Research and Analysis by Mark A. Sarney

Distributional Effects of Price Indexing Social Security Benefits
Policy Brief No. 2010-03 (released November 2010)
by Mark A. Sarney

This policy brief compares five options (four progressive price indexing and one full price indexing option) set forth by the Social Security Advisory Board to index initial benefits to price growth. It examines the distribution of benefits of Social Security beneficiaries aged 62 or older in 2030, 2050, and 2070 using Modeling Income in the Near Term (MINT) model projections. The brief finds that the full price indexing option Shield 0% would more than achieve long-term solvency by reducing benefits by about 35 percent in 2070 and would increase the aged poverty rate compared with scheduled levels. The four progressive price indexing options (Shields 30%, 40%, 50%, 60%) would produce smaller benefit reductions by exempting varying proportions of lower earners from price indexing. Those options would not increase poverty above scheduled levels, but would reduce benefits for some low earners because their auxiliary benefits come from the reduced benefits of a higher-earning spouse. The progressive price indexing options would make Social Security more progressive compared with scheduled and payable benefits, both when looking at household benefit reductions by household income in a given year and when examining the distribution of lifetime taxes and benefits.

A Progressivity Index for Social Security
Issue Paper No. 2009-01 (released January 2009)
by Andrew G. Biggs, Mark A. Sarney, and Christopher R. Tamborini

Using the Social Security Administration's MINT (Modeling Income in the Near Term) model, this paper analyzes the progressivity of the Old-Age, Survivors and Disability Insurance (OASDI) program for current and future retirees. It uses a progressivity index that provides a summary measure of the distribution of taxes and benefits on a lifetime basis. Results indicate that OASDI lies roughly halfway between a flat replacement rate and a flat dollar benefit for current retirees. Projections suggest that progressivity will remain relatively similar for future retirees. In addition, the paper estimates the effects of several policy changes on progressivity for future retirees.

Distributional Effects of Increasing the Benefit Computation Period
Policy Brief No. 2008-02 (released August 2008)
by Mark A. Sarney

The computation period is the number of highest earning years, currently 35, that are used to compute the career average earnings on which Social Security benefits are based. The brief uses MINT model projections to compare the distributional effects of two policy options discussed by the Social Security Advisory Board.

Considerations for Potential Proposals to Change the Earliest Eligibility Age for Retirement
Policy Brief No. 2007-01 (released October 2007)
by Pat Vinkenes, Alice H. Wade, Mark A. Sarney, and Tim Kelley

The earliest eligibility age (EEA) interacts with many other Social Security program rules, including the benefit formula and insured status requirements. Proposals to increase the EEA could affect some or all of these other rules depending on how policymakers design the proposal. By using a hypothetical proposal that increases the EEA, this policy brief illustrates how these interactions work and discusses the options that policymakers would need to consider.

The Canada Pension Plan's Experience with Investing Its Portfolio in Equities
from Social Security Bulletin, Vol. 64, No. 2 (released September 2002)
by Mark A. Sarney and Amy M. Preneta

This article examines the experience of the Canada Pension Plan (CPP) in investing its surplus funds in equities. The CPP investment policy is viewed by some experts as a possible model for increasing the investment income of Social Security. The article discusses the key features of this policy, its implementation, and results to date.

State and Local Pension Plans' Equity Holdings and Returns
from Social Security Bulletin, Vol. 63, No. 2 (released December 2000)
by Mark A. Sarney

This article examines the recent trends in the size and performance of the equity investments of state and local pension plans. It also provides a context for the discussion about investing some portion of the Social Security trust fund reserves in private equities.