The Social Security Board of Trustees this week released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, one year later than projected last year, with 79 percent of benefits payable at that time. The DI Trust Fund will become depleted in 2016, unchanged from last year's estimate, with 81 percent of benefits still payable.
In the 2015 Annual Report to Congress, the Trustees announced:
The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning with 2020, the cost of the program is projected to exceed income.
The projected point at which the combined trust fund reserves will become depleted, if Congress does not act before then, comes in 2034 - one year later than projected last year. At that time, there will be sufficient income coming in to pay 79 percent of scheduled benefits.
The projected actuarial deficit over the 75-year long-range period is 2.68 percent of taxable payroll -- 0.20 percentage point smaller than in last year's report.
Said Carolyn W. Colvin, Acting Commissioner of Social Security:
While the projected depletion date of the combined OASDI trust funds gained a year, the Disability Insurance Trust Fund's projected depletion year remains 2016. I agree with President Obama, we have to keep Social Security strong, protecting its future solvency. President Obama's FY 2016 budget proposes to address this near-term Disability Insurance Trust Fund's reserve depletion. By reallocating a portion of payroll taxes from Old Age Survivors to the Disability Trust Fund - as has been done many times in the past - would have no adverse effect on the solvency of the overall Social Security program.
We believe that Congress must take action to reallocate a portion of the payroll tax rate between the trust funds to avoid deep and abrupt cuts or delays in benefits for individuals with disabilities who paid into the system while they worked and now need the benefits they earned to support themselves and their families.
Other highlights of the Trustees Report include:
Income including interest to the combined OASDI Trust Funds amounted to $884 billion in 2014. ($756 billion in net contributions, $30 billion from taxation of benefits, $98 billion in interest, and less than $1 billion in reimbursements from the General Fund of the Treasury - almost exclusively resulting from the 2012 payroll tax legislation)
Total expenditures from the combined OASDI Trust Funds amounted to $859 billion in 2014.
Non-interest income fell below program costs in 2010 for the first time since 1983. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.
The asset reserves of the combined OASDI Trust Funds increased by $25 billion in 2014 to a total of $2.79 trillion.
During 2014, an estimated 166 million people had earnings covered by Social Security and paid payroll taxes.
Social Security paid benefits of $848 billion in calendar year 2014. There were about 59 million beneficiaries at the end of the calendar year.
The cost of $6.1 billion to administer the program in 2014 was a very low 0.7 percent of total expenditures.
The combined Trust Fund asset reserves earned interest at an effective annual rate of 3.6 percent in 2014.
The Board of Trustees comprises six members. Four serve by virtue of their positions with the federal government: Jacob J. Lew, Secretary of the Treasury and Managing Trustee; Carolyn W. Colvin, Acting Commissioner of Social Security; Sylvia M. Burwell, Secretary of Health and Human Services; and Thomas E. Perez, Secretary of Labor. The two public trustees are Charles P. Blahous, III and Robert D. Reischauer.
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