (32% and 15%) such that maximum worker 

benefit grows by inflation rather than the growth in average wages. Disability 

benefits are not affected by the proposal. Disabled worker beneficiaries, upon 

attaining normal retirement age, would be subject to a proportional reduction in 

benefits based on the worker's years of disability.

1.13 3.55 -0.57 -0.65

B15 Increase the PIA to a level such that a worker with 30 years of earnings at the 

minimum wage level would receive an adjusted PIA equal to 120 percent of the 

Federal poverty level for an aged individual. This provision would take full effect for 

all newly eligible OASDI workers in 2025, and would be phased in for new eligible 

in 2016 through 2024. The percentage increase in PIA would be lowered 

proportionately for those with fewer than 30 years of earnings, down to no 

enhancement for workers with 20 or fewer years of earnings. (Year-of-work 

requirements are "scaled" for disabled workers based on their years of potential 

work from age 22 to benefit eligibility). The benefit enhancement percentage would 

be reduced proportionately for workers with higher average indexed monthly 

earnings (AIME), down to no enhancement for those with AIME at least twice that 

of a 35-year steady minimum wage earner.

-0.04 0.00 -1.74 -4.21

B16 For all individuals becoming eligible for OASDI benefits in 2009 and later use a 

new, modified primary insurance amount (PIA) formula. The new formula would 

use an additional bend point placed between the current 2 bend points. The 

additional bend point would be equal to the current lower bend point plus 75 

percent of the difference between the current bend points. (The new bend point 

would be at about the 58th percentile of average career earnings levels for new 

retired worker beneficiaries.) The PIA factor for dollars of average monthly indexed 

earnings (AIME) between the new bend point and the upper bend point would be 

lowered from 32 to 20 percent. The PIA factor applied for dollars of AIME above 

the upper bend point would be lowered from 15 to 10 percent.

0.28 0.34 -1.41 -3.86

B17 Eliminate dropout years for OASI and DI computation of primary insurance amount 

(PIA) for individuals newly eligible for benefits from 2010 to 2018. Specifically, for 

OASDI benefit computation, reduce the maximum number of drop-out years from 5 

to benefit eligibility in 2009, with a decrease of 1 computation year in 2010, 2012, 

2014, 2016, and 2018.

0.65 1.03 -1.05 -3.17

B18 Multiply all PIA formula factors successively by 0.991 for new benefit eligibility in 

each year 2012 through 2040. Disabled workers and young survivors (surviving 

spouses with a child-in-care and survivor children) would not be affected by this 

provision.. Upon conversion from disabled worker to retired worker benefits, benefit 

levels would be proportionally reduced based on the fraction of years the individual 

was not disabled between ages 22 and 62.

1.46 3.11 -0.24 -1.09

Estimates based on the intermediate assumptions of the 2008 Trustees Report

December 1, 2008

Office of the Chief Actuary

Social Security Administration
Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Present Law, Alternative II. -1.70 -4.20

Summary of Provisions That Would Change the Social Security Program

Change from 

present law

Result with this 

provision

C1 Shorten the hiatus in the normal retirement age (start increasing to age 67 for 

those age 62 in 2009, rather than those age 62 in 2017).

0.10 0.00 -1.60 -4.20

C2 Shorten the hiatus in the normal retirement age (start increasing to age 67 for 

those age 62 in 2009, rather than those age 62 in 2017) and then index the normal 

retirement age (by 1 month every 2 years) until the NRA reaches age 68.

0.46 0.73 -1.24 -3.47

C3 Shorten the hiatus in the normal retirement age (start increasing to age 67 for 

those age 62 in 2009, rather than those age 62 in 2017) and then index the normal 

retirement age (by 1 month every 2 years) until the NRA reaches age 70.

0.62 1.43 -1.08 -2.78

C4 Shorten the hiatus in the normal retirement age (start increasing to age 67 for 

those age 62 in 2009, rather than those age 62 in 2017) and then increase the 

NRA 2 months per year until the NRA reaches age 68.

0.58 0.73 -1.12 -3.47

C5 Shorten the hiatus in the normal retirement age (speed up the increase to age 67). 

That is, increase the NRA by 2 months per year for those attaining age 62 in 2012 

through 2017, five years earlier than in current law, which would increase the NRA 

2 months per year for those reaching age 62 in 2017 through 2022.

0.05 0.00 -1.65 -4.20

C6 Increase the normal retirement age (NRA) from 66 to 67 one year earlier than 

current law, starting for those reaching age 62 in 2016 and ending for those 

reaching age 62 in 2021. Then, after 2021, index the NRA to maintain a constant 

ratio of expected retirement years (life expectancy at NRA) to potential work years 

(NRA minus 20).

0.38 1.11 -1.32 -3.09

C7 Index benefits to longevity after the normal retirement age (NRA) reaches age 67 

under current law. Under current law, the NRA reaches 67 for individuals who 

attain age 62 in 2022 and later. Under this provision, the NRA would be further 

increased by one month for those attaining age 62 in every other year after 2022.

0.37 1.09 -1.32 -3.12

C8 Gradually raise the earliest eligibility age (EEA) for Social Security retirement 

benefits from 62 to 65. The EEA would be increased by 2 months for individuals 

reaching age 62 in every year, starting in 2010. The EEA of 65 would apply for 

those reaching age 62 in 2027 and later (those reaching age 65 in 2030 and later). 

As under current law, the PIA formula applicable for any individual would depend 

on the year in which eligibility age is attained. It should be noted that the 

elimination of retirement eligibility between ages 62 and 65 would increase the 

number of individuals who would apply for disabled worker benefits at those ages.

-0.01 -0.28 -1.70 -4.48

C9 Shorten the hiatus in the NRA by 5 years, that is, start increasing the NRA from 66 

to 67 for individuals age 62 in 2012, rather than in 2017. Beginning for those age 

62 in 2012, increase the EEA and NRA for retired worker benefits by 2 months per 

year until the EEA reaches age 63 and the NRA reached age 67 for those attaining 

age 62 in 2017. Thereafter, increase both EEA and NRA by 1 month every 2 

years. Finally, increase the earliest eligibility age for disabled widow(er) and aged 

widow(er) at the same rate as the increase in the EEA for retired worker benefits.

0.56 1.18 -1.14 -3.02

Category: Provisions Affecting Retirement Age 

Estimates based on the intermediate assumptions of the 2008 Trustees Report

December 1, 2008

Office of the Chief Actuary

Social Security Administration
Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Present Law, Alternative II. -1.70 -4.20

Summary of Provisions That Would Change the Social Security Program

Change from 

present law

Result with this 

provision

C10 Starting in 2012, convert all disabled worker beneficiaries to retired worker status 

upon attainment of their EEA (rather than their NRA). After conversion, apply the 

early retirement reduction for retirement at EEA (currently 25%) times the ratio of 

years after 2011 (or years after attaining age 21, if later) and before attaining age 

62, to 40. Medicare eligibility would be extended to age 65 on the basis of 

disability. After 2011, disability applications would not be accepted for benefit 

entitlement that would start at an ages over EEA.

0.37 0.77 -1.33 -3.43

D1 Raise payroll tax rates (for employees and employers combined) by 1.8 percentage 

points in 2009 and later.

1.77 1.81 0.07 -2.40

D2 Raise payroll tax rates (for employees and employers combined) by 1.6 percentage 

points in 2021 (to 14.0% combined) and by an additional 1.6 percentage points in 

2051 (to 15.6% combined).

1.70 3.21 0.01 -0.99

D3 Beginning in 2009, reduce the combined OASDI payroll tax rate from 12.4 percent. -0.98 -1.00 -2.68 -5.20

E1 Beginning in 2009, make all earnings subject to the payroll tax (but retain the 

current-law taxable maximum for benefit calculations).

2.19 2.67 0.50 -1.53

E2 Beginning in 2009, make all earnings subject to the payroll tax and credit them for 

benefit purposes.

1.84 1.96 0.14 -2.24

E3 Determine the level of the contribution and benefit base such that 90 percent of the 

earnings would be subject to the payroll tax (phased in 2009-2018). All earnings 

subject to the payroll tax would be used in determining benefits.

0.83 0.93 -0.87 -3.27

E4 Make 90 percent of the earnings subject to the payroll tax (phased in 2009-2018), 

but retain the current-law taxable maximum for benefit purposes. This estimate 

considers all self-employed earnings in computing the percentage of earnings 

subject to the payroll tax.

1.01 1.36 -0.69 -2.84

E5 Raise the taxable maximum amount (the contribution and benefit base) to include 

90 percent of total OASDI covered earnings. Phase in this increase gradually 

between 2010 and 2015. Benefit computations would reflect all earnings up to the 

new taxable maximum.

0.84 0.93 -0.86 -3.27

E6 Impose a 3 percent payroll tax on OASDI covered earnings above the current 

taxable maximum starting in 2009. Benefit computations would not reflect any 

earnings above the taxable maximum amount.

0.64 0.78 -1.06 -3.42

E7 In 2009 through 2011, raise the OASDI contribution and benefit base from 

$102,000 to $110,000 (in 2008 AWI indexed dollars). For years after 2011, the 

contribution and benefit base would be increased based on changes in SSA's 

average wage index. Additional earnings subject to the OASDI payroll tax would 

be credited for benefit calculation purposes.

0.15 0.13 -1.55 -4.07

Category: Provisions Affecting Payroll Tax Rates 

Category: Provisions Affecting OASDI Contribution and Benefit 

Estimates based on the intermediate assumptions of the 2008 Trustees Report

December 1, 2008

Office of the Chief Actuary

Social Security Administration
Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Longrange 

actuarial 

balance

Annual 

balance in 

75th year

Present Law, Alternative II. -1.70 -4.20

Summary of Provisions That Would Change the Social Security Program

Change from 

present law

Result with this 

provision

F1 Cover newly hired State and local government employees beginning in 2009. 0.22 0.00 -1.48 -4.20

F2 Provide for OASDI payroll tax coverage of employer provided group health 

insurance cost, starting in 2010. Specifically, any cost toward such group health 

insurance borne by employees would cease to be deductible, and the cost borne 

by employers would now be allocated to employees as if it had been wages, for the 

purpose of payroll tax (and later, benefit) calculations. Both employee and 

employer OASDI payroll taxes would be affected by this proposal.

1.20 1.62 -0.49 -2.58

F3 Beginning in 2009, exempt individuals with more than 180 quarters of coverage 

from the OASDI payroll tax.

-0.28 -0.49 -1.98 -4.69

G1 Invest 40 percent of the Trust Funds in equities (phased in 2009-2023), assuming 

an ultimate 6.4 percent real rate of return on equities.

0.71 0.00 -0.99 -4.20

G2 Invest 40 percent of the Trust Funds in equities (phased in 2009-2023), assuming 

an ultimate 5.4 percent real rate of return on equities.

0.51 0.00 -1.19 -4.20

G3 Invest 40 percent of the Trust Funds in equities (phased in 2009-2023), assuming 

an ultimate 2.9 percent real rate of return on equities, the same as the assumed 

ultimate yield on the special-issue Social Security trust fund bonds.

0.00 0.00 -1.70 -4.20

G4 Gradually invest 15 percent of OASDI trust fund assets in a broad index of equity 

market securities (such as the Wilshire 5000). Increase the portion in equities by 

1.5 percent each year 2009 through 2018. Maintain the percentage at 15 percent 

thereafter.

0.29 0.00 -1.41 -4.20

G5 Invest 15 percent of the Trust Funds in equities (phased in 2009-2023), assuming 

an ultimate 2.9 percent annual real rate of return on equities, the same as the 

assumed ultimate yield on the special-issue Social Security trust fund bonds.

0.00 0.00 -1.70 -4.20

H1 Tax Social Security benefits in a manner similar to private pension income 

beginning in 2009. Phase out the lower-income thresholds during 2009-2018.

0.27 0.16 -1.43 -4.04

H2 Tax Social Security benefits in a manner similar to private pension income 

beginning in 2009. Phase out the lower-income thresholds during 2009-2028.

0.24 0.16 -1.46 -4.04

Category: Provisions Affecting Coverage of Employment 

Category: Provisions Affecting Trust Fund Investment in Equities 

Category: Provisions Affecting Taxation of Benefits 

Estimates based on the intermediate assumptions of the 2008 Trustees Report

December 1, 2008

Office of the Chief Actuary

Social Security Administration