1994-95 Advisory Council on Social Security Technical Panel on Assumptions and Methods, Final Report

Working paper number: 
Paper Abstract: 
The Panel's major conclusions are: The "intermediate" projection of the Trustees Report for the Old-Age. Survivors. and Disability Insurance (OASDI) program provide a reasonable evaluation of the financial status. Although the Panel suggests that modifications be considered in various specific assumptions, the overall effect of those suggestions would not significantly change the financial status evaluation. There should be evolutionary implementation of procedures to indicate more adequately the uncertainties involved in the projections. Even though such uncertainties are unavoidable, stochastic analysis should be used to examine more explicitly the probabilities of alternative projections. It is emphasized that there should be an extended period during which the new procedures would supplement, rather than replace, the current methods of considering high-cost and low-cost projections and individual assumption sensitivity analysis. Evaluation of the long-range financial status should put less emphasis on the "75-year actuarial balance" and the "test of long-range close actuarial balance." Prior to enactment of legislation reforming the program, primary emphasis should be on the projected date the Trust Fund Ratio would fall below 100 percent; when definitive legislative revisions are adopted, subsequent long-range evaluation should compare up-dated projections with the intended results of the legislation. There should be a substantial expansion of SSA's resources and its interaction with experts in related areas: increased recognition should be given to the interrelationships between OASDI and many public and private programs as well as other aspects of the economy. Social Security Administration (SSA) staff does high quality work, but is relatively small and works with inadequate resources. In addition to internal expansion, there should be greater use of outside consultants and contractual research; periodic comprehensive review by technical panels should be supplemented by ongoing arrangements for advice on specific matters.