Government Affairs
Projections for the long-term financial status of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds are the same as those issued in 2019, says the Social Security Board of Trustees. The trustees issued their annual report on the trust funds’ status on April 22.
The trustees submitted the report, “The 2020 Annual Report of the Board of Trustees of the Federal Old Age and Survivors Insurance and Federal Disability Insurance Trust Funds,” to Vice President Mike Pence as President of the Senate and Rep. Nancy Pelosi (D-CA), Speaker of the House. The trustees are required by law to report annually to Congress on the actuarial status and financial operations of the OASI and DI Trust Funds.
The trustees submitted the report, “The 2020 Annual Report of the Board of Trustees of the Federal Old Age and Survivors Insurance and Federal Disability Insurance Trust Funds,” to Vice President Mike Pence as President of the Senate and Rep. Nancy Pelosi (D-CA), Speaker of the House. The trustees are required by law to report annually to Congress on the actuarial status and financial operations of the OASI and DI Trust Funds.
2019 Results
The trustees included information concerning the 2019 results for the trust funds.
- Income. Total income, including interest, to the combined OASI and DI Trust Funds was $1.062 trillion: $944.5 billion from net payroll tax contributions, $36.5 billion from taxation of benefits, and $81 billion in interest.
- Asset Reserves. The combined asset reserves of the combined OASI and DI Trust Funds increased by $2.5 billion to $2.897 trillion. The asset reserves earned interest at an effective annual rate of 2.8%.
- Expenditures. Total expenditures from the combined trust funds amounted to $1.059 trillion.
- Social Security Benefits. Social Security paid benefits of $1.048 trillion to approximately 64 million beneficiaries. And an estimated 178 million people had earnings covered by Social Security and paid payroll taxes.
Projections
Highlights of the trustees’ projections include the following.
- Asset Reserves. The trustees project that the trust funds’ combined asset reserves will be depleted in 2035, with 79% of benefits payable at that time. That projection, the trustees say, is the same as that which they made last year. But while the trustees anticipate that the combined asset reserves’ depletion will take place in 2035, they also report that the timing of the individual trust funds’ depletion will not be uniform:
| Trust Fund | Depleted by | % of Benefits Available at Depletion | Projection 2019 | Difference, 2019-2020 |
| OASI | 2034 | 76 | 2034 | -- |
| DI | 2065 | 92 | 2952 | +13 years |
- Cost to Administer Social Security. The cost to administer the Social Security program in 2019 was $6.4 billion, 0.6% of total expenditures. The total annual cost of the program is projected to exceed total annual income in 2021, which would be the first time that has happened since 1982. And the trustees expect that the cost will exceed income for the rest of the 75-year projection period.
- Actuarial Deficit. The trustees project that the actuarial deficit over the 75-year long-range period will be 3.21% of taxable payroll, 0.43 percentage points higher than that of 2019.
A Caveat
The trustees noted in the press release announcing that they had issued the projections that they do not account for any effects of the COVID-19 pandemic.
“Given the uncertainty associated with these impacts, the Trustees believe it is not possible to adjust estimates accurately at this time,” wrote Commissioner of Social Security Andrew Saul in the release. “The duration and severity of the pandemic will affect the estimates presented in this year’s report and the financial status of the program, particularly in the short term.”
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