2017 OASDI Trustees Report

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B. TRUST FUND FINANCIAL OPERATIONS IN 2016
Table II.B1 shows the income, expenditures, and asset reserves for the OASI, the DI, and the combined OASI and DI Trust Funds in calendar year 2016.
Asset reserves at the end of 2015a

a
Benefit payments which were scheduled to be paid on January 3, 2016 were actually paid on December 31, 2015 as required by the statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accelerated basis was approximately $19.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for payment each year without regard to the accelerated payments described above.

b
Less than $50 million.

Note: Totals do not necessarily equal the sums of rounded components.
In 2016, net payroll tax contributions accounted for 87 percent of total trust fund income. Net payroll tax contributions consist of taxes paid by employees, employers, and the self-employed on earnings covered by Social Security. These taxes are paid on covered earnings up to a specified maximum annual amount, which was $118,500 in 2016. Table II.B2 shows the tax rates for 2016. Approximately 0.01 percent of OASI and DI combined Trust Fund income came from reimbursements from the General Fund of the Treasury.1
Three percent of OASI and DI combined Trust Fund income in 2016 came from subjecting up to 50 percent of Social Security benefits to Federal personal income taxation for beneficiaries with income (including half of benefits and all non-taxable interest) exceeding specified levels. Interest earned on invested trust fund asset reserves accounted for 9 percent of OASDI income. The Department of the Treasury invests trust fund reserves in interest-bearing securities issued by the U.S. Government. In 2016, the combined trust fund reserves earned interest at an effective annual rate of 3.2 percent.
Almost 99 percent of expenditures from the combined OASI and DI Trust Funds in 2016 were retirement, survivor, and disability benefits totaling $911.4 billion. A net payment of $4.7 billion was made to the Railroad Retirement Social Security Equivalent Benefit Account from the combined OASI and DI Trust Funds, which was about 0.5 percent of total OASDI expenditures. The administrative expenses of the Social Security program were $6.2 billion, which was about 0.7 percent of total expenditures.
The trust fund investments provide a reserve to pay benefits whenever total program cost exceeds income. Combined trust fund reserves increased by $35.2 billion for 2016 because income to each fund, including interest earned on trust fund reserves, exceeded total expenditures.2 At the end of 2016, the combined reserves of the OASI and the DI Trust Funds were $2,848 billion, or 298 percent of estimated expenditures3 for 2017. In comparison, the combined reserves at the end of 2015 were 305 percent of expenditures for 2016.
Note: Section 833 of Public Law 114-74, the Bipartisan Budget Act of 2015, requires a temporary reallocation of the payroll tax rates between the OASI and DI Trust Funds. For earnings in calendar years 2016 through 2018, this section increases from 1.80 percent to 2.37 percent the portion of the total 12.40 percent OASDI payroll tax that is directed to the DI Trust Fund. There is a corresponding decrease in the portion of the tax rates directed to the OASI Trust Fund for these years.

1
Public Laws 111-312, 112-78, and 112-96 account for most of the reimbursement for the year. These acts specified General Fund reimbursement for temporary reductions in revenue due to reduced payroll tax rates for employees and for self-employed workers for 2011 and 2012.

2
As noted in footnote a of table II.B1 and elsewhere in this report, asset reserves shown for the end of 2015 reflect the 12 months of benefits scheduled for payment in 2015 and thus exclude the benefits scheduled for payment on January 3, 2016, which were actually paid on December 31, 2015 as required by the law.

3
Estimated expenditures are based on the intermediate set of assumptions.


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