I 
112TH CONGRESS 
1ST SESSION H. R. 2889 
To reform Social Security by establishing a Personal Social Security Savings 
Program. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 12, 2011 
Mr. MCCOTTER introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To reform Social Security by establishing a Personal Social 
Security Savings Program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Save Social Security Act’’. 
(b) TABLE OF CONTENTS.—The table of contents is 
as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. Establishment of Personal Social Security Savings Program. 
‘‘PART B—PERSONAL SOCIAL SECURITY SAVINGS PROGRAM 
‘‘Sec. 251. Definitions. 
‘‘Sec. 252. Personal Social Security Savings Fund. 
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‘‘Sec. 253. Participation in program and establishment of personal social 
security savings accounts. 
‘‘Sec. 254. Contributions to the Savings Fund. 
‘‘Sec. 255. Tier I Investment Fund. 
‘‘Sec. 256. Tier II Investment Options. 
‘‘Sec. 257. Personal social security savings annuity and other distributions. 
‘‘Sec. 258. Guarantee of promised social security benefits. 
‘‘Sec. 259. Personal Social Security Savings Board. 
‘‘Sec. 260. Executive Director. 
Sec. 3. Monthly insurance benefits in connection with participants in the Per-
sonal Social Security Savings Program. 
Sec. 4. Tax treatment of accounts. 
Sec. 5. Reimbursement of Spending Reduction Account from savings resulting 
from Personal Social Security Savings Program. 
Sec. 6. Funding of Personal Social Security Savings Program from Credits for 
Reductions in Federal Spending. 
Sec. 7. Interim financing of the Social Security Trust Funds. 
SEC. 2. ESTABLISHMENT OF PERSONAL SOCIAL SECURITY 
SAVINGS PROGRAM. 
Title II of the Social Security Act is amended— 
(1) by inserting before section 201 the fol-
lowing: 
‘‘PART A—INSURANCE BENEFITS’’; 
and 
(2) by adding at the end the following new part: 
‘‘PART B—PERSONAL SOCIAL SECURITY SAVINGS 
PROGRAM 
‘‘SEC. 251. DEFINITIONS. 
‘‘For purposes of this part— 
‘‘(1) 
QUALIFYING
INDIVIDUAL.—The 
term 
‘qualifying individual’ means any individual— 
‘‘(A) who is born on or after January 1, 
1961, and 
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‘‘(B)(i) who receives wages in any calendar 
year after December 31, 2010, on which there 
is imposed a tax under section 3101(a) of the 
Internal Revenue Code of 1986, or 
‘‘(ii) who derives self-employment income 
for a taxable year beginning after December 31, 
2010, on which there is imposed a tax under 
section 1401(a) of such Code. 
‘‘(2) PARTICIPANT.—The term ‘participant’ 
means a qualifying individual who has elected under 
section 253(a) to participate in the program estab-
lished under this part. 
‘‘(3) BOARD.—The term ‘Board’ means the 
Personal Social Security Savings Board established 
under section 259. 
‘‘(4) EXECUTIVE DIRECTOR.—The term ‘Execu-
tive Director’ means the Executive Director ap-
pointed under section 260. 
‘‘(5) PERSONAL SOCIAL SECURITY SAVINGS AC-
COUNT.—The term ‘personal social security savings 
account’ means an account established under section 
253(b). 
‘‘(6) PERSONAL SOCIAL SECURITY SAVINGS AN-
NUITY.—The term ‘personal social security savings 
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annuity’ means an annuity offered by the Annuity 
Issuance Authority under section 257. 
‘‘(7) SAVINGS FUND.—The term ‘Savings Fund’ 
means the Personal Social Security Savings Fund 
established under section 252. 
‘‘(8) TIER
I
INVESTMENT
FUND.—The term 
‘Tier I Investment Fund’ means the fund created 
under section 255. 
‘‘(9) TIER II INVESTMENT OPTION.—The term 
‘Tier II Investment Option’ means an investment 
option which is— 
‘‘(A) offered by an eligible entity certified 
by the Board under section 256(b); and 
‘‘(B) approved by the Board under section 
256(d). 
‘‘SEC. 252. PERSONAL SOCIAL SECURITY SAVINGS FUND. 
‘‘(a) ESTABLISHMENT OF SAVINGS FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a trust fund to 
be known as the ‘Personal Social Security Savings 
Fund’. 
‘‘(2) AMOUNTS IN FUND.—The Savings Fund 
shall consist of— 
‘‘(A) all amounts contributed to the Sav-
ings Fund under section 254, increased by the 
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total net earnings from investments of sums in 
the Savings Fund attributable to such contrib-
uted amounts, and reduced by the total net 
losses from investments of such sums, and 
‘‘(B) the reserves held in the Annuity Re-
serves 
Account 
established 
under 
section 
257(b)(3), increased by the total net earnings 
from investments of such reserves, and reduced 
by the total net losses from investments of such 
reserves. 
‘‘(3) TRUSTEES.—The Board shall serve as 
trustees of the Savings Fund. 
‘‘(4) BUDGET
AUTHORITY; APPROPRIATION.— 
This part constitutes budget authority in advance of 
appropriations Acts and represents the obligation of 
the Board to provide for the payment of amounts 
provided under this part. The amounts held in the 
Savings Fund are appropriated and shall remain 
available without fiscal year limitation. 
‘‘(b) AVAILABILITY.—The sums in the Savings Fund 
are appropriated and shall remain available without fiscal 
year limitation— 
‘‘(1) to invest funds in the Tier I Investment 
Fund of the Savings Fund under section 255; 
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‘‘(2) to transfer funds in the Tier I Investment 
Fund into Tier II Investment Options under section 
256; 
‘‘(3) to make distributions in accordance with 
section 257; and 
‘‘(4) to pay the administrative expenses of the 
Board in accordance with subsection (d). 
‘‘(c) LIMITATIONS ON USE OF FUNDS.— 
‘‘(1) IN GENERAL.—Sums in the Savings Fund 
credited to a participant’s personal social security 
savings account under section 255(a)(1)(3) may not 
be used for, or diverted to, purposes other than for 
the exclusive benefit of the participant or the partici-
pant’s beneficiaries under this part. 
‘‘(2) ASSIGNMENTS.—Sums in the Savings 
Fund may not be assigned or alienated and are not 
subject to execution, levy, attachment, garnishment, 
or other legal process. 
‘‘(d) PAYMENT OF ADMINISTRATIVE EXPENSES.— 
Administrative expenses incurred to carry out this part 
shall be paid out of net earnings in the Savings Fund in 
conjunction with the allocation of investment earnings and 
losses under section 253(d). 
‘‘(e) LIMITATION.—The sums in the Savings Fund 
shall not be appropriated for any purpose other than the 
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purposes specified in this part and may not be used for 
any other purpose. 
‘‘SEC. 253. PARTICIPATION IN PROGRAM AND ESTABLISH-
MENT OF PERSONAL SOCIAL SECURITY SAV-
INGS ACCOUNTS. 
‘‘(a) PARTICIPATION.—A qualifying individual may, 
at any time on or after January 1, 2012, elect, in such 
form and manner as shall be prescribed by the Board, to 
be a participant in the program established under this 
part. The Board shall certify to the Executive Director 
that the qualifying individual is a participant in the pro-
gram. An election under this subsection shall be irrev-
ocable. 
‘‘(b) ESTABLISHMENT OF PUBLICLY ADMINISTERED 
SYSTEM OF PERSONAL SECURITY SAVINGS ACCOUNTS.— 
Upon receipt of the certification that a qualifying indi-
vidual is a participant in the program established under 
this part, the Executive Director shall establish a personal 
social security savings account for such participant. Such 
account shall be the means by which amounts contributed 
to the Savings Fund under section 254 and held in the 
Tier I Investment Fund of the Savings Fund under sec-
tion 255 or under Tier II Investment Options under sec-
tion 256 are credited to the participant, under procedures 
which shall be established by the Board by regulation. 
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Each account of a participant shall be identified to the 
participant by means of the participant’s social security 
account number. 
‘‘(c) ACCOUNT BALANCE.—The balance in a partici-
pant’s account at any time is the sum of— 
‘‘(1) the excess of— 
‘‘(A) all deposits in the Tier I Investment 
Fund of the Savings Fund credited to such par-
ticipant’s personal social security savings ac-
count, subject to such increases and reductions 
as may result from allocations made to and re-
ductions made in the account pursuant to sub-
section (d); over 
‘‘(B) amounts paid out of the Tier I In-
vestment Fund in connection with amounts 
credited to such participant’s personal social se-
curity savings account; plus 
‘‘(2) the excess of— 
‘‘(A) the deposits in the Tier II Investment 
Options credited to such participant’s personal 
social security savings account, subject to such 
increases and reductions as may result from 
amounts credited to, and reductions made in, 
the account pursuant to subsection (d)(2); over 
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‘‘(B) amounts paid out of the Tier II In-
vestment Options of such participant. 
The calculation made under paragraph (2) shall be made 
separately for each Tier II Investment Option of the par-
ticipant. 
‘‘(d) ALLOCATION OF EARNINGS AND LOSSES.—Pur-
suant to regulations which shall be prescribed by the 
Board, the Executive Director shall allocate to each per-
sonal social security savings account an amount equal to 
the net earnings and net losses from each investment of 
sums— 
‘‘(1) in the Tier I Investment Fund which are 
attributable to sums credited to such account re-
duced by an appropriate share of the administrative 
expenses paid out of the net earnings, as determined 
by the Executive Director; and 
‘‘(2) in the Tier II Investment Options which 
are attributable to sums credited to such account re-
duced by the administrative expenses paid out of the 
net earnings. 
‘‘SEC. 254. CONTRIBUTIONS TO THE SAVINGS FUND. 
‘‘(a) FORM AND MANNER OF CONTRIBUTIONS.— 
‘‘(1) DETERMINATION AND CERTIFICATION OF 
CONTRIBUTION
AMOUNTS.—In the case of each 
qualifying individual who becomes a participant pur-
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suant to an election made under section 253, the 
Executive Director shall— 
‘‘(A) prior to the first calendar quarter be-
ginning after the effective date of the election, 
determine the contribution amount with respect 
to the participant under subsection (b) for the 
calendar year in which such quarter occurs and 
certify such amount to the Secretary of the 
Treasury, and 
‘‘(B) prior to each calendar year com-
mencing after the effective date of the election, 
determine the contribution amount with respect 
to the participant under subsection (b) for such 
calendar year and certify such amount to the 
Secretary of the Treasury. 
‘‘(2) TRANSFER
OF
CONTRIBUTION
AMOUNTS 
TO SAVINGS FUND.—Upon receipt of a certification 
of a contribution amount for any calendar year 
under paragraph (1), the Secretary of the Treasury 
shall, before the end of each calendar quarter begin-
ning during such calendar year and after the date 
of such certification, transfer 25 percent of such 
amount from amounts in the general fund of the 
Treasury (subject to section 6 of the Personal Social 
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Security Savings Guarantee and Prosperity Act of 
2011). 
‘‘(b) AMOUNT OF CONTRIBUTION.— 
‘‘(1) IN GENERAL.—The contribution amount 
for any calendar year under subsection (a) with re-
spect to a participant shall be equal to the sum of— 
‘‘(A) the product derived by multiplying— 
‘‘(i) the sum of the total wages paid 
to, and self-employment income derived by, 
the participant which are creditable by the 
Commissioner of Social Security to the 
preceding calendar year, to the extent such 
total wages and self-employment income do 
not exceed the base amount for such pre-
ceding calendar year, by 
‘‘(ii) 5 percent, and 
‘‘(B) the product derived by multiplying— 
‘‘(i) the sum of the total wages paid 
to, and self-employment income derived by, 
the participant which are creditable by the 
Commissioner to such preceding calendar 
year, to the extent such total wages and 
self-employment income exceed the base 
amount for such preceding calendar year 
but do not exceed the contribution and 
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benefit base (determined under section 
230) for such preceding calendar year, by 
‘‘(ii) 2.5 percent. 
‘‘(2) BASE
AMOUNT.—For purposes of para-
graph (1)— 
‘‘(A) INITIAL
BASE
AMOUNT.—The base 
amount for calendar years 2011 and 2012 is 
$10,000. 
‘‘(B) ADJUSTMENTS TO BASE AMOUNT.— 
The base amount for any calendar year after 
2012 is the product derived by multiplying 
$10,000 by a fraction— 
‘‘(i) the numerator of which is the na-
tional average wage index (as defined in 
section 209(k)) for the first of the 2 pre-
ceding calendar years, and 
‘‘(ii) the denominator of which is the 
national average wage index (as so de-
fined) for 2010, 
except that any such product that is not a mul-
tiple of $10.00 shall be rounded to the next 
lower multiple of $10.00. 
‘‘(3) DETERMINATION AND TREATMENT OF EX-
CESS
CONTRIBUTIONS.—The amount of contribu-
tions for a participant for a calendar year shall be 
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determined on the basis of estimates, made by the 
Commissioner of Social Security and certified to the 
Executive Director, of the wages paid to, and self- 
employment income derived by, the participant for 
the preceding calendar year. Proper adjustments 
shall be made in the maximum amount for subse-
quent calendar years to the extent prior estimates 
were in excess of or were less than actual amounts, 
except that the Executive Director may, as deter-
mined appropriate by the Executive Director, pro-
vide for refunds to the Treasury of amounts contrib-
uted in excess of the maximum amount in lieu of 
such adjustments. Estimates and adjustments made 
pursuant to this paragraph shall be communicated 
by the Executive Director to the Secretary of the 
Treasury in such timely manner as to allow, to the 
greatest extent practicable, for contributions to the 
Savings Fund which do not exceed the proper 
amount. 
‘‘SEC. 255. TIER I INVESTMENT FUND. 
‘‘(a) ESTABLISHMENT
OF
TIER
I INVESTMENT 
FUND.— 
‘‘(1) IN GENERAL.—The Savings Fund shall in-
clude a separate fund to be known as the ‘Tier I In-
vestment Fund’. 
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‘‘(2) AMOUNTS IN FUND.—The Tier I Invest-
ment Fund consists of all amounts derived from con-
tributions made to the Fund under section 254 and 
remaining after investment of such amounts under 
subsection (b), including additional amounts derived 
as income from such investments. 
‘‘(3) SEPARATE CREDITING TO PERSONAL SO-
CIAL SECURITY SAVINGS ACCOUNTS.— 
‘‘(A) IN GENERAL.—Subject to this sub-
section, the Board shall provide for prompt, 
separate crediting of the amounts deposited in 
the Tier I Investment Fund to the personal so-
cial security savings account of each participant 
to the extent such amount consists of contribu-
tions made to the Savings Fund under section 
254 with respect to such participant, together 
with any increases or decreases therein so as to 
reflect the net returns and losses from invest-
ment thereof while held in the Fund. 
‘‘(B) TREATMENT OF MARRIED PARTICI-
PANTS.—If the participant is married as of the 
end of the calendar year in which the amounts 
to be credited were deposited in the Tier I In-
vestment Fund and the spouse is also a partici-
pant, the personal social security savings ac-
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count of the participant and the personal social 
security savings account of his or her spouse 
shall each be credited with 50 percent of such 
amounts. 
‘‘(4) USE OF FUNDS.—The amounts held in the 
Fund are appropriated and shall remain available 
without fiscal year limitation— 
‘‘(A) to be held for investment under sub-
section (b), 
‘‘(B) to pay the administrative expenses re-
lated to the Fund, and 
‘‘(C) to make transfers to Tier II Invest-
ment Options under section 256 or to make 
payments under section 257. 
‘‘(b) INVESTMENT GUIDELINES.— 
‘‘(1) IN GENERAL.—For purposes of investment 
of amounts credited to each personal social security 
savings account, the Board shall provide by regula-
tion for 3 investment options. Such options shall 
consist of the 90/10 investment option, the 70/30 in-
vestment option, the 50/50 investment option, and 
the lifecycle investment option. 
‘‘(2) ALTERNATIVE INVESTMENT OPTIONS.— 
‘‘(A) THE
90/10
INVESTMENT
OPTION.— 
Under the 90/10 investment option, amounts 
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credited to the participant’s personal social se-
curity savings account are held in the Tier I In-
vestment Fund so as to ensure, to the max-
imum extent practicable, that, of the total bal-
ance credited to the account and available for 
investment (after allowing for administrative 
expenses)— 
‘‘(i) 90 percent is invested in common 
stock as provided in paragraph (4), and 
‘‘(ii) 10 percent is invested in fixed in-
come securities as provided in paragraph 
(5). 
For such purpose, certified account managers 
shall offer the participant a choice of one or 
more portfolios of each such type of investment. 
‘‘(B) THE
70/30
INVESTMENT
OPTION.— 
Under the 70/30 investment option, amounts 
credited to the participant’s personal social se-
curity savings account are held in the Tier I In-
vestment Fund so as to ensure, to the max-
imum extent practicable, that, of the total bal-
ance credited to the account and available for 
investment (after allowing for administrative 
expenses)— 
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‘‘(i) 70 percent is invested in common 
stock as provided in paragraph (4), and 
‘‘(ii) 30 percent is invested in fixed in-
come securities as provided in paragraph 
(5). 
For such purpose, certified account managers 
shall offer the participant a choice of one or 
more portfolios of each such type of investment. 
‘‘(C) THE
50/50
INVESTMENT
OPTION.— 
Under the 50/50 investment option, amounts 
credited to the participant’s personal social se-
curity savings account are held in the Tier I In-
vestment Fund so as to ensure, to the max-
imum extent practicable, that, of the total bal-
ance credited to the account and available for 
investment (after allowing for administrative 
expenses)— 
‘‘(i) 50 percent is invested in common 
stock as provided in paragraph (4), and 
‘‘(ii) 50 percent is invested in fixed in-
come securities as provided in paragraph 
(5). 
For such purpose, certified account managers 
shall offer the participant a choice of one or 
more portfolios of each such type of investment. 
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‘‘(D) LIFECYCLE INVESTMENT OPTION.— 
‘‘(i) 
IN
GENERAL.—Under 
the 
lifecycle investment option, amounts cred-
ited to the participant’s personal social se-
curity savings account are held in the Tier 
I Investment Fund so as to ensure, to the 
maximum extent practicable, that the total 
balance credited to the account and avail-
able for investment (after allowing for ad-
ministrative expenses) shall be invested 
over time, under regulations which shall be 
prescribed by the Board, in a mix of com-
mon stock and fixed income securities ac-
cording to the each of the investment op-
tions described in subparagraphs (A), (B), 
and (C) so as to ensure, to the maximum 
extent practicable, that the percentage in-
vested in fixed income securities by individ-
uals in designated cohorts, ranging in age 
up to those of at least retirement age, will 
increase from 10 percent to 50 percent as 
the cohort approaches retirement age. 
‘‘(ii) DEFAULT
OPTION.—Except as 
provided in an election under paragraph 
(3), amounts credited to the participant’s 
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personal social security savings account 
and held in the Tier I Investment Fund 
shall be invested as provided in clause (i). 
‘‘(3) ELECTIONS
AMONG
INVESTMENT
OP-
TIONS.—Pursuant to any individual’s election filed 
in accordance with regulations of the Board during 
annual open seasons specified in such regulations, 
the Executive Director shall, in accordance with 
such regulations, provide for disinvestment and rein-
vestment of amounts credited to the participant’s 
personal social security savings account and held in 
the Tier I Investment Fund under any of the invest-
ment options described in paragraph (2) so as to 
provide for investment of amounts credited to the 
account in any of the other such investment options 
specified in such election. 
‘‘(4) COMMON STOCK INDEX REQUIREMENTS.— 
The Board shall establish by regulation standards 
which must be met by any portfolio of common stock 
selected for investment as provided in subparagraph 
(A)(i), (B)(i), (C)(i), or (D) of paragraph (2). 
Amounts invested in common stock under an invest-
ment option shall be held in a portfolio designed to 
replicate the performance of one or more of indices 
comprised of common stock the aggregate market 
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value of which is, in each case, a reasonably broad 
representation of publicly held companies whose 
shares are traded on the equity markets. 
‘‘(5) FIXED
INCOME
SECURITIES
REQUIRE-
MENTS.—The Board shall establish by regulation 
standards which must be met by fixed income securi-
ties selected for investment as provided in subpara-
graph (A)(ii), (B)(ii), (C)(ii), or (D) of paragraph 
(2). The amounts invested in fixed income securities 
shall be held in a portfolio which shall consist of a 
diverse range of high-grade corporate bonds, taking 
into full account the opposing considerations of risk 
and maximization of return. 
‘‘(c) ANNUAL DESCRIPTION OF TIER I INVESTMENT 
OPTIONS
AND
DISCLOSURE
OF
ADMINISTRATIVE 
COSTS.—The Board shall provide annually to each partici-
pant— 
‘‘(1) a description of the investment options 
available with respect to amounts held in the Tier I 
Investment Fund and the procedures for selecting 
such options; and 
‘‘(2) a disclosure of the rate of administrative 
costs chargeable with respect to each investment op-
tion. 
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Descriptions and disclosures required under this sub-
section shall be written in a manner calculated to be un-
derstood by the average participant. 
‘‘(d) TREATMENT OF AMOUNTS HELD IN TIER I IN-
VESTMENT FUND.—Subject to this part, amounts depos-
ited into, and held and accounted for in, the Tier I Invest-
ment Fund with respect to any participant shall be treated 
as property of such participant, held in trust for such par-
ticipant in the Fund. 
‘‘SEC. 256. TIER II INVESTMENT OPTIONS. 
‘‘(a) ELECTION OF TIER II INVESTMENT OPTIONS.— 
‘‘(1) IN GENERAL.—A participant may elect to 
direct transfers from amounts in the Savings Fund 
credited to the personal social security savings ac-
count of such individual into 1 or more Tier II In-
vestment Options in accordance with paragraph (2). 
‘‘(2) COMMENCEMENT OF TIER II INVESTMENT 
OPTIONS UPON ATTAINMENT OF ELECTION THRESH-
OLD.—In any case in which, as of the end of any 
calendar year, the total balance in the Savings Fund 
credited to a participant’s personal social security 
savings account exceeds for the first time the elec-
tion threshold, the Board shall, by regulation, pro-
vide for an opportunity for such participant to make, 
at any time thereafter, such individual’s first elec-
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tion of one or more of the Tier II Investment Op-
tions for investment of an amount in the Savings 
Fund credited to such account. Such election may be 
in lieu of or in addition to investment in the options 
available with respect to the Tier I Investment Fund 
of the Savings Fund. 
‘‘(3) ALLOCATION OF FUNDS.—In the case of 
an election under paragraph (1), funds credited to 
the personal social security savings account of the 
participant and elected for transfer to one or more 
Tier II Investment Options shall be transferred to 
the Tier II Investment Options so elected for such 
calendar year, in percentages specified in the elec-
tion by the participant for each Tier II Investment 
Option. 
‘‘(4) ELECTION THRESHOLD.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), for purposes of this subsection the 
term ‘election threshold’ means an amount 
equal to $25,000. 
‘‘(B) ADJUSTMENTS.—The Board shall ad-
just annually (effective for annual reporting 
months occurring after December 2012) the 
dollar amount set forth in subparagraph (A) 
under procedures providing for adjustments in 
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the same manner and to the same extent as ad-
justments are provided for under the proce-
dures used to adjust benefit amounts under sec-
tion 215(i)(2)(A), except that any amount so 
adjusted that is not a multiple of $1.00 shall be 
rounded to the nearest multiple of $1.00. 
‘‘(5) SUBSEQUENT INVESTMENT OF AMOUNTS 
HELD
IN
TIER
II
INVESTMENT
OPTIONS.—Any 
amounts held in one or more Tier II Investment Op-
tions may be— 
‘‘(A) transferred at any time to one or 
more other Tier II Investment Options offered 
by the same or different eligible entities, subject 
to applicable regulations of the Board and the 
terms governing the affected Tier II Investment 
Options, and 
‘‘(B) transferred, not more frequently than 
annually, to the Tier I Investment Fund, for 
deposit in the applicable investment account 
then selected by the participant under section 
255. 
‘‘(b) CERTIFICATION OF ELIGIBLE ENTITIES.— 
‘‘(1) IN GENERAL.—The Board shall certify eli-
gible entities to offer Tier II Investment Options 
under this part. 
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‘‘(2) APPLICATION.—Any eligible entity that de-
sires to be certified by the Board to offer a Tier II 
Investment Option shall submit an application to the 
Board at such time, in such manner, and containing 
such information as the Board may require. 
‘‘(3) REQUIREMENTS
FOR
APPROVAL.—The 
Board shall not certify an eligible entity unless such 
eligible entity agrees to the following requirements: 
‘‘(A) RECORDKEEPING.—Each eligible en-
tity shall, with respect to each Tier II Invest-
ment Option offered by such eligible entity to 
participants, comply with standards which shall 
be prescribed by the Board to maintain accu-
rate crediting of the interest of each participant 
in the Option to that participant’s personal so-
cial security savings account. 
‘‘(B) TREATMENT OF AMOUNTS HELD IN 
FUND.—Amounts deposited into, and held and 
accounted for in, a Tier II Investment Option 
with respect to any participant shall be treated 
as property of such participant, held in trust 
for such participant. 
‘‘(C) TRUST
REQUIREMENTS.—Amounts 
held and accounted for with respect to a partici-
pant shall be held in a trust created or orga-
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nized in the United States for the exclusive ben-
efit of such participant or his or her bene-
ficiaries. 
‘‘(D) EXEMPTION
FROM
THIRD
PARTY 
CLAIMS.—Each Tier II Investment Option shall 
be exempt from any and all third party claims 
against the eligible entity. 
‘‘(E) DISCLOSURE
OF
ADMINISTRATIVE 
COSTS.—Each eligible entity offering a Tier II 
Investment Option under this section shall pro-
vide to each participant an annual disclosure of 
the rate of administrative costs chargeable with 
respect to investment in such Option. Such dis-
closure shall be written in a manner calculated 
to be understood by the average participant. 
The Board shall provide for coordination of dis-
closures with respect to Tier II Investment Op-
tions under this subparagraph so as to assist 
participants in comparing alternative Options 
based on administrative costs. 
‘‘(F) ANNUAL DESCRIPTION OF TIER II IN-
VESTMENT OPTIONS AND DISCLOSURE OF AD-
MINISTRATIVE COSTS.— 
‘‘(i) DISCLOSURES TO THE BOARD.— 
Each eligible entity offering a Tier II In-
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vestment Option under this section shall, 
in accordance with regulations of the 
Board, provide to the Board an annual dis-
closure of the Tier II Investment Options 
then currently available with respect to 
amounts credited to personal social secu-
rity savings accounts under this part, the 
procedures in effect in the case of such eli-
gible entity for selecting such Options, and 
the rate of administrative costs chargeable 
with respect to investment in each such 
Option. 
‘‘(ii) ANNUAL
NOTICES
TO
PARTICI-
PANTS.—The Board shall provide annually 
to each participant a notice setting forth— 
‘‘(I) a description of the Tier II 
Investment Options available with re-
spect to amounts credited to the par-
ticipant’s personal social security sav-
ings account and the procedures for 
selecting such Options; and 
‘‘(II) a disclosure of the rate of 
administrative costs chargeable with 
respect to each such Option. 
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Descriptions 
and 
disclosures 
required 
under this clause shall be written in a 
manner calculated to be understood by the 
average participant. 
‘‘(G) REPORTING TO THE EXECUTIVE DI-
RECTOR AND THE BOARD.—Each eligible entity 
shall provide reports to the Executive Director 
and the Board at such time, in such manner, 
and containing such information as the Board 
may require. 
‘‘(4) ELIGIBLE
ENTITY
DEFINED.—For pur-
poses of this section, the term ‘eligible entity’ means 
any investment company (as defined in section 3 of 
the Investment Company Act of 1940) or other per-
son that the Board determines appropriate to offer 
Tier II Investment Options under this part. 
‘‘(c) TIER II INVESTMENT OPTIONS.— 
‘‘(1) IN GENERAL.—For purposes of investment 
of amounts credited to each personal social security 
savings account, the Board shall provide by regula-
tion for investment in any of 3 alternative Tier II 
Investment Options which may be offered by any eli-
gible entity. Any such option shall consist of a less 
conservative investment option, a moderate invest-
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ment option, or a more conservative investment op-
tion. 
‘‘(2) ALTERNATIVE
TIER
II
INVESTMENT
OP-
TIONS.— 
‘‘(A) LESS
CONSERVATIVE
INVESTMENT 
OPTIONS.—Under a less conservative invest-
ment option, amounts credited to the partici-
pant’s personal social security savings account 
are held by the eligible entity so as to ensure, 
to the maximum extent practicable, that, of the 
total balance credited to the account and avail-
able for investment (after allowing for adminis-
trative expenses)— 
‘‘(i) at least 85 percent but not more 
than 95 percent is invested in common 
stock, and 
‘‘(ii) the remainder is invested in fixed 
income securities. 
For such purpose, the eligible entity shall offer 
the participant a choice of one or more port-
folios of each such type of investment. 
‘‘(B) MODERATE INVESTMENT OPTIONS.— 
Under a moderate investment option, amounts 
credited to the participant’s personal social se-
curity savings account are held by the eligible 
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entity so as to ensure, to the maximum extent 
practicable, that, of the total balance credited 
to the account and available for investment 
(after allowing for administrative expenses)— 
‘‘(i) at least 65 percent but less than 
75 percent is invested in common stock, 
and 
‘‘(ii) the remainder is invested in fixed 
income securities. 
For such purpose, the eligible entity shall offer 
the participant a choice of one or more port-
folios of each such type of investment. 
‘‘(C) MORE
CONSERVATIVE
INVESTMENT 
OPTIONS.—Under a more conservative invest-
ment option, amounts credited to the partici-
pant’s personal social security savings account 
are held by the eligible entity so as to ensure, 
to the maximum extent practicable, that, of the 
total balance credited to the account and avail-
able for investment (after allowing for adminis-
trative expenses)— 
‘‘(i) at least 45 percent but less than 
55 percent is invested in common stock, 
and 
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‘‘(ii) the remainder is invested in fixed 
income securities. 
For such purpose, the eligible entity shall offer 
the participant a choice of one or more port-
folios of each such type of investment. 
‘‘(3) ELECTIONS
AMONG
INVESTMENT
OP-
TIONS.—Pursuant to the participant’s election filed 
in accordance with regulations of the Board, and 
subject to the terms of the investment options de-
scribed in paragraph (2) offered to the participant 
by the eligible entity and approved by the Board, the 
eligible entity offering any such investment option 
shall, in accordance with such regulations, provide 
for disinvestment and reinvestment of amounts cred-
ited to the participant’s personal social security sav-
ings account and held by the eligible entity in such 
investment option so as to provide for investment of 
amounts credited to the account in any of the other 
such investment options specified in such election. 
‘‘(d) APPROVAL
OF
TIER
II INVESTMENT
OP-
TIONS.— 
‘‘(1) IN GENERAL.—No funds may be trans-
ferred into a Tier II Investment Option unless the 
Board has approved an application submitted under 
paragraph (2) with respect to the option. 
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‘‘(2) APPLICATION.—With respect to each Tier 
II Investment Option that an eligible entity certified 
under subsection (b)(1) seeks to offer, such entity 
shall submit an application to the Board at such 
time, in such manner, and containing such informa-
tion as the Board may require. 
‘‘(3) QUALIFICATIONS
FOR
APPROVAL.—The 
Board may not approve an application submitted 
under paragraph (2) in connection with a Tier II In-
vestment Option unless the following requirements 
are met: 
‘‘(A) OPTION MUST BE OFFERED BY CER-
TIFIED ELIGIBLE ENTITY.—The Tier II Invest-
ment Option is offered by an eligible entity cer-
tified under subsection (b). 
‘‘(B) OPTION MUST MEET QUALITY FAC-
TORS.— 
‘‘(i) IN GENERAL.—The Tier II In-
vestment Option meets qualifications which 
shall be prescribed by the Board relating 
to the quality factors described in clause 
(ii). 
‘‘(ii) QUALITY FACTORS.—The quality 
factors described in this clause are— 
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‘‘(I) the safety and soundness of 
the Tier II Investment Option’s pro-
posed investment policy; 
‘‘(II) the experience and record 
of performance of the proposed Op-
tion, if any; 
‘‘(III) the experience and record 
of performance of the entity issuing or 
offering such Option; and 
‘‘(IV) such other factors as the 
Board may determine appropriate. 
‘‘(e) CONSIDERATIONS FOR CERTIFICATION AND AP-
PROVAL.—In determining whether to certify an eligible en-
tity under subsection (b) or to approve a Tier II Invest-
ment Option under subsection (d), the Board shall— 
‘‘(1) act in the best interests of the partici-
pants; 
‘‘(2) base its determination solely on consider-
ations of balancing safety and soundness of the Tier 
II Investment Option with the maximization of re-
turns of such option; 
‘‘(3) give equal consideration to options offered 
by variously-sized banks (as defined in section 581 
of the Internal Revenue Code of 1986) or insured 
credit unions (within the meaning of section 101(7) 
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of the Federal Credit Union Act, 12 U.S.C. 
1752(7)) located in the United States; and 
‘‘(4) not base any determination related to the 
entity or option on political or other extraneous con-
siderations. 
‘‘(f) SPONSORSHIP OF TIER II INVESTMENT OPTIONS 
BY MEMBERSHIP AND LABOR ORGANIZATIONS.— 
‘‘(1) IN GENERAL.—A membership or labor or-
ganization (as defined by the Board) may sponsor 
Tier II Investment Options under contracts with eli-
gible entities certified under subsection (b) who shall 
administer the investment option if such investment 
option is approved by the Board under subsection 
(c). 
‘‘(2) LIMITATION
TO
MEMBERSHIP.—A mem-
bership or labor organization (as so defined) may 
limit to the members of such organization participa-
tion in a Tier II Investment Option sponsored by 
such organization. 
‘‘(g) DISTRIBUTIONS IN CASE OF DEATH.—Upon the 
death of a participant, the amount of any assets held 
under a Tier II Investment Option credited to the personal 
social security savings account of such individual shall be 
distributed in accordance with section 257(e). 
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‘‘SEC. 257. PERSONAL SOCIAL SECURITY SAVINGS ANNUITY 
AND OTHER DISTRIBUTIONS. 
‘‘(a) DATE OF INITIAL DISTRIBUTION.—Except as 
provided in subsection (e), distributions may be made to 
a participant from amounts credited to the personal social 
security savings account of such individual only on or after 
the date the participant attains retirement age (as defined 
in section 216(l)(1)) or, if elected by the participant, the 
early retirement age (as defined in section 216(l)(2)) ap-
plicable for old-age insurance benefits. 
‘‘(b) PERSONAL SOCIAL SECURITY SAVINGS ANNU-
ITIES.— 
‘‘(1) NOTICE OF AVAILABLE ANNUITIES.—Not 
later than the date determined under subsection (a), 
the Board shall notify each participant of— 
‘‘(A) the most recent listing of personal so-
cial security savings annuities offered by the 
Annuity Issuance Authority under paragraph 
(2); and 
‘‘(B) the entitlement of the participant to 
purchase such an annuity. 
‘‘(2) ANNUITY ISSUANCE AUTHORITY.—There is 
established in the office of the Board an agency 
which shall be known as the ‘Annuity Issuance Au-
thority’. The Authority shall provide, in accordance 
with regulations of the Board, for the issuance of 
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personal social security savings annuities for pur-
chase from the Authority under this section and to 
otherwise administer the issuance of such annuities 
in accordance with such regulations. 
‘‘(3) ANNUITY RESERVES ACCOUNT.—There is 
established in the Savings Fund an Annuity Re-
serves Account. The Account shall consist of all 
amounts received by the Authority from the pur-
chase of personal social security savings annuities 
under this section (plus such amounts as may be 
transferred to the Account under paragraph (5)(B)), 
increased by the total net earnings from investments 
of such reserves under subparagraph (A) of para-
graph (5) and reduced by the total net losses from 
investments of such reserves under such subpara-
graph. 
‘‘(4) PURCHASE OF ANNUITIES.— 
‘‘(A) SELECTION OF ANNUITY.—On a date 
elected by the participant, but no earlier than 
the date determined under subsection (a), a 
participant may purchase a personal social se-
curity savings annuity selected from among the 
annuities offered by the Authority under para-
graph (2). 
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‘‘(B) TRANSFER
OF
ASSETS.—Upon the 
selection of an annuity by a participant under 
subparagraph (A), the Board shall provide for 
the transfer of assets, credited to the personal 
social security savings account of the partici-
pant and held in the Tier I Investment Fund 
or under 1 or more Tier II Investment Options 
(or any combination thereof), in a total amount 
sufficient to purchase the annuity selected by 
the participant from annuities offered by the 
Authority. 
‘‘(C) 
MINIMUM
ANNUITY
PAYMENT 
AMOUNT.— 
‘‘(i) IN
GENERAL.—Subject to sub-
paragraph (D), if, at the time a personal 
social security savings annuity is pur-
chased under subparagraph (A), the assets 
credited to the personal social security sav-
ings account of the participant are suffi-
cient to purchase a personal social security 
savings annuity offered by the Authority 
under paragraph (2) with a monthly annu-
ity payment that is at least equal to the 
minimum annuity payment amount, the 
amount of the monthly annuity payment 
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provided by such annuity may not be less 
than 
the 
minimum 
annuity 
payment 
amount. 
‘‘(ii) 
CONSTRUCTION.—Nothing 
in 
this subparagraph shall be construed to 
prohibit a participant from using personal 
social security savings account assets to 
purchase a personal social security savings 
annuity offered by the Authority under 
paragraph (2) which provides for a month-
ly payment in excess of the minimum 
amount required under clause (i). 
‘‘(iii) MINIMUM
ANNUITY
PAYMENT 
AMOUNT DEFINED.—For purposes of this 
part, the term ‘minimum annuity payment 
amount’ means, as of any date, an amount 
equal to one-half of the old-age insurance 
benefit under section 202(a) of a partici-
pant under part B and any other monthly 
insurance benefit under such section based 
on the participant’s wages and self-employ-
ment income (as determined before apply-
ing any reduction or deduction otherwise 
applicable under this title and without re-
gard to subsection (z)). 
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‘‘(iv) ASSUMPTIONS.—For purposes of 
making actuarial determinations relating 
to the amounts of annuities offered by the 
Authority under this section and the 
amounts necessary for the purchase of 
such annuities, the Authority shall project 
returns from the investment, in accordance 
with paragraph (5)(A), of the reserves held 
in the Annuities Reserves Account. The 
projection by the Authority of such returns 
shall be made under assumptions of long- 
term average returns of equities and fixed 
income instruments which shall be issued 
annually by the Board of Trustees of the 
Federal Old-Age and Survivors Insurance 
Trust Fund and the Federal Disability In-
surance Trust Fund, based on analysis of 
historical market returns. 
‘‘(D) PURCHASE
OF
ANNUITIES
IN
THE 
EVENT OF INSUFFICIENT ASSETS.—If, as of the 
date determined under subsection (a), the as-
sets credited to a participant’s personal social 
security savings account are insufficient to pur-
chase a personal social security savings annuity 
that provides for a monthly payment that is at 
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least equal to the minimum annuity payment 
amount (as defined in paragraph (4)(C)(iii)), 
the participant may purchase a personal social 
security savings annuity with a monthly pay-
ment equal to the maximum amount that the 
participant’s personal social security savings ac-
count can fund, as determined in accordance 
with regulations which shall be prescribed by 
the Authority, and that otherwise meets the re-
quirements of this subsection (including the 
cost-of-living protection requirement of sub-
section (c)(1)(C)). 
‘‘(5) INVESTMENT OF RESERVES FOR PAYMENT 
OF ANNUITIES.—For purposes of investment of re-
serves held in the Annuity Reserves Account, the 
Authority shall contract with appropriate investment 
managers, recordkeepers, and custodians selected by 
the Authority for investment of such reserves. Such 
reserves shall be invested under regulations which 
shall be prescribed by the Authority so as to ensure, 
to the maximum extent practicable, that, of the total 
balance of the reserves (after payment of adminis-
trative expenses to such managers, recordkeepers, 
and custodians)— 
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‘‘(A) 65 percent is invested in equities in 
the same manner and under the same stand-
ards as are provided in section 255(b)(4), and 
‘‘(B) 35 percent is invested in fixed income 
instruments in the same manner and under the 
same standards as are provided in section 
255(b)(5). 
‘‘(c) PERSONAL SOCIAL SECURITY SAVINGS ANNU-
ITY.— 
‘‘(1) IN GENERAL.—For purposes of this part, 
the term ‘personal social security savings annuity’ 
means an annuity that meets the following require-
ments: 
‘‘(A) The annuity starting date (as defined 
in section 72(c)(4) of the Internal Revenue 
Code of 1986) commences on the first day of 
the month beginning after the date of the pur-
chase of the annuity. 
‘‘(B) The terms of the annuity provide— 
‘‘(i) for a monthly payment to the 
participant during the life of the partici-
pant equal to at least the minimum annu-
ity payment amount (as defined in sub-
section (b)(4)(C)(iii)), or 
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‘‘(ii) in the case of an annuity pur-
chased under subparagraph (D) of sub-
section (b)(4), the maximum monthly pay-
ment determined under regulations pre-
scribed under such subparagraph. 
‘‘(C) The terms of the annuity include pro-
cedures providing for adjustments in the 
amount of the monthly payments in the same 
manner and to the same extent as adjustments 
are provided for under the procedures used to 
adjust 
benefit 
amounts 
under 
section 
215(i)(2)(A). Nothing in this subparagraph 
shall be construed to preclude the terms gov-
erning such an annuity from providing for ad-
justments in the amount of monthly payments 
resulting in a payment for any month greater 
than the payment for that month that would re-
sult from adjustments required under the pre-
ceding sentence. 
‘‘(D) The terms of the annuity include 
such other terms and conditions as the Board 
requires for the protection of the annuitant. 
‘‘(2) 
EXEMPTION
FROM
THIRD
PARTY 
CLAIMS.—Each personal social security savings an-
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nuity shall be exempt from any and all third party 
claims against the issuer. 
‘‘(d) RIGHT TO CASH OUT PERSONAL SOCIAL SECU-
RITY SAVINGS ACCOUNT ASSETS.—To the extent assets 
credited to a participant’s personal social security savings 
account are not used to purchase an annuity under sub-
section (b), the assets not so used shall be payable to the 
participant at such time (in accordance with subsection 
(a)), in such manner, and in such amounts as the partici-
pant may specify. 
‘‘(e) DISTRIBUTIONS IN CASE OF DEATH.—If the 
participant dies before all amounts which are held in the 
Tier I Investment Fund of the Savings Fund or held 
under a Tier II Investment Option and which are credited 
to the personal social security savings account of the indi-
vidual are otherwise distributed in accordance with this 
section, such amounts shall be distributed, under regula-
tions which shall be prescribed by the Board— 
‘‘(1) in any case in which one or more bene-
ficiaries have been designated in advance, to such 
beneficiaries in accordance with such designation as 
provided in such regulations, and 
‘‘(2) in the case of any amount not distributed 
as described in paragraph (1), to such individual’s 
estate. 
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‘‘SEC. 258. GUARANTEE OF PROMISED SOCIAL SECURITY 
BENEFITS. 
‘‘(a) IN GENERAL.—In any case in which, for any 
month ending after the date on which a participant attains 
retirement age (as defined in section 216(l)(1))— 
‘‘(1) such participant’s assumed normal total 
part A retirement benefit for such month, exceeds 
‘‘(2) the sum of— 
‘‘(A) the monthly payment which is pay-
able (or would be payable) for such month 
under a personal social security savings annuity 
with a monthly payment equal to the maximum 
amount that the participant’s personal social 
security savings account can fund (irrespective 
of whether such an annuity is purchased and of 
the amount of the monthly payment actually 
payable under any personal social security sav-
ings annuity which is purchased), and 
‘‘(B) such participant’s assumed actual 
total part A retirement benefit for such month, 
the Secretary of the Treasury shall pay to such individual 
for such month, from amounts in the general fund of the 
Treasury (subject to section 6 of the Personal Social Secu-
rity Savings Guarantee and Prosperity Act of 2011), an 
additional amount (if any) equal to the excess of the 
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amount described in paragraph (1) over the amount de-
scribed in paragraph (2). 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) ASSUMED NORMAL TOTAL PART A RETIRE-
MENT BENEFIT.—The term ‘assumed normal total 
retirement part A benefit’ means, in connection with 
a participant, the total amount of the monthly insur-
ance benefits under section 202 based on such par-
ticipant’s wages and self-employment income that 
would have been payable (as adjusted by taking into 
account adjustments under section 215(i)) if— 
‘‘(A) section 202(z) did not apply, and 
‘‘(B) all the beneficiaries had applied for 
such benefits during the month in which occurs 
the date on which the participant attains retire-
ment age (as defined in section 216(l)(1)). 
‘‘(2) ASSUMED ACTUAL TOTAL PART A RETIRE-
MENT BENEFIT.—The term ‘assumed actual total 
part A retirement benefit’ means, in connection with 
a participant, the total amount of the monthly insur-
ance benefits under section 202 based on such par-
ticipant’s wages and self-employment income that 
would have been payable (after applying section 
202(z) and as adjusted by taking into account ad-
justments under section 215(i)) if all the bene-
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ficiaries had applied for such benefits during the 
month in which such participant attains retirement 
age (as defined in section 216(l)(1)). For purposes 
of this paragraph, any entitlement of an individual 
to such benefits for which an application may have 
been filed prior to such month shall be disregarded. 
‘‘SEC. 259. PERSONAL SOCIAL SECURITY SAVINGS BOARD. 
‘‘(a) ESTABLISHMENT.—There is established in the 
executive branch of the Government a Personal Social Se-
curity Savings Board. 
‘‘(b) COMPOSITION.—The Board shall be composed 
of— 
‘‘(1) 3 members appointed by the President, of 
whom 1 shall be designated by the President as 
Chairman; and 
‘‘(2) 2 members appointed by the President, of 
whom— 
‘‘(A) 1 shall be appointed by the President 
after taking into consideration the recommenda-
tion made by the Speaker of the House of Rep-
resentatives in consultation with the minority 
leader of the House of Representatives; and 
‘‘(B) 1 shall be appointed by the President 
after taking into consideration the recommenda-
tion made by the majority leader of the Senate 
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in consultation with the minority leader of the 
Senate. 
‘‘(c) ADVICE AND CONSENT.—Appointments under 
subsection (b) shall be made by and with the advice and 
consent of the Senate. 
‘‘(d) MEMBERSHIP REQUIREMENTS.—Members of 
the Board shall have substantial experience, training, and 
expertise in the management of financial investments and 
pension benefit plans. 
‘‘(e) LENGTH OF APPOINTMENTS.— 
‘‘(1) TERMS.—A member of the Board shall be 
appointed for a term of 4 years, except that of the 
members first appointed under subsection (b)— 
‘‘(A) the Chairman shall be appointed for 
a term of 4 years; 
‘‘(B) the members appointed under sub-
section (b)(2) shall be appointed for terms of 3 
years; and 
‘‘(C) the remaining members shall be ap-
pointed for terms of 2 years. 
‘‘(2) VACANCIES.— 
‘‘(A) IN
GENERAL.—A vacancy on the 
Board shall be filled in the manner in which the 
original appointment was made and shall be 
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subject to any conditions that applied with re-
spect to the original appointment. 
‘‘(B) COMPLETION
OF
TERM.—An indi-
vidual chosen to fill a vacancy shall be ap-
pointed for the unexpired term of the member 
replaced. 
‘‘(3) EXPIRATION.—The term of any member 
shall not expire before the date on which the mem-
ber’s successor takes office. 
‘‘(f) DUTIES.—The Board shall— 
‘‘(1) administer the program established under 
this part and issue regulations necessary for the ad-
ministration of such program; 
‘‘(2) establish policies for the investment and 
management of the Savings Fund, including the 
Tier I Investment Fund, and amounts held under 
Tier II Investment Options, including policies appli-
cable to the asset managers, recordkeepers, and 
custodians with responsibility for managing the in-
vestment of amounts credited to personal social se-
curity investment accounts, and for the management 
and operation of personal social security savings an-
nuities, which shall provide for— 
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‘‘(A) prudent investments suitable for ac-
cumulating funds for payment of retirement in-
come; 
‘‘(B) sound management practices; and 
‘‘(C) low administrative costs; 
‘‘(3) review the performance of investments 
made for the Tier I Investment Fund; 
‘‘(4) review the performance of investments 
made under Tier II Investment Options; 
‘‘(5) review the management and operation of 
personal social security savings annuities; 
‘‘(6) review and approve the budget of the 
Board; and 
‘‘(7) comply with the fiduciary requirements of 
part 4 of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974 (relating to fi-
duciary responsibility) in connection with any exer-
cise of discretion in connection with the assets of the 
Savings Fund. 
‘‘(g) ADMINISTRATIVE PROVISIONS.— 
‘‘(1) IN GENERAL.—The Board may— 
‘‘(A) adopt, alter, and use a seal; 
‘‘(B) except as provided in paragraph (4), 
direct the Executive Director to take such ac-
tion as the Board considers appropriate to 
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carry out the provisions of this part and the 
policies of the Board in accordance with delega-
tions under this part; 
‘‘(C) upon the concurring votes of 4 mem-
bers, remove the Executive Director from office 
for good cause shown; 
‘‘(D) provide to the Executive Director 
such resources as are necessary to carry out the 
duties of the Executive Director; and 
‘‘(E) take such other actions as may be 
necessary to carry out the functions of the 
Board. 
‘‘(2) MEETINGS.—The Board shall meet— 
‘‘(A) not less than once during each 
month; and 
‘‘(B) at additional times at the call of the 
Chairman. 
‘‘(3) EXERCISE OF POWERS.— 
‘‘(A) IN GENERAL.—Except as provided in 
paragraph (1)(C), the Board shall perform the 
functions and exercise the powers of the Board 
on a majority vote of a quorum of the Board. 
Three members of the Board shall constitute a 
quorum for the transaction of business. 
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‘‘(B) VACANCIES.—A vacancy on the 
Board shall not impair the authority of a 
quorum of the Board to perform the functions 
and exercise the powers of the Board. 
‘‘(4) LIMITATIONS
ON
INVESTMENTS.—The 
Board may not direct any person— 
‘‘(A) to invest, or to cause to be invested, 
in any specific asset any sums which are in the 
Tier I Investment Fund or which are otherwise 
credited to any personal social security invest-
ment account, or 
‘‘(B) to dispose of, or cause to be disposed 
of, any specific asset of such Fund or any such 
account. 
‘‘(h) COMPENSATION.— 
‘‘(1) IN GENERAL.—Each member of the Board 
who is not an officer or employee of the Federal 
Government shall be compensated at the daily rate 
of basic pay for level IV of the Executive Schedule 
for each day during which such member is engaged 
in performing a function of the Board. 
‘‘(2) EXPENSES.—A member of the Board shall 
be paid travel, per diem, and other necessary ex-
penses under subchapter I of chapter 57 of title 5, 
United States Code, while traveling away from such 
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member’s home or regular place of business in the 
performance of the duties of the Board. 
‘‘(3) SOURCE OF FUNDS.—Payments authorized 
under this subsection shall be paid from the Tier I 
Investment Fund, as determined appropriate by the 
Board. 
‘‘(i) DISCHARGE OF RESPONSIBILITIES.—The mem-
bers of the Board shall discharge their responsibilities 
solely in the interest of the participants and their bene-
ficiaries under this part. 
‘‘(j) ANNUAL INDEPENDENT AUDIT.—The Board 
shall annually engage an independent qualified public ac-
countant to audit the activities of the Board. 
‘‘(k) SUBMISSION OF BUDGET TO CONGRESS.—The 
Board shall prepare and submit to the President, and, at 
the same time, to the appropriate committees of Congress, 
an annual budget of the expenses and other items relating 
to the Board which shall be included as a separate item 
in the budget required to be transmitted to Congress 
under section 1105 of title 31, United States Code. 
‘‘(l) SUBMISSION
OF LEGISLATIVE RECOMMENDA-
TIONS.—The Board may submit to the President, and, at 
the same time, shall submit to each House of Congress, 
any legislative recommendations of the Board relating to 
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any of its functions under this part or any other provision 
of law. 
‘‘SEC. 260. EXECUTIVE DIRECTOR. 
‘‘(a) APPOINTMENT OF EXECUTIVE DIRECTOR.—The 
Board shall appoint, without regard to the provisions of 
law governing appointments in the competitive service, an 
Executive Director by action agreed to by a majority of 
the members of the Board. 
‘‘(b) DUTIES.—The Executive Director shall, as de-
termined appropriate by the Board— 
‘‘(1) carry out the policies established by the 
Board; 
‘‘(2) invest and manage the Tier I Investment 
Fund in accordance with the investment policies and 
other policies established by the Board; 
‘‘(3) administer the provisions of this part re-
lating to the Tier I Investment Fund; and 
‘‘(4) prescribe such regulations (other than reg-
ulations relating to fiduciary responsibilities) as may 
be necessary for the administration of this part re-
lating to the Tier I Investment Fund. 
‘‘(c) ADMINISTRATIVE AUTHORITY.—The Executive 
Director may, within the scope of the duties of the Execu-
tive Director as determined by the Board— 
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‘‘(1) appoint such personnel as may be nec-
essary to carry out the provisions of this part relat-
ing to the Tier I Investment Fund; 
‘‘(2) subject to approval by the Board, procure 
the services of experts and consultants under section 
3109 of title 5, United States Code; 
‘‘(3) secure directly from an Executive agency, 
the United States Postal Service, or the Postal Rate 
Commission any information necessary to carry out 
the provisions of this part and the policies of the 
Board relating to the Tier I Investment Fund; 
‘‘(4) make such payments out of sums in the 
Tier I Investment Fund as the Executive Director 
determines, in accordance with regulations of the 
Board, are necessary to carry out the provisions of 
this part and the policies of the Board; 
‘‘(5) pay the compensation, per diem, and travel 
expenses of individuals appointed under paragraphs 
(1), (2), and (6) from the Tier I Investment Fund, 
in accordance with regulations of the Board; 
‘‘(6) accept and use the services of individuals 
employed intermittently in the Government service 
and reimburse such individuals for travel expenses, 
authorized by section 5703 of title 5, United States 
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Code, including per diem as authorized by section 
5702 of such title; 
‘‘(7) except as otherwise expressly prohibited by 
law or the policies of the Board, delegate any of the 
Executive Director’s functions to such employees 
under the Board as the Executive Director may des-
ignate and authorize such successive redelegations of 
such functions to such employees under the Board 
as the Executive Director may consider to be nec-
essary or appropriate; and 
‘‘(8) take such other actions as are appropriate 
to carry out the functions of the Executive Direc-
tor.’’. 
SEC. 3. MONTHLY INSURANCE BENEFITS IN CONNECTION 
WITH PARTICIPANTS IN THE PERSONAL SO-
CIAL SECURITY SAVINGS PROGRAM. 
Section 202 of the Social Security Act (42 U.S.C. 
402) is amended by adding at the end the following new 
subsection: 
‘‘Benefits in the Case of Participants Under Part B 
‘‘(z)(1) Notwithstanding any other provision of this 
title, subject to paragraphs (2) and (3), the amount of 
any old-age insurance benefit under subsection (a) of a 
participant under part B and any other monthly insurance 
benefit under this section based on the participant’s wages 
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and self-employment income (as determined before apply-
ing any reduction or deduction otherwise applicable under 
this title) shall be reduced by a percentage equal to the 
product derived by multiplying 50 percent by a fraction— 
‘‘(A) the numerator of which is the present 
value of the total amount of the contributions made 
with respect to the participant to the Personal Social 
Security Savings Fund under section 254, and 
‘‘(B) the denominator of which is the present 
value of the total amount of the contributions which 
would have been made with respect to the partici-
pant to the Personal Social Security Savings Fund 
under section 254 if contributions under section 254 
had been made with respect to such participant for 
all of such participant’s benefit computation years 
(as defined in 215(b)(2)(B)((i)), determined— 
‘‘(i) as if the program established by this 
part had been in effect as of the beginning of 
such participant’s first benefit computation 
year, and 
‘‘(ii) without regard to section 6 of the 
Save Social Security Act. 
‘‘(2) Paragraph (1) shall not apply with respect to 
child’s insurance benefits under subsection (d) or mother’s 
or father’s insurance benefits under subsection (g). 
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‘‘(3) In the case of old-age insurance benefits of an 
individual who was entitled to disability insurance benefits 
under section 223 for the month preceding the month in 
which such individual attained retirement age (as defined 
in section 216(l)), such benefit shall be subject to a reduc-
tion under this subsection, in lieu of the reduction other-
wise applicable under paragraph (1), equal to the product 
derived by multiplying— 
‘‘(A) the amount of such reduction otherwise 
applicable, by 
‘‘(B) a fraction— 
‘‘(i) the numerator of which is the number 
of calendar years, ending after the participant 
attained age 21 and beginning before the date 
on which the participant attained age 61, dur-
ing each of which the participant was not enti-
tled to disability insurance benefits under sec-
tion 223 or was so entitled for fewer than 6 
months, to 
‘‘(ii) 40.’’. 
SEC. 4. TAX TREATMENT OF ACCOUNTS. 
(a) PERSONAL SOCIAL SECURITY SAVINGS PRO-
GRAM.—Subchapter F of chapter 1 of the Internal Rev-
enue Code of 1986 (relating to exempt organizations) is 
amended by adding at the end the following new part: 
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‘‘PART IX—PERSONAL SOCIAL SECURITY 
SAVINGS PROGRAM 
‘‘Sec. 530A. Personal Social Security Savings Program 
‘‘SEC. 530A. PERSONAL SOCIAL SECURITY SAVINGS PRO-
GRAM. 
‘‘(a) GENERAL RULE.—The Personal Social Security 
Savings Fund and each Tier II Investment Option are ex-
empt from taxation under this subtitle. Notwithstanding 
the preceding sentence, sums in a personal social security 
savings account which are attributable to a Tier II Option 
shall be subject to the taxes imposed by section 511 (relat-
ing to imposition of tax on unrelated business income of 
charitable, etc. organizations). 
‘‘(b) DISTRIBUTIONS TAXED AS SOCIAL SECURITY 
BENEFITS.—See section 86 for tax treatment of distribu-
tions from personal social security savings accounts and 
personal social security annuity as social security benefits. 
‘‘(c) ESTATE TAX TREATMENT.—No amount shall be 
includible in the gross estate of any individual for pur-
poses of chapter 11 by reason of an interest in the Tier 
I Investment Fund of the Personal Social Security Sav-
ings Fund or held under a Tier II Investment Option and 
which is credited to the personal social security savings 
account of the individual. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
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‘‘(1) PERSONAL SOCIAL SECURITY SAVINGS AC-
COUNT.—The term ‘personal social security savings 
account’ means an account established under section 
253(b) of the Social Security Act. 
‘‘(2) PERSONAL SOCIAL SECURITY SAVINGS AN-
NUITY.—The term ‘personal social security savings 
annuity’ means an annuity purchased under section 
257 of the Social Security Act. 
‘‘(3) PERSONAL
SOCIAL
SECURITY
SAVINGS 
FUND.—The term ‘Personal Social Security Savings 
Fund’ means the Savings Fund established under 
section 252 of the Social Security Act. 
‘‘(4) TIER
I
INVESTMENT
FUND.—The term 
‘Tier I Investment Fund’ has the meaning given 
such term by section 251(8) of the Social Security 
Act. 
‘‘(5) TIER II INVESTMENT OPTION.—The term 
‘Tier II Investment Option’ has the meaning given 
such term by section 251(9) of the Social Security 
Act.’’. 
(b) ANNUITY AND GUARANTEE PAYMENTS.—Para-
graph (1) of section 86(d) of the Internal Revenue Code 
of 1986 is amended to read as follows: 
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