Pension Projection Models
This is a brief description of just one of the PSG models, a unit of three that work seamlessly together as described on the homepage.
SSASIM is a social security policy simulation model that has been under continuous development since 1994, when started as part of Advisory Council's work.
SSASIM development has been funded by many organizations, including SSA, GAO, EBRI, AARP, IMF, Concord Coalition, and Policy Simulation Group.
SSASIM is two models in one: a macro model of aggregate program finances and an embedded micro model of cohort individuals that can represent a wide range of policy reforms including individual accounts.
Model changes in assumptions and policy are accomplished by altering values of parameters in a thoroughly documented input database using a simple run specification language — there is no need to reprogram model's logic or to work directly with the input database.
The macro model operates in cell-based actuarial (CBA) mode by default, or in overlapping cohorts (OLC) mode with the optional PENSIM and GEMINI add-ons. Both modes represent systemic risks affecting social security finances using stochastic (Monte Carlo) simulation of key demographic and economic assumptions plus equity returns. Macro model produces output like in Trustees Reports. A four-page introduction OASDI Solvency Estimation using the PSG Models was prepared at the request of the Social Security Advisory Board.
The micro model operates in exemplary cohort
individuals (ECI) mode by default, or in representative cohort
sample (RCS) mode with the optional PENSIM and GEMINI
add-ons. Both modes use logic similar to other microsimulation
models of birth cohorts. Both modes project all systemic risks
simulated by macro model onto individuals, and RCS mode also
represents idiosyncratic risks facing individuals regarding
mortality, disability, labor force participation, earnings
fluctuations, marriage, divorce, and childbirth. Both modes
produce a wide array of benefit adequacy and contribution return
money's worth) statistics for individuals and
couples. A four-page introduction OASDI Distributional Estimation using the PSG Models was
prepared at the request of the Social Security Advisory
Research on alternative stochastic simulation methods, which was commissioned by SSA, is reported in Methods for Stochastic Trust Fund Projection (January 2003).