Description of Proposed Provision:
G2: Invest 40 percent of the OASI and DI Trust Fund reserves in equities (phased in 2019-2033), assuming an ultimate 5.2 percent annual real rate of return on equities.
Financial Estimates for the OASDI Trust Fund Program
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
|
Expressed as a percentage of current-law taxable payroll |
Trust fund ratio as of January 1 |
Expressed as a percentage of current-law taxable payroll |
|||||||
|
Calendar year |
Cost rate |
Income rate |
Annual balance |
Cost rate |
Income rate |
Annual balance |
|||
| 2018 | 13.81 | 12.64 | -1.17 | 288 | 0.00 | 0.00 | 0.00 | ||
| 2019 | 13.95 | 12.87 | -1.08 | 272 | 0.00 | 0.00 | 0.00 | ||
| 2020 | 14.12 | 12.89 | -1.23 | 256 | 0.00 | 0.00 | 0.00 | ||
| 2021 | 14.27 | 12.92 | -1.35 | 240 | 0.00 | 0.00 | 0.00 | ||
| 2022 | 14.44 | 12.95 | -1.49 | 224 | 0.00 | 0.00 | 0.00 | ||
| 2023 | 14.62 | 12.97 | -1.66 | 208 | 0.00 | 0.00 | 0.00 | ||
| 2024 | 14.80 | 12.99 | -1.81 | 192 | 0.00 | 0.00 | 0.00 | ||
| 2025 | 14.98 | 13.01 | -1.98 | 176 | 0.00 | 0.00 | 0.00 | ||
| 2026 | 15.16 | 13.13 | -2.02 | 160 | 0.00 | 0.00 | 0.00 | ||
| 2027 | 15.36 | 13.15 | -2.21 | 144 | 0.00 | 0.00 | 0.00 | ||
| 2028 | 15.58 | 13.17 | -2.41 | 129 | 0.00 | 0.00 | 0.00 | ||
| 2029 | 15.79 | 13.19 | -2.60 | 113 | 0.00 | 0.00 | 0.00 | ||
| 2030 | 15.98 | 13.20 | -2.78 | 97 | -0.00 | 0.00 | 0.00 | ||
| 2031 | 16.16 | 13.22 | -2.94 | 80 | 0.00 | 0.00 | 0.00 | ||
| 2032 | 16.32 | 13.23 | -3.09 | 63 | -0.00 | 0.00 | 0.00 | ||
| 2033 | 16.45 | 13.24 | -3.21 | 45 | 0.00 | 0.00 | 0.00 | ||
| 2034 | 16.57 | 13.25 | -3.32 | 27 | 0.00 | 0.00 | 0.00 | ||
| 2035 | 16.65 | 13.25 | -3.40 | 7 | 0.00 | 0.00 | 0.00 | ||
| 2036 | 16.72 | 13.26 | -3.46 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2037 | 16.78 | 13.27 | -3.52 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2038 | 16.82 | 13.27 | -3.55 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2039 | 16.83 | 13.27 | -3.56 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2040 | 16.83 | 13.27 | -3.56 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2041 | 16.81 | 13.27 | -3.54 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2042 | 16.78 | 13.27 | -3.50 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2043 | 16.73 | 13.27 | -3.46 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2044 | 16.69 | 13.27 | -3.42 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2045 | 16.66 | 13.27 | -3.39 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2046 | 16.63 | 13.27 | -3.36 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2047 | 16.60 | 13.27 | -3.33 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2048 | 16.58 | 13.27 | -3.31 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2049 | 16.55 | 13.27 | -3.29 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2050 | 16.54 | 13.27 | -3.27 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2051 | 16.53 | 13.27 | -3.27 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2052 | 16.53 | 13.27 | -3.26 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2053 | 16.54 | 13.27 | -3.27 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2054 | 16.56 | 13.27 | -3.29 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2055 | 16.59 | 13.28 | -3.31 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2056 | 16.62 | 13.28 | -3.34 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2057 | 16.67 | 13.28 | -3.38 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2058 | 16.71 | 13.29 | -3.43 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2059 | 16.76 | 13.29 | -3.47 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2060 | 16.81 | 13.29 | -3.51 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2061 | 16.86 | 13.30 | -3.56 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2062 | 16.91 | 13.30 | -3.61 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2063 | 16.96 | 13.31 | -3.66 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2064 | 17.01 | 13.31 | -3.70 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2065 | 17.07 | 13.31 | -3.75 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2066 | 17.13 | 13.32 | -3.81 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2067 | 17.18 | 13.32 | -3.86 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2068 | 17.24 | 13.33 | -3.92 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2069 | 17.30 | 13.33 | -3.97 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2070 | 17.36 | 13.34 | -4.03 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2071 | 17.42 | 13.34 | -4.08 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2072 | 17.47 | 13.34 | -4.13 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2073 | 17.51 | 13.35 | -4.17 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2074 | 17.55 | 13.35 | -4.20 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2075 | 17.59 | 13.35 | -4.23 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2076 | 17.61 | 13.35 | -4.26 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2077 | 17.62 | 13.36 | -4.27 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2078 | 17.63 | 13.36 | -4.27 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2079 | 17.62 | 13.36 | -4.26 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2080 | 17.61 | 13.36 | -4.25 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2081 | 17.59 | 13.35 | -4.23 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2082 | 17.57 | 13.35 | -4.22 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2083 | 17.55 | 13.35 | -4.20 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2084 | 17.54 | 13.35 | -4.19 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2085 | 17.53 | 13.35 | -4.18 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2086 | 17.53 | 13.35 | -4.18 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2087 | 17.53 | 13.35 | -4.18 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2088 | 17.55 | 13.35 | -4.19 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2089 | 17.57 | 13.35 | -4.22 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2090 | 17.60 | 13.35 | -4.24 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2091 | 17.64 | 13.36 | -4.28 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2092 | 17.68 | 13.36 | -4.32 | ---- | 0.00 | 0.00 | 0.00 | ||
| 2093 | 17.72 | 13.36 | -4.36 | ---- | 0.00 | 0.00 | 0.00 | ||
Summarized Estimates
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Years | Cost rate |
Income rate |
Actuarial balance |
Year of reserve depletion1 |
Cost rate |
Income rate |
Actuarial balance |
||
| 2018-2092 | 16.46%2 | 14.00%2 | -2.47%2 | 2035 | -0.22%2 | 0.16%2 | 0.38%2 | ||
1 Under current law, the year of Trust Fund reserve depletion is 2034. |
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| 2 A change
in the investment of trust fund reserves to include some
equities affects the size of all summarized measures because increased
"present-value" discounting reduces the weight on values for more distant
future years. As a result, the magnitude of the current-law actuarial
balance and the summarized effects of most proposals is reduced. Therefore,
the size of the change in the long-range actuarial balance indicated here
cannot be interpreted directly as a reduction in the shortfall. The actual
reduction in the shortfall from equity investment depends on the amount of
reserves that are available for investment throughout the period. For example,
if provisions to change revenue or scheduled benefits resulted in a purely
pay-as-you-go system (reserves just above zero throughout the period), then
investment in equities would have no effect on the actuarial balance. |
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Based on Intermediate Assumptions of the 2018 Trustees Report.