Industry News

On January 17, 2024, the American Academy of Actuaries (AAA) released its issue brief, An Actuarial Perspective on the 2023 Social Security Trustees Report. The brief was developed by the AAA’s Social Security Committee and presents the Committee’s perspective regarding the 2023 Trustees Report, which examines the Social Security program’s long-term solvency issues.  

Importantly, the Trustees Report reflects the recent reduction in the assumed level of economic growth. The cumulative reduction of about 3% affects the system by suppressing realized and projected increases in payroll tax income. According to the report, “In addition to the economic results, the system’s financial status was affected by changes in demographic assumptions and methodology, and by the shift in the valuation period (which adds a year of less favorable finances at the end of the 75-year projection period).” 

The key findings include:

• The combined trust fund reserves are projected to become depleted during 2034, one year earlier than projected last year. 
• If changes to the program are not implemented before 2034, only 80% of scheduled benefits would be payable after depletion in 2034, declining to 74% by 2097.
• The actuarial deficit increased from 3.42% of taxable payroll to 3.61% of taxable payroll.   

Congress is urged to act to ensure the sustainable solvency of the Social Security program.

The AAA’s Social Security Committee prepared this issue brief. Brian Murphy, a retired senior consultant and past president of GRS, serves on this committee.

The brief is available here.