Industry News

On May 22, 2019, the American Academy of Actuaries (AAA) released its issue brief, An Actuarial Perspective on the 2019 Social Security Trustees Report. The brief was developed by the AAA’s Social Security Committee and presents the Committee’s perspective regarding the 2019 Trustees Report, which examines the Social Security program’s long-term solvency issues. In addition, it recommends that Congress should take action to ensure the sustainable solvency of the program. The Trustees Report projects that the Social Security trust fund exhaustion date is extended to 2035 when payroll taxes will cover about 75% of promised benefits.

The report provides separate solvency measures and tests in the short-range (2019-2028) and long-range (2019-2093) time periods. According to the report, “Social Security’s short-range OASDI financial projection is about the same as the projection made a year ago… Moving the short-range estimate period one year forward alone caused a decline of 17 percentage points…The actuarial balance improved from a negative 2.84 percent in the 2018 report to a negative 2.78 percent in the 2019 Trustees Report.”

The report states, “In order to achieve viability of Social Security in the foreseeable future, any modifications to the system should include sustainable solvency as a primary goal. Sustainable solvency means that not only will the program be solvent for the next 75 years under the reform methods adopted, but also that the trust fund reserves at the end of the 75-year period will be stable or increasing as a percentage of the annual program cost…Providing for solvency beyond the next 75 years will require changes to address micro-aging, as beneficiaries will likely be receiving benefits for ever-longer periods of retirement.”

The brief is available here.