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Tuesday, April 24, 2012

SSA Board of Trustees Annual Report Reveals SS Disability Trust Fund to Drain Three Years Earlier than Projected

In an annual report regarding the financial status of the Social Security Trust Funds, the SSA Board of Trustees revealed that the merged asset of the Old-Age and Survivor Insurance and Disability Insurance (OASDI) Trust Funds will run out by 2033. It is actually three years earlier than the SSA Board of Trustees projected last year.

The Social Security disability insurance, likewise, is expected to drain out by 2016, a couple of years earlier than originally projected.

Also, the Board of Trustees projected that by 2012, the cost of the OASDI program will exceed and continue to stay higher until the remainder of the 75-year period. 

The SSA Board of Trustees 2012 annual report announcements are quoted below:

•    The projected period at which the combined Trust Funds will be drained comes in 2033 — three years earlier than projected last year.  During that time, there will be enough non-interest income coming in to pay about 75 percent of scheduled benefits.

•    The projected actuarial shortage over the 75-year long-range period is 2.67 percent of taxable payroll — 0.44 percentage point larger than in last year’s report.

•    Over the 75-year period, the Trust Funds would require additional revenue equivalent to $8.6 trillion in present dollar’s value to pay all scheduled benefits.

SSA Commissioner Michael J. Astrue said that the Trustees’ annual report this year is disturbing. Such trouble about social security’s finances was not even anticipated way before. Commissioner Astrue added that the alarming report calls for the attention of the Congress. Apparently, Congress needs to act within four years to avoid cutting off the social security disability benefits.

The agency’s Board of Trustees has six members. Four of its members serve the federal government by virtue of their positions, while the two serve the public.

The other highlights of the Board of Trustee’s report were discussed at the agency’s official press release page.

The social security disability benefits program is a very helpful program for people who really need financial assistance, such as the elderly and the disabled. Hence, if the said disability benefits program will be automatically cut, a huge portion of the US population will be significantly affected. However, it is never too late, since Congress still has options to save the funds from exhaustion.