## Provisions Affecting Trust Fund Investment in Marketable         Securities

- Office of the Chief Actuary
- Individual Provisions
- Current law trust                fund investment holdings

          These provisions invest a portion of the Social Security          trust funds in marketable securities (e.g., equities,          corporate bonds), rather than in special-issue government bonds          as under current law. We provide a          summary list of all options              (printer-friendly PDF version)          in this category. For each provision listed below, we provide an          estimate of the financial effect on the OASDI program over the          long-range period (the next 75 years) and for the 75th year. In          addition, we provide graphs and detailed single year tables.          We base all estimates on the intermediate assumptions          described in the           2023 Trustees Report.         

          The selections G3, G5, and G7 provide a low-yield or risk-adjusted          perspective where equity yields equal the average real yield on          long-term Treasury bonds. Thus, these selections have no effect          on the actuarial balance of the OASDI program. Many analysts          believe the higher expected return for equities should not be          included in valuations because the tendency for higher average          returns is compensation for the higher volatility in equities.          The low or risk-adjusted yield assumption reflects this perspective.         

          Choose the type of estimates (summary or detailed) from          the list of provisions.         

| Number | Table and graph selection                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| G1     | Invest 40 percent of the OASI and DI Trust Fund reserves in equities 		(phased in 2024-2038), assuming an ultimate 5.8 percent annual real 		rate of return on equities.              Summary measures and graphs         (PDF version)       Detailed single year tables         (PDF version)       Memorandum containing this or a similar provision:- Social Security Advisory Board 2005                                                                                                    |
| G2     | Invest 40 percent of the OASI and DI Trust Fund reserves in equities 		(phased in 2024-2038), assuming an ultimate 4.8 percent annual real 		rate of return on equities.              Summary measures and graphs         (PDF version)       Detailed single year tables         (PDF version)       Memorandum containing this or a similar provision:- Social Security Advisory Board 2005                                                                                                    |
| G3     | Invest 40 percent of the OASI and DI Trust Fund reserves in equities 		(phased in 2024-2038), assuming an ultimate 2.3 percent annual real 		rate of return on equities. Thus, the ultimate rate of return on equities 		is the same as that assumed for Trust Fund bonds.              Summary measures and graphs         (PDF version)       Detailed single year tables         (PDF version)       Memorandum containing this or a similar provision:- Social Security Advisory Board 2005 |
| G4     | Invest 15 percent of the OASI and DI Trust Fund reserves in equities 	   (phased in 2024-2033), assuming an ultimate 5.8 percent annual real 	   rate of return on equities.              Summary measures and graphs         (PDF version)       Detailed single year tables         (PDF version)       Memorandum containing this or a similar provision:- AARP 2008                                                                                                                          |
| G5     | Invest 15 percent of the OASI and DI Trust Fund reserves in equities 	   (phased in 2024-2033), assuming an ultimate 2.3 percent annual real 	   rate of return on equities. Thus, the ultimate rate of return on equities 	   is the same as that assumed for Trust Fund bonds.              Summary measures and graphs         (PDF version)       Detailed single year tables         (PDF version)       Memorandum containing this or a similar provision:- AARP 2008                     |
| G6     | Invest 25 percent of the OASI and DI Trust Fund reserves in equities 	   (phased in 2026-2035), assuming an ultimate 5.8 percent annual real 	   rate of return on equities.              Summary measures and graphs         (PDF version)       Detailed single year tables         (PDF version)       Memorandum containing this or a similar provision:- Larson 2014                                                                                                                        |
| G7     | Invest 25 percent of the OASI and DI Trust Fund reserves in equities 	   (phased in 2026-2035), assuming an ultimate 2.3 percent annual real 	   rate of return on equities. Thus, the ultimate rate of return on equities 	   is the same as that assumed for Trust Fund bonds.              Summary measures and graphs         (PDF version)       Detailed single year tables         (PDF version)       Memorandum containing this or a similar provision:- Larson 2014                   |
|        | Summary list of all options in this category                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |