__Description of Proposed Provision__:

E3.16: Beginning in 2020, apply 4 percent payroll tax rate on earnings above the wage-indexed equivalent of $400,000 in 2015 (about $462,300 in 2020), with the threshold wage-indexed after 2020. Provide benefit credit for additional earnings taxed, using a secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+" derived from annual earnings taxed only between 2015 wage-indexed equivalents of $400,000 and $500,000, or about $462,300 and $578,100 in 2020 (with thresholds wage-indexed after 2020); and (2) a formula factor of 2 percent on this newly computed "AIME+".

*Estimates based on the intermediate assumptions
of the 2018 Trustees Report*

Summary Measures | |||||||
---|---|---|---|---|---|---|---|

Current law [percent of payroll] |
Change from current law [percent of payroll] |
Shortfall eliminated | |||||

Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
||

-2.84 | -4.32 | 0.31 | 0.33 | 11% | 8% |