U.S. Social Security Death Index 1935-2014

I have a general question about the reliability of this source. A relative of mine was born in Brooklyn in 1916 and lived there with his parents until 1940. In the census of that year he is listed as unemployed, and that is also his status in a World War II Draft Card issued to him in October of that year. After that I can find nothing. When his parents died in 1963 and 1969, his two brothers and two sisters were mentioned in the obituaries, but he not. Searches at findagrave also yield nil return. There is one exception, however; when searching at Ancestry.com I get a match at a source called the U.S. Social Security Death Index 1935-2014, saying that he died in 2007. Now I wonder how reliable this is? Does anyone know how the data in this source are generated? Does 2007 really mean that he died that year, or could it just refer to the year when somebody at the appropriate office determined that he was no longer around, or something like that?