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2015 Technical Panel on Assumptions and Methods, A Report to the Board, September 2015

(Report to the Board)

SUMMARY: Every four years the Social Security Advisory Board commissions a panel of expert economists, demographers and actuaries to review the assumptions of the Social Security Trustees and the methods of the Office of the Chief Actuary used in projecting the finances of the Old Age Survivors and Disability Insurance (OASDI) trust funds. The 2015 Technical Panel on Assumptions and Methods, the fifth commissioned by the Board, was chaired by Alicia H. Munnell of Boston College, and included economists Katharine G. Abraham (University of Maryland), David Autor (Massachusetts Institute of Technology), Jeffrey R. Brown (University of Illinois), Peter Diamond (Massachusetts Institute of Technology), and Claudia Goldin (Harvard University); actuaries Sam Gutterman (consulting actuary) and Joe Silvestri (Government Accountability Office); and demographers Ronald R. Rindfuss (University of North Carolina) and Michael Teitelbaum (Harvard Law School).

The Panel concluded that although they had some disagreements with the Trustees and Actuaries about certain assumptions, overall the assumptions adopted by the Trustees and the methods used by the Office of the Chief Actuary in the annual projections of OASDI finances are reasonable. The Panel also recommended that the Trustees assume lower rates of fertility, faster rates of improvement in life expectancy, and lower interest rates over the long run. If adopted together these three changes to the current assumptions would increase the currently projected 75-year deficit by about twenty-eight percent. The Panel also recommended several variations for of presenting the relationship between earnings and benefits (including measures of “replacement rates”), and alternative ways of presenting the uncertainty of projections in the annual Trustees Report.