II 

111TH CONGRESS 

2D SESSION S. 3577 

To encourage savings, promote financial literacy, and expand opportunities 

for young adults by establishing Lifetime Savings Accounts. 

IN THE SENATE OF THE UNITED STATES 

JULY 14, 2010 

Mr. SCHUMER (for himself and Mr. DODD) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To encourage savings, promote financial literacy, and expand 

opportunities for young adults by establishing Lifetime 

Savings Accounts. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘America Saving for Personal Investment, Retirement, 

6 and Education Act of 2010’’ or the ‘‘ASPIRE Act of 

7 2010’’. 

8 (b) TABLE OF CONTENTS.—The table of contents for 

9 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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Sec. 2. ASPIRE Fund. 

Sec. 3. Lifetime Savings Accounts. 

Sec. 4. Certifications related to Government contributions. 

Sec. 5. Rules governing Lifetime Savings Accounts relating to investment, accounting, and reporting. 

Sec. 6. Tax treatment of Lifetime Savings Accounts. 

Sec. 7. Private management of Lifetime Savings Accounts. 

Sec. 8. ASPIRE Fund Board. 

Sec. 9. Fiduciary responsibilities. 

Sec. 10. Assignment, alienation, and treatment of deceased individuals. 

Sec. 11. Accounts disregarded in determining eligibility for Federal benefits. 

Sec. 12. Reports. 

Sec. 13. Programs for promoting financial literacy. 

1 SEC. 2. ASPIRE FUND. 

2 (a) ESTABLISHMENT.—There is established in the 

3 Treasury of the United States an ASPIRE Fund. 

4 (b) AMOUNTS HELD BY FUND.—The ASPIRE Fund 

5 consists of the sum of all amounts paid into the Fund 

6 under subsections (d) and (e), increased by the total net 

7 earnings from investments of sums held in the Fund or 

8 reduced by the total net losses from investments of sums 

9 held in the Fund, and reduced by the total amount of pay10 ments made from the Fund (including payments for ad11 ministrative expenses). 

12 (c) USE OF FUND.— 

13 (1) IN GENERAL.—The sums in the ASPIRE 

14 Fund are appropriated and shall remain available 

15 without fiscal year limitation— 

16 (A) to invest under section 5, 

17 (B) to make distributions as provided pur18 suant to section 6, 


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1 (C) to pay the administrative expenses of 

2 carrying out this Act, and 

3 (D) to purchase insurance as provided in 

4 section 9(c)(2). 

5 (2) EXCLUSIVE PURPOSES.—The sums in the 

6 ASPIRE Fund shall not be appropriated for any 

7 purpose other than the purposes specified in this 

8 section and may not be used for any other purpose. 

9 (d) GOVERNMENT CONTRIBUTIONS.— 

10 (1) IN GENERAL.—The Secretary of the Treas11 ury shall make transfers from the general fund of 

12 the Treasury to the ASPIRE Fund as follows: 

13 (A) AUTOMATIC CONTRIBUTIONS.—Upon 

14 receipt of each certification under section 3(b), 

15 the Secretary of the Treasury shall transfer 

16 $500. 

17 (B) SUPPLEMENTAL CONTRIBUTIONS.— 

18 Upon receipt of each certification under section 

19 4(a), the Secretary of the Treasury shall trans20 fer the supplemental amount. 

21 (C) MATCHING CONTRIBUTIONS.—Upon 

22 receipt of each certification under section 4(b), 

23 the Secretary of the Treasury shall transfer the 

24 matching amount. 

25 (2) ADJUSTMENT FOR INFLATION.— 


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1 (A) IN GENERAL.—For each fifth calendar 

2 year beginning after 2011, the $500 amount in 

3 paragraph (1)(A) shall be increased by such 

4 dollar amount multiplied by the cost-of-living 

5 adjustment determined under section 1(f)(3) of 

6 the Internal Revenue Code of 1986 determined 

7 by substituting ‘‘calendar year 2010’’ for ‘‘cal8 endar year 1992’’ in subparagraph (B) thereof. 

9 (B) ROUNDING.—If any amount adjusted 

10 under subparagraph (A) is not a multiple of 

11 $50, such amount shall be rounded to the next 

12 lowest multiple of $50. 

13 (e) PRIVATE CONTRIBUTIONS.—The Executive Di14 rector shall pay into the ASPIRE Fund such amounts as 

15 are contributed under section 3(f). 

16 SEC. 3. LIFETIME SAVINGS ACCOUNTS. 

17 (a) ESTABLISHMENT.—The Executive Director shall 

18 establish in the ASPIRE Fund a Lifetime Savings Ac19 count for each eligible individual certified under subsection 

20 (b). Each such account shall be identified to its account 

21 holder by means of the account holder’s social security ac22 count number. 

23 (b) CERTIFICATION OF ACCOUNT HOLDERS.—On the 

24 date on which an eligible individual is issued a social secu25 rity account number under section 203(c)(2) of the Social 


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1 Security Act, the Commissioner of Social Security shall 

2 certify to the Executive Director and the Secretary of the 

3 Treasury the name of, and social security number issued 

4 to, such eligible individual. 

5 (c) ACCOUNT BALANCE.—The balance in an account 

6 holder’s Lifetime Savings Account at any time is the ex7 cess of— 

8 (1) the sum of— 

9 (A) all deposits made into the ASPIRE 

10 Fund and credited to the account under sub11 section (d), and 

12 (B) the total amount of allocations made 

13 to and reductions made in the account pursuant 

14 to subsection (e), over 

15 (2) the amounts paid out of the account with 

16 respect to such individual under section 6. 

17 (d) CREDITING OF CONTRIBUTIONS.—Pursuant to 

18 regulations which shall be prescribed by the Executive Di19 rector, the Executive Director shall credit to each Lifetime 

20 Savings Account the amounts paid into the ASPIRE Fund 

21 under subsections (d) and (e) of section 2 which are attrib22 utable to the account holder of such account. 

23 (e) ALLOCATION OF EARNINGS AND LOSSES.—The 

24 Executive Director shall allocate to each Lifetime Savings 

25 Account an amount equal to the net earnings and net 


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1 losses from each investment of sums in the ASPIRE Fund 

2 which are attributable, on a pro rata basis, to sums cred3 ited to such account, reduced by an appropriate share of 

4 the administrative expenses paid out of the net earnings, 

5 as determined by the Executive Director. 

6 (f) PRIVATE CONTRIBUTIONS.— 

7 (1) IN GENERAL.—The Executive Director shall 

8 accept cash contributions for payment into the AS9 PIRE Fund if such contribution is identified (in 

10 such manner as the Executive Director may require) 

11 with the account holder of a Lifetime Savings Ac12 count to whom it is to be credited at the time the 

13 contribution is made. 

14 (2) ALTERNATIVE METHODS OF CONTRIBU15 TION.— 

16 (A) PAYROLL DEDUCTION.—Under regula17 tions prescribed by the Executive Director and 

18 at the election of the employer, contributions 

19 under paragraph (1) may be made through pay20 roll deductions. 

21 (B) TAX REFUNDS.—Under regulations 

22 prescribed by the Secretary of the Treasury, 

23 contributions under paragraph (1) may be made 

24 by an election to contribute all or a portion of 

25 the tax refund of the contributor. 


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1 (3) ANNUAL LIMITATION.— 

2 (A) ACCOUNT HOLDERS UNDER AGE 18.— 

3 In the case of an account holder who has not 

4 attained age 18 at the end of a calendar year— 

5 (i) the limitation under section 

6 219(b)(1) of the Internal Revenue Code of 

7 1986 shall not apply, and 

8 (ii) the Executive Director shall not 

9 accept any contribution identified with 

10 such account holder if such contribution, 

11 when added to all other contributions made 

12 under this subsection during such calendar 

13 year with respect to such account holder, 

14 exceeds $2,000. 

15 (B) ACCOUNT HOLDERS AGE 18 OR

16 OLDER.—In the case of an account holder who 

17 is age 18 or older at the end of a calendar year, 

18 any contribution identified with such account 

19 holder shall be taken into account under section 

20 219(b)(1) of the Internal Revenue Code of 

21 1986 for such year. 

22 (C) ADJUSTMENT FOR INFLATION.— 

23 (i) IN GENERAL.—For each fifth cal24 endar year beginning after 2011, the 

25 $2,000 amount under subparagraph (A)(ii) 


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1 shall be increased by such dollar amount 

2 multiplied by the cost-of-living adjustment 

3 determined under section 1(f)(3) of the In4 ternal Revenue Code of 1986 determined 

5 by substituting ‘‘calendar year 2010’’ for 

6 ‘‘calendar year 1992’’ in subparagraph (B) 

7 thereof. 

8 (ii) ROUNDING.—If any amount ad9 justed under clause (i) is not a multiple of 

10 $50, such amount shall be rounded to the 

11 next lowest multiple of $50. 

12 (4) TAX TREATMENT OF PRIVATE CONTRIBU13 TIONS FROM EMPLOYERS.— 

14 (A) EXCLUSION FROM INCOME.— 

15 (i) IN GENERAL.—Part III of sub16 chapter B of chapter 1 of the Internal 

17 Revenue Code of 1986 is amended by in18 serting before section 140 the following 

19 new section: 

20 ‘‘SEC. 139F. EMPLOYER LIFETIME SAVINGS ACCOUNT CON21 TRIBUTIONS. 

22 ‘‘Gross income does not include any amount paid by 

23 an employer to the Lifetime Savings Account of an em24 ployee or any person treated as an employee under the 

25 rules of section 132(h).’’. 


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1 (ii) CLERICAL AMENDMENT.—The 

2 table of sections for part III of subchapter 

3 B of chapter 1 of such Code is amended by 

4 inserting before the item relating to section 

5 140 the following new item: 

‘‘Sec. 139F. Employer Lifetime Savings Account contributions.’’. 

6 (B) EXCLUSION FROM EMPLOYMENT

7 TAXES.— 

8 (i) FICA WAGES.— 

9 (I) INTERNAL REVENUE CODE.— 

10 Section 3121(a)(20) of the Internal 

11 Revenue Code of 1986 is amended by 

12 striking ‘‘or 132’’ and inserting ‘‘132, 

13 or 139F’’. 

14 (II) SOCIAL SECURITY ACT.— 

15 Section 209(a)(17) of the Social Secu16 rity Act (42 U.S.C. 409(a)(17)) is 

17 amended by striking ‘‘or 132’’ and in18 serting ‘‘132, or 139F’’. 

19 (ii) RAILROAD RETIREMENT COM20 PENSATION.—Section 3231(a)(5) of the 

21 Internal Revenue Code of 1986 is amended 

22 by striking ‘‘or 132’’ and inserting ‘‘132, 

23 or 139F’’. 

24 (iii) FUTA WAGES.—Section 

25 3306(b)(16) of such Code is amended by 


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1 striking ‘‘or 132’’ and inserting ‘‘132, or 

2 139D’’. 

3 (iv) WITHHOLDING.—Section 

4 3401(a)(19) of such Code is amended by 

5 striking ‘‘or 132’’ and inserting ‘‘132, or 

6 139F’’. 

7 (g) ELIGIBLE INDIVIDUAL.—For purposes of this 

8 Act, the term ‘‘eligible individual’’ means any individual 

9 who is— 

10 (1) a United States citizen or a person de11 scribed in paragraph (1) of section 431(b) of the 

12 Personal Responsibility and Work Opportunity Rec13 onciliation Act of 1996, 

14 (2) born after December 31, 2010, and 

15 (3) less than 18 years of age. 

16 (h) RIGHTS OF LEGAL GUARDIAN.—Until the ac17 count holder of a Lifetime Savings Account attains age 

18 18, any rights or duties of the account holder under this 

19 Act with respect to such account shall be exercised or per20 formed by the legal guardian of such account holder. 

21 SEC. 4. CERTIFICATIONS RELATED TO GOVERNMENT CON22 TRIBUTIONS. 

23 (a) SUPPLEMENTAL GOVERNMENT CONTRIBU24 TIONS.— 


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1 (1) IN GENERAL.—Upon such showing as the 

2 Executive Director may require to establish the basis 

3 for certification, the Executive Director shall, with 

4 respect to each eligible account holder, certify to the 

5 Secretary of the Treasury the supplemental amount 

6 with respect to such account holder. 

7 (2) ELIGIBLE ACCOUNT HOLDER.—For pur8 poses of this subsection, the term ‘‘eligible account 

9 holder’’ means an account holder of a Lifetime Sav10 ings Account who, for the last taxable year ending 

11 before such account holder’s certification under sec12 tion 3(b), has a modified adjusted gross income 

13 which is below the applicable national median ad14 justed gross income amount. 

15 (3) SUPPLEMENTAL AMOUNT.— 

16 (A) IN GENERAL.—For purposes of this 

17 Act, the term ‘‘supplemental amount’’ means 

18 $500. 

19 (B) INCOME PHASE-OUT.—With respect to 

20 any account holder who has a modified adjusted 

21 gross income for the last taxable year ending 

22 before such account holder’s certification under 

23 section 3(b) which is in excess of 75 percent of 

24 the applicable national median adjusted gross 

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1 graph (A) shall be reduced (but not below zero) 

2 by an amount which bears the same ratio to 

3 $500 as such excess bears to 25 percent of the 

4 applicable national median adjusted gross in5 come amount. 

6 (C) ADJUSTMENT FOR INFLATION.— 

7 (i) IN GENERAL.—For each fifth cal8 endar year beginning after 2011, each of 

9 the $500 amounts under subparagraphs 

10 (A) and (B) shall be increased by such dol11 lar amount multiplied by the cost-of-living 

12 adjustment determined under section 

13 1(f)(3) of the Internal Revenue Code of 

14 1986 determined by substituting ‘‘calendar 

15 year 2010’’ for ‘‘calendar year 1992’’ in 

16 subparagraph (B) thereof. 

17 (ii) ROUNDING.—If any amount ad18 justed under clause (i) is not a multiple of 

19 $50, such amount shall be rounded to the 

20 next lowest multiple of $50. 

21 (b) GOVERNMENT MATCHING CONTRIBUTION.— 

22 (1) IN GENERAL.—Upon such showing as the 

23 Executive Director may require to establish the basis 

24 for certification, the Executive Director shall, with 

25 respect to each private contribution to the account 


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1 of an account holder which is made before such ac2 count holder attains age 18, certify to the Secretary 

3 of the Treasury the matching amount with respect 

4 to such contribution. 

5 (2) MATCHING AMOUNT.— 

6 (A) IN GENERAL.—For purposes of this 

7 subsection, the term ‘‘matching amount’’ 

8 means, with respect to the first $500 of private 

9 contributions to an account during any calendar 

10 year, an amount equal to 100 percent of such 

11 contribution. 

12 (B) INCOME PHASE-OUT.—With respect to 

13 any account holder who has a modified adjusted 

14 gross income for the last taxable year ending 

15 before such contribution which is in excess of 

16 75 percent of the applicable national median 

17 adjusted gross income amount, the $500 

18 amount in subparagraph (A) shall be reduced 

19 (but not below zero) by an amount which bears 

20 the same ratio to $500 as— 

21 (i) such excess, bears to 

22 (ii) 25 percent of the applicable na23 tional median adjusted gross income 

24 amount. 

25 (C) ADJUSTMENT FOR INFLATION.— 


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1 (i) IN GENERAL.—For each fifth cal2 endar year beginning after 2011, each of 

3 the $500 amounts under subparagraphs 

4 (A) and (B) shall be increased by such dol5 lar amount multiplied by the cost-of-living 

6 adjustment determined under section 

7 1(f)(3) of the Internal Revenue Code of 

8 1986 determined by substituting ‘‘calendar 

9 year 2010’’ for ‘‘calendar year 1992’’ in 

10 subparagraph (B) thereof. 

11 (ii) ROUNDING.—If any amount ad12 justed under clause (i) is not a multiple of 

13 $50, such amount shall be rounded to the 

14 next lowest multiple of $50. 

15 (3) PRIVATE CONTRIBUTION.—For purposes of 

16 this subsection, the term ‘‘private contribution’’ 

17 means a contribution accepted under section 3(f). 

18 (c) DEFINITIONS AND RULES RELATING TO MODI19 FIED ADJUSTED GROSS INCOME.—For purposes of this 

20 section— 

21 (1) SPECIAL RULE FOR ACCOUNT HOLDERS

22 WHO CAN BE CLAIMED AS DEPENDENTS.—In the 

23 case of an account holder of a Lifetime Savings Ac24 count for whom a deduction is allowable under sec25 tion 151 of the Internal Revenue Code of 1986 to 


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1 another taxpayer, any reference in this section to the 

2 modified adjusted gross income of the account hold3 er for any taxable year shall be treated as a ref4 erence to the modified adjusted gross income of such 

5 other taxpayer. 

6 (2) MODIFIED ADJUSTED GROSS INCOME.—The 

7 term ‘‘modified adjusted gross income’’ has the 

8 meaning given such term in section 221(b) of the In9 ternal Revenue Code of 1986. 

10 (3) APPLICABLE NATIONAL MEDIAN ADJUSTED

11 GROSS INCOME.— 

12 (A) IN GENERAL.—The term ‘‘applicable 

13 national median adjusted gross income’’ means, 

14 with respect to any calendar year, the median 

15 amount of adjusted gross income (as defined in 

16 section 62 of the Internal Revenue Code of 

17 1986) for individual taxpayers for taxable years 

18 ending in the prior calendar year as determined 

19 by the Secretary of the Treasury. 

20 (B) JOINT RETURNS.—The applicable na21 tional median adjusted gross income shall be 

22 calculated and applied separately with respect 

23 to joint returns and all other returns. 


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1 SEC. 5. RULES GOVERNING LIFETIME SAVINGS ACCOUNTS 

2 RELATING TO INVESTMENT, ACCOUNTING, 

3 AND REPORTING. 

4 (a) DEFAULT INVESTMENT PROGRAM.—The AS5 PIRE Fund Board shall establish a default investment 

6 program under which, in a manner similar to a lifecycle 

7 investment program, sums in each Lifetime Savings Ac8 count are allocated to investment funds in the ASPIRE 

9 Fund based on the amount of time before the account 

10 holder attains the age of 18. Each account holder of a 

11 Lifetime Savings Account shall be enrolled in such pro12 gram unless such account holder, in such form and man13 ner as prescribed by the Executive Director, elects other14 wise. 

15 (b) OTHER RULES.—Under regulations which shall 

16 be prescribed by the Executive Director, and subject to 

17 the provisions of this Act, the provisions of— 

18 (1) section 8438 of title 5, United States Code 

19 (relating to investment of the Thrift Savings Fund), 

20 (2) section 8439(b) of such title (relating to en21 gagement of independent qualified public account22 ant), 

23 (3) section 8439(c) of such title (relating to 

24 periodic statements and summary descriptions of in25 vestment options), and 


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1 (4) section 8439(d) of such title (relating to as2 sumption of risk), 

3 shall apply with respect to the ASPIRE Fund and ac4 counts maintained in such Fund in the same manner and 

5 to the same extent as such provisions relate to the Thrift 

6 Savings Fund and the accounts maintained in the Thrift 

7 Savings Fund. For purposes of this subsection, references 

8 in such sections 8438 and 8439 to an employee, Member, 

9 former employee, or former Member shall be deemed ref10 erences to an account holder of a Lifetime Savings Ac11 count in the ASPIRE Fund. 

12 SEC. 6. TAX TREATMENT OF LIFETIME SAVINGS ACCOUNTS. 

13 (a) IN GENERAL.—Except as otherwise provided in 

14 this Act, for purposes of the Internal Revenue Code of 

15 1986— 

16 (1) each Lifetime Savings Account shall be 

17 treated in the same manner as a Roth IRA (within 

18 the meaning of section 408A of such Code), except 

19 that section 408A of such Code shall be applied sep20 arately to Lifetime Savings Accounts, and 

21 (2) any distribution from such account shall be 

22 treated in the same manner as a distribution from 

23 a Roth IRA. 

24 (b) SEPARATE APPLICATION OF TAXATION RULES.— 

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1 section (c) thereof (relating to treatment of contributions), 

2 of the Internal Revenue Code of 1986 shall be applied sep3 arately to Lifetime Savings Accounts. 

4 (c) MINIMUM BALANCE.—No amount shall be dis5 tributed pursuant to subsection (a)(2) to the extent such 

6 distribution would cause the balance of such account to 

7 be less than the amount transferred to such account under 

8 section 2(d)(1)(A) before the account holder— 

(1) attains age 591 9 ⁄2, 

10 (2) dies, or 

11 (3) becomes disabled (within the meaning of 

12 section 72(m)(7). 

13 (d) DISTRIBUTIONS FOR HIGHER EDUCATION.—In 

14 the case of higher education expenses of an account holder 

15 incurred during the period beginning on the date the ac16 count holder attains 18 and ending before the account 

17 holder attains 25, no amount shall be treated as a quali18 fied distribution pursuant to subsection (a)(2) unless such 

19 amount is paid directly to the institution of higher edu20 cation (as defined in section 101 of the Higher Education 

21 Act of 1065 (20 U.S.C. 1001)) through which the higher 

22 education is provided. 

23 (e) AGE LIMITATION.—Except as otherwise provided 

24 by this Act, no distribution shall be made under subsection 


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1 (a) with respect to any account holder of a Lifetime Sav2 ings Account before such account holder attains age 18. 

3 (f) QUALIFIED ROLLOVERS CONTRIBUTIONS.— 

4 (1) IN GENERAL.—Under regulations prescribed 

5 by the Secretary of the Treasury in consultation 

6 with the Executive Director, any account holder of 

7 a Lifetime Savings Account may elect to make a 

8 rollover contribution from such account holder’s ac9 count to a privately managed Lifetime Savings Ac10 count (as defined in section 408B of the Internal 

11 Revenue Code of 1986). 

12 (2) LIMITATION.—No rollover contribution may 

13 be made under this paragraph to the extent that 

14 such rollover contribution would cause the balance of 

15 such account holder’s account to be less than the 

16 minimum balance specified in subsection (c). 

17 (g) 100 PERCENT TAX ON GOVERNMENT CONTRIBU18 TIONS.— 

19 (1) LIFETIME SAVINGS ACCOUNTS.— 

20 (A) IN GENERAL.—In the case of any 

21 amount distributed from a Lifetime Savings Ac22 count which is attributable to contributions 

23 made under section 2(d) and which would be in24 cludible in gross income (but for this para25 graph)— 


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1 (i) such amount shall not be includible 

2 in gross income, and 

3 (ii) the tax imposed under chapter 1 

4 of the Internal Revenue Code of 1986 on 

5 the distributee for the taxable year in 

6 which such amount is distributed shall be 

7 increased by 100 percent of such amount. 

8 (B) ORDERING RULES.—For purposes of 

9 this paragraph, distributions from Lifetime 

10 Savings Accounts shall be treated as made from 

11 amounts attributable to contributions made 

12 under section 3(f) and from earnings before 

13 made from amounts attributable to contribu14 tions made under section 2(d). 

15 SEC. 7. PRIVATE MANAGEMENT OF LIFETIME SAVINGS AC16 COUNTS. 

17 (a) IN GENERAL.—Part I of subchapter D of chapter 

18 1 of the Internal Revenue Code of 1986 is amended by 

19 inserting after section 408A the following new section: 

20 ‘‘SEC. 408B. PRIVATELY MANAGED LIFETIME SAVINGS AC21 COUNTS. 

22 ‘‘(a) IN GENERAL.—Except as provided in this sec23 tion, a privately managed Lifetime Savings Account shall 

24 be treated in the same manner as a Roth IRA, except that: 


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1 ‘‘(1) QUALIFIED SPECIAL PURPOSE DISTRIBU2 TIONS.—Qualified special distributions (as defined in 

3 section 408A(d)(5)) shall include— 

4 ‘‘(A) distributions to the extent that such 

5 distributions do not exceed qualified higher edu6 cation expenses (as defined in section 

7 529(e)(3)) of the beneficiary of a privately man8 aged Lifetime Savings Account, reduced by the 

9 sum of— 

10 ‘‘(i) the amount excluded from gross 

11 income under section 127, 135, 529, or 

12 530 by reason of such expenses, 

13 ‘‘(ii) the amount excluded from gross 

14 income under section 221 by reason of 

15 such expenses (determined without regard 

16 to the last sentence of subsection (d)(2) 

17 thereof), 

18 ‘‘(iii) the amount of any scholarship, 

19 allowance, or payment described in section 

20 25A(g)(2), and 

21 ‘‘(iv) the amount of such expenses 

22 which were taken into account in deter23 mining the credit allowed to the taxpayer 

24 or any other person under section 25A, 

25 and 


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1 ‘‘(B) amounts which within 60 days of dis2 tribution are transferred to a qualified tuition 

3 program under section 529 for the benefit of 

4 the account holder of a privately managed Life5 time Savings Account or a member of the fam6 ily (within the meaning of section 529(e)(2)) of 

7 such account holder. 

8 ‘‘(2) NONEXCLUSION PERIOD DOES NOT

9 APPLY.—Section 408A(d)(2)(B) shall not apply. 

10 ‘‘(3) QUALIFIED ROLLOVER.—In lieu of the def11 inition given the term ‘qualified rollover contribu12 tion’ under section 408A(e), such term shall mean a 

13 rollover contribution to a privately managed Lifetime 

14 Savings Account from another such account or from 

15 a Lifetime Savings Account under section 7(b)(2)(A) 

16 of the America Saving for Personal Investment, Re17 tirement, and Education Act of 2010, but only if 

18 such rollover contribution meets the requirements of 

19 section 408(d)(3). 

20 ‘‘(4) AGE LIMITATION ON DISTRIBUTIONS.—Ex21 cept as otherwise provided in this section, no dis22 tribution may be made with respect to any account 

23 holder of a privately managed Lifetime Savings Ac24 count before such account holder attains age 18. 


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1 ‘‘(5) TAXATION OF GOVERNMENT CONTRIBU2 TIONS.—In the case of any distribution which is at3 tributable to contributions made under section 2(d) 

4 of the America Saving for Personal Investment, Re5 tirement, and Education Act of 2010 and which 

6 would be includible in gross income (but for this 

7 paragraph)— 

8 ‘‘(A) such amount shall not be includible in 

9 gross income, and 

10 ‘‘(B) the tax imposed under chapter 1 on 

11 the distributee for the taxable year in which 

12 such amount is distributed shall be increased by 

13 100 percent of such amount. 

14 For purposes of this paragraph, distributions shall 

15 be treated as made from amounts attributable to 

16 other contributions and from earnings before made 

17 from amounts attributable to contributions made 

18 under section 2(d) of the America Saving for Per19 sonal Investment, Retirement, and Education Act of 

20 2010. 

21 ‘‘(6) ASSIGNMENT, ALIENATION, AND TREAT22 MENT OF DECEASED INDIVIDUALS.—Section 10 of 

23 the America Saving for Personal Investment, Retire24 ment, and Education Act of 2010 shall apply in lieu 

25 of treatment under this subsection as a Roth IRA. 


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1 ‘‘(b) PRIVATELY MANAGED LIFETIME SAVINGS AC2 COUNT.—For purposes of this title, the term ‘privately 

3 managed Lifetime Savings Account’ means an individual 

4 retirement plan (as defined in section 7701(a)(37)) which 

5 is designated (in such manner as the Secretary may pre6 scribe) as a privately managed Lifetime Savings Account 

7 and which meets the requirements of the America Saving 

8 for Personal Investment, Retirement, and Education Act 

9 of 2010.’’. 

10 (b) CONFORMING AMENDMENT.—The table of sec11 tions for part I of subchapter D of chapter 1 of the Inter12 nal Revenue Code of 1986 is amended by inserting after 

13 the item related to section 408A the following new item: 

‘‘Sec. 408B. Privately managed Lifetime Savings Accounts.’’. 

14 SEC. 8. ASPIRE FUND BOARD. 

15 (a) IN GENERAL.—There is established in the execu16 tive branch of the Government a ASPIRE Fund Board. 

17 (b) COMPOSITION, DUTIES, AND RESPONSIBIL18 ITIES.—Subject to the provisions of this Act, the provi19 sions of— 

20 (1) section 8472 of title 5, United States Code 

21 (relating to composition of Federal Retirement 

22 Thrift Investment Board), 

23 (2) section 8474 of such title (relating to Exec24 utive Director), 


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1 (3) section 8475 of such title (relating to in2 vestment policies), and 

3 (4) section 8476 of such title (relating to ad4 ministrative provisions), 

5 shall apply with respect to the ASPIRE Fund Board in 

6 the same manner and to the same extent as such provi7 sions relate to the Federal Retirement Thrift Investment 

8 Board. 

9 SEC. 9. FIDUCIARY RESPONSIBILITIES. 

10 (a) IN GENERAL.—Under regulations of the Sec11 retary of Labor, the provisions of sections 8477 and 8478 

12 of title 5, United States Code, shall apply in connection 

13 with the ASPIRE Fund and the accounts maintained in 

14 such Fund in the same manner and to the same extent 

15 as such provisions apply in connection with the Thrift Sav16 ings Fund and the accounts maintained in the Thrift Sav17 ings Fund. 

18 (b) INVESTIGATIVE AUTHORITY.—Any authority 

19 available to the Secretary of Labor under section 504 of 

20 the Employee Retirement Income Security Act of 1974 

21 (29 U.S.C. 1134) is hereby made available to the Sec22 retary of Labor, and any officer designated by the Sec23 retary of Labor, to determine whether any person has vio24 lated, or is about to violate, any provision applicable under 

25 subsection (a). 


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1 (c) EXCULPATORY PROVISIONS; INSURANCE.— 

2 (1) IN GENERAL.—Any provision in an agree3 ment or instrument which purports to relieve a fidu4 ciary from responsibility or liability for any responsi5 bility, obligation, or duty under this Act shall be 

6 void. 

7 (2) INSURANCE.—Amounts in the ASPIRE 

8 Fund available for administrative expenses shall be 

9 available and may be used at the discretion of the 

10 Executive Director to purchase insurance to cover 

11 potential liability of persons who serve in a fiduciary 

12 capacity with respect to the Fund and accounts 

13 maintained therein, without regard to whether a pol14 icy of insurance permits recourse by the insurer 

15 against the fiduciary in the case of a breach of a fi16 duciary obligation. 

17 SEC. 10. ASSIGNMENT, ALIENATION, AND TREATMENT OF 

18 DECEASED INDIVIDUALS. 

19 (a) ASSIGNMENT AND ALIENATION.—Under regula20 tions which shall be prescribed by the Executive Director, 

21 rules relating to assignment and alienation applicable 

22 under chapter 84 of title 5, United States Code, with re23 spect to amounts held in accounts in the Thrift Savings 

24 Fund shall apply with respect to amounts held in Lifetime 

25 Savings Accounts in the ASPIRE Fund. 


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1 (b) TREATMENT OF ACCOUNTS OF DECEASED INDI2 VIDUALS.—In the case of a deceased account holder of a 

3 Lifetime Savings Account which has an account balance 

4 greater than zero, upon receipt of notification of such indi5 vidual’s death, the Executive Director shall close the ac6 count and shall transfer the balance in such account to 

7 the Lifetime Savings Account of such account holder’s 

8 surviving spouse or, if there is no such account of a sur9 viving spouse, to the duly appointed legal representative 

10 of the estate of the deceased account holder, or if there 

11 is no such representative, to the person or persons deter12 mined to be entitled thereto under the laws of the domicile 

13 of the deceased account holder. 

14 SEC. 11. ACCOUNTS DISREGARDED IN DETERMINING ELIGI15 BILITY FOR FEDERAL BENEFITS. 

16 Amounts in any Lifetime Savings Account shall not 

17 be taken into account in determining any individual’s or 

18 household’s financial eligibility for, or amount of, any ben19 efit or service, paid for in whole or in part with Federal 

20 funds, including student financial aid. 

21 SEC. 12. REPORTS. 

22 The Executive Director, in consultation with the Sec23 retary of the Treasury, shall annually transmit a written 

24 report to the Congress. Such report shall include— 


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1 (1) a detailed description of the status and op2 eration of the ASPIRE Fund and the management 

3 of the Lifetime Savings Accounts, and 

4 (2) a detailed accounting of the administrative 

5 expenses in carrying out this Act, including the ratio 

6 of such administrative expenses to the balance of the 

7 ASPIRE Fund and the methodology adopted by the 

8 Executive Director for allocating such expenses 

9 among the Lifetime Savings Accounts. 

10 SEC. 13. PROGRAMS FOR PROMOTING FINANCIAL LIT11 ERACY. 

12 The Secretary of the Treasury, in coordination with 

13 the Financial Literacy and Education Commission, shall 

14 develop programs to promote the financial literacy of ac15 count holders of Lifetime Savings Accounts and the legal 

16 guardians of such account holders who have the rights 

17 with respect to such accounts under section 3(h). 

Æ 


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