Social Security: Cost-of-Living Adjustments

To compensate for the effects of inflation, Social Security recipients usually receive an annual cost-of-living adjustment (COLA). Benefits will be increased by 1.7% in 2015, following an increase of 1.5% in 2014. Social Security COLAs are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), updated monthly by the Department of Labor’s Bureau of Labor Statistics (BLS). The COLA equals the growth, if any, in the index from the highest third calendar quarter average CPI-W recorded (most often, from the previous year) to the average CPI-W for the third calendar quarter of the current year. The COLA becomes effective in December of the current year and is payable in January of the following year. (Social Security payments always reflect the benefits due for the preceding month.) If there is no percentage increase in the CPI-W between the measuring periods, no COLA is payable. No COLA was payable in January 2010 because the average CPI-W for the third quarter of 2009 did not increase from the average CPI-W for the third quarter of 2008, and again in 2011 because the average CPI-W for the third quarter of 2010 remained below the average CPI-W for the third quarter of 2008. When the average CPI-W for the third quarter of 2011 exceeded that for 2008, establishing a new benchmark, a COLA was payable in 2012. Because the average CPI-W for the third quarters of 2012 and 2013 exceeded the average CPI-W for the third quarters of each respective preceding year, 2014 will be the third consecutive year in which a COLA will be paid. Because a COLA of 1.7% will be paid to Social Security beneficiaries in 2015, identical percentage increases in Supplemental Security Income (SSI) and railroad retirement “tier 1” benefits will be paid, and other changes in the Social Security program will be triggered. Although COLAs under the federal Civil Service Retirement System (CSRS) and the federal military retirement program are not triggered directly by the Social Security COLA, these programs use the same measuring period and formula for computing their COLAs. As a result, their recipients similarly will receive a 1.7% COLA in January 2015. The Congressional Budget Office (CBO) and the trustees for the Social Security trust funds both project annual COLAs beyond 2015. This report is updated annually

The Social Security Retirement Age: In Brief

[Excerpt] Two important ages may affect a worker’s decision of when to claim Social Security retired-worker benefits. Workers may claim full Social Security benefits at the full retirement age (FRA), which is currently 66 and is rising gradually to the age of 67 for workers who were born in 1960 or later. Retired-worker beneficiaries may claim benefits as early as the age of 62, which is known as the early eligibility age (EEA). Social Security benefits are reduced, however, for every month that retired worker benefits are claimed before the FR

LAND USE PLANNING ISSUES

Land Economics/Use,

Social Security: The Trust Fund

The Social Security program pays benefits to retired or disabled workers and their family members, and to family members of deceased workers. Program income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal Old-Age and Survivors Insurance (OASI) trust fund and the Federal Disability Insurance (DI) trust fund. This report refers to the two trust funds as an aggregate Social Security trust fund and discusses the operations of the OASI and DI trust funds on a combined basis. This report covers the basics of how the Social Security program is financed and how the Social Security trust fund works. It will be updated annually to reflect current projections of the financial status of the Social Security trust fund

Benefit Reductions in the Central States Multiemployer DB Pension Plan: Frequently Asked Questions

[Excerpt] Under the Multiemployer Pension Reform Act (MPRA), enacted as Division O in the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235) on December 16, 2014, certain multiemployer defined benefit (DB) pension plans that are projected to become insolvent and therefore have insufficient funds from which to pay benefits may apply to the U.S. Department of the Treasury to reduce participants’ benefits. The benefit reductions can apply to both retirees who are currently receiving benefits from a plan and current workers who have earned the right to future benefits. On September 25, 2015, the Central States, Southeast and Southwest Areas Pension Plan (Central States) applied to the Treasury to reduce benefits to plan participants in order to avoid becoming insolvent. At the end of 2014, Central States had almost 400,000 participants, of whom about 200,000 received $2.8 billion in benefits that year. The plan reported$18.7 billion in assets that was sufficient to pay 53% of promised benefits. In its application to reduce benefits, Central States projects that it will become insolvent in 2026. If Central States does not reduce participants’ benefits and the plan becomes insolvent, then the Pension Benefit Guaranty Corporation (PBGC) would provide financial assistance to the plan. PBGC is an independent U.S. government agency that insures participants’ benefits in private- sector DB pension plans. Multiemployer plans that receive financial assistance from PBGC are required to reduce participants’ benefits to a maximum of $12,870 per year in 2016. However, the insolvency of Central States would likely result in the insolvency of PBGC, as PBGC would likely have insufficient resources from which to provide financial assistance to Central States to pay 100Under MPRA, participants’ benefits in the Central States plan could be reduced to 110Treasury is currently reviewing Central States’ application and must approve or deny the application by May 7, 2016. If Central States’ financial condition and proposed benefit suspensions meet the criteria specified in MPRA, then Treasury must approve the application for benefit reductions. The plan has proposed to begin implementing the benefit reductions beginning in July 2016. If Treasury approves a plan’s application to reduce benefits, it must also obtain the approval of the plan’s participants via a vote of plan participants. However, MPRA requires Treasury to designate certain plans as systematically important if a plan is projected to require$1 billion or more in financial assistance from PBGC. Plans that are labelled systematically important may implement benefit suspensions regardless of the outcome of the participant vote. Central States is likely a systematically important plan. Legislation has been introduced in the 114th Congress that would affect potentially insolvent multiemployer DB pension plans. H.R. 2844 and S. 1631, the Keep Our Pension Promises Act, would, among other provisions, repeal the benefit reductions enacted in MPRA. H.R. 4029 and S. 2147, the Pension Accountability Act, would change the criteria of the participant vote and would eliminate the ability of systematically important plans to implement benefit suspensions regardless of the participant vote

An inventory of state natural resources information systems

The status of a project to inventory state natural resources information systems is summarized. All tasks accomplished are described, and tasks remaining to be completed are outlined

Rule-based air combat simulation

An improved version of the Adaptive Maneuvering Logic (AML) program for air-combat maneuvering is discussed. The modifications and improvements incorporated into the AML program are documented