Provision Number

H.R. 2771 language

Statted Intent

2

Early retirement factors applied to aged spouse benefits are unchanged.

Early retirement reduction factors are increased for aged spouse benefits.

3

This provision applies to individuals who become eligible for oldage or disability benefits or who die. The life expectancy ratio is the ratio of:
 The life expectancy at age 62 from the period life table for the calendar year 2010 to
 The life expectancy at age 62 from the period life table for the calendar year that is three years prior to the year in which the retiree turns age 62.

This provision applies to individuals who become eligible for oldage benefits or who die. (Disabled worker beneficiaries are excluded from this adjustment to the benefit formula factors.) The life expectancy ratio is the ratio of:
 The life expectancy at age 62 from the period life table for the calendar year 2008 to
 The life expectancy at age 62 from the period life table for the calendar year that is three years prior to the year in which the retiree turns age 62.

4

In the case of a twoearner couple, the benefit computation period is retained at 35 years for the earner with the smaller amount of wages paid and selfemployment income credited to the preceding calendar year.

In the case of a twoearner couple, the benefit computation period used in the denominator for the earner with the lower PIA (or estimated PIA) is retained at 35 years.

4

No mention is made of gradually including all years of earnings in the numerator of the AIME calculation. In addition, the language attempting to include all earnings is flawed. The bill does include all earnings in the numerator. However, it also assigns the number of years used in calculating the denominator of the AIME years to years after 1950. Thus, a beneficiary entitled at age 62 and born in 1985 would have 97 years (19512047) used in the denominator of the AIME.

In conjunction with increasing the benefit period, phase in including earnings for all years in the numerator of the AIME calculation.

6

The Annual Applicable Poverty Level for 2000 is $8,259 (Monthly Applicable Poverty Level would equal 1/12 of this amount). The Annual Applicable Poverty Level that applies to an individual in their year of initial eligibility is determined by increasing the 2000 level by:
 COLAs for 1996 through the earlier of (1) the year prior to the year of initial benefit eligibility and (2) 2009; and
 Increases in the average wage index between 2009 and the second year prior to initial benefit eligibility.

The Annual Applicable Poverty Level for 2000 is $8,259 (Monthly Applicable Poverty Level would equal 1/12 of this amount). The Annual Applicable Poverty Level that applies to an individual in their year of initial eligibility is determined by increasing the 2000 level by:
 COLAs for 2000 through the earlier of (1) the year prior to the year of initial benefit eligibility and (2) 2011; and
 Increases in the average wage index between 2010 and the second year prior to initial benefit eligibility.

6

This provision would apply to those who initially become eligible for benefits after December 31, 2009.

This provision would be phased in for those who initially become eligible for benefits after December 31, 2007 and would be fully effective for those who become eligible for benefits after December 31, 2011.

6

In determining the minimum PIA under this provision, the minimum quarters of coverage is equal to 80, with no exceptions for type of beneficiaries.

In determining the minimum PIA under this provision for a disabled worker beneficiary or young survivor the minimum quarters of coverage would be twice his/her number of elapsed years. For retired workers, the minimum quarters of coverage is equal to 80, reduced by 2 for each year of disabledworker entitlement.

7 and 8

These provisions apply to individuals who become eligible for oldage or disability benefits or who die, in any calendar year after 2008.

These provisions apply to individuals who become eligible for oldage benefits or who die, in any calendar year after 2011. Disabled worker beneficiaries are excluded from these adjustments to the benefit formula factors.

9a

Beginning in 2003, workers who are born after December 31, 1946 would begin contributing to individual accounts.

Beginning in 2003, workers who are born after December 31, 1947 would begin contributing to individual accounts.

9a

The $10,000 threshold in determining the level of contributions to individual accounts is increased after 2003 by the increase in the COLA.

The $10,000 threshold in determining the level of contributions to individual accounts is increased after 2003 by the increase in the Average Wage Index.

11

After 2004, the benefit and contribution would be set equal to 86% of the average wage.

After 2004, the benefit and contribution base would be maintained at a level so that 86% of covered earnings would be subject to the OASDI payroll tax.

12

A new bend point equal to 196% of the first bend point would be established and formula factors would become 90, 70, 20, and 15. These changes apply to those newly eligible for benefits after 2008.

A new bend point equal to 196% of the first bend point would be established and formula factors would become 90, 70, 20, and 10. These changes apply to those newly eligible for benefits after 2014 and are phased on for those newly eligible for benefits over the period 20062014.
