Glossary

ASSUMPTIONS

Values relating to future trends in certain key factors that affect the balance in the trust funds. Demographic assumptions include fertility, mortality, net immigration, marriage, divorce, retirement patterns, disability incidence and termination rates, and changes in the labor force. Economic assumptions include unemployment, average earnings, inflation, interest rates, and productivity. Three sets of economic assumptions are presented in the Trustees Report:

1. The low cost alternative, with relatively rapid economic growth, low inflation, and favorable (from the standpoint of program financing) demographic conditions;
2. The intermediate assumptions, which represent the Trustees' best estimates of likely future economic and demographic conditions; and
3. The high cost alternative, with slow economic growth, more rapid inflation and financially disadvantageous demographic conditions.

See also Hospital assumptions.

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