To amend title 5, United States Code, to provide for the establishment of a precious metals investment option in the Thrift Savings Fund.

Summary: Thrift Savings Fund Improvement Act - Establishes the Precious Metals Investment Fund as an investment option for individuals participating in the Thrift Savings Plan. Requires that contributions to such Fund be invested in physical gold, silver, or platinum bullion.

Directs the Federal Retirement Thrift Investment Board to: (1) study the operation of existing precious metal funds to determine the best practices of such funds; (2) establish the Precious Metals Investment Fund incorporating the best practices of existing funds; and (3) make such Fund available to individuals participating in the Thrift Savings Plan.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Thrift Savings Fund Improvement 
Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) In order to enhance stability in the operations of the 
        legislative branch of the Government, it is important to 
        maintain a professional congressional staff and to promote 
        longevity of service.
            (2) Consistent with paragraph (1), Congress has recently 
        enacted legislation authorizing new benefits, such as a student 
        loan forgiveness program, and taken other measures to improve 
        staff compensation and benefits.
            (3) The Thrift Savings Plan is an important benefit which 
        is offered to congressional employees, and which furthers the 
        goal of attracting and retaining talented individuals to serve 
        in the legislative branch of the Government.
            (4) The 3 stock index funds in the Thrift Savings Plan have 
        not performed well recently, especially when measured against 
        inflation. In 2002, for example, losses from those funds were 
        greater than 3, 4, and 5 percent, respectively, in the month of 
        December alone, and more than 15, 18, and 22 percent, 
        respectively, for the entire year.
            (5) By contrast, during that same year, the Government 
        securities and bond index funds in the Thrift Savings Plan had 
        earnings of 5 and 10 percent, respectively, and, in December of 
        that year alone, slightly more than \1/2\ of 1 percent and 2 
        percent, respectively.
            (6) By yet greater contrast, increases in gold spot prices 
        more than offset the losses experienced by even the worst-
        performing stock index fund in the Thrift Savings Plan in 2002, 
        with the price of gold increasing by nearly 25 percent in that 
        year and by more than 9 percent in December of that year alone.

SEC. 3. PRECIOUS METALS INVESTMENT FUND.

    (a) Fund Defined.--Section 8438(a) of title 5, United States Code, 
is amended--
            (1) in paragraph (9), by striking ``and'' at the end;
            (2) in paragraph (10), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(11) the term `Precious Metals Investment Fund' means the 
        Precious Metals Investment Fund established under subsection 
        (b)(1)(F).''.
    (b) Establishment.--
            (1) In general.--Section 8438(b)(1) of title 5, United 
        States Code, is amended--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end;
                    (B) in subparagraph (E), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(F) a Precious Metals Investment Fund as provided 
                in paragraph (5).''.
            (2) Fund requirements.--Section 8438(b) of title 5, United 
        States Code, is amended by adding at the end the following:
    ``(5)(A) The Board shall establish a Precious Metals Investment 
Fund.
    ``(B) Contributions to the Precious Metals Investment Fund shall be 
invested in physical gold, silver, or platinum bullion (rather than any 
mining company shares, certificates, derivatives, or futures options), 
and any bullion so acquired shall constitute the assets of the Precious 
Metals Investment Fund and shall be stored in a vault in a Federally 
chartered or State chartered bank. Each share in the Precious Metals 
Investment Fund shall represent a direct investment in the precious 
metal itself.''.
    (c) Acknowledgment of Risk.--Section 8439(d) of title 5, United 
States Code, is amended--
            (1) by striking ``or the Small Capitalization Stock Index 
        Investment Fund,'' and inserting ``the Small Capitalization 
        Stock Index Investment Fund, or the Precious Metals Investment 
        Fund,''; and
            (2) by striking ``and (10),'' and inserting ``(10), and 
        (11),''.

SEC. 4. EFFECTIVE DATE; DEFINITIONS.

    (a) Effective Date.--The Federal Retirement Thrift Investment 
Board--
            (1) shall study the operation of existing precious metals 
        funds to determine the best practices of those funds; and
            (2) not later than 1 year after the date of the enactment 
        of this Act--
                    (A) shall establish the Precious Metals Investment 
                Fund, incorporating the best practices referred to in 
                paragraph (1) to such extent and in such manner as the 
                Board shall determine; and
                    (B) shall make the Precious Metals Investment Fund 
                available to individuals participating in the Thrift 
                Savings Plan.
    (b) Definitions.--For purposes of this section--
            (1) the term ``Precious Metals Investment Fund'' has the 
        meaning given such term by section 8438(a)(11) of title 5, 
        United States Code (as amended by section 3(a)); and
            (2) the term ``Thrift Savings Plan'' refers to the plan 
        described in subchapter III of chapter 84 of such title 5.