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Report from Social Security Board of Trustees Projects Depletion of Trust Fund Three Years Earlier Than Expected.


 Patrick Mansfield | US Gov Connect



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The Trustees of the Social Security Board released their 2012 Annual Report to Congress regarding the financial condition of the Trust Funds. The report stated that the total assets of the Disability Insurance (OASDI) and the Old-Age and Survivors Insurance Trust Funds will be depleted by 2033; this is three years sooner than the estimate in 2011.

More specifically, the DI Trust Fund will run out of money in 2016, two years sooner than expected. The Social Security Report also projected that OASDI operating expenses will surpass non-interest income beginning in 2012 and will continue this excess for the remaining 75 years.

After the combined Trust Funds become exhausted in 2033, non-interest income will only cover about 75 percent of scheduled benefits. Actuaries project the deficit as 2.67 percent of taxable payroll over the 75 year period. This deficit is 0.44 percent higher than the projection in last year's report. In present value dollars, the Trust Funds will need $8.6 trillion in additional revenues over the next 75 years to fully cover all scheduled benefits.

The Commissioner of Social Security, Michael J. Astrue, said the dismal state of Trust Funds' finances were troubling, but not surprising. He emphasized that Congress must address these problems to ensure the long-term survival of these retirement payments. Astrue stressed that Congress must do something within four years; otherwise, there will be automatic cuts to recipients of disability benefits.

The Trustees Social Security Report showed that the combined OASDI Trust Funds had 2011 income with interest of $805 billion. This figure included reimbursement from the General Fund of the Treasury of $103 billion, interest income of $114 billion, $564 billion in net contributions and $24 billion in taxes of benefits.

The OASDI Trust Funds had combined expenses of $736 billion in 2011. Non-interest income dropped below program expenditures in 2010. This has not happened since 1983. The Report projects program costs to exceed non-interest income for the rest of the 75-year period.

In 2011, the combined assets of the OASDI Trust Funds rose by $69 billion, reaching a total of $2.7 trillion. These assets earned interest in 2011 at a 4.4 percent effective annual rate.

Approximately 158 million people paid taxes in 2011 on earnings covered by Social Security.

During the calendar year 2011, around 55 million people received $725 billion in retirement benefits..

 In 2011, the administrative cost of the program was $6.4 billion. This figure was an extremely low 0.9 percent of total operating expenses.

















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