Trust funds

Funds collected and used by the Federal government for carrying out specific purposes and programs according to terms of a trust agreement or statute, such as the social security and unemployment trust funds. Trust funds are administered by the government in a fiduciary capacity for those benefitted and are not available for the general purposes of the government. Trust fund receipts whose use is not anticipated in the immediate future are generally invested in interest bearing government securities and earn interest for the trust fund. The Medicare program is financed through two trust funds—the Federal Hospital Insurance Fund which finances Part A, and the Federal Supplementary Medical Insurance Trust Fund which finances Part B.


 


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