Personal Retirement Savings Account Act of 1998

Summary: Personal Retirement Savings Account Act of 1998 - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act (SSA) to add a new part B (Personal Social Security Plus Accounts).  Establishes in the Treasury a Social Security Plus Fund to hold 80 percent of the surplus (if any) in the Federal budget for each fiscal year for investment in accordance with rules governing the Thrift Savings Plan which shall otherwise govern other Fund operations. 
Directs the Commissioner of Social Security to establish in the Social Security Plus Fund a personal social security plus account for each living individual who has been assigned a social security number.  Requires the Commissioner to allocate:  (1) evenly among all personal social security plus accounts the amount transferred annually to the Social Security Plus Fund; as well as (2) an amount equal to the net earnings and net losses from each investment of sums in the Fund. Makes eligible for such an account any individual the amount of whose wages paid and self-employment income derived in the year equals, in the aggregate, at least the amount such individual must have in order to be credited with four quarters of coverage in such year. 
Requires distribution to an account holder of the balance in a personal social security plus account when the account holder becomes entitled to Old-Age insurance benefits under SSA title II.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Personal Retirement Savings Account 
Act of 1998''.

SEC. 2. PERSONAL SOCIAL SECURITY PLUS ACCOUNTS.

    (a) In General.--Title II of the Social Security Act is amended--
            (1) by inserting before section 201 the following:

                    ``Part A--Insurance Benefits'';

        and
            (2) by adding at the end the following new part:

            ``Part B--Personal Social Security Plus Accounts

``annual appropriation of budget surpluses to the social security plus 
      fund for crediting to personal social security plus accounts

    ``Sec. 251. (a) In General.--At the end of fiscal year 1998 and 
each fiscal year thereafter, the Secretary of the Treasury shall 
transfer, from the general fund of the Treasury to the Social Security 
Plus Fund, an amount equal to 80 percent of the surplus (if any) in the 
total budget of the United States Government for that fiscal year.
    ``(b) Allocation of Assets Among Personal Social Security Plus 
Accounts.--Upon the transfer of an amount to the Social Security Plus 
Fund at the end of a fiscal year pursuant to subsection (a), the 
Commissioner of Social Security shall allocate such amount evenly among 
the personal social security plus accounts then maintained in the Fund 
by individuals who are eligible individuals for the calendar year 
ending in such fiscal year and shall credit to each account the amount 
so allocated.
    ``(c) Eligible Individual.--For purposes of this part, the term 
`eligible individual' means, for any calendar year beginning after 
December 31, 1996, any individual the amount of whose wages paid and 
self-employment income derived in such year equals, in the aggregate, 
at least the amount such individual must have in order to be credited 
with 4 quarters of coverage in such year.

                      ``social security plus fund

    ``Sec. 252. (a) Establishment.--There is established in the 
Treasury of the United States a Social Security Plus Fund. Subject to, 
and to the extent consistent with, the provisions of this part, the 
Commissioner of Social Security shall exercise the same powers, duties, 
and responsibilities with respect to the Fund as the powers, duties and 
responsibilities exercised by the Executive Director with respect to 
the Thrift Savings Fund.
    ``(b) Amounts Held by Fund.--The Social Security Plus Fund consists 
of the sum of all amounts transferred to the Fund under section 251, 
increased by the total net earnings from investments of sums held in 
the Fund or reduced by the total net losses from investments of sums 
held in the Fund, and reduced by the total amount of payments made from 
the Fund (including payments for administrative expenses).
    ``(c) Use of Fund.--
            ``(1) In general.--The sums in the Social Security Plus 
        Fund are appropriated and shall remain available without fiscal 
        year limitation--
                    ``(A) to invest under section 254,
                    ``(B) to make distributions under section 255,
                    ``(C) to pay the administrative expenses of this 
                part, and
                    ``(D) to purchase insurance as provided in section 
                256(b)(2).
            ``(2) Exclusive purposes.--The sums in the Social Security 
        Plus Fund shall not be appropriated for any purpose other than 
        the purposes specified in this section and may not be used for 
        any other purpose.

                ``personal social security plus accounts

    ``Sec. 253. (a) Establishment of Personal Social Security Plus 
Accounts.--Not later than January 1, 1999, the Commissioner of Social 
Security shall establish in the Social Security Plus Fund a personal 
social security plus account for each living individual who has been 
assigned a social security account number under section 205(c)(2) 
before such date. The Commissioner shall also establish such an account 
for each other individual on the date, on or after January 1, 1999, of 
the issuance to such individual of a social security account number 
under such section. Amounts in the Social Security Plus Fund shall be 
credited by the Commissioner to the account in accordance with section 
251(b). Each account shall be identified to its account holder by means 
of the account holder's social security account number.
    ``(b) Account Balance.--The balance in an individual's personal 
social security plus account at any time is the excess of--
            ``(1) the sum of--
                    ``(A) all deposits made into the Social Security 
                Plus Fund and credited to the account under section 
                251(b), and
                    ``(B) the total amount of allocations made to and 
                reductions made in the account pursuant to subsection 
                (c),
        over
            ``(2) the amounts paid out of the account with respect to 
        such individual under this part.
    ``(c) Allocation of Earnings and Losses.--Pursuant to regulations 
which shall be prescribed by the Commissioner, the Commissioner shall 
allocate to each account an amount equal to the net earnings and net 
losses from each investment of sums in the Social Security Plus Fund 
which are attributable, on a pro rata basis, to sums credited to such 
account, reduced by an appropriate share of the administrative expenses 
paid out of the net earnings, as determined by the Commissioner.

 ``rules governing personal social security plus accounts relating to 
            investment, accounting, reporting, and taxation

    ``Sec. 254. (a) In General.--Under regulations which shall be 
prescribed by the Commissioner of Social Security, and subject to the 
provisions of this part, the provisions of--
            ``(1) section 8438 of title 5, United States Code (relating 
        to investment of the Thrift Savings Fund),
            ``(2) section 8439(b) of such title (relating to engagement 
        of independent qualified public accountant),
            ``(3) section 8439(c) of such title (relating to periodic 
        statements and summary descriptions of investment options),
            ``(4) section 8439(d) of such title (relating to assumption 
        of risk), and
            ``(5) section 8440 of such title (relating to tax treatment 
        of the Thrift Savings Fund), other than subsection (c) thereof,
shall apply with respect to the Social Security Plus Fund and accounts 
maintained in such Fund in the same manner and to the same extent as 
such provisions relate to the Thrift Savings Fund and personal social 
security plus accounts maintained in such Fund.
    ``(b) Related Rules.--For purposes of subsection (a)--
            ``(1) the Federal Retirement Thrift Investment Board shall 
        exercise with respect to the Social Security Plus Fund the same 
        powers, duties, and responsibilities as are required to be 
        exercised by the Board under the provisions referred to in 
        subsection (a) with respect to the Thrift Savings Fund,
            ``(2) the Commissioner of Social Security shall exercise 
        with respect to the Social Security Plus Fund the same powers, 
        duties, and responsibilities as are required to be exercised by 
        the Executive Director under the provisions referred to in 
        subsection (a) with respect to the Thrift Savings Fund, and
            ``(3) references in such sections 8438 and 8439 to an 
        employee, Member, former employee, or former Member shall be 
        deemed references to an account holder of a social security 
        plus account in the Social Security Plus Fund.

      ``distributions from personal social security plus accounts

    ``Sec. 255. (a) In General.--Except as provided in subsections (b) 
and (c), the balance in a personal social security plus account--
            ``(1) shall be distributed to the account holder commencing 
        with the date of the commencement of such account holder's 
        entitlement to old-age insurance benefits under section 202(a), 
        and
            ``(2) shall be paid, as elected by the account holder (in 
        such form and manner as shall be prescribed in regulations of 
        the Commissioner of Social Security) in the form of--
                    ``(A) equal annual installments over the life 
                expectancy of the account holder (determined as of the 
                date of the distribution under reasonable actuarial 
                assumptions), or
                    ``(B) otherwise in the form of an immediate annuity 
                (as shall be prescribed in regulations of the 
                Commissioner of Social Security).
    ``(b) Lump Sum Distributions of Minimal Amounts.--
            ``(1) In general.--Notwithstanding subsection (a), if the 
        account holder becomes entitled to old-age insurance benefits 
        under section 202(a) and the balance in the account is $3,500 
        or less, the Commissioner of Social Security shall pay the 
        balance to the account holder in a single payment.
            ``(2) Cost-of-living adjustments.--Under regulations of the 
        Commissioner of Social Security, effective January 1 of each 
        calendar year after 1999, the dollar amount referred to in 
        paragraph (1) shall be adjusted annually by the same percentage 
        change as the percentage change then taking effect under 
        section 230.

                      ``fiduciary responsibilities

    ``Sec 256. (a) In General.--Under regulations of the Secretary of 
Labor, the provisions of sections 8477 and 8478 of title 5, United 
States Code, shall apply in connection with the Social Security Plus 
Fund and the personal social security plus accounts maintained in such 
Fund in the same manner and to the same extent as such provisions apply 
in connection with the Thrift Savings Fund and accounts maintained in 
the Thrift Savings Fund.
    ``(b) Investigative Authority.--Any authority available to the 
Secretary of Labor under section 504 of the Employee Retirement Income 
Security Act of 1974 is hereby made available to the Secretary of 
Labor, and any officer designated by the Secretary of Labor, to 
determine whether any person has violated, or is about to violate, any 
provision applicable under subsection (a).
    ``(c) Exculpatory Provisions; Insurance.--
            ``(1) In general.--Any provision in an agreement or 
        instrument which purports to relieve a fiduciary from 
        responsibility or liability for any responsibility, obligation, 
        or duty under this part shall be void.
            ``(2) Insurance.--Amounts in the Social Security Plus Fund 
        available for administrative expenses shall be available and 
        may be used at the discretion of the Commissioner of Social 
        Security to purchase insurance to cover potential liability of 
        persons who serve in a fiduciary capacity with respect to the 
        Fund and personal social security plus accounts maintained 
        therein, without regard to whether a policy of insurance 
        permits recourse by the insurer against the fiduciary in the 
        case of a breach of a fiduciary obligation.

    ``assignment, alienation, and treatment of deceased individuals

    ``Sec. 257. (a) Assignment and Alienation.--Under regulations which 
shall be prescribed by the Commissioner of Social Security, rules 
relating to assignment and alienation applicable under chapter 84 of 
title 5, United States Code, with respect to amounts held in accounts 
in the Thrift Savings Fund shall apply with respect to amounts held in 
personal social security plus accounts in the Social Security Plus 
Fund.
    ``(b) Treatment of Accounts of Deceased Individuals.--In the case 
of a deceased individual who is the account holder with respect to a 
personal social security plus account and who died before attaining 
retirement age (as defined in section 216(l)), upon receipt of 
notification of such individual's death, the Commissioner of Social 
Security shall close the account and shall transfer the balance in such 
account to the personal social security plus account of such account 
holder's surviving spouse or, if there is no such account of a 
surviving spouse, to the duly appointed legal representative of the 
estate of the deceased account holder, or if there is no such 
representative, to the person or persons determined to be entitled 
thereto under the laws of the domicile of the deceased account holder.