April 6, 2004
Peter Ferrara
Stephen C. Goss, Chief Actuary
Additional Estimated Financial Effects of "The Progressive Personal Account Plan"--INFORMATION

The attached tables 1e and 2e provide additional information that supplements the memorandum of December 1, 2003. All estimates in these tables are entirely consistent with estimates provided on December 1.

Specifically these tables provide a component breakdown of the estimates of total net cash flow from the OASDI trust funds to the General Fund of the Treasury. The total net cash flow estimates were provided in tables 1c and 2c earlier.

Total net cash flow from the trust funds to the general fund is shown in two components. The first is the cash flow due to the net amounts of the specified transfers to the trust funds under this proposal. The amounts of the specified transfers are detailed in columns (3), (4), and (5) of tables 1d and 2d provided earlier. Under the provisions of the proposal, net specified transfers to the trust funds are projected to occur in years 2005 through 2054 in table 1e with expected average yield assumptions, and in years 2005 through beyond 2078 in table 2e with the low-yield assumptions.

The second component is the residual amount of cash flow due to the trust funds' net purchase (or redemption) of assets held in the form of special-issue Treasury securities. Net purchases of Treasury securities are assumed to change to net redemptions starting in 2005, under the proposal. Net redemptions are projected to continue through 2028 under the expected average yield assumptions and through 2034 under the low-yield assumptions. After these years, the trust funds are expected to make no further net purchase or redemption of Treasury securities, on a cash flow basis. The trust funds, by the design of the proposal are then projected to grow solely through the reinvestment of interest credited on assets.

Stephen C. Goss

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