States Code, are hereby extended to authorize the issuance 
of public debt obligations consisting of recognition bonds 
issued under this paragraph. Each such obligation shall 
be evidenced by a paper instrument issued by the Sec-
retary of the Treasury setting forth the terms specified 
in this section, and stating on its face that the obligation 
shall be incontestable in the hands of the bearer, that the 
obligation is supported by the full faith and credit of the 
United States, and that the United States is pledged to 
the payment of the obligation, in accordance with the pro-
visions of this section. 
‘‘(c) CALCULATION OF FACE VALUE.—
‘‘(1) IN GENERAL.—The face value of a rec-
ognition bond issued in the name of an individual 
under this section shall be the actuarial present 
value of the future monthly insurance benefits under 
part A to which such individual would have been en-
titled, and to which other individuals would have 
been entitled under part A based on such individ-
ual’s wages and self-employment income, determined 
under then current law but as if section 215(j) did 
not apply and subject to paragraph (2) of this sub-
section.
‘‘(2) ASSUMPTIONS.—The actuarial present 
value determined under paragraph (1) shall be de-
termined—
‘‘(A) taking into account solely wages and 
self-employment income credited to such indi-
vidual as of the effective date of the election re-
ferred to in subsection (a), 
‘‘(B) assuming that such individual would 
become entitled to disability insurance benefits 
under section 223 (in lieu of old-age insurance 
benefits under section 202(a)) on the day such 
individual would attain retirement age (as de-
fined in section 216(l)), except that, in com-
puting average indexed monthly earnings under 
section 215(b), the number of such individual’s 
benefit computation years shall be determined 
without regard to any reduction in the number 
of elapsed years under section 215(b)(2)(A), 
and 
‘‘(C) using reasonable actuarial assump-
tions, including reasonable current age-specific 
and gender-specific expected mortality rates. 
‘‘(d) REDEMPTION.—A bond issued in the name of 
any participant under this section shall be redeemable (by 
the participant or other person bearing the bond after sale
or resale pursuant to subsection (e)) on or after the date 
on which such participant would attain retirement age (as 
defined in section 216(l)(1)), for the amount of the face 
value. 
‘‘(e) NEGOTIABILITY AND CREDITING OF PROCEEDS 
TO PART B TOTALIZATION ACCOUNT.—A recognition 
bond issued in the name of a participant under this section 
shall not be taken into account in determining the amount 
credited to the participant’s part B totalization account. 
Such bond shall be fully tradable on the secondary mar-
kets under such procedures as may be provided in regula-
tions of the Board, and any amount derived by the partici-
pant from the sale of such bond shall be deposited in the 
Tier II Investment Fund and shall be included in the total 
amount credited to such participant’s part B totalization 
account. 
‘‘SEC. 258. SUPPLEMENTAL MINIMUM BENEFIT PAYMENTS. 
‘‘(a) IN GENERAL.—In any case in which—
‘‘(1) a participant attains retirement age (as 
defined in section 216(l)(1)), 
‘‘(2) as of the date such participant attains 
such age, no distribution from amounts credited to 
the participant’s part B totalization account has 
been made to the participant under section 260, and
‘‘(3) as of such date, the balance in the partici-
pant’s part B totalization account does not exceed 
the minimum annuity amount, 
the Board shall promptly notify the participant of the par-
ticipant’s eligibility for a supplemental minimum benefit 
payment under this section. The participant, upon applica-
tion to the Board filed by the participant on or after such 
date and in such form and manner as shall be prescribed 
by the Board, shall be entitled to a supplemental minimum 
benefit payment either to the Tier II Investment Fund (to 
the credit of the participant’s part B totalization account) 
or to the participant’s Tier III investment account, as may 
be specified by the participant in such application. Upon 
receipt of such application, the Board shall certify to the 
Secretary of the Treasury the amount of such payment, 
and such Secretary shall pay the amount of such payment 
to such Fund or such Tier III investment account in ac-
cordance with such certification from funds otherwise 
available in the general fund of the Treasury. 
‘‘(b) AMOUNT OF SUPPLEMENTAL MINIMUM BEN-
EFIT PAYMENT.—The amount of a supplemental min-
imum benefit payment payable with respect to a partici-
pant under subsection (a) is the excess (if any) of—
‘‘(1) the minimum annuity amount as of the 
date described in subsection (a), over
‘‘(2) the amount credited to the participant’s 
part B totalization account. 
‘‘(c) MARRIED COUPLES.—In the case of any 2 par-
ticipants who are married, subsection (a) shall apply with 
respect to each such participant, upon the joint written 
request of such participants, by totalling the balances in 
the accounts referred to in subsection (a) of both such in-
dividuals. 
‘‘(d) PROTECTION FROM ASSIGNMENT OR ALIEN-
ATION.—Any supplemental minimum benefit payment 
under this section may not be assigned or alienated. 
‘‘(e) MINIMUM ANNUITY AMOUNT.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘minimum annuity amount’ means an 
amount necessary to purchase, as of the date de-
scribed in subsection (a), an immediate life annuity 
which provides for payments which are, on an an-
nual basis, at least equal to 120 percent of the pov-
erty line (as in effect on such date, for an individual, 
under section 673(2) of the Community Services 
Block Grant Act (42 U.S.C. 9902(2))). 
‘‘(2) IMMEDIATE LIFE ANNUITY.—For purposes 
of paragraph (1), the term ‘immediate life annuity’ 
means an annuity—
‘‘(A) the annuity starting date (as defined 
in section 72(c)(4) of the Internal Revenue 
Code of 1986) of which commences with the 
first month following the date described in sub-
section (a), and 
‘‘(B) which provides for a series of sub-
stantial equal annual payments over the life ex-
pectancy of the participant. 
‘‘SEC. 259. ELECTION FOR PARTICIPATION. 
‘‘(a) IN GENERAL.—Any individual who—
‘‘(1) is not a participant (within the meaning of 
section 251(1)(A)), 
‘‘(2) meets the requirements of clause (i) of sec-
tion 251(1)(B), 
‘‘(3) has not attained retirement age (as de-
fined in section 216(l)(1)), and 
‘‘(4) has not become entitled to old-age insur-
ance benefits under section 202(a), 
may file with the Board under this section, in such form 
and manner as shall be prescribed in regulations of the 
Board, a written form electing the status of ‘participant’ 
for purposes of this part. On and after the effective date 
of the election, such individual shall be treated as a partic-
ipant under this part.