ACTUARIAL NOTE
 
 
SOCIAL SECURITY ADMINISTRATION
Number 103
May 1981
Office of the Chief Actuary
Baltimore, Maryland
AVERAGE WAGES FOR INDEXING UNDER THE SOCIAL SECURITY ACT
AND THE AUTOMATIC DETERMINATIONS FOR 1979-81
by Eli N. Donkar, Ph.D., A.S.A.
INTRODUCTION
CONSTRUCTION OF THE 1951-77 AVERAGE WAGE SERIES
1. Historical precedents for wage indexing and average wage
2. The preliminary series of average wages
3. Limitations on other historical sources of data available from SSA
4. The construction of the final average wage series for 1951-77
5. The final series—indications of reliability
AVERAGE WAGES FOR 1978 AND 1979
1. Sources of data for years after 1977
2. IRS wage data for 1977-79
3. Average wages for indexing, 1977-79
DETERMINATION OF WAGE-INDEXED PROGRAM AMOUNTS FOR 1979-81
1. The retirement test exempt amounts
2. Amount of earnings required for a quarter of coverage
3. Bend points in PIA formula and maximum family benefit formula
4. Contribution and benefit base
5. Contribution and benefit base under provisions in "old law"

Relevant Federal Register Publications

  1. "Social Security Contribution and Benefit Base and Retirement Test Exempt Amount for 1975"—Vol. 39, No. 211, October 31, 1974, pp. 38406-38407.
  2. "Retirement Test Monthly Exempt Amount and Contribution and Benefit Base for years after 1974" (including description of first-quarter wage data)—Vol. 40, No. 122, June 24, 1975, pp. 26532-26535.
  3. "Social Security Contribution and Benefit Base and Retirement Test Exempt Amount for 1976"—Vol. 40, No. 210, October 30, 1975, pp. 50556-50557.
  4. "Social Security Contribution and Benefit Base and Retirement Test Exempt Amount for 1977"—Vol. 41, No. 199, October 13, 1976, pp. 44878-44879.
  5. "Social Security Contribution and Benefit Base"—Vol. 42, No. 213, November 4, 1977, pp. 57754-57755.
  6. Automatic Determinations for 1979—Vol. 43, No. 222, November 16, 1978, pp. 53504-53506.
  7. "Effects of Annual Wage Reporting"—Vol. 43, No. 231, November 30, 1978, pp. 56036-56039.
  8. Announcement of average wages for 1951-77—Vol. 43, No. 251, December 29, 1978, pp. 61016-61017.
  9. Announcement of "old-law" base for 1979—Vol. 44, No. 97, May 17, 1979 p. 28881-28882.
  10. Automatic Determinations for 1980—Vol. 44, No. 213, November 1, 1979, pp. 62956-62960.
  11. New methods for computing OASDI benefits—Vol. 45, No. 5, January 8, 1980, pp. 1605-1611.
  12. Announcement of "old-law" base for 1980—Vol. 45, No. 65, April 2, 1980, p. 21715.
  13. Automatic Determinations for 1981—Vol. 45, No. 224, November 18, 1980, pp. 76252-76254.

Tables
1. Average wage series for indexing earnings under the Social Security Act, calendar years 1951-79
2. Social Security program amounts determined under the automatic provisions which depend on increases in average wages, calendar years 1978-81
3. First-quarter averages used in constructing the preliminary indexing series, calendar years 1951-77
4. First-quarter averages used in constructing the final indexing series, calendar years 1951-77
5. Average wages, percentage increases and indexing factors resulting from the preliminary average wage series, the final average wage series, and an average wage series derived from Department of Commerce (DoC) estimates, calendar years 1951-77
6. Number of "wage items" per employee tabulated from the 1-percent sample LEED file, calendar years 1957-73
7. Average wages for the first quarter for private industry population covered by unemployment insurance, calendar years 1951-75
8. Estimated amounts of Average Indexed Monthly Earnings for maximum wage earners retiring at age 62 in each year 1979-90, calculated using three different wage series for indexing
9. Summary of wage data tabulated by the Internal Revenue Service from individual tax returns filed for tax years 1977-79

Notes published in the 1980s