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Social Security is a complex program, and one of the more confusing aspects is the financial state of its trust funds: the Old-Age and Survivors Insurance (OASI) fund (which covers retirement ...
Between 1975 and 2008, the OASI was subject to ten actual revisions and three minor legislative revisions. An 11th revision is under discussion in 2009. This is a pay-as-you-go pension system, the law on occupational pensions (2nd pillar) being a funded pension system. The OASI also allows for a (partial) redistribution of wealth. [2]
OASI Fund Could Be Depleted in a Decade The OASI is expected to run out of money by 2033 or 2034. When it does, the program will be solely funded by payroll taxes, which currently cover only 77% ...
Some lawmakers propose raising more revenue by increasing the Social Security payroll tax rate from its current 12.4% to 15.6% following the trust fund depletion, and then gradually increasing it ...
The OASI Trust Fund and the DI Trust Fund are legally separate. For employees and employers combined, the OASI payroll taxes are 10.6 percent and the DI payroll taxes are 1.8 percent. In 2022, trust fund reserves for the OASI and DI programs were $2.7 trillion and $118 billion, respectively.
However, due to interest (earned at a 3.6% rate in 2014) the program will run an overall surplus that adds to the fund through the end of 2019. Under current law, the securities in the Trust Fund represent a legal obligation the government must honor when program revenues are no longer sufficient to fully fund benefit payments.
Disability Insurance (DI) Trust Fund: This fund provides financial support to those currently receiving Social Security disability benefits. In 2022, the Social Security trust funds collected $1. ...
Unemployment insurance is funded by both federal and state payroll taxes. In most states, employers pay state and federal unemployment taxes if: (1) they paid wages to employees totaling $1,500 or more in any quarter of a calendar year, or (2) they had at least one employee during any day of a week for 20 or more weeks in a calendar year, regardless of whether those weeks were consecutive.