Social Security Trust Funds Gain
One Additional Year of Solvency
The Social Security Board of Trustees today
released its annual report on the long-term financial health
of the Social Security Trust Funds. The 2001 Trustees' Report
projects that the Social Security program will remain solvent
until 2038 - one year later than reported last year.
"The additional year of solvency is good news.
However, we should both maintain fiscal discipline and move forward
on a bipartisan basis to strengthen Social Security to face the
challenges presented by the Baby Boom generation's retirement,"
said William A. Halter, Acting Commissioner of Social Security.
Social Security ran a surplus of $153 billion in
2000 and ended the year with $1.049 trillion in assets. Annual
Trust Fund revenues are projected to exceed expenditures until
2016, a year later than estimated in last year's Trustees' report.
Acting Commissioner Halter stated, "Social
Security is the major source of income for two-thirds of older
Americans and virtually the only source of income for one-third
of older Americans. In a real sense, Social Security is the most
important income security program in American history. We should
utilize this period of Social Security surpluses to fashion the
legislative changes necessary to extend the solvency of the system
for future generations."
Beginning in 2025, assets of the combined Old-Age
and Survivors Insurance and Disability Insurance Trust Funds will
be drawn down to pay benefits until the funds are exhausted in
2038. Over the 75-year long-range actuarial period, the projected
actuarial balance is a deficit of 1.86 percent of taxable payroll,
compared to 1.89 percent projected in 2000.
Based on the most recent experience, the Social
Security Trustees made some small adjustments in the demographic
and disability assumptions used in last year's report, resulting
in the one-year change to the exhaustion date of the combined
trust funds. Data accumulated since last year's report indicate
that the death rate declined recently at a slower pace than estimated
for the 2000 report. An update of disability data resulted in
a lower overall rate of disability incidence than was projected
in last year's report. These two factors together acted as the
main force behind extending the combined Trust Fund exhaustion
date from the 2037 projected in the 2000 report to 2038 in the
2001 Trustees' Report.
In their 2001 Annual Report to Congress, the Trustees
also reported the following:
-
The Old-Age and Survivors, and Disability Insurance Trust Funds
paid benefits amounting to $407.6 billion in calendar year 2000,
and there were 45.4 million beneficiaries on the rolls at the
end of 2000;
-
In 2000, an estimated 154 million people worked in jobs covered
by Social Security;
-
Income to the combined Trust Funds amounted to $568.4 billion
in 2000 and expenditures were $415.1 billion, increasing the
assets of the combined funds by $153.3 billion to $1,049.4 billion
at the end of 2000;
-
Interest earned on the invested assets of the combined Trust
Funds was $64.5 billion in 2000, representing an effective annual
interest rate of 6.9 percent. The average interest rate on the
new securities purchased by the Trust Funds was 6.2 percent;
and
-
Administrative expenses were $3.8 billion in 2000, or about
.6 percent of total income for the year. For OASI, administrative
expenses were about .4 percent of total income for the year.
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