Little Change in Social Security Solvency
The 2005 Social Security Trustees Report shows little change
in the projected financial status of the Social Security program
over last year. The Trustees Report projects that the Social Security
Trust Fund will be exhausted in 2041 - one year sooner than last
year’s projection. The Trustees recommend that projected
trust fund deficits be addressed in a timely way to allow for gradual
changes and advance notice to workers.
In the 2005 Annual
Report to Congress, the Trustees announced:
The projected point at which tax revenues will fall below
program costs comes in 2017 – one year earlier than the
projection in last year’s report.
The projected point at which the Trust Funds will be exhausted
comes in 2041 – also one year earlier than the projection
in last year’s report.
The projected actuarial deficit over the 75-year long-range
period is 1.92 percent of taxable payroll, slightly higher
than the estimate in last year’s report and the same
as in the 2003 Trustees Report.
- Over the 75-year period, the Trust Funds require additional
revenue equivalent to $4.0 trillion in today’s dollars
to pay all scheduled benefits. This unfunded obligation is $300
billion higher than the amount estimated last year.
“For nearly 70 years, Social Security has provided financial
security to American workers and their families,” said Jo
Anne Barnhart, Commissioner of Social Security. “Our
grandparents and parents were confident that Social Security would
be there for them. Current retirees and near retirees can
be just as confident. But for our children and grandchildren,
unless changes are made, this report shows that their promised
benefits are not secure. I am confident that by coming together
in a bipartisan way we can ensure that Social Security continues
to provide financial security for future generations.”
Other highlights of the Trustees Report include:
Income to the combined Old-Age and Survivors, and Disability
Insurance (OASDI) Trust Funds amounted to $658 billion in 2004.
During the year, an estimated 157 million people had earnings
covered by Social Security and paid payroll taxes.
The Trust Funds paid benefits of more than $493 billion in
calendar year 2004. There were 48 million beneficiaries at
the end of the calendar year.
The cost of $4.5 billion to administer the program in 2004
was a very low 0.9 percent of total expenditures.
Total expenditures from the combined OASDI Trust Funds amounted
to $502 billion in 2004.
The assets of the combined OASDI Trust Funds increased by $156
billion in 2004 to a total of $1.7 trillion.
Interest earned on the invested assets of the combined Trust
Funds was $89 billion in 2004. The combined Trust Fund assets
earned interest at an effective annual rate of 5.7 percent.
- The changes in key dates for the combined Trust Funds are due
to updated economic data from last year's report.
The Board of Trustees is comprised of six members. Four serve
by virtue of their positions with the federal government: John
W. Snow, Secretary of the Treasury and Managing Trustee; Jo Anne
Barnhart, Commissioner of Social Security; Michael O. Leavitt,
Secretary of Health and Human Services; and Elaine L. Chao, Secretary
of Labor. The other two members, appointed by the President and
confirmed by the Senate, are John L. Palmer and Thomas R. Saving.
The 2005 Trustees Report is posted at www.socialsecurity.gov/OACT/TR/TR05/index.html.
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