2018 OASDI Trustees Report

 

B. TRUST FUND FINANCIAL OPERATIONS IN 2017

Table II.B1 shows the income, expenditures, and asset reserves for the OASI, the DI, and the combined OASI and DI Trust Funds in calendar year 2017.

Table II.B1.—Summary of 2017 Trust Fund Financial Operations

[In billions]

		OASI	DI	OASDI
Asset reserves at the end of 2016		$2,801.3	$46.3	$2,847.7
Total income in 2017		825.6	171.0	996.6
	Net payroll tax contributions	706.5	167.1	873.6
	Reimbursement from General Fund of the Treasury	a	a	a
	Taxation of benefits	35.9	2.0	37.9
	Interest	83.2	1.9	85.1
Total expenditures in 2017		806.7	145.8	952.5
	Benefit payments	798.7	142.8	941.5
	Railroad Retirement financial interchange	4.3	.2	4.5
	Administrative expenses	3.7	2.8	6.5
Net increase in asset reserves in 2017		19.0	25.1	44.1
Asset reserves at the end of 2017		2,820.3	71.5	2,891.8

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a

Less than $50 million.

Note: Totals do not necessarily equal the sums of rounded components.

In 2017, net payroll tax contributions accounted for 88 percent of total trust fund income. Net payroll tax contributions consist of taxes paid by employees, employers, and the self-employed on earnings covered by Social Security. These taxes are paid on covered earnings up to a specified maximum annual amount, which was $127,200 in 2017. Table  II.B2 shows the payroll tax rates for 2017.

Four percent of OASI and DI combined Trust Fund income in 2017 came from subjecting up to 50 percent of Social Security benefits to Federal personal income taxation for beneficiaries with income (including half of benefits and all non-taxable interest received) exceeding specified levels. Interest earned on invested trust fund asset reserves accounted for 9 percent of OASDI income. The remaining income to the combined OASI and DI Trust Funds, less than 0.01 percent, came from reimbursements from the General Fund of the Treasury.¹

The Department of the Treasury invests trust fund reserves in interest-bearing securities issued by the U.S. Government. In 2017, the combined trust fund reserves earned interest at an effective annual rate of 3.0 percent.

Almost 99 percent of expenditures from the combined OASI and DI Trust Funds in 2017 were retirement, survivor, and disability benefits totaling $941.5 billion. A net payment of $4.5 billion was made to the Railroad Retirement Social Security Equivalent Benefit Account from the combined OASI and DI Trust Funds, which was about 0.5 percent of total OASDI expenditures. The administrative expenses of the Social Security program were $6.5 billion, which was about 0.7 percent of total expenditures.

The trust fund investments provide the basis for paying benefits. Combined trust fund reserves increased by $44.1 billion for 2017 because income to each fund, including interest earned on trust fund reserves, exceeded total expenditures. At the end of 2017, the combined reserves of the OASI and the DI Trust Funds were $2,892 billion, or 288 percent of estimated expenditures² for 2018. In comparison, the combined reserves at the end of 2016 were 299 percent of actual expenditures for 2017.

Table II.B2.—Payroll Tax Contribution Rates for 2017

[In percent]

	OASI	DI	OASDI
Payroll tax contribution rate for employees	5.015	1.185	6.20
Payroll tax contribution rate for employers	5.015	1.185	6.20
Payroll tax contribution rate for self-employed persons	10.030	2.370	12.40

Note: Section 833 of Public Law 114-74, the Bipartisan Budget Act of 2015, requires a temporary reallocation of the payroll tax rates between the OASI and DI Trust Funds. For earnings in calendar years 2016 through 2018, this section increases from 1.80 percent to 2.37 percent the portion of the total 12.40 percent OASDI payroll tax that is directed to the DI Trust Fund. There is a corresponding decrease in the portion of the tax rates directed to the OASI Trust Fund for these years.

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1

Public Laws 111-312, 112-78, and 112-96 account for most of the reimbursement for the year. These acts specified General Fund reimbursement for temporary reductions in revenue due to reduced payroll tax rates for employees and for self-employed workers for 2011 and 2012.

2

Estimated expenditures are based on the intermediate set of assumptions.