2021 OASDI Trustees Report

 

B. TRUST FUND FINANCIAL OPERATIONS IN 2020

Table II.B1 shows the income, cost, and asset reserves for the OASI, the DI, and the combined OASI and DI Trust Funds in calendar year 2020.

Table II.B1.—Summary of 2020 Trust Fund Financial Operations

[In billions]

		OASI	DI	OASDI
Asset reserves at the end of 2019		$2,804.3	$93.1	$2,897.4
Total income in 2020 a		968.3	149.7	1,118.1
	Net payroll tax contributions	856.0	145.3	1,001.3
	Interest	73.3	2.8	76.1
	Taxation of benefits	39.0	1.7	40.7
Total cost in 2020b		961.0	146.3	1,107.2
	Benefit paymentsb	952.4	143.6	1,095.9
	Administrative expenses	3.7	2.6	6.3
	Railroad Retirement financial interchange	4.8	.1	5.0
Net increase in asset reserves in 2020b		7.4	3.5	10.9
Asset reserves at the end of 2020b		2,811.7	96.6	2,908.3

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a

Includes less than $50 million in reimbursements from the General Fund of the Treasury and gifts. See section III.A for details.

b

Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31, 2020 as required by the statutory provision for early delivery of benefit payments when the normal delivery date is a Saturday, Sunday, or public legal holiday. The amount of these payments was approximately $18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for payment each year.

Note: Components may not sum to totals because of rounding.

In 2020, net payroll tax contributions accounted for 89.6 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 $137,700 in 2020. Table II.B2 shows the payroll tax rates for 2020.

Table II.B2.—Payroll Tax Contribution Rates for 2020

[In percent]

	OASI	DI	OASDI
Payroll tax contribution rate for employees	5.3	0.9	6.2
Payroll tax contribution rate for employers	5.3	.9	6.2
Payroll tax contribution rate for self-employed persons	10.6	1.8	12.4

Interest earned on invested trust fund asset reserves accounted for 6.8 percent of OASI and DI combined trust fund income in 2020. Revenue 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 accounted for 3.6 percent of OASDI income.

The Department of the Treasury invests all trust fund income in interest-bearing securities issued by the U.S. Government. In 2020, the combined trust fund reserves (the excess of all past income over all past expenditures) earned interest at an effective annual rate of 2.6 percent.

Retirement, survivor, and disability benefits accounted for 99.0 percent of OASI and DI combined trust fund cost in 2020. The expenses for administering the Social Security program were 0.6 percent of total cost. The net payment to the Railroad Retirement Social Security Equivalent Benefit Account from the combined OASI and DI Trust Funds accounted for 0.5 percent of total OASDI cost.

Trust fund reserves provide the basis for paying benefits. Combined trust fund reserves increased by $10.9 billion during 2020 because income to each fund, including interest earned on trust fund reserves, exceeded total cost.¹ In last year’s report, combined reserves were projected to increase by $4.4 billion in 2020, and then start declining in 2021.² At the end of 2020, the combined reserves of the OASI and the DI Trust Funds were $2,908 billion, or 253 percent of estimated cost ² for 2021. In comparison, the combined reserves at the end of 2019 were 262 percent of actual cost for 2020.

 

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1

As noted in footnote b of table II.B1 and elsewhere in this report, asset reserves shown for the end of 2020 reflect the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for payment on January 3, 2021, which were actually paid on December 31, 2020 as required by the law.

2

Estimated cost is based on the intermediate set of assumptions.