Appendix K to the report of the 1983 Greenspan Commission on Social Security Reform

Appendix K- Section K


Option No.



Trust-fund investment procedures.


Social Security and the unified budget.


Social Security Administration to become an independent agency.


Benefits to certain overseas beneficiaries.


Eliminate mandatory retirement.


Require continued accrual of pensions.


Encourage employment of low-income older workers.


K-1 Trust-Fund Investment Procedures

Present law. The OASI, DI, HI, and SMI Trust Funds are invested in U.S. Government obligations, primarily in special issues, but also in publicly available obligations of the Federal government or certain Federal agencies. Maturity dates for the special issues are intended generally to be spread in equal amounts over the next 15 years. The interest rate for new special issues is equal to the average market yield rate on all marketable government obligations that are not due or callable for at least 4 years.

Option. Revise the investment procedures of the four trust funds in the following manner -- (1) in the future, all special issues would be invested on a month-to-month basis, at an interest rate based on the average market rate of all public-debt obligations outstanding, exclusive of "flower" bonds; (2) all present special issues would be redeemed; (3) all "flower" bonds would be redeemed at their current market values (not their face or maturity values); and (4) all other current holdings would be held until maturity.

K-2 Social Security and the Unified Budget

Present law. The operations of the OASI, DI, HI, and SMI Trust Funds are included in the Unified Budget.

Option. Remove the operations of the four trust funds from the Unified Budget.

K-3 Social Security Administration to Become Independent Agency

Present law. The Social Security Administration is under the jurisdiction of the Department of Health and Human Services.

Option. Establish an independent Social Security agency, removed from the Department of Health and Human Services, and reporting directly to the President. This agency would be headed by a board, which might consist of three members appointed by the President, with Senate confirmation (e.g., the Chairman would have a term corresponding with that of the President, while the other two members would have to be of different political parties, with 4-year terms expiring at the end of 1986, 1990, etc.).

K-4 Benefits to Certain Overseas Beneficiaries

Present law. OASDI benefits are payable outside of the United States -- whether to citizens or non-citizens -- on exactly the same basis as in the United States, except when the individual is a noncitizen and had only a short period of coverage, or when the individual is a citizen of a country which does not pay benefits to U.S. citizens under parallel circumstances, or when the individual is residing in a country where there is no reasonable assurance that checks can be cashed at full value.

Option. Prohibit benefit eligibility for auxiliary benefits for spouses and children of beneficiaries living abroad when such auxiliary beneficiary had not resided in the U.S. for at least 5 years and when such auxiliary beneficiary continues to reside abroad.

Long-Term Cost: -.01% of taxable payroll

K-5 Eliminate Mandatory Retirement

Amend the Age Discrimination in Employment Act to remove the upper age limit of 70, thereby eliminating mandatory retirement at any age.

Long-Term Cost: -.03% of taxable payroll

K-6 Require Continued Accrual of Pensions

Amend the Employee Retirement Income Security Act to require employers to continue accruing pensions for workers after age 65.

Long-Term Cost: n.a.

K-7 Encourage Employment of Low Income Older Workers

Amend the Targeted Jobs Tax Credit to include low income older workers (age 62+).

Long-Term Cost: n.a.
n.a. = Not available