Highlights from the 2011 social security trustees report
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Highlights from the 2011 Social Security Trustees Report. Bruce D. Schobel , FSA, MAAA, FCA. Short-Range Solvency: Trust Fund Ratios. Long-Range Solvency: Trust Fund Ratios. Long-Range Solvency: Trust Fund Ratio Sensitivity. Long-Range Solvency: Projected Annual Balance, % of Payroll.

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Highlights from the 2011 social security trustees report

Highlights from the2011 Social Security Trustees Report

Bruce D. Schobel, FSA, MAAA, FCA


Short range solvency trust fund ratios
Short-Range Solvency:Trust Fund Ratios


Long range solvency trust fund ratios
Long-Range Solvency:Trust Fund Ratios


Long range solvency trust fund ratio sensitivity
Long-Range Solvency:Trust Fund Ratio Sensitivity


Long range solvency projected annual balance of payroll
Long-Range Solvency:Projected Annual Balance, % of Payroll


Long range solvency projected annual balance sensitivity
Long-Range Solvency:Projected Annual Balance Sensitivity


Long range solvency actuarial balance
Long-Range Solvency:Actuarial Balance

  • Actuarial Balance =

    Summarized Income Rate - Summarized Cost Rate

  • Trust Fund Balance is included in Income Rate

  • Ending Target Fund included in Cost Rate

  • Expressed as a percentage of the summarized taxable payroll


Long range solvency actuarial balance 2010 11
Long-Range Solvency:Actuarial Balance, 2010-11


Long range solvency actuarial balance sensitivity
Long-Range Solvency:Actuarial Balance Sensitivity


Congress should restore social security s financial soundness sooner rather than later
Congress Should Restore Social Security’s Financial SoundnessSooner Rather Than Later

  • Workers will have time to plan for reduced after-tax income and benefits.

  • Reforms can be phased-in more gradually over a longer period of time, affecting more people.

    • Starting in 2011, achieving actuarial balance over 75 years would require:

      • Increase tax rate from 12.4% to 14.55%, or

      • 13.8% decrease in benefits

    • Starting in 2036, it would require

      • Increase tax rate from 12.4% to 16.45%, or

      • 23% decrease in benefits


Policymakers must consider
Policymakers must consider:

Individual equity versus social adequacy?

Pay-as-you-go funding versus pre-funding?


Reform options
Reform Options

These are some of the “big-ticket” items that would contribute significantly to restoring the program’s solvency:

Raising the normal retirement age beyond 67

Raising the maximum taxable amount beyond $106,800

Reducing the primary insurance account (PIA) formula in various ways

Modifying cost-of-living adjustments (COLAs)




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