I
104TH CONGRESS
2D SESSION
H. R. 3758
To amend title II of the Social Security Act and the Internal Revenue
Code of 1986 to provide prospectively for personal retirement savings
accounts to allow for more control by individuals over their Social Secu-
rity retirement income, to provide for a limitation on payment of benefits
payable from the Federal Old-Age and Survivors Insurance Trust Fund
with respect to individuals with higher levels of income once payments
of such benefits have exceeded prior contributions plus interest, and
to provide other reforms relating to benefits under such title II.
IN THE HOUSE OF REPRESENTATIVES
JULY 9, 1996
Mr. SMITH of Michigan introduced the following bill; which was referred to
the Committee on Ways and Means
A BILL
To amend title II of the Social Security Act and the Internal
Revenue Code of 1986 to provide prospectively for per-
sonal retirement savings accounts to allow for more con-
trol by individuals over their Social Security retirement
income, to provide for a limitation on payment of benefits
payable from the Federal Old-Age and Survivors Insur-
ance Trust Fund with respect to individuals with higher
levels of income once payments of such benefits have
exceeded prior contributions plus interest, and to provide
other reforms relating to benefits under such title II.
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.
This Act may be cited as the ‘‘Social Security Sol-
vency Act of 1996’’.
TABLE OF CONTENTS
Sec. 1. Short title.
Sec. 2. Findings and purposes.
TITLE I—INDIVIDUAL RETIREMENT SECURITY PROGRAM
Sec. 101. Reduction in Social Security trust fund contributions.
Sec. 102. Individual retirement program and personal retirement savings ac-
counts.
Sec. 103. Adjustments to primary insurance amounts under part A of title II
of the Social Security Act.
Sec. 104. Tax treatment of personal retirement savings accounts.
Sec. 105. Revenues from increases in income tax on Social Security benefits de-
posited in OASDI trust funds.
TITLE II—SOCIAL SECURITY BENEFIT REFORMS
Sec. 201. Limitation on payment of certain benefits in excess of contributions
during years of higher income.
Sec. 202. Gradual increase in retirement age and early retirement age.
Sec. 203. Adjustments to bend points in determining primary insurance
amounts.
Sec. 204. Information relating to benefit limitations provided in Social Security
account statements.
Sec. 205. Coverage of newly hired State and local employees.
Sec. 206. Phased reduction in spousal benefits other than survivor’s benefits to
33 percent of primary insurance amount.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress makes the following
findings:
(1) America’s most popular Government pro-
gram, Social Security, is in jeopardy. The 1996
Board of Trustee’s report states that the current
system faces a actuarial deficit of 2.19 percent of
taxable payroll.
(2) The Social Security system was designed in
1935 as a pay-as-you-go system, in which current
workers support current retirees. This design worked
when America had 42 workers per beneficiary in
1945, but that ratio has fallen over time. In 1995
there are only 3.3 workers per beneficiary, and by
2060 the ratio is projected to fall to 1.8 workers per
beneficiary. To pay benefits to the rising number of
retirees, the Government has levied increasing FICA
taxes on a shrinking portion of the population.
These taxes have been increased 33 times since
1970.
(3) Life expectancy has risen substantially since
the creation of the Social Security system in 1935.
The original retirement age for Social Security was
65, but life expectancy at birth in 1935 was 61. Life
expectancy today is now 76, and it is projected to
grow to 81 over the next 75 years. The normal re-
tirement age today remains at 65, and is scheduled
for only a slight increase to 67 under current law.
(4) In 1983, the Congress and President
Reagan formed the bipartisan Greenspan Commis-
sion which agreed on historic legislation to ‘‘save So-
cial Security.’’ At that time, the Social Security Ad-
ministration actuaries warned that the System had
an unfunded liability equal to 1.82 percent of tax-
able payroll. The 1983 law eliminated this liability
temporarily. However, the actuaries now say that
the unfunded liability is 2.19 percent, worse than in
1983.
(5) According to The 1996 Board of Trustee’s
report the Social Security trust fund will be ex-
hausted by 2029. However, starting in 2012 benefits
will exceed income (excluding interest), and the trust
fund nonnegotiable IOUs will have to be tapped. The
Federal Government must then decide if it can pay
back those IOUs through tax increases, more bor-
rowing, cuts in Government programs, or cuts in So-
cial Security benefits.
(b) PURPOSES.—This Act is passed for the following
purposes:
(1) To restore the solvency of the Social Secu-
rity program in perpetuity, protecting the livelihoods
of millions of U.S. workers and retirees.
(2) To gradually replace the current ‘‘pay-as-
you-go’’ Social Security financing system with a true
retirement savings program over the next 75 to 100
years.
(3) To give workers and retirees more control
over and responsibility for their retirement savings
by allowing them to decide how their money is in-
vested.
(4) To increase retirement benefits and improve
the living standards of American seniors by allowing
them to take advantage of safe investment opportu-
nities that earn higher returns than those realized
under the current Social Security system.
(5) To stimulate the American economy by in-
creasing savings and investment. This will lead to
higher productivity, more jobs, and better wages.
(6) To protect the Social Security system for
the benefit of future generations of Americans.
TITLE 
I—INDIVIDUAL 
RETIRE-
MENT SECURITY PROGRAM
SEC. 101. REDUCTION IN SOCIAL SECURITY TRUST FUND
CONTRIBUTIONS.
(a) ANNUAL DECLARATION OF REALLOCATION PER-
CENTAGE.—Section 201 of the Social Security Act (42
U.S.C. 401) is amended by adding at the end the following
new subsection:
‘‘Annual Declaration of Reallocation Percentage
‘‘(n)(1) The Commissioner of Social Security shall
declare and publish in the Federal Register on or before
August 1 of each calendar year the reallocation percentage
for amounts otherwise appropriated for the following fiscal
year to the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust
Fund under paragraphs (3) and (4) of subsection (a) and
under paragraphs (1) and (2) of subsection (b).
‘‘(2) For purposes of this title—
‘‘(A) The term ‘reallocation percentage’ for any
fiscal year means the Commissioner’s best estimate
of the maximum percentage by which the amounts
described in paragraph (1) for such fiscal year may
be reduced—
‘‘(i) in any case in which such fiscal year
precedes fiscal year 2012, so as to maintain a
linear annual reduction in the trust funds per-
formance ratio from the amount of such ratio
for the fiscal year preceding such fiscal year to
an amount of such ratio for 2012 equal to 1.00,
and
‘‘(ii) in any case in which such fiscal year
is a fiscal year after fiscal year 2011, so as to
maintain a trust funds performance ratio for
such fiscal year of 1.00.
In making the estimate under this paragraph, the
Commissioner shall utilize the intermediate actuarial
assumptions utilized by the Board of Trustees of the
Trust Funds for its most recent annual report is-
sued under subsection (c).
‘‘(B) The term ‘‘trust funds performance ratio’’
means, for any fiscal year, the ratio of—
‘‘(i) the total amount which (as estimated
by the Commissioner of Social Security) will be
paid into the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disabil-
ity Insurance Trust Fund during such fiscal
year—
‘‘(I) including the taxes transferred
under subsection (a) at any time during
such year,
‘‘(II) disregarding loans (and interest
thereon) made to either such Trust Fund
from the Federal Hospital Insurance Trust
Fund under subsection (l),
‘‘(III) disregarding any transfer pay-
ments between such Trust Funds, and
‘‘(IV) reducing the amount of any
transfers into either such Trust Fund from
the Railroad Retirement Account by the
amount of any transfers from either such
Trust Fund to such Account,
to
‘‘(ii) the total amount which (as estimated
by the Commissioner of Social Security) will be
paid from the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disabil-
ity Insurance Trust Fund during such fiscal
year for all purposes authorized by this sec-
tion—
‘‘(I) disregarding payments of interest
on (and repayments of) loans from the
Federal Hospital Insurance Trust Fund
under subsection (l),
‘‘(II) disregarding any transfer pay-
ments between such Trust Funds, and
‘‘(III) reducing the amount of any
transfers to the Railroad Retirement Ac-
count by the amount of any transfers into
either such Trust Fund from that Ac-
count.’’.
(b) REDUCTION IN TRUST FUND CONTRIBUTIONS.—
Section 201 of such Act (as amended by subsection (a))
is amended further by adding at the end the following new
subsection:
‘‘Reduction in Trust Fund Contributions
‘‘(o) Under regulations prescribed by the Commis-
sioner of Social Security (in consultation with the Sec-
retary of the Treasury) to carry out this subsection, in
any case in which a covered employee or a covered self-
employed individual has elected to enter into elective re-
tirement status under section 251(a), the amounts appro-
priated for any fiscal year under paragraphs (3) and (4)
of subsection (a) and under paragraphs (1) and (2) of sub-
section (b), to the extent attributable to taxes paid with
respect to such employee or individual during such fiscal
year, shall be reduced by the reallocation percentage for
such fiscal year.’’.
SEC. 102. INDIVIDUAL RETIREMENT PROGRAM AND PER-
SONAL RETIREMENT SAVINGS 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—INDIVIDUAL RETIREMENT SECURITY
PROGRAM
‘‘ELECTIVE RETIREMENT STATUS
‘‘SEC. 251. (a) ELECTION.—
‘‘(1) IN
GENERAL.—Under regulations pre-
scribed by the Commissioner of Social Security, an
individual who is a covered employee or a covered
self-employed individual may elect, in writing filed
with the Commissioner, to enter into elective retire-
ment status, if—
‘‘(A) the election designates, in such form
and manner as may be prescribed in such regu-
lations, one or more personal retirement savings
accounts to which contributions with respect to
the individual are to be made under subsection
(b),
‘‘(B) the election sets forth or is accom-
panied by the individual’s consent to the adjust-
ment to his primary insurance amount under
section 215(j), and
‘‘(C) no benefit or other payment under
part A this title or under title XVIII on the
basis of the individual’s wages and self-employ-
ment income has become payable at or before
the date of the election.
The individual may designate other personal retire-
ment savings accounts in lieu of or in addition to ac-
counts previously designated, in accordance with reg-
ulations of the Secretary of the Treasury.
‘‘(2) ADDITIONAL RULES.—Reductions pursu-
ant to an election under this subsection shall apply
with respect to calendar years after the calendar
year in which the application for the election is filed.
Any election made under paragraph (1) shall take
effect only if the election is made during the period
beginning October 1 and ending November 30 pre-
ceding the first calendar year for which it is effec-
tive. Any election under this subsection shall be ir-
revocable.
‘‘(3) ELECTIVE
RETIREMENT
STATUS.—For
purposes of this part—
‘‘(A) COVERED
EMPLOYEES.—A covered
employee is in ‘elective retirement status’ for a
calendar year if, as of January 1 of such cal-
endar year, such employee has made an effec-
tive election under this subsection.
‘‘(B) COVERED SELF-EMPLOYED INDIVID-
UALS.—A covered self-employed individual is in
‘elective retirement status’ for a taxable year if,
as of the first day of such taxable year, such in-
dividual has made an effective election under
this subsection.
‘‘(b) DEPOSITS INTO PERSONAL RETIREMENT SAV-
INGS ACCOUNTS.—Within 10 business days after receipt
during any fiscal year of taxes paid under sections 3101(a)
and 3111(a) of the Internal Revenue Code of 1986 with
respect to a covered employee in elective retirement status,
and within 10 business days after receipt during any fiscal
year of taxes paid under section 1401(a) of such Code with
respect to a covered self-employed individual in elective re-
tirement status, the Secretary of the Treasury, from
amounts otherwise available in the general fund of the
Treasury, shall deposit, into such personal retirement sav-
ings accounts as are designated under subsection (a), a
total amount equal to the product derived by multiplying
the amount of such taxes by the reallocation percentage
declared for such fiscal year under section 201(n).
‘‘DESIGNATION OF ACCOUNTS OF SURVIVING SPOUSES
AND SURVIVING DIVORCED SPOUSES
‘‘SEC. 252. (a) IN GENERAL.—Except as provided in
subsection (b), in the case of a deceased individual with
respect to whom a personal retirement savings account
was established and maintained pursuant to section
251(b), the trustee of such account shall transfer the bal-
ance in such account to a personal retirement savings ac-
count maintained by an eligible survivor if such account
is designated by the eligible survivor to the trustee not
later than 20 business days after the date of such individ-
ual’s death. Any such designation shall be made in such
form and manner as may be prescribed in regulations of
the Commissioner of Social Security, in consultation with
the Secretary of the Treasury.
‘‘(b) DESIGNATION IN ABSENCE OF TIMELY DES-
IGNATION BY ELIGIBLE SURVIVOR.—In any case in which,
upon the expiration of such 20-day period, there is an eli-
gible survivor but no timely designation of a personal re-
tirement savings account is made by the eligible survivor
under subsection (a), the trustee shall make the designa-
tion of the personal retirement savings account under sub-
section (a) on behalf of such eligible survivor, in accord-
ance with regulations of the Commissioner of Social Secu-
rity prescribed in consultation with the Secretary of the
Treasury.
‘‘(c) DISPOSITION OF ACCOUNT BALANCE WHERE
NO ELIGIBLE SURVIVOR EXISTS.—In any case in which,
upon the expiration of such 20-day period no timely des-
ignation under subsection (b) has been made and there
is no eligible survivor, the trustee of the deceased individ-
ual’s account shall transfer the balance in such account
to the deceased individual’s estate within the period of 20
business days following the expiration of such 20-day pe-
riod.
‘‘QUARTERLY REPORTS BY TRUSTEES
‘‘SEC. 253. (a) IN GENERAL.—The trustee of a per-
sonal retirement savings account shall make quarterly re-
ports concerning the status of the account. Each quarterly
report shall be furnished to the account holder on or be-
fore the 30th day following the calendar quarter for which
the report is required.
‘‘(b) INFORMATION REQUIRED TO BE INCLUDED.—
The quarterly report shall contain the following informa-
tion for transactions occurring during the calendar quar-
ter for which the report is required:
‘‘(1) The balance in the account.
‘‘(2) The amount of elective retirement con-
tributions.
‘‘(3) The amount of distributions.
‘‘(4) The name and address of the trustee.
‘‘(5) Commission fees and fees for administra-
tive expenses charged in connection with the ac-
count.
The language of the report shall be written in a form so
as to be understood by the average covered employee.
‘‘(c) REPORTS TO COMMISSIONER.—The Commis-
sioner of Social Security may require the quarterly report
to be filed with the Social Security Administration at such
time as the Commissioner may specify in regulations
under this section.
‘‘DEFINITIONS
‘‘SEC. 254. For purposes of this part—
‘‘(1) PERSONAL
RETIREMENT
SAVINGS
AC-
COUNT.—The term ‘personal retirement savings ac-
count’ has the meaning provided in section 408A(b)
of the Internal Revenue Code of 1986.
‘‘(2) COVERED EMPLOYER.—The term ‘covered
employer’ means, for any calendar year, any person
on whom an excise tax is imposed under section
3111 of the Internal Revenue Code of 1986 with re-
spect to having an individual in his employ to whom
wages are paid by such person during such calendar
year.
‘‘(3) COVERED EMPLOYEE.—The term ‘covered
employee’ means, for any calendar year, any individ-
ual with respect to whose employment by a covered
employer during such calendar year there is imposed
an excise tax under section 3111 of the Internal
Revenue Code of 1986.
‘‘(4) COVERED SELF-EMPLOYED INDIVIDUAL.—
The term ‘covered self-employed individual’ means
any individual on whose self-employment income for
a taxable year there is imposed a tax under section
1401(a) of the Internal Revenue Code of 1986.
‘‘(5) ELECTIVE RETIREMENT CONTRIBUTION.—
The term ‘elective retirement contribution’ means,
with respect to any employee or other individual in
elective retirement status, an amount deposited with
respect to such employee or other individual into a
personal retirement savings account pursuant to sec-
tion 251(b).
‘‘(6) ELIGIBLE SURVIVOR.—The term ‘eligible
survivor’ of a deceased individual means such indi-
vidual’s widow or, if there is no such widow, such in-
dividual’s last surviving divorced wife or surviving
divorced husband. Such term shall not include any
such surviving divorced wife or surviving divorced
husband who is married on the date of the deceased
individual’s death.
‘‘(7) BUSINESS DAY.—The term ‘business day’
means any day other than a Saturday, Sunday, or
legal holiday in the area involved.
‘‘PENALTIES
‘‘SEC. 256. (a) FAILURE BY TRUSTEE TO MAKE
TIMELY TRANSFERS.—If the balance in the personal re-
tirement savings account of a deceased individual is not
transferred by the trustee within the time prescribed by
section 253—
‘‘(1) the trustee shall be subject to a civil pen-
alty of not to exceed 50 percent of the amount of
the balance, and
‘‘(2) shall be liable—
‘‘(A) in the case of a transfer required to
be made to another personal retirement savings
account, to the widow or the surviving divorced
wife or surviving divorced husband (as the case
may be), or
‘‘(B) in the case of a transfer required to
be made to the Federal Old-Age and Survivors
Insurance Trust Fund, to such Trust Fund,
for interest on the balance at the underpayment rate
determined under section 6621 of the Internal Reve-
nue Code of 1986 from the last day by which such
balance was required to be so transferred to the date
on which such balance is transferred to the des-
ignated personal retirement savings account.
‘‘(b) FAILURE BY TRUSTEE TO MAKE TIMELY QUAR-
TERLY REPORTS.—The trustee of a personal retirement
savings account shall be subject to a civil penalty of not
to exceed $100 a day from the date of such trustee’s fail-
ure or refusal to furnish the quarterly report required to
be furnished by the trustee under section 254 until the
date on which such report is furnished.
‘‘(c) RULES FOR APPLICATION OF SECTION.—
‘‘(1) 
PENALTIES
ASSESSED
BY
COMMIS-
SIONER.—Any civil penalty assessed by this section
shall be imposed by the Commissioner of Social Se-
curity and collected in a civil action.
‘‘(2) COMPROMISES.—The Commissioner may
compromise the amount of any civil penalty imposed
by this section.
‘‘(3) AUTHORITY TO WAIVE PENALTY IN CER-
TAIN CASES.—The Commissioner may waive the ap-
plication of this section with respect to any failure
if the Commissioner determines that such failure is
due to reasonable cause and not to intentional dis-
regard of rules and regulations.’’
(b) EFFECTIVE
DATE
AND
NOTICE
REQUIRE-
MENTS.—
(1) EFFECTIVE DATE.—The amendments made
by subsection (a) shall apply with respect to wages
paid after December 31, 1997, for pay periods end-
ing after such date and self-employment income for
taxable years beginning after such date.
(2) NOTICE REQUIREMENTS.—
(A) IN GENERAL.—Not later than October
1, 1997, the Commissioner of Social Security
shall—
(i) send to the last known address of
each eligible individual a description of the
program established by the amendments
made by this Act, which shall be written in
the form of a pamphlet in language which
may be readily understood by the average
worker,
(ii) provide for toll-free access by tele-
phone from all localities in the United
States to the Social Security Administra-
tion through which individuals may obtain
information and answers to questions re-
garding such program, and
(iii) provide information to the media
in all localities of the United States about
such program and such toll-free access by
telephone.
(B) ELIGIBLE INDIVIDUAL.—For purposes
of this paragraph, the term ‘‘eligible individual’’
means an individual who, as of the date of the
pamphlet sent pursuant to subparagraph (A), is
indicated within the records of the Social Secu-
rity Administration as—
(i) not having attained age 65, and
(ii) being credited with one or more
quarters of coverage under section 213 of
the Social Security Act.
(C) MATTERS
TO
BE
INCLUDED.—The
Commissioner shall include with the pamphlet
sent to each eligible individual pursuant to sub-
paragraph (A)—
(i) a statement of the number of quar-
ters of coverage indicated in the records of
the Social Security Administration as of
the date of the description as credited to
such individual under section 213 of the
Social Security Act and the date as of
which such records may be considered ac-
curate, and
(ii) the number for toll-free access by
telephone established by the Commissioner
pursuant to subparagraph (A).
SEC. 
103. 
ADJUSTMENTS 
TO 
PRIMARY 
INSURANCE
AMOUNTS UNDER PART A OF TITLE II OF THE
SOCIAL SECURITY ACT.
(a) IN GENERAL.—Section 215 of the Social Security
Act (42 U.S.C. 415) is amended by adding at the end the
following new subsection:
‘‘Adjustment of Primary Insurance Amount of Covered
Employees and Covered Self-Employed Individuals
in Elective Retirement Status Under Part B
‘‘(j)(1) Except as provided in paragraph (2), in the
case of an individual who is a covered employee (as defined
under section 254(3)) or a covered self-employed individ-
ual (as defined under section 254(4)) and who is in elec-
tive retirement status (as defined in section 251(a)(3)),
such individual’s primary insurance amount as determined
in accordance with this section (before adjustments made
under subsection (i)) shall be equal to the excess (if any)
of—
‘‘(A) the amount which would be so determined
if this subsection did not apply, over
‘‘(B) the actuarial present value, as of the date
of the determination of such amount, of the total
amount of the elective retirement contributions paid
or payable under section 251 with respect to such
individual, assuming an interest rate, compounded
annually, at 4.3 percent.
‘‘(2)(A) In the case of an individual described in
paragraph (1) who becomes entitled to disability insurance
benefits under section 223, such individual’s primary in-
surance amount shall be determined without regard to
paragraph (1).
‘‘(B) For any month ending after an individual de-
scribed in subparagraph (A) has attained age 60, such in-
dividual’s primary insurance amount as determined in ac-
cordance with this section (before subsequent adjustments
made under subsection (i)) shall be equal the product de-
rived by multiplying—
‘‘(i) the amount which would be so determined
if this subsection did not apply, by
‘‘(ii) the applicable percentage determined
under the following table:
‘‘If the number of such individual’s
quarters of coverage (within the
meaning of section 213(a)(2)) as of
the end of such month in which
he or she attains age 60 (or,
if later, the first month of
The applicable
entitlement) is:
percentage is:
Less than 9 ...............................................................
100 percent.
More than 8 but less than 21 ...................................
90 percent.
More than 20 but less than 61 .................................
80 percent.
More than 60 but less than 101 ...............................
70 percent.
More than 100 but less than 141 .............................
60 percent.
More than 140 ...........................................................
50 percent.’’
(b) CONFORMING AMENDMENT TO RAILROAD RE-
TIREMENT ACT OF 1974.—Section 1 of the Railroad Re-
tirement Act of 1974 (45 U.S.C. 231) is amended by add-
ing at the end the following:
‘‘(s) In applying applicable provisions of the Social
Security Act for purposes of determining the amount of
the annuity to which an individual is entitled under this
Act, such individual shall not be treated as in ‘elective re-
tirement status’ as defined in section 251(a)(3) of the So-
cial Security Act.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to months after De-
cember 1997.
SEC. 104. TAX TREATMENT OF PERSONAL RETIREMENT
SAVINGS ACCOUNTS.
(a) IN GENERAL.—Subpart A of part I of subchapter
D of chapter 1 of the Internal Revenue Code of 1986 (re-
lating to pension, profit-sharing, stock bonus plans, etc.)
is amended by inserting after section 408 the following
new section:
‘‘SEC. 408A. PERSONAL RETIREMENT SAVINGS ACCOUNTS.
‘‘(a) GENERAL RULE.—Gross income shall not in-
clude any amount deposited in a personal retirement sav-
ings account under section 251 or 252 of the Social Secu-
rity Act.
‘‘(b) PERSONAL RETIREMENT SAVINGS ACCOUNT.—
For purposes of this title, the term ‘personal retirement
savings account’ means a trust created or organized in the
United States for the exclusive benefit of an individual or
his beneficiaries, but only if the written governing instru-
ment creating the trust meets the following requirements:
‘‘(1) No contribution will be accepted other
than under sections 251 and 252 of the Social Secu-
rity Act.
‘‘(2) No amount may be paid or distributed
from such trust before the date on which the ac-
count holder attains age 60, becomes entitled to dis-
ability insurance benefits under section 223 of the
Social Security Act, or dies.
‘‘(3) The trustee is a bank (as defined in sec-
tion 408(n)) or such other person who demonstrates
to the satisfaction of the Secretary that the manner
in which such other person will administer the trust
will be consistent with the requirements of this sec-
tion.
‘‘(4) No part of the trust fund is invested in life
insurance contracts.
‘‘(5) The interest of an individual in the bal-
ance in his account is nonforfeitable.
‘‘(6) The assets of the trust will not be commin-
gled with other property except in a common trust
fund or common investment fund.
‘‘(7) Under the terms governing the account,
contributions will be accepted irrespective of the
amount of the contribution.
‘‘(8) The same requirements as are applicable
with respect to trusts under paragraph (11) of sec-
tion 401(a) are met with respect to the account (dis-
regarding subparagraph (B) thereof), as if the annu-
ity starting date with respect to the account holder
is the day on which the account holder attains age
60 or becomes entitled to disability insurance bene-
fits under section 223 of the Social Security Act.
Paragraphs (1), (2), and (8) shall not apply to direct
trustee-to-trustee transfers between personal retirement
savings accounts of the same individual.
‘‘(c) INVESTMENT REQUIREMENTS.—Amounts held
in an individual’s account shall be invested in the manner
described in paragraph (1), (2), or (3), or in a manner
consisting of any combination thereof.
‘‘(1) Investments under this paragraph may be
in the form of securities of the United States Gov-
ernment.
‘‘(2) Investments under this paragraph may be
in the form of—
‘‘(A) insurance contracts,
‘‘(B) certificates of deposit, or
‘‘(C) other instruments or obligations se-
lected by qualified professional asset managers,
which return the amount invested and pay interest,
at a specified rate or rates, on that amount during
a specified period of time.
‘‘(3) Investments under this paragraph may be
in the form of a portfolio of common stock designed
to replicate the performance of an index which shall
be selected by the trustee, under standards which
shall be prescribed in regulations of the Secretary
applying for purposes of this paragraph the same
principles as are applicable under section 8438(b)(2)
of title 5, United States Code. Such index must be
a commonly recognized index comprised of common
stock the aggregate market value of which is a rea-
sonably complete representation of the United States
equity markets. The portfolio shall be designed such
that, to the extent practicable, the percentage of the
total amount invested in the manner described in
this paragraph that is invested in each stock is the
same as the percentage determined by dividing the
aggregate market value of all shares of that stock
by the aggregate market value of all shares of all
stocks included in such index.
‘‘(d) ACCOUNT EXEMPT FROM TAX.—
‘‘(1) GENERAL RULE.—Except as provided in
paragraph (2), any personal retirement savings ac-
count is exempt from taxation under this subtitle.
Notwithstanding the preceding sentence, any such
account is subject to the taxes imposed by section
511 (relating to imposition of tax on unrelated busi-
ness income of charitable, etc. organizations).
‘‘(2) APPLICATION
OF
PROHIBITED
TRANS-
ACTIONS RULES, ETC.—Rules similar to the rules of
paragraphs (2), (3), and (4) of section 408(e) shall
apply to personal retirement savings accounts.
‘‘(e) DISTRIBUTIONS TAXED AS IF SOCIAL SECURITY
BENEFITS.—
‘‘(1) GENERAL RULE.—Amounts paid or dis-
tributed from a personal retirement savings account
shall be includible in gross income only if so includ-
ible under section 86, determined by treating such
amounts as Social Security benefits (as defined in
such section).
‘‘(2) TRUSTEE-TO-TRUSTEE
TRANSFERS.—No
amount shall be includible in gross income by reason
of a direct trustee-to-trustee transfer between per-
sonal retirement savings accounts of the same indi-
vidual.
‘‘(f) CERTAIN OTHER RULES TO APPLY.—The fol-
lowing rules shall apply to personal retirement savings ac-
counts in the same manner that such rules apply to indi-
vidual retirement accounts:
‘‘(1) Section 408(h) (relating to custodial ac-
counts)
‘‘(2) Sections 408(i) and 6693 (relating to re-
ports).
‘‘(3) Section 4975 (relating to prohibited trans-
actions).’’
(b) CLERICAL AMENDMENT.—The table of sections
for such subpart A is amended by inserting after the item
relating to section 408 the following new item:
‘‘Sec. 408A. Personal retirement savings accounts.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1997.
SEC. 105. REVENUES FROM INCREASES IN INCOME TAX ON
SOCIAL SECURITY BENEFITS DEPOSITED IN
OASDI TRUST FUNDS.
Subparagraph (B) of section 121(e)(1) of the Social
Security Amendments of 1983 (Public Law 98–21, 42
U.S.C. 401 note) is amended to read as follows:
‘‘(B)(i) There are hereby appropriated to
the hospital insurance trust fund amounts equal
to the increase in tax liabilities described in
subparagraph (A)(ii) with respect to taxable
years beginning before January 1, 1998.
‘‘(ii) There are hereby appropriated to
each payor fund amounts equal to the increase
in tax liabilities described in subparagraph
(A)(ii), with respect to taxable years beginning
after December 31, 1997, which is attributable
to the application of sections 86 and 871(a)(3)
of such Code to payments from such payor
fund.
‘‘(iii) Such appropriated amounts shall be
transferred from the general fund of the Treas-
ury on the basis of estimates of such tax liabil-
ities made by the Secretary of the Treasury.
Transfers shall be made pursuant to a schedule
made by the Secretary of the Treasury that
takes into account estimated timing of collec-
tion of such liabilities.’’
TITLE II—SOCIAL SECURITY
BENEFIT REFORMS
SEC. 201. LIMITATION ON PAYMENT OF CERTAIN BENEFITS
IN 
EXCESS 
OF 
CONTRIBUTIONS 
DURING
YEARS OF HIGHER INCOME.
(a) IN GENERAL.—Section 202 of the Social Security
Act (42 U.S.C. 402) is amended by adding at the end the
following new subsection:
‘‘LIMITATION ON PAYMENT OF CERTAIN BENEFITS IN EX-
CESS OF CONTRIBUTIONS DURING YEARS OF HIGHER
INCOME
‘‘(y)(1) Notwithstanding any other provision of this
title, if, with respect to any year of higher income for an
individual—
‘‘(A) the total amount of the current adjusted
values of all of such individual’s social security old-
age or survivors benefits in prior months, deter-
mined as of the beginning of such year, exceed
‘‘(B) the total amount of the current adjusted
values of all OASDI taxes paid with respect to the
wages and self-employment income on which such
benefits are based, determined as of the beginning
of such year,
then such individual’s social security old-age or survivors
benefits for any month in such year shall be reduced (after
all other deductions and reductions applicable under this
title) by the percentage reduction determined under para-
graph (2) for such year. Benefits, as reduced under this
paragraph, if not a multiple of $1, shall be increased to
the next higher multiple of $1.
‘‘(2)(A) The percentage reduction determined under
this paragraph for an individual’s taxable year is the prod-
uct derived by multiplying—
‘‘(i) 1 percent, by
‘‘(ii) the applicable income-based factor of the
individual for the taxable year.
‘‘(B)(i) For purposes of subparagraph (A), in the
case of an individual who is not married as of the begin-
ning of the taxable year, the applicable income-based fac-
tor of the individual for the taxable year is the quotient
(not greater than 100) derived by dividing—
‘‘(I) the individual’s excess income for the tax-
able year, by
‘‘(II) $300,
rounded (if not a whole number) to the next lower whole
number.
‘‘(ii) For purposes of clause (i), an individual’s excess
income for a taxable year is the excess of—
‘‘(I) the adjusted gross income of such individ-
ual for such taxable year, over
‘‘(II) $50,000.
‘‘(C)(i) For purposes of subparagraph (A), in the
case of an individual who is married as of the beginning
of the taxable year, the applicable income-based factor of
the individual for the taxable year is the quotient (not
greater than 100) derived by dividing—
‘‘(I) the excess joint income of the individual
and the individual’s spouse for the taxable year, by
‘‘(II) $600,
rounded (if not a whole number) to the next lower whole
number.
‘‘(ii) For purposes of clause (i), the excess joint in-
come of an individual and the individual’s spouse for a
taxable year is the excess of—
‘‘(I) the total adjusted gross income of such in-
dividual and such individual’s spouse for such tax-
able year, over
‘‘(II) $100,000.
‘‘(D)(i) For taxable years ending after December 31,
1998, the dollar amounts referred to in subparagraphs (B)
and (C) shall each be adjusted as provided in this subpara-
graph. The Commissioner of Social Security shall, on or
before November 1 of 1998 and every year thereafter, de-
termine and publish in the Federal Register the dollar
amounts referred to in subparagraphs (B) and (C) as ad-
justed under this subparagraph for taxable years ending
after December 31 of such year.
‘‘(ii) The amount of each such dollar amount as ad-
justed under this subparagraph shall be the larger of—
‘‘(I) the dollar amount in effect for the taxable
year ending in or with the calendar year in which
the determination under this subparagraph is made,
or
‘‘(II) the product of such dollar amount and the
ratio of the national average wage index (as defined
in section 209(k)(1)) for the calendar year preceding
the calendar year in which the determination under
this subparagraph is made to the national average
wage index (as so defined) for 1996,
with such product, if not a multiple of $10, being rounded
to the next higher multiple of $10 where such amount is
a multiple of $5 but not of $10 and to the nearest multiple
of $10 in any other case.
‘‘(3) For purposes of this subsection—
‘‘(A) The term ‘year of higher income’ for an
individual means any taxable year—
‘‘(i) if, in the case of an individual who is
not married as of the beginning of such taxable
year, the adjusted gross income of such individ-
ual for such taxable year (disregarding distribu-
tions from personal retirement savings accounts
(as defined in section 254(1)) exceeds $50,000,
or
‘‘(ii) if, in the case of an individual who is
married as of the beginning of such taxable
year, the total adjusted gross income of such in-
dividual and such individual’s spouse for such
taxable year (disregarding distributions from
personal retirement savings accounts (as de-
fined in section 254(1)) exceeds $100,000.
‘‘(B) The term ‘adjusted gross income’ has the
meaning provided in section 62 of the Internal Reve-
nue Code of 1986.
‘‘(C)(i) The term ‘current adjusted value’ of an
amount, determined as of the beginning of any cal-
endar year, means the original amount, plus interest
on such amount, compounded annually through the
end of the preceding calendar year at the trust fund
interest rate as in effect from year to year.
‘‘(ii) The term ‘trust fund interest rate’ in ef-
fect for any year means the average rate of interest
earned during the fiscal year ending in such year
on investments of amounts in the Federal Old-Age
and Survivors Insurance Trust Fund and the Fed-
eral Disability Insurance Trust Fund, as determined
by the Managing Trustee of such Trust Funds.
‘‘(D) The term ‘social security old-age or survi-
vors benefit’ of an individual means a monthly insur-
ance benefit under this title based on the wages and
self-employment income of such individual and paid
or payable from the Federal Old-Age and Survivors
Insurance Trust Fund.
‘‘(E) The term ‘OASDI taxes’ means the taxes
imposed under sections 1401(a), 3101(a), and
3111(a) of the Internal Revenue Code of 1986.
‘‘(4) The Commissioner of Social Security shall pro-
vide by regulation for the maintenance of such records,
relating to individuals to whom social security old-age or
survivors benefits are otherwise payable under this section,
of total benefits paid and OASDI taxes paid, as is nec-
essary to preclude, to the maximum extent practicable,
overpayments and underpayments of benefits resulting
from the operation of this subsection. The Commissioner
and the Secretary of the Treasury shall enter into such
arrangements as are necessary to ensure that such records
maintained by the Commissioner are currently accurate at
all times.
‘‘(5)(A) In any case in which a taxable year of an
individual is a year of higher income for such individual,
if a social security old-age or survivors benefit has been
paid to such individual for any month in such year, such
individual (or the individual who is in receipt of such bene-
fit on his behalf) shall make a report to the Commissioner
of Social Security of his adjusted gross income, and (if
he is married) the adjusted gross income of his spouse,
for such taxable year. Such report shall be made on or
before the fifteenth day of the fourth month following the
close of such year, and shall contain such information and
be made in such manner as the Commissioner may by reg-
ulations prescribe. The Commissioner may grant a reason-
able extension of time for making such report if he finds
that there is valid reason for a delay, but in no case may
the period be extended more than three months.
‘‘(B) If an individual fails to make a report required
under subparagraph (A), within the time prescribed by or
in accordance with such subparagraph, for any taxable
year and a benefit based on such individual’s wages and
self-employment income is paid for any month in such tax-
able year or the next following taxable year which is in
excess of the amount payable by reason of this subsection,
he shall be deemed to have been overpaid for such month
an additional amount as follows:
‘‘(i) in the case of the first such month for
which a benefit is paid in excess of the amount pay-
able by reason of this subsection, the additional
amount shall be equal to the amount of such excess;
‘‘(ii) in the case of the second such month for
which a benefit is paid in excess of the amount pay-
able by reason of this subsection, the additional
amount shall be equal to two times the amount of
such excess; and
‘‘(iii) in the case of the third or a subsequent
such month for which a benefit is paid in excess of
the amount payable by reason of this subsection, the
additional amount shall be equal to three times the
amount of such excess;
except that additional amounts of overpayment deter-
mined under this paragraph shall be determined only for
months for which the benefit in excess of the amount pay-
able was received and accepted.
‘‘(C)(i)(I) If the Commissioner of Social Security de-
termines, on the basis of information obtained by or sub-
mitted to him, that it may reasonably be expected that
an individual’s social security old-age or survivors benefits
will not be payable (in whole or in part) for any month
in a taxable year of such individual by reason of this sub-
section, the Commissioner may, before the close of such
taxable year, suspend the payment (in whole or in part)
for each month in such year (or for only such months as
the Commissioner may specify) of such benefits. Such sus-
pension shall remain in effect with respect to the benefits
for any month until the Commissioner has determined the
extent to which benefits are payable under this subsection.
‘‘(II) The Commissioner of Social Security may, be-
fore the close of the taxable year of an individual on whose
wages and self-employment income benefits are otherwise
payable during such year, request of such individual that
he make, at such time or times as the Commissioner may
specify, a declaration of his estimated adjusted gross in-
come (or the estimated total adjusted gross income for
him and his spouse) for the taxable year and that he fur-
nish to the Commissioner such other information with re-
spect to such income as the Commissioner may specify.
A failure by such individual to comply with any such re-
quest shall in itself constitute justification for a deter-
mination under subclause (I) that it may reasonably be
expected that such benefits are not payable (in whole or
in part) by reason of this subsection.
‘‘(III) If the payment of an individual’s social security
old-age or survivors benefits have been suspended (in
whole or in part) for all months in any taxable year of
such individual under subclause (I), no payment of such
unpaid benefits shall be made for any such month in such
taxable year after the expiration of the period of three
years, three months, and fifteen days following the close
of such taxable year unless within such period the individ-
ual, or some other person entitled to benefits under this
title on the basis of the same wages and self-employment
income, files with the Commissioner of Social Security in-
formation showing that the unpaid portion of a benefit
for such month is payable to such individual.
‘‘(ii) If, after the close of a taxable year of an individ-
ual to whom social security old-age or survivors benefits
were otherwise payable for months in such year, the Com-
missioner of Social Security requests such individual to
furnish a report of his adjusted gross income (or the total
adjusted gross income of him and his spouse) for such tax-
able year or any other information with respect to such
income which the Commissioner may specify, and the indi-
vidual fails to comply with such request, such failure shall
in itself constitute justification for a determination that
such benefits were not payable (in whole or in part) for
each month in such taxable year (or only for such months
thereof as the Commissioner may specify) by reason of
this subsection.
‘‘(D) The Commissioner of Social Security shall de-
velop and implement procedures in accordance with this
paragraph to avoid paying more than the correct amount
of an individual’s social security old-age or survivors bene-
fits as a result of the failure of the individual to file a
correct report or estimate of adjusted gross income. Such
procedures may include identifying categories of individ-
uals whose social security old-age or survivors benefits
which are not payable (in whole or in part) under this
subsection are likely to be paid and requesting that they
estimate their adjusted gross income (or the total adjusted
gross income of them and their spouses) more frequently
than other persons subject to this subsection.
‘‘(6) Benefits of any individual (other than an indi-
vidual described in paragraph (1)) based on the wages and
self-employment income of any other individual to whom
benefits are not payable by reason of paragraph (1) shall
be payable as though such other individual were receiving
such benefits.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to benefits otherwise
payable in taxable years ending after December 31, 1997.
SEC. 202. GRADUAL INCREASE IN RETIREMENT AGE AND
EARLY RETIREMENT AGE.
(a) RETIREMENT AGE.—Section 216(l)(1) of the So-
cial Security Act (42 U.S.C. 416(l)(1)) is amended to read
as follows:
‘‘(l)(1) The term ‘retirement age’ means—
‘‘(A) with respect to an individual who attains
age 62 before January 1, 2000, 65 years of age,
‘‘(B) with respect to an individual who attains
age 62 after December 31, 1999, and before Janu-
ary 1, 2015, 65 years of age plus 3⁄12 of the number
of months in the period beginning with January
2000 and ending with the last month of the calendar
year in which the individual attains age 62,
‘‘(C) with respect to an individual who attains
age 62 after December 31, 2014, and before Janu-
ary 1, 2016, 69 years of age, and
‘‘(D) with respect to an individual who attains
age 62 in any year after December 31, 2015, the
projected retirement age (as determined by the Com-
missioner under paragraph (3)) for the year in
which such individual attains age 62.’’.
(b) EARLY RETIREMENT AGE.—Section 216(l)(2) of
such Act (42 U.S.C. 416(l)(2)) is amended to read as fol-
lows:
‘‘(2) The term ‘early retirement age’ means—
‘‘(A) except as otherwise provided in this para-
graph—
‘‘(i) age 62, in the case of an old-age,
wife’s, or husband’s insurance benefit, or
‘‘(ii) age 60, in the case of a widow’s or
widower’s insurance benefit,
‘‘(B) with respect to an individual who attains
early retirement age (as defined in subparagraph
(A)) after December 31, 1999, and before January
1, 2011, the applicable retirement age (as defined in
paragraph (1)), minus—
‘‘(i) 3 years, in the case of an old-age,
wife’s, or husband’s insurance benefit, or
‘‘(ii) 5 years, in the case of a widow’s or
widower’s insurance benefit,
‘‘(C) with respect to an individual who attains
early retirement age (as defined in subparagraph
(A)) after December 31, 2010, and before January
1, 2016—
‘‘(i) age 65, in the case of an old-age,
wife’s, or husband’s insurance benefit, or
‘‘(ii) age 63, in the case of a widow’s or
widower’s insurance benefit, and
‘‘(D) with respect to an individual who attains
early retirement age (as defined in subparagraph
(A)) after December 31, 2015, the applicable retire-
ment age (as defined in paragraph (1)), minus—
‘‘(i) 4 years, in the case of an old-age,
wife’s, or husband’s insurance benefit, or
‘‘(ii) 6 years, in the case of a widow’s or
widower’s insurance benefit.’’.
(c) 
PROJECTED
RETIREMENT
AGE.—Section
216(l)(3) of such Act (42 U.S.C. 416(l)(3)) is amended
to read as follows:
‘‘(3)(A) Not later than October 1 of each year after
2014, the Commissioner of Social Security shall deter-
mine, and publish in the Federal Register, the projected
retirement age for the year following such October 1.
‘‘(B) For purposes of this paragraph—
‘‘(i) The ‘projected retirement age’ for any year
means the age (rounded, if not otherwise expressible
as a whole number of months, to the next lower
whole number of months) which, if such age were
the retirement age (as defined in this subsection) in
effect for individuals who attain age 62 in such year
(and are credited under this title with wages or self-
employment income), would cause the ratio of the
projected post-retirement lifetime for such individ-
uals to the potential working lifetime for such indi-
viduals to be equal to the ratio of the projected post-
retirement lifetime for all individuals who attain age
62 in 2015 (and are credited under this title with
wages or self-employment income) to the potential
working lifetime for such individuals attaining age
62 in 2015.
‘‘(ii) The ‘projected post-retirement lifetime’ for
individuals attaining age 62 in any year means the
average projected lifetime (rounded, if not otherwise
expressible as a whole number of months, to the
next lower whole number of months) of such individ-
uals commencing with the month following the
month in which the applicable retirement age is at-
tained, as determined by the Commissioner of Social
Security, utilizing the intermediate actuarial as-
sumptions utilized by the Board of Trustees of the
Federal Old-Age and Survivors Insurance Trust
Fund for its most recent annual report issued under
section 201(c).
‘‘(iii) The ‘potential working lifetime’ for indi-
viduals attaining age 62 in any year means the num-
ber of calendar months during the period beginning
with January of the year following the year in which
age 20 is attained by such individuals and ending
with the month in which the applicable retirement
age is attained by such individuals.’’.
(d) DEFINITION OF ELAPSED YEARS FOR PURPOSES
OF DETERMINING BENEFIT COMPUTATION YEARS.—Sec-
tion 
215(b)(2)(B)(iii) 
of 
such 
Act 
(42 
U.S.C.
415(b)(2)(B)(iii)) is amended—
(1) by striking ‘‘the year in which he attained
age 62’’ and all that follows and inserting ‘‘the year
in which he attained—’’; and
(2) by adding at the end the following:
‘‘(I) early retirement age (as defined in
section 216(l)(2) in the case of old-age, wife’s,
and husband’s insurance benefits), in the case
of an individual who attained age 62 before
January 1, 2012,
‘‘(II) age 65 plus 3⁄12 of the number of
months in the period beginning with January
2012 and ending with the last month of the cal-
endar year in which the individual attained age
62, in the case of an individual who attained
age 62 after December 31, 2011, and before
January 1, 2015, or
‘‘(III) one year greater than early retire-
ment age (as so defined), in the case of an indi-
vidual who attained age 62 after December 31,
2014;
except that such term excludes any calendar year
any part of which is included in a period of disabil-
ity.’’.
SEC. 203. ADJUSTMENTS TO BEND POINTS IN DETERMIN-
ING PRIMARY INSURANCE AMOUNTS.
(a) 
ADDITIONAL
BEND
POINT.—Section
215(a)(1)(A) of the Social Security Act (42 U.S.C.
415(a)(1)(A)) is amended—
(1) in clause (ii), by striking ‘‘and’’ at the end;
(2) in clause (iii), by striking ‘‘clause (ii),’’ and
inserting the following: ‘‘clause (ii) but do not exceed
the amount established for purposes of this clause
by subparagraph (B), and’’; and
(3) by inserting after clause (iii) the following
new clause:
‘‘(iv) 5 percent of the individual’s average in-
dexed monthly earnings to the extent that such
earnings exceed the amount established for purposes
of clause (iii),’’.
(b) INITIAL LEVEL OF ADDITIONAL BEND POINT.—
Section 
215(a)(1)(B)(i) 
of 
such 
Act 
(42 
U.S.C.
415(a)(1)(B)(i)) is amended by adding at the end the fol-
lowing new sentence: ‘‘For individuals who initially become
eligible for old-age or disability insurance benefits, or who
die (before becoming eligible for such benefit), in the cal-
endar year 1998, the amount established for purposes of
clause (iii) of subparagraph (A) shall be $3,391.’’.
(c) USE OF CPI IN DETERMINING COST-OF-LIVING
INCREASES IN HIGHEST 2 BEND POINTS.—
(1) IN GENERAL.—Section 215(i)(2)(A)(ii) of
such Act (42 U.S.C. 415(i)(2)(A)(ii)) is amended by
striking the sentence after and below subdivision
(III) and inserting the following new sentences:
‘‘If the Commissioner, effective with December of any
year, increases the amounts described in subdivisions (I),
(II), and (III), the Commissioner shall also, effective for
the following calendar year, increase the amounts estab-
lished under subsection (a)(1)(B) for purposes of clauses
(ii) and (iii) of subsection (a)(1)(A). The increases in the
amounts described in subdivisions (I), (II), and (III) shall
be derived by multiplying each of the amounts (including
each of those amounts as previously increased under this
subparagraph) by the applicable increase percentage. The
increase in the amounts established under subsection
(a)(1)(B) for purposes of clauses (ii) and (iii) of sub-
section (a)(1)(A) shall be derived by multiplying each of
the amounts (including each of those amounts as pre-
viously increased under this subparagraph) by the excess
(if any) of the wage increase percentage over 1.3 percent-
age points. Any amount so increased that is not a multiple
of $0.10 shall be decreased to the next lower multiple of
$0.10.’’.
(2) 
CONFORMING
AMENDMENT.—Section
215(a)(1)(B)(ii) 
of 
such 
Act 
(42 
U.S.C.
415(a)(1)(B)(ii)) is amended by striking ‘‘each of
the amounts so established’’ and inserting ‘‘the
amount so established for purposes of subparagraph
(A)(i)’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply with respect to
amounts effective for calendar years after 1997.
SEC. 204. INFORMATION RELATING TO BENEFIT LIMITA-
TIONS PROVIDED IN SOCIAL SECURITY AC-
COUNT STATEMENTS.
(a) IN GENERAL.—Section 1143 of the Social Secu-
rity Act (42 U.S.C. 1320b–13) is amended—
(1) in the heading for subsection (a), by strik-
ing ‘‘Upon Request’’ and inserting ‘‘of Annual
Statements’’;
(2) in subsection (a)(1), by striking ‘‘Begin-
ning’’ and all that follows and inserting the follow-
ing: ‘‘Not later than October 1 of each year, the
Commissioner of Social Security shall provide an an-
nual social security account statement (hereinafter
in this section referred to as the ‘statement’) to each
eligible individual for whom a mailing address can be
determined through such methods as the Commis-
sioner determines to be appropriate.’’;
(3) in subsection (a)(2)(A), by striking ‘‘at the
date of the request’’;
(4) in subsection (a)(2)(B), by striking ‘‘on the
date of the request’’;
(5) in subsection (a)(2)(C), by striking ‘‘on the
date of the request’’ and by striking ‘‘and’’ at the
end;
(6) in subsection (a)(2)(D), by inserting ‘‘in the
case of individuals not receiving benefits,’’ after
‘‘(D)’’, and by striking ‘‘title XVIII.’’ and inserting
‘‘title XVIII;’’;
(7) by adding after subparagraph (D) the fol-
lowing:
‘‘(E) a table setting forth an estimate, in rela-
tion to 1980 and every 10th year thereafter through
2030, of the following information:
‘‘(i) the total amount of the current ad-
justed values of all employee, employer, and
self-employment contributions made with re-
spect to the wages and self-employment income
of the average earner retiring at retirement age
in each such year;
‘‘(ii) the total amount of the current ad-
justed values of the social security old-age or
survivors 
benefits 
(as 
defined 
in 
section
202(y)(3)(D)) paid for all prior months on the
basis of the wages and self-employment income
of the average earner retiring at retirement age
in each such year; and
‘‘(iii) the total amount of the current ad-
justed values of the monthly benefits which will
have been paid under such subsections, as of
the time of the death of the average earner re-
tiring at retirement age in each such year, on
the basis of his or her wages and self-employ-
ment income, as projected under the intermedi-
ate actuarial assumptions utilized by the Board
of Trustees of the Federal Old-Age and Survi-
vors Insurance Trust Fund for its most recent
annual report issued under section 201(c); and
‘‘(F) the year for which the annual rate of
outgo from the Federal Old-Age and Survivors In-
surance Trust Fund will first exceed the annual rate
of deposits to such Trust Fund (excluding any re-
turn of obligations held by such Trust Fund), as
projected under the intermediate actuarial assump-
tions utilized by the Board of Trustees of the Fed-
eral Old-Age and Survivors Insurance Trust Fund
for its most recent annual report issued under sec-
tion 201(c).
For purposes of subparagraph (E), the term ‘current ad-
justed value’ has the meaning provided in section
202(y)(3)(C).’’;
(8) by striking subsection (b);
(9) in subsection (c)—
(A) by striking the heading and inserting
the following: