Description of Proposed Provision:
B3.16: For retired worker and disabled worker beneficiaries becoming initially eligible in January 2026 or later, phase in a new benefit formula (from 2026 to 2035). 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 2035.

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
201913.9112.85-1.06
273
0.000.000.00
202013.9412.87-1.07
260
0.000.000.00
202114.0912.90-1.19
245
0.000.000.00
202214.2312.92-1.31
229
0.000.000.00
202314.4012.94-1.46
213
0.000.000.00
202414.5912.97-1.62
197
0.000.000.00
202514.7912.99-1.80
180
0.000.000.00
202614.9913.11-1.88
163
-0.00-0.000.00
202715.1913.13-2.06
147
-0.00-0.000.00
202815.4313.17-2.25
130
-0.01-0.000.01
202915.6113.19-2.43
114
-0.01-0.000.01
203015.7913.20-2.58
97
-0.02-0.000.02
203115.9413.21-2.72
81
-0.03-0.000.03
203216.0613.23-2.83
64
-0.05-0.000.05
203316.1613.23-2.92
47
-0.08-0.000.07
203416.2213.24-2.98
29
-0.11-0.010.10
203516.2513.24-3.00
12
-0.15-0.010.14
203616.2613.25-3.01
----
-0.20-0.010.19
203716.2613.25-3.01
----
-0.26-0.010.24
203816.2413.25-2.99
----
-0.32-0.020.30
203916.2113.25-2.96
----
-0.39-0.020.37
204016.1513.25-2.91
----
-0.46-0.030.43
204116.0813.24-2.83
----
-0.53-0.030.50
204215.9813.24-2.74
----
-0.61-0.030.57
204315.8813.23-2.64
----
-0.68-0.040.64
204415.7713.23-2.54
----
-0.75-0.040.71
204515.6613.22-2.44
----
-0.82-0.050.78
204615.5613.22-2.34
----
-0.89-0.050.84
204715.4713.21-2.26
----
-0.96-0.060.90
204815.3913.21-2.18
----
-1.02-0.060.96
204915.3013.21-2.10
----
-1.08-0.061.02
205015.2313.20-2.03
----
-1.14-0.071.07
205115.1713.20-1.97
----
-1.19-0.071.12
205215.1213.20-1.92
----
-1.25-0.071.17
205315.0813.20-1.88
----
-1.29-0.081.22
205415.0413.20-1.85
----
-1.34-0.081.26
205515.0213.20-1.83
----
-1.39-0.081.30
205615.0113.20-1.82
----
-1.43-0.081.34
205715.0113.20-1.82
----
-1.47-0.091.38
205815.0213.20-1.82
----
-1.50-0.091.42
205915.0413.20-1.84
----
-1.54-0.091.45
206015.0613.20-1.86
----
-1.57-0.091.48
206115.0813.21-1.88
----
-1.60-0.101.50
206215.1113.21-1.90
----
-1.62-0.101.52
206315.1513.21-1.93
----
-1.64-0.101.54
206415.1813.21-1.97
----
-1.66-0.101.56
206515.2213.22-2.00
----
-1.68-0.101.58
206615.2613.22-2.04
----
-1.69-0.101.59
206715.3113.22-2.08
----
-1.71-0.101.60
206815.3613.23-2.13
----
-1.72-0.101.62
206915.4113.23-2.18
----
-1.73-0.101.63
207015.4613.23-2.22
----
-1.74-0.101.63
207115.5013.24-2.27
----
-1.75-0.111.64
207215.5513.24-2.31
----
-1.75-0.111.65
207315.5913.24-2.34
----
-1.76-0.111.66
207415.6213.25-2.38
----
-1.77-0.111.66
207515.6613.25-2.41
----
-1.77-0.111.67
207615.6813.25-2.43
----
-1.78-0.111.67
207715.7013.25-2.44
----
-1.78-0.111.67
207815.7013.25-2.45
----
-1.78-0.111.67
207915.7013.25-2.44
----
-1.78-0.111.67
208015.6813.25-2.43
----
-1.78-0.111.67
208115.6713.25-2.41
----
-1.78-0.111.67
208215.6513.25-2.40
----
-1.78-0.111.67
208315.6313.25-2.38
----
-1.77-0.111.67
208415.6113.25-2.36
----
-1.77-0.111.67
208515.5913.25-2.34
----
-1.77-0.111.66
208615.5713.25-2.32
----
-1.77-0.111.66
208715.5613.25-2.32
----
-1.77-0.111.66
208815.5613.24-2.32
----
-1.77-0.111.66
208915.5713.25-2.32
----
-1.77-0.111.66
209015.5913.25-2.34
----
-1.77-0.111.66
209115.6113.25-2.37
----
-1.77-0.111.67
209215.6513.25-2.40
----
-1.78-0.111.67
209315.6913.25-2.44
----
-1.78-0.111.67
209415.7413.26-2.48
----
-1.79-0.111.68


Summarized Estimates

  Proposal   Change from Current Law
Years Cost
rate
Income
rate
Actuarial
balance

Year of reserve
depletion
1

Cost
rate
Income
rate
Actuarial
balance
2019-2093 15.59% 13.75% -1.84%
2035
-1.01% -0.06% 0.95%

1 Under current law, the year of Trust Fund reserve depletion is 2035.
Based on Intermediate Assumptions of the 2019 Trustees Report.