Description of Proposed Provision:
B3.16: For retired worker and disabled worker beneficiaries becoming initially eligible in January 2024 or later, phase in a new benefit formula (from 2024 to 2033). 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 2033.
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 |
|||
| 2017 | 13.41 | 13.03 | -0.38 | 298 | 0.00 | 0.00 | 0.00 | ||
| 2018 | 13.49 | 12.93 | -0.56 | 287 | 0.00 | 0.00 | 0.00 | ||
| 2019 | 13.70 | 12.95 | -0.75 | 273 | 0.00 | 0.00 | 0.00 | ||
| 2020 | 13.85 | 12.96 | -0.89 | 259 | 0.00 | 0.00 | 0.00 | ||
| 2021 | 14.02 | 12.99 | -1.03 | 245 | 0.00 | 0.00 | 0.00 | ||
| 2022 | 14.26 | 13.02 | -1.23 | 230 | 0.00 | 0.00 | 0.00 | ||
| 2023 | 14.54 | 13.05 | -1.50 | 215 | 0.00 | 0.00 | 0.00 | ||
| 2024 | 14.83 | 13.08 | -1.74 | 199 | -0.00 | -0.00 | 0.00 | ||
| 2025 | 15.10 | 13.10 | -1.99 | 182 | -0.00 | -0.00 | 0.00 | ||
| 2026 | 15.36 | 13.13 | -2.23 | 165 | -0.01 | -0.00 | 0.01 | ||
| 2027 | 15.60 | 13.15 | -2.45 | 148 | -0.01 | -0.00 | 0.01 | ||
| 2028 | 15.83 | 13.17 | -2.66 | 130 | -0.02 | -0.00 | 0.02 | ||
| 2029 | 16.03 | 13.18 | -2.85 | 113 | -0.04 | -0.00 | 0.04 | ||
| 2030 | 16.21 | 13.19 | -3.01 | 95 | -0.06 | -0.00 | 0.06 | ||
| 2031 | 16.36 | 13.20 | -3.16 | 77 | -0.09 | -0.00 | 0.08 | ||
| 2032 | 16.48 | 13.21 | -3.27 | 58 | -0.13 | -0.01 | 0.12 | ||
| 2033 | 16.57 | 13.22 | -3.35 | 39 | -0.17 | -0.01 | 0.16 | ||
| 2034 | 16.62 | 13.22 | -3.40 | 20 | -0.23 | -0.01 | 0.21 | ||
| 2035 | 16.64 | 13.22 | -3.42 | ---- | -0.28 | -0.02 | 0.27 | ||
| 2036 | 16.64 | 13.23 | -3.42 | ---- | -0.35 | -0.02 | 0.33 | ||
| 2037 | 16.61 | 13.23 | -3.38 | ---- | -0.41 | -0.02 | 0.39 | ||
| 2038 | 16.54 | 13.22 | -3.31 | ---- | -0.48 | -0.03 | 0.46 | ||
| 2039 | 16.44 | 13.22 | -3.22 | ---- | -0.55 | -0.03 | 0.52 | ||
| 2040 | 16.34 | 13.21 | -3.12 | ---- | -0.62 | -0.03 | 0.59 | ||
| 2041 | 16.22 | 13.21 | -3.02 | ---- | -0.69 | -0.04 | 0.65 | ||
| 2042 | 16.10 | 13.20 | -2.90 | ---- | -0.76 | -0.04 | 0.71 | ||
| 2043 | 15.99 | 13.20 | -2.79 | ---- | -0.82 | -0.05 | 0.77 | ||
| 2044 | 15.88 | 13.19 | -2.69 | ---- | -0.88 | -0.05 | 0.83 | ||
| 2045 | 15.78 | 13.18 | -2.60 | ---- | -0.94 | -0.05 | 0.89 | ||
| 2046 | 15.69 | 13.18 | -2.51 | ---- | -0.99 | -0.06 | 0.94 | ||
| 2047 | 15.60 | 13.18 | -2.42 | ---- | -1.05 | -0.06 | 0.99 | ||
| 2048 | 15.52 | 13.17 | -2.34 | ---- | -1.10 | -0.06 | 1.04 | ||
| 2049 | 15.44 | 13.17 | -2.27 | ---- | -1.15 | -0.06 | 1.08 | ||
| 2050 | 15.37 | 13.16 | -2.21 | ---- | -1.20 | -0.07 | 1.13 | ||
| 2051 | 15.32 | 13.16 | -2.15 | ---- | -1.24 | -0.07 | 1.17 | ||
| 2052 | 15.27 | 13.16 | -2.11 | ---- | -1.28 | -0.07 | 1.21 | ||
| 2053 | 15.25 | 13.16 | -2.09 | ---- | -1.32 | -0.07 | 1.25 | ||
| 2054 | 15.23 | 13.16 | -2.07 | ---- | -1.36 | -0.08 | 1.28 | ||
| 2055 | 15.22 | 13.16 | -2.06 | ---- | -1.40 | -0.08 | 1.32 | ||
| 2056 | 15.23 | 13.16 | -2.07 | ---- | -1.43 | -0.08 | 1.35 | ||
| 2057 | 15.24 | 13.16 | -2.07 | ---- | -1.46 | -0.08 | 1.38 | ||
| 2058 | 15.25 | 13.16 | -2.09 | ---- | -1.49 | -0.08 | 1.40 | ||
| 2059 | 15.27 | 13.16 | -2.11 | ---- | -1.51 | -0.09 | 1.43 | ||
| 2060 | 15.29 | 13.17 | -2.13 | ---- | -1.53 | -0.09 | 1.45 | ||
| 2061 | 15.32 | 13.17 | -2.15 | ---- | -1.55 | -0.09 | 1.46 | ||
| 2062 | 15.35 | 13.17 | -2.18 | ---- | -1.57 | -0.09 | 1.48 | ||
| 2063 | 15.39 | 13.17 | -2.21 | ---- | -1.58 | -0.09 | 1.49 | ||
| 2064 | 15.42 | 13.17 | -2.25 | ---- | -1.59 | -0.09 | 1.50 | ||
| 2065 | 15.46 | 13.18 | -2.28 | ---- | -1.60 | -0.09 | 1.51 | ||
| 2066 | 15.50 | 13.18 | -2.32 | ---- | -1.61 | -0.09 | 1.52 | ||
| 2067 | 15.55 | 13.18 | -2.36 | ---- | -1.62 | -0.09 | 1.53 | ||
| 2068 | 15.59 | 13.19 | -2.41 | ---- | -1.63 | -0.09 | 1.54 | ||
| 2069 | 15.64 | 13.19 | -2.45 | ---- | -1.64 | -0.09 | 1.54 | ||
| 2070 | 15.68 | 13.19 | -2.49 | ---- | -1.64 | -0.09 | 1.55 | ||
| 2071 | 15.72 | 13.19 | -2.53 | ---- | -1.65 | -0.09 | 1.56 | ||
| 2072 | 15.76 | 13.20 | -2.56 | ---- | -1.66 | -0.09 | 1.56 | ||
| 2073 | 15.79 | 13.20 | -2.59 | ---- | -1.66 | -0.09 | 1.56 | ||
| 2074 | 15.82 | 13.20 | -2.62 | ---- | -1.66 | -0.09 | 1.57 | ||
| 2075 | 15.84 | 13.20 | -2.64 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2076 | 15.85 | 13.20 | -2.65 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2077 | 15.86 | 13.20 | -2.65 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2078 | 15.85 | 13.20 | -2.65 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2079 | 15.85 | 13.20 | -2.64 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2080 | 15.84 | 13.20 | -2.64 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2081 | 15.84 | 13.20 | -2.64 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2082 | 15.84 | 13.20 | -2.64 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2083 | 15.84 | 13.20 | -2.64 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2084 | 15.86 | 13.20 | -2.66 | ---- | -1.67 | -0.10 | 1.57 | ||
| 2085 | 15.88 | 13.20 | -2.67 | ---- | -1.67 | -0.10 | 1.58 | ||
| 2086 | 15.91 | 13.21 | -2.70 | ---- | -1.67 | -0.10 | 1.58 | ||
| 2087 | 15.94 | 13.21 | -2.73 | ---- | -1.68 | -0.10 | 1.58 | ||
| 2088 | 15.97 | 13.21 | -2.77 | ---- | -1.68 | -0.10 | 1.59 | ||
| 2089 | 16.01 | 13.21 | -2.80 | ---- | -1.69 | -0.10 | 1.59 | ||
| 2090 | 16.06 | 13.21 | -2.84 | ---- | -1.69 | -0.10 | 1.59 | ||
| 2091 | 16.10 | 13.22 | -2.88 | ---- | -1.70 | -0.10 | 1.60 | ||
| 2092 | 16.14 | 13.22 | -2.92 | ---- | -1.70 | -0.10 | 1.60 | ||
Summarized Estimates
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Years | Cost rate |
Income rate |
Actuarial balance |
Year of reserve depletion1 |
Cost rate |
Income rate |
Actuarial balance |
||
| 2017-2091 | 15.73% | 13.79% | -1.94% | 2034 | -0.94% | -0.05% | 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 2017 Trustees Report.