2022 OASDI Trustees Report

 

B. TRUST FUND FINANCIAL OPERATIONS IN 2021

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 2021.

Table II.B1.—Summary of 2021 Trust Fund Financial Operations

[In billions]

		OASI	DI	OASDI
Asset reserves at the end of 2020a		$2,811.7	$96.6	$2,908.3
Total income in 2021 b		942.9	145.5	1,088.3
	Net payroll tax contributionsc	838.2	142.4	980.6
	Interest	67.5	2.6	70.1
	Taxation of benefits c	37.2	.5	37.6
Total cost in 2021a		1,001.9	142.6	1,144.6
	Benefit paymentsa	993.1	140.1	1,133.2
	Administrative expenses	4.0	2.5	6.5
	Railroad Retirement financial interchange	4.8	.1	4.9
Net increase in asset reserves in 2021a		-59.1	2.8	-56.3
Asset reserves at the end of 2021		2,752.6	99.4	2,852.0

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a

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.

b

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

c

Includes adjustments for prior calendar years. In June 2021, unusually large negative adjustments to payroll tax contributions in the amounts of $30.4 billion for OASI and $5.2 billion for DI were made because payroll tax revenue credited to the trust funds in 2020 was based on estimates that did not anticipate the effects of the pandemic and recession.

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

In 2021, net payroll tax contributions accounted for 90.1 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 $142,800 in 2021. Table II.B2 shows the payroll tax rates for 2021.

Table II.B2.—Payroll Tax Contribution Rates for 2021

[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 6.4 percent of OASI and DI combined trust fund income in 2021. 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 3.5 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 2021, the combined trust fund reserves (the excess of all past income over all past expenditures) earned interest at an effective annual rate of 2.5 percent.

Retirement, survivor, and disability benefits accounted for 99.0 percent of OASI and DI combined trust fund cost in 2021. 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 0.4 percent of total OASDI cost.

Trust fund reserves provide the basis for paying benefits. Combined trust fund reserves decreased by $56.3 billion during 2021 because income to the combined funds, including interest earned on trust fund reserves, was less than total cost.¹ In last year’s report, combined reserves were projected to decrease by $77.3 billion in 2021.² At the end of 2021, the combined reserves of the OASI and the DI Trust Funds were $2,852 billion, or 230 percent of estimated cost 2 for 2022. In comparison, the combined reserves at the end of 2020 were 254 percent of actual cost for 2021.

 

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1

As noted in footnote a 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.