Social Security Trust Fund Amendments of 1993

Summary: Social Security Trust Fund Amendments of 1993 - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to require that the Board of Trustees of the OASDI trust funds include eight members of the public, rather than two, and meet at least ten times each calendar year.  Imposes a duty on the Board to use prudent person standards in overseeing the investment of OASDI funds for the exclusive purposes of providing benefits for OASDI beneficiaries and defraying reasonable expenses in administering such funds.  Limits the proportion of such funds which may be invested in interest-bearing obligations of the United States.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security Trust Fund 
Amendments of 1993''.
    Sec. 2. Title II, section 201 of the Social Security Act (42 U.S.C. 
401) is amended by deleting subsections (c) and (d) and inserting in 
lieu thereof the following:
    ``(c) Board of Trustees: Duties; Reports to Congress.--With respect 
to the Federal Old-Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund (hereinafter in this subchapter 
called the ``Trust Funds'') there is hereby created a body to be known 
as the Board of Trustees of the Trust Funds (hereinafter in this 
subchapter called the ``Board of Trustees'') which Board of Trustees 
shall be composed of the Secretary of the Treasury, the Secretary of 
Labor, and the Secretary of Health and Human Services, all ex officio, 
and of eight members of the public (not more than four of whom may be 
from the same political party), who shall be nominated by the President 
for a term of four years and subject to confirmation by the Senate. The 
terms of two of the members of the public shall expire each year. A 
member of the Board of Trustees serving as a member of the public and 
nominated and confirmed to fill a vacancy occurring during a term shall 
be nominated and confirmed only for the remainder of such term. An 
individual nominated and confirmed as a member of the public may serve 
in such position after the expiration of such member's term until the 
earlier of the time at which the member's successor takes office or the 
time at which a report of the Board is first issued under paragraph (2) 
after the expiration of the member's term. The Secretary of the 
Treasury shall be the Managing Trustee of the Board of Trustees 
(hereinafter in this subchapter called the ``Managing Trustee''). The 
Commissioner of Social Security shall serve as Secretary of the Board 
of Trustees. The Board of Trustees shall meet not less frequently than 
ten times each calendar year. It shall be the duty of the Board of 
Trustees to--
            ``(1) hold the Trust Funds;
            ``(2) report to the Congress not later than the first day 
        of April of each year on the operation and status of the Trust 
        Funds during the preceding fiscal year and on their expected 
        operation and status during the next ensuing five fiscal years;
            ``(3) report immediately to the Congress whenever the Board 
        of Trustees is of the opinion that the amount of either of the 
        Trust Funds is unduly small;
            ``(4) recommend improvements in administrative procedures 
        and policies designed to effectuate the proper coordination of 
        the old-age and survivors insurance and Federal-State 
        unemployment compensation program;
            ``(5) review the general policies followed in managing the 
        Trust Funds, and recommend changes in such policies, including 
        necessary changes in the provisions of the law which govern the 
        way in which the Trust Funds are to be managed; and
            ``(6) approve the investment of funds and discharge their 
        duties in a manner which is solely in the interest of the 
        beneficiaries of the funds; and
                    ``(A) for the exclusive purpose of--
                            ``(i) providing benefits for the 
                        beneficiaries; and
                            ``(ii) defraying reasonable expenses of 
                        administering the fund;
                    ``(B) with the care, skill, prudence, and diligence 
                under the circumstances then prevailing that a prudent 
                person acting in a like capacity and familiar with such 
                matters would use in the conduct of an enterprise of a 
                like character and with like aims;
                    ``(C) by diversifying the investments of the plan 
                so as to minimize the risk of large losses, unless 
                under the circumstances it is clearly prudent not to do 
                so; and
                    ``(D) in accordance with the provisions of 
                subsection (d) below.
    ``(d) Investments.--It shall be the duty of the Managing Trustee to 
invest such portion of the Trust Funds as is not, in his judgment, 
required to meet current withdrawals. Not more than one-fourth of such 
investments (based upon the cost at the time of investment) may be held 
in interest-bearing obligations of the United States. For such purpose 
such obligations may be acquired (1) on original issue at the issue 
price, or (2) by purchase of outstanding obligations at the market 
price. The purposes for which obligations of the United States may be 
issued under chapter 31 of title 31 are hereby extended to authorize 
the issuance at par of public-debt obligations for purchase by the 
Trust Funds. Such obligations issued for purchase by the Trust Funds 
shall have maturities fixed with due regard for the needs of the Trust 
Funds and shall bear interest at a rate equal to the average market 
yield (computed by the Managing Trustee on the basis of market 
quotations as of the end of the calendar month next preceding the date 
of such issue) on all marketable interest-bearing obligations of the 
United States then forming a part of the public debt which are not due 
or callable until after the expiration of four years from the end of 
such calendar month; except that where such average market yield is not 
a multiple of one-eighth of 1 per centum, the rate of interest of such 
obligations shall be the multiple of one-eighth of 1 per centum nearest 
such market yield. The Managing Trustee, with the approval of a 
majority of the Board of Trustees, shall invest the funds not required 
to meet current withdrawals and not invested in interest-bearing 
obligations of the United States described above, in other interest-
bearing obligations of the United States or obligations guaranteed as 
to both principal and interest by the United States, on original issue 
or at the market price, and in bonds, debentures, and securities in 
accordance with the provisions of section (c).''.