5 New Facts About THE Annuity Gorilla’s 2018 Earnings
April 24, 2019 by Allison Bell
Low interest rates and a rigid rate structure have hurt the mother of all retirement annuity gorillas.
The giant Federal Old-Age and Survivors Insurance (OASI) trust fund — the fund that makes Social Security retirement benefits payments — is reporting a $22 billion operating loss for 2018 on $831 billion in revenue, compared with $26 billion in operating earnings on $826 billion in revenue for 2017.
The OASI trust fund backs its Social Security retirement benefits obligations with a portfolio of $2.8 trillion in government bonds. The size of the portfolio held steady between 2017 and 2018.
The bonds in the portfolio in 2018 paid interest rates ranging from 1.375% to 5.25%, and the average rate increased to 2.875% for bonds purchased in 2018, from 2.25% in 2017.