Description of Proposed Provision:
B3.16: For retired worker and disabled worker beneficiaries becoming initially eligible in January 2025 or later, phase in a new benefit formula (from 2025 to 2034). Replace the existing two primary insurance amount (PIA) bend points with three new bend points as follows: (1) 25% AWI/12 from 2 years prior to initial eligibility; (2) 100% AWI/12 from 2 years prior to initial eligibility; and (3) 125% AWI/12 from 2 years prior to initial eligibility. The new PIA factors are 95%, 27.5%, 5% and 2%. During the phase in, those becoming newly eligible for benefits will receive an increasing portion of their benefits based on the new formula, reaching 100% of the new formula in 2034.
Financial Estimates for the OASDI Trust Fund Program
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
|
Expressed as a percentage of current-law taxable payroll |
Trust fund ratio as of January 1 |
Expressed as a percentage of current-law taxable payroll |
|||||||
|
Calendar year |
Cost rate |
Income rate |
Annual balance |
Cost rate |
Income rate |
Annual balance |
|||
| 2018 | 13.81 | 12.64 | -1.17 | 288 | 0.00 | 0.00 | 0.00 | ||
| 2019 | 13.95 | 12.87 | -1.08 | 272 | 0.00 | 0.00 | 0.00 | ||
| 2020 | 14.12 | 12.89 | -1.23 | 256 | 0.00 | 0.00 | 0.00 | ||
| 2021 | 14.27 | 12.92 | -1.35 | 239 | 0.00 | 0.00 | 0.00 | ||
| 2022 | 14.44 | 12.95 | -1.49 | 223 | 0.00 | 0.00 | 0.00 | ||
| 2023 | 14.62 | 12.97 | -1.66 | 206 | 0.00 | 0.00 | 0.00 | ||
| 2024 | 14.80 | 12.99 | -1.81 | 188 | 0.00 | 0.00 | 0.00 | ||
| 2025 | 14.98 | 13.01 | -1.97 | 171 | -0.00 | -0.00 | 0.00 | ||
| 2026 | 15.16 | 13.13 | -2.02 | 154 | -0.00 | -0.00 | 0.00 | ||
| 2027 | 15.36 | 13.15 | -2.21 | 137 | -0.01 | -0.00 | 0.01 | ||
| 2028 | 15.57 | 13.17 | -2.40 | 121 | -0.01 | -0.00 | 0.01 | ||
| 2029 | 15.77 | 13.19 | -2.59 | 104 | -0.02 | -0.00 | 0.02 | ||
| 2030 | 15.95 | 13.20 | -2.75 | 87 | -0.03 | -0.00 | 0.03 | ||
| 2031 | 16.11 | 13.21 | -2.90 | 70 | -0.05 | -0.00 | 0.05 | ||
| 2032 | 16.24 | 13.22 | -3.02 | 52 | -0.08 | -0.00 | 0.07 | ||
| 2033 | 16.34 | 13.23 | -3.11 | 34 | -0.11 | -0.01 | 0.11 | ||
| 2034 | 16.41 | 13.24 | -3.17 | 16 | -0.16 | -0.01 | 0.15 | ||
| 2035 | 16.45 | 13.24 | -3.20 | ---- | -0.20 | -0.01 | 0.19 | ||
| 2036 | 16.46 | 13.25 | -3.22 | ---- | -0.26 | -0.01 | 0.25 | ||
| 2037 | 16.46 | 13.25 | -3.21 | ---- | -0.32 | -0.02 | 0.31 | ||
| 2038 | 16.43 | 13.25 | -3.18 | ---- | -0.39 | -0.02 | 0.37 | ||
| 2039 | 16.37 | 13.25 | -3.13 | ---- | -0.46 | -0.03 | 0.43 | ||
| 2040 | 16.30 | 13.24 | -3.05 | ---- | -0.53 | -0.03 | 0.50 | ||
| 2041 | 16.21 | 13.24 | -2.97 | ---- | -0.60 | -0.03 | 0.57 | ||
| 2042 | 16.10 | 13.23 | -2.87 | ---- | -0.67 | -0.04 | 0.64 | ||
| 2043 | 15.99 | 13.23 | -2.76 | ---- | -0.74 | -0.04 | 0.70 | ||
| 2044 | 15.89 | 13.22 | -2.66 | ---- | -0.81 | -0.05 | 0.76 | ||
| 2045 | 15.79 | 13.22 | -2.57 | ---- | -0.87 | -0.05 | 0.82 | ||
| 2046 | 15.70 | 13.21 | -2.48 | ---- | -0.93 | -0.05 | 0.88 | ||
| 2047 | 15.61 | 13.21 | -2.40 | ---- | -0.99 | -0.06 | 0.93 | ||
| 2048 | 15.53 | 13.21 | -2.32 | ---- | -1.05 | -0.06 | 0.99 | ||
| 2049 | 15.45 | 13.20 | -2.25 | ---- | -1.10 | -0.07 | 1.04 | ||
| 2050 | 15.39 | 13.20 | -2.19 | ---- | -1.16 | -0.07 | 1.09 | ||
| 2051 | 15.33 | 13.20 | -2.13 | ---- | -1.21 | -0.07 | 1.13 | ||
| 2052 | 15.28 | 13.20 | -2.09 | ---- | -1.25 | -0.07 | 1.18 | ||
| 2053 | 15.25 | 13.19 | -2.05 | ---- | -1.30 | -0.08 | 1.22 | ||
| 2054 | 15.22 | 13.19 | -2.03 | ---- | -1.34 | -0.08 | 1.26 | ||
| 2055 | 15.21 | 13.19 | -2.02 | ---- | -1.38 | -0.08 | 1.30 | ||
| 2056 | 15.21 | 13.19 | -2.01 | ---- | -1.42 | -0.08 | 1.33 | ||
| 2057 | 15.21 | 13.20 | -2.02 | ---- | -1.45 | -0.09 | 1.36 | ||
| 2058 | 15.23 | 13.20 | -2.03 | ---- | -1.48 | -0.09 | 1.39 | ||
| 2059 | 15.25 | 13.20 | -2.05 | ---- | -1.51 | -0.09 | 1.42 | ||
| 2060 | 15.27 | 13.20 | -2.07 | ---- | -1.54 | -0.09 | 1.45 | ||
| 2061 | 15.30 | 13.21 | -2.09 | ---- | -1.56 | -0.09 | 1.47 | ||
| 2062 | 15.33 | 13.21 | -2.12 | ---- | -1.58 | -0.09 | 1.49 | ||
| 2063 | 15.36 | 13.21 | -2.15 | ---- | -1.60 | -0.10 | 1.50 | ||
| 2064 | 15.40 | 13.21 | -2.19 | ---- | -1.61 | -0.10 | 1.52 | ||
| 2065 | 15.44 | 13.22 | -2.23 | ---- | -1.63 | -0.10 | 1.53 | ||
| 2066 | 15.49 | 13.22 | -2.27 | ---- | -1.64 | -0.10 | 1.54 | ||
| 2067 | 15.53 | 13.22 | -2.31 | ---- | -1.65 | -0.10 | 1.55 | ||
| 2068 | 15.58 | 13.23 | -2.36 | ---- | -1.66 | -0.10 | 1.56 | ||
| 2069 | 15.63 | 13.23 | -2.40 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2070 | 15.69 | 13.23 | -2.45 | ---- | -1.68 | -0.10 | 1.58 | ||
| 2071 | 15.73 | 13.24 | -2.50 | ---- | -1.69 | -0.10 | 1.58 | ||
| 2072 | 15.78 | 13.24 | -2.54 | ---- | -1.69 | -0.10 | 1.59 | ||
| 2073 | 15.82 | 13.24 | -2.57 | ---- | -1.70 | -0.10 | 1.60 | ||
| 2074 | 15.85 | 13.25 | -2.60 | ---- | -1.70 | -0.10 | 1.60 | ||
| 2075 | 15.88 | 13.25 | -2.63 | ---- | -1.71 | -0.10 | 1.60 | ||
| 2076 | 15.90 | 13.25 | -2.65 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2077 | 15.91 | 13.25 | -2.66 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2078 | 15.91 | 13.25 | -2.66 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2079 | 15.90 | 13.25 | -2.65 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2080 | 15.89 | 13.25 | -2.64 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2081 | 15.88 | 13.25 | -2.63 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2082 | 15.86 | 13.25 | -2.61 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2083 | 15.85 | 13.25 | -2.60 | ---- | -1.71 | -0.10 | 1.60 | ||
| 2084 | 15.83 | 13.25 | -2.59 | ---- | -1.71 | -0.10 | 1.60 | ||
| 2085 | 15.82 | 13.25 | -2.58 | ---- | -1.71 | -0.10 | 1.60 | ||
| 2086 | 15.82 | 13.25 | -2.58 | ---- | -1.71 | -0.10 | 1.60 | ||
| 2087 | 15.83 | 13.25 | -2.58 | ---- | -1.71 | -0.10 | 1.60 | ||
| 2088 | 15.84 | 13.25 | -2.59 | ---- | -1.71 | -0.10 | 1.60 | ||
| 2089 | 15.86 | 13.25 | -2.61 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2090 | 15.89 | 13.25 | -2.64 | ---- | -1.71 | -0.10 | 1.61 | ||
| 2091 | 15.92 | 13.25 | -2.67 | ---- | -1.72 | -0.10 | 1.61 | ||
| 2092 | 15.96 | 13.26 | -2.70 | ---- | -1.72 | -0.10 | 1.62 | ||
| 2093 | 16.00 | 13.26 | -2.74 | ---- | -1.73 | -0.11 | 1.62 | ||
Summarized Estimates
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Years | Cost rate |
Income rate |
Actuarial balance |
Year of reserve depletion1 |
Cost rate |
Income rate |
Actuarial balance |
||
| 2018-2092 | 15.74% | 13.79% | -1.95% | 2034 | -0.95% | -0.06% | 0.89% | ||
1 Under current law, the year of Trust Fund reserve depletion is 2034. |
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Based on Intermediate Assumptions of the 2018 Trustees Report.