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Actuarial Publications 
Summary of Provisions That Would Change the Social Security Program 
Description of Proposed Provisions:


Estimates based on the intermediate assumptions of the 2016 Trustees Report
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Change from present law [percent of payroll] 
Shortfall eliminated  

Longrange actuarial balance 
Annual balance in 75th year 
Longrange actuarial balance 
Annual balance in 75th year 

Present law shortfall in longrange actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.  
G1 
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased in
20172031), assuming an ultimate 6.2 percent annual real rate of return
on equities.
graph  table  pdfgraph  pdftable  memo (Social Security Advisory Board) 
0.53*  0.00  *  0%  
G2 
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased in
20172031), assuming an ultimate 5.2 percent annual real rate of return
on equities.
graph  table  pdfgraph  pdftable  memo (Social Security Advisory Board) 
0.39*  0.00  *  0%  
G3 
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased in
20172031), assuming an ultimate 2.7 percent annual real rate of return
on equities. Thus, the ultimate rate of return on equities is the same as
that assumed for Trust Fund bonds.
graph  table  pdfgraph  pdftable  memo (Social Security Advisory Board) 
0.00*  0.00  *  0%  
G4 
Invest 15 percent of the OASDI Trust Fund reserves in equities (phased in
20172026), assuming an ultimate 6.2 percent annual real rate of return
on equities.
graph  table  pdfgraph  pdftable  memo (AARP) 
0.22*  0.00  *  0%  
G5 
Invest 15 percent of the OASDI Trust Fund reserves in equities (phased in
20172026), assuming an ultimate 2.7 percent annual real rate of return on
equities. Thus, the ultimate rate of return on equities is the same as that
assumed for Trust Fund bonds.
graph  table  pdfgraph  pdftable  memo (AARP) 
0.00*  0.00  *  0%  
G6 
Invest 25 percent of the OASDI Trust Fund reserves in equities (phased in
20192028), assuming an ultimate 6.2 percent annual real rate of return on
equities.
graph  table  pdfgraph  pdftable  memo (Larson 2014) 
0.34*  0.00  *  0%  
G7 
Invest 25 percent of the OASDI Trust Fund reserves in equities (phased in
20192028), assuming an ultimate 2.7 percent annual real rate of return on
equities. Thus, the ultimate rate of return on equities is the same as that
assumed for Trust Fund bonds.
graph  table  pdfgraph  pdftable  memo (Larson 2014) 
0.00*  0.00  *  0% 
* A change in the investment of trust fund reserves to include some equities affects the size of all summarized measures because increased "presentvalue" discounting reduces the weight on values for more distant future years. As a result, the magnitude of the presentlaw actuarial balance and the summarized effects of most proposals is reduced. Therefore, the size of the change in the longrange actuarial balance indicated here cannot be interpreted directly as a reduction in the shortfall. The actual reduction in the shortfall from equity investment depends on the amount of reserves that are available for investment throughout the period. For example, if provisions to change revenue or scheduled benefits resulted in a purely payasyougo system (reserves just above zero throughout the period), then investment in equities would have no effect on the actuarial balance. 
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