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Social Security (OASDI)Actuarial Status 2010 Annual Report of the Board of Trustees

Social Security (OASDI)Actuarial Status 2010 Annual Report of the Board of Trustees. October 8, 2010 Middle Atlantic Actuarial Club. Office of the Chief Actuary Social Security Administration. Social Security – Current Status and the Future?.

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Social Security (OASDI)Actuarial Status 2010 Annual Report of the Board of Trustees

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  1. Social Security (OASDI)Actuarial Status 2010 Annual Report of the Board of Trustees October 8, 2010 Middle Atlantic Actuarial Club Office of the Chief Actuary Social Security Administration

  2. Social Security – Current Status and the Future? • Key results under intermediate assumptions – Alice Wade • Provisions to change Social Security – Daniel Nickerson • Comprehensive proposals to change Social Security – Chris Chaplain

  3. News from the 2010 OASDI Trustees Report • Near-term—More disabled workers and slower economic recovery • DI Trust Fund exhausts in 2018, 2 years earlier • Lower Annual Balance through 2016 • Long-term—Actuarial deficit reduced from 2.00 to 1.92 percent of payroll due to effect of health care legislation • Combined OASDI Trust Fund exhaustion still 2037 • Annual Balance improved after 2016

  4. Near-Term Factors • Deeper recession, longer recovery • Reduced employment • More disability beneficiaries • Result in: • Lower annual balance in the near-term • Sooner DI Trust Fund exhaustion • No COLA for December 2010

  5. SOLVENCY: OASDI Trust Fund Exhaustion 2037 — No Change Last 16 Reports (1995-2010) varied from 2029 to 2042 DI Trust Fund — Exhaustion in 2018, or 2 years earlier OASI Trust Fund — Exhaustion in 2040, or 1 year later

  6. OASDI Annual Cost and Tax Income: Percent of Taxable Payroll Persistent Negative Balance in 2015 — 1 Year EarlierThree fourths of scheduled benefits still payable after TF exhaustionAnnual deficit in 2083: 4.08 percent of payroll — 0.26 percent lower than last year OCACT/SSA, May 15, 2009

  7. OASDI Annual Balances Are Lower Through 2016 But Higher Thereafter (Tax Income minus Cost as percent of Payroll)

  8. SUSTAINABILITY: Cost as Percent of GDP Rises from 4.8 percent in 2009 to a peak of 6.1 percent in 2035 then roughly stabilizes between 5.9 and 6.0 percent

  9. Long-Term Effects: Health Care Legislation

  10. Measures used to address uncertainty • Low-cost and high cost estimates • Sensitivity analysis • Stochastic modeling

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