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Summary of Provisions That Would Change the Social Security Program
Solvency Provisions

Description of Proposed Provisions:
Provisions Affecting Level of Monthly Benefits (PIA)

Estimates based on the intermediate assumptions of the 2005 Trustees Report

  Change from present law Results with this provision
Long-range
actuarial
balance		 Annual
balance in
75th year		 Long-range
actuarial
balance		 Annual
balance in
75th year
Present Law, Alternative II.
 -1.92 -5.70
B1 Increase the number of years used to calculate benefits for retirees and survivors (but not for disabled workers) from 35 to 38, phased in 2006-2010.
graph | table | pdf-graph | pdf-table 		0.28 0.43 -1.64 -5.27
B2 Increase the number of years used to calculate benefits for retirees and survivors (but not for disabled workers) from 35 to 40, phased in 2006-2014.
graph | table | pdf-graph | pdf-table 		0.46 0.73 -1.46 -4.97
B3 For each year from 2006-2036, multiply the 32 and 15 percent formula factors by 0.987, reducing the factors to 21 percent and 10 percent respectively, for new eligibles in 2036 and later.
graph | table | pdf-graph | pdf-table 		1.60 3.29 -0.32 -2.41
B4 Reduce benefits by 3 percent for those newly eligible for benefits in 2006 and later.
graph | table | pdf-graph | pdf-table 		0.37 0.54 -1.56 -5.16
B5 Reduce benefits by 5 percent for those newly eligible for benefits in 2006 and later.
graph | table | pdf-graph | pdf-table 		0.61 0.90 -1.31 -4.80
B6 Beginning with those newly eligible for OASDI benefits in 2012 and later, reduce PIA formula factors so that benefits grow by inflation rather than by increases in real wages.
graph | table | pdf-graph | pdf-table 		2.38 7.85 0.45 2.14
B7 Progressive price indexing of PIA formula factors beginning with individuals newly eligible for OASDI benefits in 2012. Create new bend point at the 30th percentile of earners. Maintain current-law benefits for earners at the 30th percentile and below and reduce upper 2 formula factors (32% and 15%) such that maximum worker benefit grows by inflation rather than the growth in average wages.
graph | table | pdf-graph | pdf-table 		1.43 4.62 -0.50 -1.09
B8 Progressive price indexing of PIA formula factors beginning with individuals newly eligible for OASDI benefits in 2012. Create new bend point at the 40th percentile of earners. Maintain current-law benefits for earners at the 40th percentile and below and reduce upper 2 formula factors (32% and 15%) such that maximum worker benefit grows by inflation rather than the growth in average wages.
graph | table | pdf-graph | pdf-table 		1.21 3.89 -0.72 -1.81
B9 Progressive price indexing of PIA formula factors beginning with individuals newly eligible for OASDI benefits in 2012. Create new bend point at the 50th percentile of earners. Maintain current-law benefits for earners at the 50th percentile and below and reduce upper 2 formula factors (32% and 15%) such that maximum worker benefit grows by inflation rather than the growth in average wages.
graph | table | pdf-graph | pdf-table 		0.97 2.92 -0.96 -2.78
B10 Progressive price indexing of PIA formula factors beginning with individuals newly eligible for OASDI benefits in 2012. Create new bend point at the 60th percentile of earners. Maintain current-law benefits for earners at the 60th percentile and below and reduce upper 2 formula factors (32% and 15%) such that maximum worker benefit grows by inflation rather than the growth in average wages.
graph | table | pdf-graph | pdf-table 		0.68 1.82 -1.24 -3,88
B11 Beginning with those newly eligible in 2013, multiply the 90 and 32 PIA factors each year by 0.9925 and 0.982, respectively. Stop reductions in 2050. Beginning with those newly eligible in 2008, multiply the 15 factor by 0.982. Stop reduction of the 15 factor in 2045. DI will have present law scheduled benefit and proportional reduction at conversion to retired worker benefits at normal retirement age, based on years of disability.
graph | table | pdf-graph | pdf-table 		2.08 5.78 0.15 0.08
B12 Progressive price indexing of PIA formula factors beginning with individuals newly eligible for OASI benefits in 2012. Create new bend point at the 30th percentile of earners. Maintain current-law benefits for earners at the 30th percentile and below and reduce upper 2 formula factors (32% and 15%) such that maximum worker benefit grows by inflation rather than the growth in average wages. Disability benefits are not affected by the proposal. Disabled worker beneficiaries, upon attaining normal retirement age, would be subject to a proportional reduction in benefits based on the worker's years of disability.
graph | table | pdf-graph | pdf-table 		1.21 3.97 -0.71 -1.73
B13 For OASI beneficiaries becoming eligible for benefits in 2018 and later, multiply the PIA factors by the ratio of life expectancy at 67 for 2013 to the life expectancy at age 67 for the 4th year prior to the year of benefit eligibility. Unisex life expectancies, based on period life tables, would be used as projected by SSA's Office of the Chief Actuary. Disability benefits are not affected by the proposal. Disabled worker beneficiaries, upon attaining normal retirement age, would be subject to a proportional reduction in benefits based on the worker's years of disability.
graph | table | pdf-graph | pdf-table 		0.45 1.77 -1.48 -3.93
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Last reviewed or modified Tuesday Dec 11, 2007