I
105TH CONGRESS
2D SESSION
H. R. 3456
To provide for personal Social Security plus accounts funded by surpluses
in the total budget of the United States Government and available
for private investment in indexed funds.
IN THE HOUSE OF REPRESENTATIVES
MARCH 12, 1998
Mr. KASICH (for himself and Mr. SHAYS) introduced the following bill; which
was referred to the Committee on Ways and Means
A BILL
To provide for personal Social Security plus accounts funded
by surpluses in the total budget of the United States
Government and available for private investment in in-
dexed funds.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Personal Retirement
Savings Account Act of 1998’’.
SEC. 2. PERSONAL SOCIAL SECURITY PLUS ACCOUNTS.
(a) IN GENERAL.—Title II of the Social Security Act
is amended—
(1) by inserting before section 201 the follow-
ing:
‘‘PART A—INSURANCE BENEFITS’’;
and
(2) by adding at the end the following new part:
‘‘PART B—PERSONAL SOCIAL SECURITY PLUS
ACCOUNTS
‘‘ANNUAL
APPROPRIATION
OF
BUDGET
SURPLUSES
TO
THE SOCIAL SECURITY PLUS FUND FOR CREDITING
TO PERSONAL SOCIAL SECURITY PLUS ACCOUNTS
‘‘SEC. 251. (a) IN GENERAL.—At the end of fiscal
year 1998 and each fiscal year thereafter, the Secretary
of the Treasury shall transfer, from the general fund of
the Treasury to the Social Security Plus Fund, an amount
equal to 80 percent of the surplus (if any) in the total
budget of the United States Government for that fiscal
year.
‘‘(b) ALLOCATION OF ASSETS AMONG PERSONAL SO-
CIAL SECURITY PLUS ACCOUNTS.—Upon the transfer of
an amount to the Social Security Plus Fund at the end
of a fiscal year pursuant to subsection (a), the Commis-
sioner of Social Security shall allocate such amount evenly
among the personal social security plus accounts then
maintained in the Fund by individuals who are eligible in-
dividuals for the calendar year ending in such fiscal year
and shall credit to each account the amount so allocated.
‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this
part, the term ‘eligible individual’ means, for any calendar
year beginning after December 31, 1996, any individual
the amount of whose wages paid and self-employment in-
come derived in such year equals, in the aggregate, at least
the amount such individual must have in order to be cred-
ited with 4 quarters of coverage in such year.
‘‘SOCIAL SECURITY PLUS FUND
‘‘SEC. 252. (a) ESTABLISHMENT.—There is estab-
lished in the Treasury of the United States a Social Secu-
rity Plus Fund. Subject to, and to the extent consistent
with, the provisions of this part, the Commissioner of So-
cial Security shall exercise the same powers, duties, and
responsibilities with respect to the Fund as the powers,
duties and responsibilities exercised by the Executive Di-
rector with respect to the Thrift Savings Fund.
‘‘(b) AMOUNTS HELD BY FUND.—The Social Secu-
rity Plus Fund consists of the sum of all amounts trans-
ferred to the Fund under section 251, increased by the
total net earnings from investments of sums held in the
Fund or reduced by the total net losses from investments
of sums held in the Fund, and reduced by the total
amount of payments made from the Fund (including pay-
ments for administrative expenses).
‘‘(c) USE OF FUND.—
‘‘(1) IN GENERAL.—The sums in the Social Se-
curity Plus Fund are appropriated and shall remain
available without fiscal year limitation—
‘‘(A) to invest under section 254,
‘‘(B) to make distributions under section
255,
‘‘(C) to pay the administrative expenses of
this part, and
‘‘(D) to purchase insurance as provided in
section 256(b)(2).
‘‘(2) EXCLUSIVE PURPOSES.—The sums in the
Social Security Plus Fund shall not be appropriated
for any purpose other than the purposes specified in
this section and may not be used for any other pur-
pose.
‘‘PERSONAL SOCIAL SECURITY PLUS ACCOUNTS
‘‘SEC. 253. (a) ESTABLISHMENT OF PERSONAL SO-
CIAL SECURITY PLUS ACCOUNTS.—Not later than Janu-
ary 1, 1999, the Commissioner of Social Security shall es-
tablish in the Social Security Plus Fund a personal social
security plus account for each living individual who has
been assigned a social security account number under sec-
tion 205(c)(2) before such date. The Commissioner shall
also establish such an account for each other individual
on the date, on or after January 1, 1999, of the issuance
to such individual of a social security account number
under such section. Amounts in the Social Security Plus
Fund shall be credited by the Commissioner to the account
in accordance with section 251(b). Each account shall be
identified to its account holder by means of the account
holder’s social security account number.
‘‘(b) ACCOUNT BALANCE.—The balance in an indi-
vidual’s personal social security plus account at any time
is the excess of—
‘‘(1) the sum of—
‘‘(A) all deposits made into the Social Se-
curity Plus Fund and credited to the account
under section 251(b), and
‘‘(B) the total amount of allocations made
to and reductions made in the account pursuant
to subsection (c),
over
‘‘(2) the amounts paid out of the account with
respect to such individual under this part.
‘‘(c) ALLOCATION OF EARNINGS AND LOSSES.—Pur-
suant to regulations which shall be prescribed by the Com-
missioner, the Commissioner shall allocate to each account
an amount equal to the net earnings and net losses from
each investment of sums in the Social Security Plus Fund
which are attributable, on a pro rata basis, to sums cred-
ited to such account, reduced by an appropriate share of
the administrative expenses paid out of the net earnings,
as determined by the Commissioner.
‘‘RULES GOVERNING PERSONAL SOCIAL SECURITY PLUS
ACCOUNTS RELATING TO INVESTMENT, ACCOUNTING,
REPORTING, AND TAXATION
‘‘SEC. 254. (a) IN GENERAL.—Under regulations
which shall be prescribed by the Commissioner of Social
Security, and subject to the provisions of this part, the
provisions of—
‘‘(1) section 8438 of title 5, United States Code
(relating to investment of the Thrift Savings Fund),
‘‘(2) section 8439(b) of such title (relating to
engagement of independent qualified public account-
ant),
‘‘(3) section 8439(c) of such title (relating to
periodic statements and summary descriptions of in-
vestment options),
‘‘(4) section 8439(d) of such title (relating to
assumption of risk), and
‘‘(5) section 8440 of such title (relating to tax
treatment of the Thrift Savings Fund), other than
subsection (c) thereof,
shall apply with respect to the Social Security Plus Fund
and accounts maintained in such Fund in the same man-
ner and to the same extent as such provisions relate to
the Thrift Savings Fund and personal social security plus
accounts maintained in such Fund.
‘‘(b) RELATED RULES.—For purposes of subsection
(a)—
‘‘(1) the Federal Retirement Thrift Investment
Board shall exercise with respect to the Social Secu-
rity Plus Fund the same powers, duties, and respon-
sibilities as are required to be exercised by the
Board under the provisions referred to in subsection
(a) with respect to the Thrift Savings Fund,
‘‘(2) the Commissioner of Social Security shall
exercise with respect to the Social Security Plus
Fund the same powers, duties, and responsibilities
as are required to be exercised by the Executive Di-
rector under the provisions referred to in subsection
(a) with respect to the Thrift Savings Fund, and
‘‘(3) references in such sections 8438 and 8439
to an employee, Member, former employee, or former
Member shall be deemed references to an account
holder of a social security plus account in the Social
Security Plus Fund.
‘‘DISTRIBUTIONS FROM PERSONAL SOCIAL SECURITY
PLUS ACCOUNTS
‘‘SEC. 255. (a) IN GENERAL.—Except as provided in
subsections (b) and (c), the balance in a personal social
security plus account—
‘‘(1) shall be distributed to the account holder
commencing with the date of the commencement of
such account holder’s entitlement to old-age insur-
ance benefits under section 202(a), and
‘‘(2) shall be paid, as elected by the account
holder (in such form and manner as shall be pre-
scribed in regulations of the Commissioner of Social
Security) in the form of—
‘‘(A) equal annual installments over the
life expectancy of the account holder (deter-
mined as of the date of the distribution under
reasonable actuarial assumptions), or
‘‘(B) otherwise in the form of an imme-
diate annuity (as shall be prescribed in regula-
tions of the Commissioner of Social Security).
‘‘(b) LUMP
SUM
DISTRIBUTIONS
OF
MINIMAL
AMOUNTS.—
‘‘(1) IN GENERAL.—Notwithstanding subsection
(a), if the account holder becomes entitled to old-age
insurance benefits under section 202(a) and the bal-
ance in the account is $3,500 or less, the Commis-
sioner of Social Security shall pay the balance to the
account holder in a single payment.
‘‘(2) COST-OF-LIVING
ADJUSTMENTS.—Under
regulations of the Commissioner of Social Security,
effective January 1 of each calendar year after
1999, the dollar amount referred to in paragraph
(1) shall be adjusted annually by the same percent-
age change as the percentage change then taking ef-
fect under section 230.
‘‘FIDUCIARY RESPONSIBILITIES
‘‘SEC 256. (a) 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 Social Security Plus Fund and the
personal social security plus accounts maintained in such
Fund in the same manner and to the same extent as such
provisions apply in connection with the Thrift Savings
Fund and accounts maintained in the Thrift Savings
Fund.
‘‘(b) INVESTIGATIVE AUTHORITY.—Any authority
available to the Secretary of Labor under section 504 of
the Employee Retirement Income Security Act of 1974 is
hereby made available to the Secretary 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 applicable under subsection (a).
‘‘(c) EXCULPATORY PROVISIONS; INSURANCE.—
‘‘(1) IN GENERAL.—Any provision in an agree-
ment or instrument which purports to relieve a fidu-
ciary from responsibility or liability for any respon-
sibility, obligation, or duty under this part shall be
void.
‘‘(2) INSURANCE.—Amounts in the Social Secu-
rity Plus Fund available for administrative expenses
shall be available and may be used at the discretion
of the Commissioner of Social Security to purchase
insurance to cover potential liability of persons who
serve in a fiduciary capacity with respect to the
Fund and personal social security plus accounts
maintained therein, without regard to whether a pol-
icy of insurance permits recourse by the insurer
against the fiduciary in the case of a breach of a fi-
duciary obligation.
‘‘ASSIGNMENT, ALIENATION, AND TREATMENT OF
DECEASED INDIVIDUALS
‘‘SEC. 257. (a) ASSIGNMENT AND ALIENATION.—
Under regulations which shall be prescribed by the Com-
missioner of Social Security, rules relating to assignment
and alienation applicable under chapter 84 of title 5,
United States Code, with respect to amounts held in ac-
counts in the Thrift Savings Fund shall apply with respect
to amounts held in personal social security plus accounts
in the Social Security Plus Fund.
‘‘(b) TREATMENT OF ACCOUNTS OF DECEASED INDI-
VIDUALS.—In the case of a deceased individual who is the
account holder with respect to a personal social security
plus account and who died before attaining retirement age
(as defined in section 216(l)), upon receipt of notification
of such individual’s death, the Commissioner of Social Se-
curity shall close the account and shall transfer the bal-
ance in such account to the personal social security plus
account of such account holder’s surviving spouse or, if
there is no such account of a surviving spouse, to the duly
appointed legal representative of the estate of the deceased
account holder, or if there is no such representative, to
the person or persons determined to be entitled thereto
under the laws of the domicile of the deceased account
holder.
Æ