‘‘(2) TRANSFER
CONTINGENT
UPON
RECEIPT
OF NECESSARY INFORMATION.—A transfer may not
be made for an account holder under paragraph (1)
until the Executive Director receives from such ac-
count holder the information required by the Execu-
tive Director specifically to identify the eligible re-
tirement plan or plans to which the transfer is to be
made.
‘‘(d) MODIFICATION OF ELECTIONS.—
‘‘(1) IN
GENERAL.—Subject to paragraph
(3)(A) and subsections (a) and (d) of section 258,
an account holder may change an election previously
made under this section.
‘‘(2) MODIFICATION
OF
DATE
FOR
DELAYED
DISTRIBUTIONS.—Subject to paragraph (3)(B) and
section 258(d), an account holder who has made an
election pursuant to subsection (b)(2) may modify
the date specified in such election or in a previous
modification under this paragraph.
‘‘(3) LIMITATIONS.—
‘‘(A) MODIFICATIONS DISALLOWED UPON
COMMENCEMENT
OF
DISTRIBUTION.—An ac-
count holder may not change an election under
this section on or after the date on which a
payment is made in accordance with such elec-
tion or, in the case of an election to receive an
annuity, the date on which an annuity contract
is purchased to provide for the annuity elected
by the account holder.
‘‘(B) OTHER
LIMITATIONS.—A modifica-
tion of a date may not be made under para-
graph (2) on or after the date on which an an-
nuity contract is purchased to provide for the
annuity involved, and may not specify a date
for the commencement of an annuity earlier
than 90 days after the date on which the modi-
fication is submitted to the Executive Director
(or such period shorter than 90 days as the Ex-
ecutive Director may by regulation prescribe).
‘‘(e) DEFAULT MEANS OF DISTRIBUTION.—
‘‘(1) LUMP SUM DISTRIBUTIONS OF MINIMAL
AMOUNTS.—Notwithstanding subsection (b), if an
account holder becomes entitled to old-age insurance
benefits under section 202(a) and the balance in
such account holder’s investment account is $3,500
or less, the Executive Director shall pay the balance
to the account holder in a single payment unless the
account holder elects, at such time and otherwise in
such manner as the Executive Director prescribes,
one of the options available under subsection (b).
‘‘(2) 
DEFAULT
ANNUITY
COMMENCEMENT
DATE.—Unless otherwise elected under this section,
and subject to paragraph (1), the balance in an ac-
count holder’s investment account shall be paid as
an annuity commencing for the account holder on
February 1 of the year following the year in which
the account holder becomes entitled to old-age insur-
ance benefits under section 202(a).
‘‘PAYMENT OF ANNUITIES
‘‘SEC. 257. (a) METHODS OF PAYMENT.—The Board
shall prescribe methods of payment of annuities under this
part. The methods of payment prescribed under this sub-
section shall include, but not be limited to—
‘‘(1) a method which provides for the payment
of a monthly annuity only to an annuitant during
the life of the annuitant;
‘‘(2) a method which provides for the payment
of a monthly annuity to an annuitant for the joint
lives of the annuitant and the spouse of the annu-
itant and an appropriate monthly annuity to the one
of them who survives the other of them for the life
of the survivor;
‘‘(3) a method described in paragraph (1) which
provides for automatic adjustments in the amount of
the annuity payable so long as the amount of the
annuity payable in any one year shall not be less
than the amount payable in the previous year;
‘‘(4) a method described in paragraph (2) which
provides for automatic adjustments in the amount of
the annuity payable so long as the amount of the an-
nuity payable in any one year shall not be less than
the amount payable in the previous year; and
‘‘(5) a method which provides for the payment
of a monthly annuity—
‘‘(A) to the annuitant for the joint lives of
the annuitant and an individual who is des-
ignated by the annuitant under regulations pre-
scribed by the Executive Director and (i) is a
former spouse of the annuitant, or (ii) has an
insurable interest in the annuitant; and
‘‘(B) to the one of them who survives the
other of them for the life of the survivor.
‘‘(b) REQUIREMENT OF ELECTION.—Subject to sec-
tion 258(c), under such regulations as the Executive Di-
rector shall prescribe, an account holder who elects under
section 256 to receive an annuity under this part shall
elect, on or before the date on which an annuity contract
is purchased to provide for that annuity, one of the meth-
ods of payment prescribed under subsection (a).
‘‘(c) CONTINUED PERIOD OF 5 YEARS AVAILABILITY
FOR ELIMINATED METHODS.—Notwithstanding an elimi-
nation of a method of payment by the Board, an account
holder may elect the eliminated method if the elimination
of such method became effective less than 5 years before
the date on which the annuity commences.
‘‘(d) CONTRACTS FOR PURCHASE OF ANNUITIES.—
‘‘(1) TIME
LIMIT
FOR
ENTERING
INTO
CON-
TRACT.—Not earlier than 90 days (or such shorter
period as the Executive Director may by regulation
prescribe) before an annuity is to commence under
this part, the Executive Director shall expend the
balance in the annuitant’s account to purchase an
annuity contract from any entity which, in the nor-
mal course of its business, sells and provides annu-
ities.
‘‘(2) ASSURANCE OF PROVISION OF ANNUITY.—
The Executive Director shall assure, by contract en-
tered into with each entity from which an annuity
contract is purchased under paragraph (1), that the
annuity shall be provided in accordance with the
provisions of this part.
‘‘(3) TERMS
AND
CONDITIONS.—An annuity
contract purchased under paragraph (1) shall in-
clude such terms and conditions as the Executive
Director requires for the protection of the annuitant.
‘‘(4) BONDING.—The Executive Director shall
require, from each entity from which an annuity
contract is purchased under paragraph (1), a bond
or proof of financial responsibility sufficient to pro-
tect the annuitant.
‘‘(e) EXEMPTION
FROM
LOCAL
TAXATION
OF
AMOUNTS PAID TO PURCHASE ANNUITIES.—
‘‘(1) IN GENERAL.—No tax, fee, or other mone-
tary payment may be imposed or collected by any
State, or by any political subdivision or other gov-
ernmental authority thereof, on, or with respect to,
any amount paid to purchase an annuity contract
under this section.
‘‘(2) TAXATION OF ISSUER PERMITTED.—Para-
graph (1) shall not be construed to exempt any com-
pany or other entity issuing an annuity contract
under this section from the imposition, payment, or
collection of a tax, fee, or other monetary payment
on the net income or profit accruing to or realized
by that entity from the sale of an annuity contract
under this section if that tax, fee, or payment is ap-
plicable to a broad range of business activity.
‘‘PROTECTIONS FOR SPOUSES AND FORMER SPOUSES
‘‘SEC. 258. (a) REQUIREMENT OF SPOUSAL CON-
SENT.—
‘‘(1) IN GENERAL.—A married account holder
may make an election under subsection (b)(3) or
(b)(4) of section 256 or change an election pre-
viously made under subsection (b)(1) or (b)(2) of
such section only if the account holder and the ac-
count holder’s spouse jointly waive, by written elec-
tion, any right which the spouse may have to a sur-
vivor annuity with respect to such account holder
under section 257 or subsection (b).
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply to an election or change of election by an ac-
count holder who establishes to the satisfaction of
the Executive Director (at the time of the election
or change and in accordance with regulations pre-
scribed by the Executive Director)—
‘‘(A) that the spouse’s whereabouts cannot
be determined; or
‘‘(B) 
that, 
due 
to 
exceptional 
cir-
cumstances, requiring the spouse’s waiver would
otherwise be inappropriate.
‘‘(b) JOINT AND SURVIVOR ANNUITY FORM APPLIES
UNLESS OTHERWISE ELECTED.—
‘‘(1) IN GENERAL.—Notwithstanding any elec-
tion under subsection (b) of section 257, the method
described in subsection (a)(2)(B) of such section (or,
if more than one form of such method is available,
the form which the Board determines to be the one
which provides for a surviving spouse a survivor an-
nuity most closely approximating the annuity of a
surviving spouse under section 8442 of title 5, Unit-
ed States Code) shall be deemed the applicable
method under such subsection (b) in the case of an
account holder who is married on the date on which
an annuity contract is purchased to provide for the
account holder’s annuity under this part.
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply if—
‘‘(A) a joint waiver of such method is
made, in writing, by the account holder and the
spouse; or
‘‘(B) the account holder waives such meth-
od, in writing, after establishing to the satisfac-
tion of the Executive Director that cir-
cumstances described under subsection (a)(2)
(A) or (B) make the requirement of a joint
waiver inappropriate.
‘‘(c) ELECTIONS AND OTHER CHANGES SUBJECT TO
COURT ORDERS.—
‘‘(1) IN GENERAL.—An election, change of elec-
tion, or modification of the commencement date of
a deferred annuity shall not be effective under this
part to the extent that the election, change, modi-
fication, or transfer conflicts with any court decree,
order, or agreement described in paragraph (2).
‘‘(2) REQUIREMENTS.—A court decree, order,
or agreement referred to in paragraph (1) is, with
respect to an account holder, a court decree of di-
vorce, annulment, or legal separation issued in the
case of the account holder and any former spouse of
the account holder or any court order or court-ap-
proved property settlement agreement incident to
the decree if—
‘‘(A) the decree, order, or agreement ex-
pressly relates to any portion of the balance in
the account holder’s investment account; and
‘‘(B) notice of the decree, order, or agree-
ment was received by the Executive Director be-
fore—
‘‘(i) the date on which payment is
made, or
‘‘(ii) in the case of an annuity, the
date on which an annuity contract is pur-
chased to provide for the annuity,
in accordance with the election, change, modi-
fication, or contribution referred to in para-
graph (1).
‘‘(3) TREATMENT OF 2 OR MORE COURT OR-
DERS.—The Executive Director shall prescribe regu-
lations under which this subsection shall be applied
in any case in which the Executive Director receives
two or more decrees, orders, or agreements referred
to in paragraph (1).
‘‘(d) RIGHTS OF FORMER SPOUSES.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2)
through (7), a former spouse of a deceased account
holder who died as a fully insured individual is enti-
tled to a survivor annuity under this subsection if
and to the extent that—
‘‘(A) an election under section 257(a)(5),
or
‘‘(B) any court decree, order, or agreement
(described in subsection (c)(2), without regard
to subparagraph (B) of such subsection) which
relates to such deceased account holder and
such former spouse,
expressly provides for such survivor annuity.
‘‘(2) WRITTEN NOTICE REQUIRED.—Paragraph
(1) shall apply only to payments made by the Execu-
tive Director after the date on which the Executive
Director receives written notice of the election, de-
cree, order, or agreement, and such additional infor-
mation and documentation as the Executive Director
may require.
‘‘(3) LIMITATION ON AMOUNT.—The amount of
the survivor annuity payable from the Trust Fund
to a former spouse of a deceased account holder
under this section may not exceed the excess, if any,
of—
‘‘(A) the amount of the survivor annuity
determined for a surviving spouse of the de-
ceased account holder under the method de-
scribed in subsection (b)(1), over
‘‘(B) the total amount of all other survivor
annuities payable under part to other former
spouses of such deceased account holder based
on the order of precedence provided in para-
graph (4).
‘‘(4) ORDER OF PRECEDENCE.—If more than
one former spouse of a deceased account holder is
entitled to a survivor annuity pursuant to this sub-
section, the amount of each such survivor annuity
shall be limited appropriately to carry out paragraph
(3) in the order of precedence established for the en-
titlements by the chronological order of the dates on
which elections are properly made pursuant to sec-
tion 257(a)(5) and the dates on which the court de-
crees, orders, or agreements applicable to the entitle-
ment were issued, as the case may be.
‘‘(5) RULES FOR COMMENCEMENT AND TERMI-
NATION
UNDER
COURT
ORDERS.—The commence-
ment and termination of an annuity payable under
this section shall be governed by the terms of the ap-
plicable order, decree, agreement, or election, as the
case may be, except that any such annuity—
‘‘(A) shall not commence before—
‘‘(i) the day after the account holder
dies; or
‘‘(ii) the first day of the second month
beginning after the date on which the Ex-
ecutive Director receives written notice of
the order, decree, agreement, or election,
as the case may be, together with such ad-
ditional information or documentation as
the Executive Director may prescribe;
whichever is later; and
‘‘(B) shall terminate no later than the last
day of the month before the former spouse re-
marries before becoming 55 years of age or
dies.
‘‘(6) RESTRICTION
ON
MODIFICATIONS.—For
purposes of this part, a modification in a decree,
order, agreement, or election referred to in this sec-
tion shall not be effective—
‘‘(A) if such modification is made after the
retirement or death of the account holder or an-
nuitant concerned; and
‘‘(B) to the extent that such modification
involves an annuity under this part.
‘‘(7) COURT
ORDERS
SUBJECT
TO
PREVIOUS
JOINT WAIVERS.—For the purposes of this section,
a court decree, order, or agreement or an election re-
ferred to in subsection (a) shall not be effective, in
the case of a former spouse, to the extent that the
election is inconsistent with any joint waiver pre-
viously executed with respect to such former spouse
under subsection (a)(2) or (b)(2).
‘‘(8) EXCLUSIVE
RECOVERY.—Any payment
under this subsection to any individual bars recovery
by any other individual.
‘‘(e) WAIVERS
AND MODIFICATIONS SUBJECT
TO
PRESCRIBED PROCEDURES.—Waivers and notifications
required by this section and waivers of the requirements
for such waivers and notifications (as authorized by this
section) may be made only in accordance with procedures
prescribed by the Executive Director.
‘‘(f) INAPPLICABILITY TO MINIMAL ACCOUNT BAL-
ANCES.—None of the provisions of this section requiring
notification to, or the consent or waiver of, a spouse or
former spouse of an account holder shall apply in any case
in which the balance in the account holder’s investment
account is $3,500 or less.
‘‘(g) APPLICABLE COURT ORDERS.—The protections
provided by this section are in addition to the protections
provided by section 263.
‘‘ADMINISTRATIVE PROVISIONS
‘‘SEC. 259. (a) PAYMENTS AND TRANSFERS IN AC-
CORDANCE WITH ELECTION.—The Executive Director
shall make or provide for payments and transfers in ac-
cordance with an election of an account holder under sec-
tion 256 or 257(b) or, if applicable, in accordance with
section 258.
‘‘(b) ELECTIONS AND MODIFICATIONS OF DEFERRED
COMMENCEMENT DATES
IN WRITING.—Any election,
change of election, or modification of a deferred annuity
commencement date made under this part shall be in writ-
ing and shall be filed with the Executive Director in ac-
cordance with regulations prescribed by the Executive Di-
rector.
‘‘SOCIAL SECURITY INVESTMENT TRUST FUND
‘‘SEC. 260. (a) IN GENERAL.—There is established
in the Treasury of the United States a Social Security In-
vestment Trust Fund.
‘‘(b) AMOUNT COMPRISING THE TRUST FUND.—The
Trust Fund consists of the sum of all amounts contributed
under sections 252(c) and 253, increased by the total net
earnings from investments of sums in the Trust Fund
under section 254 or reduced by the total net losses from
investments of the Trust Fund under such section, and
reduced by the total amount of payments made from the
Trust Fund (including payments for administrative ex-
penses).
‘‘(c) APPROPRIATION OF TRUST FUND AMOUNTS.—
The sums in the Trust Fund are appropriated and shall
remain available without fiscal year limitation—
‘‘(1) to invest under section 254;
‘‘(2) to make distributions or purchase annuity
contracts under this part;
‘‘(3) to pay the administrative expenses in-
curred in carrying out this part under subsection
(d); and
‘‘(4) to purchase insurance as provided in sub-
section (h)(3)(B).
‘‘(d) ADMINISTRATIVE EXPENSES.—Administrative
expenses incurred to carry out this part shall be paid out
of net earnings in the Trust Fund.
‘‘(e) ASSIGNMENT OR ALIENATION AND RELATED
MATTERS.—
‘‘(1) EXCLUSIVE
BENEFIT
OF
THE
ACCOUNT
HOLDER.—Subject to subsection (d) and paragraphs
(2) and (3), sums in the Trust Fund credited to the
account of any account holder may not be used for,
or diverted to, purposes other than for the exclusive
benefit of the account holder or other persons to
whom distributions are made under section 255.
‘‘(2) IMMUNITY
FROM
ASSIGNMENT, ALIEN-
ATION, AND CERTAIN OTHER LEGAL PROCESS.—Ex-
cept as provided in paragraph (3), sums in the
Trust Fund may not be assigned or alienated and
are not subject to execution, levy, attachment, gar-
nishment, or other legal process. For the purposes of
this paragraph, a loan made from the Trust Fund
to an account holder shall not be considered to be
an assignment or alienation.
‘‘(3) EXCEPTIONS.—Moneys due or payable
from the Trust Fund to any person and, in the case
of an account holder, the balance in the individual
account of the account holder, shall be subject to
legal process for the enforcement of the legal obliga-
tions of such person or account holder to provide
child support or make alimony payments as provided
in section 459 or relating to the enforcement of a
judgment for physically, sexually, or emotionally
abusing a child as provided under section 263.
‘‘(f) EXCLUSIVE APPROPRIATION.—The sums in the
Trust 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.
‘‘(g) CONTRIBUTIONS
AND
EARNINGS
HELD
IN
TRUST FOR ACCOUNT HOLDERS.—All sums contributed
to the Trust Fund by an account holder and all net earn-
ings in the Trust Fund attributable to investment of such
sums are held in the Trust Fund in trust for such account
holder.
‘‘(h) FIDUCIARY RESPONSIBILITIES; ENFORCEMENT
UNDER THE SECRETARY OF LABOR.—
‘‘(1) 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 Trust Fund in the same man-
ner and to the same extent as such provisions apply
in connection with the Thrift Savings Fund.
‘‘(2) INVESTIGATIVE AUTHORITY.—Any author-
ity available to the Secretary of Labor under section
504 of the Employee Retirement Income Security
Act of 1974 is hereby made available to the Sec-
retary 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 ap-
plicable under paragraph (1).
‘‘(3) EXCULPATORY PROVISIONS; INSURANCE.—
‘‘(A) IN GENERAL.—Any provision in an
agreement or instrument which purports to re-
lieve a fiduciary from responsibility or liability
for any responsibility, obligation, or duty under
this part shall be void.
‘‘(B) INSURANCE.—The Trust Fund shall
be available and may be used at the discretion
of the Executive Director to purchase insurance
to cover potential liability of persons who serve
in a fiduciary capacity with respect to the Trust
Fund, without regard to whether a policy of in-
surance permits recourse by the insurer against
the fiduciary in the case of a breach of a fidu-
ciary obligation.
‘‘WAIVER, ALLOTMENT AND ASSIGNMENT OF PAYMENTS
‘‘SEC. 261. (a) WAIVER OF ENTITLEMENT.—An indi-
vidual entitled to an annuity or other payment payable
from the Trust Fund may decline to accept all or any part
of the amount of the payment by a waiver signed and filed
with the Executive Director. The waiver may be revoked
in writing at any time. Payment of the annuity waived
may not be made for the period during which the waiver
is in effect.
‘‘(b) ALLOTMENTS OR ASSIGNMENTS.—An individual
entitled to an annuity or other payment payable from the
Trust Fund may make allotments or assignments of
amounts from the annuity or other payment for such pur-
poses as the Executive Director considers appropriate.
‘‘APPLICATION FOR ANNUITY OR OTHER PAYMENTS
‘‘SEC. 262. (a) APPLICATIONS REQUIRED.—No pay-
ment of an annuity or other payment from the Social Se-
curity Investment Trust Fund under this part may be
made unless an application for payment of the annuity or
other payment is received by the Executive Director before
the one hundred and fifteenth anniversary of the birth of
the account holder.
‘‘(b) APPLICATIONS WITH RESPECT TO DECEASED
ACCOUNT HOLDERS.—Notwithstanding subsection (a),
after the death of an account holder, a payment of the
annuity or other payment shall not be paid unless an ap-