Social Security Trust Fund

The Social Security Trust Fund is the United States federal government's means of saving up workers' paid-in contributions to cover retirement payouts in coming years.

Unlike private pension funds, the Social Security Trust Fund does not hold any marketable assets to secure workers' paid-in contributions. The Social Security Trust Fund "invests" surpluses in Treasury bonds[?] and U.S. securities backed "by the full faith and credit of the government".

Practically speaking, the federal government has used the Social Security Trust Fund in a way which would be illegal for any private-sector company to do - in order to help balance the federal budget, the government has borrowed money from the Trust Fund to pay current operating expenses and replaced those funds with government IOU's.

The FY 2000 budget put the issue very clearly:

 These [Trust Fund] balances are available to finance future benefit
 payments  and other Trust Fund expenditures – but only in a bookkeeping
 sense. ... They do not consist of real economic assets that can be drawn
 down in the future to fund benefits. Instead, they are claims on the
 Treasury that, when redeemed, will have to be financed by raising taxes,
 borrowing from the public, or reducing benefits or other expenditures. The
 existence of large Trust Fund balances, therefore, does not, by itself, have
 any impact on the Government’s ability to pay benefits. 
 Source: FY 2000 Budget, Analytical Perspectives, p. 337

Board of Trustees of the Social Security Trust Fund

The Board of Trustees is made up of 6 members. 4 are automatically members because of the office they hold in the Federal Government. These 4 are:

• United States Secretary of the Treasury (the Managing Trustee)
• Commissioner of Social Security
• United States Secretary of Health and Human Services
• United States Secretary of Labor

Two additional members are appointed by the President and confirmed by the Senate to serve 4-year terms.