I
106TH CONGRESS
2D SESSION
H. R. 4839
To amend title II of the Social Security Act and the Internal Revenue
Code of 1986 to provide prospectively for personalized retirement security
through personal retirement accounts to allow for more control by indi-
viduals over their Social Security retirement income.
IN THE HOUSE OF REPRESENTATIVES
JULY 12, 2000
Mr. SANFORD (for himself, Mr. BARR of Georgia, Mr. BARTON of Texas, Mr.
BURTON of Indiana, Mr. BRYANT, Mr. CAMPBELL, Mrs. CHENOWETH-
HAGE, Mr. COBURN, Mr. COX, Mr. DEMINT, Mr. DOOLITTLE, Mr. DUN-
CAN, Mr. GANSKE, Mr. GRAHAM, Mr. HERGER, Mr. HOEKSTRA, Mr.
HUNTER, Mr. HYDE, Mr. JONES of North Carolina, Mr. KINGSTON, Mr.
LARGENT, Mr. MCINNIS, Mr. MCINTOSH, Mr. METCALF, Mrs. MYRICK,
Mr. PAUL, Mr. PICKERING, Mr. PITTS, Mr. RILEY, Mr. SALMON, Mr.
SESSIONS, Mr. SCARBOROUGH, Mr. SCHAFFER, Mr. SHADEGG, Mr.
SHAYS, Mr. SMITH of New Jersey, Mr. SPENCE, Mr. SUNUNU, Mr.
TERRY, and Mr. TOOMEY) introduced the following bill; which was re-
ferred 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-
sonalized retirement security through personal retirement
accounts to allow for more control by individuals over
their Social Security retirement income.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Personal Lockbox Act
of 2000’’.
SEC. 2. PERSONAL RETIREMENT ACCOUNT PROGRAM.
(a) IN GENERAL.—Title II of the Social Security Act
(42 U.S.C. 401 et seq.) is amended—
(1) by inserting after the heading for title II
the following:
‘‘PART A—INSURANCE BENEFITS’’;
and
(2) by adding after section 233 (42 U.S.C. 433)
the following new part:
‘‘PART B—PERSONAL RETIREMENT ACCOUNT PROGRAM
‘‘Subpart 1—General Provisions
‘‘DEFINITIONS
‘‘SEC. 251. For purposes of this part—
‘‘(1) 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 who was
born on or after January 1, 1945, and to whom
wages are paid by such person during such calendar
year.
‘‘(2) COVERED
INDIVIDUAL.—The term ‘cov-
ered individual’ means, for any calendar year, any
individual—
‘‘(A) who was born on or after January 1,
1945, and
‘‘(B)(i) with respect to whose employment
by a covered employer during such calendar
year there is imposed an excise tax under sec-
tion 3111 of the Internal Revenue Code of
1986, or
‘‘(ii) on whose self-employment income, for
the taxable year beginning with or during such
calendar year, there is imposed a tax under sec-
tion 1401(a) of the Internal Revenue Code of
1986.
‘‘(3) EMPLOYMENT.—The term ‘employment’
has the meaning provided in section 210.
‘‘(4) PERSONAL RETIREMENT ACCOUNT.—The
term ‘personal retirement account’ means a trust
meeting the requirements of section 531 of the In-
ternal Revenue Code of 1986.
‘‘(5) PERSONAL RETIREMENT ACCOUNT HOLD-
ER.—The term ‘account holder’ means, with respect
to any personal retirement account, the individual
for whose benefit such account is maintained.
‘‘(6) SELF-EMPLOYMENT
INCOME.—The term
‘self-employment income’ has the meaning provided
in section 211(b).
‘‘(7) WAGES.—The term ‘wages’ has the mean-
ing provided in section 209.
‘‘DESIGNATION OF PERSONAL RETIREMENT ACCOUNTS
‘‘SEC. 252. (a) DESIGNATION OF PERSONAL RETIRE-
MENT ACCOUNTS.—In the case of any individual who is
a covered individual for a calendar year after 2000 for
whom a personal retirement account is not otherwise des-
ignated under this part, a personal retirement account
shall be designated for such individual in accordance with
this section to the extent necessary to receive deposits
made with respect to the individual under section 253.
Under regulations prescribed pursuant to this section, any
such individual may make such designation, in writing
filed with the Commissioner of Social Security, the Securi-
ties and Exchange Commission, and the Secretary of the
Treasury, in such form and manner as may be prescribed
in such regulations. The individual may designate another
personal retirement account in lieu of an account pre-
viously designated, in accordance with such regulations.
‘‘(b) DESIGNATION BY COMMISSIONER IN ABSENCE
OF TIMELY DESIGNATION BY INDIVIDUAL.—The initial
designation by an individual of a personal retirement ac-
count must be made within such period as shall be pre-
scribed in regulations under this section. In any case in
which there is no timely designation of a personal retire-
ment account with respect to such an individual, the Com-
missioner of Social Security shall make the designation of
a personal retirement account under subsection (a) on be-
half of such individual, in accordance with regulations pre-
scribed under to this section. For the purposes of desig-
nating such accounts, the Commissioner shall make ar-
rangements with certified institutions which shall be se-
lected by the Securities and Exchange Commission so as
to serve as trustees for such accounts in localities through-
out the United States.
‘‘(c) REGULATIONS.—The regulations under this sec-
tion shall be prescribed by the Commissioner of Social Se-
curity, in consultation with the Securities and Exchange
Commission and the Secretary of the Treasury.
‘‘FEDERAL CONTRIBUTIONS
‘‘SEC. 253. (a) IN GENERAL.—Not later than 18
months after the end of each calendar quarter in any cal-
endar year after 2000 for which an individual is a covered
individual, the Secretary of the Treasury shall deposit into
such individual’s personal retirement account, from
amounts in the Federal Old-Age and Survivors Insurance
Trust Fund not otherwise required for immediate with-
drawal, an amount equal to the product derived by
multiplying—
‘‘(1) the excess in the receipts of such Trust
Fund for such calendar quarter over the expendi-
tures of such Trust Fund for such calendar quarter,
by
‘‘(2) the allocation percentage for such indi-
vidual for such calendar year.
‘‘(b) ALLOCATION PERCENTAGE.—For purposes of
subsection (a), the allocation percentage for an individual
for a calendar year is the ratio, expressed as a percentage,
of—
‘‘(1) the total amount of the taxes paid under
sections 3101(a) and 3111(a) of the Internal Rev-
enue Code of 1986 with respect to such individual
in such calendar year and the taxes paid under sec-
tion 1401(a) of such Code with respect to such indi-
vidual in such calendar year, to
‘‘(2) the total amount of the taxes paid under
such sections 3101(a), 3111(a), and 1401(a) in such
calendar year with respect to all individuals who are
covered individuals for such calendar year.
‘‘(c) ELECTRONIC PAYMENT.—Deposits made pursu-
ant to subsection (a) shall, to the maximum extent prac-
ticable, be made by electronic payment.
‘‘Subpart 2—Certified Institutions
‘‘CERTIFICATION OF INSTITUTIONS BY SECURITIES AND
EXCHANGE COMMISSION
‘‘SEC 261. (a) IN GENERAL.—For purposes of meet-
ing the requirements of section 531 of the Internal Rev-
enue Code of 1986 (relating to trusteeship of personal re-
tirement accounts), any institution that is engaged, in a
fiduciary capacity, in the business of maintaining accounts
for individuals for purposes of investment may apply to
the Securities and Exchange Commission (in such form
and manner as shall be provided by the Commission by
regulation) for certification under this subpart.
‘‘(b) REVIEW REQUIREMENTS.—In reviewing any ap-
plication for certification under this subpart and deter-
mining whether to approve the application for certifi-
cation, the Commission shall consider the following fac-
tors:
‘‘(1) The financial history and condition of the
institution.
‘‘(2) The adequacy of the institution’s capital
structure.
‘‘(3) The future earnings prospects of the insti-
tution.
‘‘(4) The general character and fitness of the
management of the institution.
‘‘(5) The convenience and needs of individuals
who are account holders with respect to personal re-
tirement accounts for which the institution is to
serve as trustee.
‘‘(6) Whether the institution’s corporate powers
are consistent with the purposes of this part.
‘‘(c) NOTICE OF DENIAL OF APPLICATION FOR CER-
TIFICATION.—If the Commission votes to deny any appli-
cation for certification by any institution, the Commission
shall promptly notify the institution of the denial of such
application, giving specific reasons in writing for the Com-
mission’s determination with reference to the factors de-
scribed in subsection (b).
‘‘(d) NONDELEGATION REQUIREMENT.—The author-
ity of the Commission to make any determination to deny
any application under this section may not be delegated
by the Commission.
‘‘ACCESS TO RECORDS
‘‘SEC. 262. (a) IN GENERAL.—The Securities and
Exchange Commission may from time to time require any
certified institution to file such reports as the Commission
may deem advisable for purposes of this subpart.
‘‘(b) REPORTS BY CERTIFIED INSTITUTIONS.—
‘‘(1) IN GENERAL.—Each such report shall con-
tain a declaration by the president, by a vice presi-
dent, by the cashier or the treasurer, or by any other
officer designated by the board of directors or trust-
ees of the reporting certified institution to make
such declaration, that the report is true and correct
to the best of his knowledge and belief. The correct-
ness of such report shall be attested by the signa-
tures of at least two directors or trustees of the re-
porting certified institution other than the officer
making such declaration, with a declaration that the
report has been examined by them and to be the
best of their knowledge and belief is true and cor-
rect. At the time of making such reports each cer-
tified institution shall furnish to the Commission a
copy thereof containing such signed declaration and
attestations. Nothing in this paragraph shall be con-
strued to preclude any Federal or State agency or
instrumentality from requiring a certified institution
under its jurisdiction to make additional reports at
any time.
‘‘(2) INFORMATION TO BE PROVIDED.—In the
reports required to be made by paragraph (1), each
certified institution shall report the total amount of
the liability of the institution for balances main-
tained in personal retirement accounts for which
such institution serves as trustee.
‘‘(3) DATA COLLECTIONS.—In addition to or in
connection with any other report required under this
subsection, the Commission shall take such action as
may be necessary to ensure that—
‘‘(A) each certified institution maintains;
and
‘‘(B) the Commission receives on a regular
basis from such institution,
information on the total amount of all liability of the
institution for balances maintained in personal re-
tirement accounts for which such institution serves
as trustee. In prescribing reporting and other re-
quirements for the collection of actual and accurate
information pursuant to this paragraph, the Com-
mission shall minimize the regulatory burden im-
posed upon certified institutions while taking into
account the benefit of the information to the Com-
mission in carrying out its functions under this sub-
part.
‘‘REVOCATION OF CERTIFICATION
‘‘SEC. 263. (a) VOLUNTARY REVOCATION.—Any in-
stitution may revoke such institution’s status as a certified
institution if such institution provides written notice to the
Securities and Exchange Commission of the institution’s
intent to revoke such status not less than 90 days before
the effective date of such revocation.
‘‘(b) INVOLUNTARY REVOCATION.—
‘‘(1) NOTICE TO PRIMARY REGULATOR.—
‘‘(A) IN GENERAL.—If the Commission de-
termines that—
‘‘(i) a certified institution or the direc-
tors or trustees of a certified institution
have engaged or are engaging in unsafe or
unsound practices in conducting the busi-
ness of the institution,
‘‘(ii) a certified institution is in an un-
safe or unsound condition to continue op-
erations as a certified institution, or
‘‘(iii) a certified institution or the di-
rectors or trustees of the institution have
violated any applicable law, regulation,
order, condition imposed in writing by the
Commission in connection with the ap-
proval of any application or other request
by the institution, or written agreement
entered into between the institution and
the Commission,
and the Commission determines that any unsafe
or unsound practice or condition or any viola-
tion specified in such notice requires the revoca-
tion of the certified status of the certified insti-
tution, the Commission shall take the actions
required under subparagraph (B).
‘‘(B) REQUIRED
ACTIONS.—If the Com-
mission makes the determination under sub-
paragraph (A) with respect to a certified insti-
tution, the Commission shall—
‘‘(i) serve written notice to the cer-
tified institution of the Commission’s in-
tention to revoke the certified status of the
institution;
‘‘(ii) provide the certified institution
with a statement of the charges on the
basis of which the determination to revoke
such institution’s certified status was
made; and
‘‘(iii) notify the certified institution of
the date (not less than 30 days after notice
under this paragraph) and place for a
hearing before the Commission (or any
person designated by the Commission) with
respect to the revocation of the institu-
tion’s certified status.
‘‘(2) HEARING; REVOCATION.—If, on the basis
of the evidence presented at a hearing before the
Commission (or any person designated by the Com-
mission for such purpose), in which all issues shall
be determined on the record pursuant to section 554
of title 5, United States Code, and the written find-
ings of the Commission (or such person) with re-
spect to such evidence (which shall be conclusive),
the Commission finds that any unsafe or unsound
practice or condition or any violation specified in the
notice to a certified institution under paragraph (1)
has been established, the Commission may issue an
order revoking the certified status of such institution
effective as of a date subsequent to such finding.
‘‘(3) APPEARANCE; 
CONSENT
TO
REVOCA-
TION.—Unless the institution appears at the hearing
by a duly authorized representative, it shall be
deemed to have consented to the revocation of its
status as a certified institution and revocation of
such status thereupon may be ordered.
‘‘(4) PUBLICATION
OF
NOTICE
OF
REVOCA-
TION.—The Commission may publish notice of such
revocation and the institution shall give notice of
such revocation to the account holder of each per-
sonal retirement account for which the institution
serves as trustee at his last address of record on the
books of the institution, in such manner and at such
time as the Commission may find to be necessary
and may order for the protection of account holders.
‘‘(5) TEMPORARY
CONTINUANCE
OF
CERTIFI-
CATION AS OF REVOCATION.—After the Commission
has determined under the provisions of this sub-
section that the certified status of any institution is
to be revoked, the certification of the institution
shall continue for a period of at least 6 months or
up to 2 years, within the discretion of the Commis-
sion. The institution shall not advertise or hold itself
out as being a certified institution unless in the
same connection it shall also state with equal promi-
nence that such certification is temporarily in force
pending the termination of a limited continuance
certification after revocation thereof under this sub-
section. Such institution shall, in all other respects,
be subject to the duties and obligations of a certified
institution for the period referred to in the first sen-
tence of this paragraph from the date of such rev-
ocation, and the Commission shall have the same
powers and rights with respect to such institution as
in the case of a certified institution.
‘‘(6) TEMPORARY
SUSPENSION
OF
CERTIFI-
CATION.—
‘‘(A) IN GENERAL.—If the Commission ini-
tiates a revocation proceeding under paragraph
(1), and the Commission, after consultation
with any appropriate regulatory agency with ju-
risdiction over the institution, finds that the in-
stitution has no tangible capital under the cap-
ital guidelines or regulations of regulatory agen-
cy, the Commission may issue a temporary
order suspending certification of the institution.
‘‘(B) EFFECTIVE PERIOD OF TEMPORARY
ORDER.—Any order issued under subparagraph
(A) shall become effective not earlier than 10
days from the date of service upon the institu-
tion and, unless set aside, limited, or suspended
by a court in proceedings authorized under this
paragraph, such temporary order shall remain
effective and enforceable until an order of the
Commission under paragraph (2) becomes final
or until the Commission dismisses the pro-
ceedings under paragraph (2).
‘‘(C) JUDICIAL REVIEW.—Before the close
of the 10-day period beginning on the date any
temporary order has been served upon the insti-
tution under subparagraph (A), the institution
may apply to the United States District Court
for the District of Columbia, or the United
States district court for the judicial district in
which the home office of the institution is lo-
cated, for an injunction setting aside, limiting,
or suspending the enforcement, operation, or ef-
fectiveness of such order, and such court shall
have jurisdiction to issue such injunction.
‘‘(D) PUBLICATION OF ORDER.—The insti-
tution shall give notice of such order to the ac-
count holder of each personal retirement ac-
count for which the institution serves as trustee
in such manner and at such times as the Com-
mission may find to be necessary and may
order for the protection of account holders.
‘‘(E) NOTICE
BY
COMMISSION.—If the
Commission determines that the institution has
not substantially complied with the notice to
contributors required by the Commission, the
Commission may provide such notice in such
manner as the Commission may find to be nec-
essary and appropriate.
‘‘(7) FINAL
DECISIONS
TO
REVOKE
CERTIFI-
CATION.—Any decision by the Commission to—
‘‘(A) issue a temporary order revoking cer-
tification; or
‘‘(B) issue a final order revoking certifi-
cation;
shall be made by the Commission and may not be
delegated.
‘‘(8) JUDICIAL REVIEW.—Any party to any pro-
ceeding under this subsection to which an institution
is a party may obtain a review of any order served
pursuant to this subsection by the filing in the court
of appeals of the United States for the circuit in
which the home office of the institution is located,
or in the United States Court of Appeals for the
District of Columbia Circuit, within 30 days after
the date of service of such order, a written petition
praying that the order of the Commission be modi-
fied, terminated, or set aside. A copy of such peti-
tion shall be forthwith transmitted by the clerk of
the court to the Commission, and thereupon the
Commission shall file in the court the record in the
proceeding, as provided in section 2112 of title 28,
United States Code. Upon the filing of such petition,
such court shall have jurisdiction, which upon the
filing of the record shall be exclusive, to affirm,
modify, terminate, or set aside, in whole or in part,
the order of the Commission. Review of such pro-
ceedings shall be had as provided in chapter 7 of
title 5, United States Code. The judgment and de-
cree of the court shall be final, except that the judg-
ment and decree shall be subject to review by the
Supreme Court upon certiorari, as provided in sec-
tion 1254 of title 28, United States Code. The com-
mencement of proceedings for judicial review under
this paragraph shall not, unless specifically ordered
by the court, operate as a stay of any order issued
by the Commission.
‘‘INSTITUTION OF CLOSING PROCEEDINGS BY THE
COMMISSION
‘‘SEC. 264. (a) IN GENERAL.—The Securities and
Exchange Commission shall as soon as practicable insti-
tute proceedings under this section to close a personal re-
tirement account whenever the Commission determines
that—
‘‘(1) the certified status of the institution serv-
ing as trustee of the account ceases to be in effect,
or
‘‘(2) the trustee of the account is unable to
make full distributions of the balance in the account
when due.
The Commission may prescribe a simplified procedure to
follow in closing personal retirement accounts as long as
that procedure includes substantial safeguards for the
rights of the account holder. Notwithstanding any other
provision of this part, the Commission is authorized to
pool assets of closed personal retirement accounts for pur-
poses of administration, investment, payment of liabilities
of all such accounts, and such other purposes as it deter-
mines to be appropriate in the administration of this part.
‘‘(b) INITIAL
APPOINTMENT
OF
ALTERNATIVE
TRUSTEE.—
‘‘(1) IN GENERAL.—Whenever the Commission
makes a determination under subsection (a) with re-
spect to a personal retirement account, it may, upon
notice to the institution serving as trustee of the ac-
count, apply to the appropriate United States dis-
trict court for the appointment of an alternative
trustee to administer the account pending the
issuance of a decree under subsection (c) ordering
the closing of the account. If within 3 business days
after the filing of an application under this sub-
section, or such other period as the court may order,
the institution consents to the appointment of an al-
ternative trustee, or fails to show why an alternative
trustee should not be appointed, the court may grant
the application and appoint an alternative trustee to
administer the account in accordance with the terms
governing the account until the Commission deter-
mines that the account should be closed or that clos-
ing is unnecessary. The Commission may request
that it be appointed as alternative trustee of the ac-
count in any case.
‘‘(2) STANDARD FOR COURT APPOINTMENT.—
Notwithstanding any other provision of this part,
upon the petition of a certified institution or the
Commission, the appropriate United States district
court may appoint an alternative trustee in accord-
ance with the provisions of this section if the inter-
ests of the account holder with respect to the per-
sonal retirement account is maintained would be bet-
ter served by the appointment of the alternative
trustee.
‘‘(3) APPOINTMENT BY AGREEMENT BETWEEN
PARTIES.—The Commission and the institution serv-
ing as trustee of the account may agree to the ap-
pointment of an alternative trustee without pro-
ceeding in accordance with the requirements of para-
graphs (1) and (2).
‘‘(c) TERMINATION PROCEEDINGS.—
‘‘(1) IN GENERAL.—If the Commission is re-
quired under subsection (a) to commence pro-
ceedings under this section with respect to a per-
sonal retirement account or, after issuing a notice
under this section to the certified institution serving
as trustee of the account, has determined that the
account should be closed, the Commission may, upon
notice to the institution, apply to the appropriate
United States district court for a decree adjudi-
cating that the account must be closed in order to
protect the interests of the account holder with re-
spect to the account or to avoid any unreasonable
deterioration of the financial condition of the ac-
count. If the alternative trustee appointed under
subsection (b) disagrees with the determination of
the Commission under the preceding sentence, he
may intervene in the proceeding relating to the ap-
plication for the decree, or make application for such
decree himself. Upon granting a decree for which the
Commission or alternative trustee has applied under
this subsection, the court shall authorize the alter-
native trustee (or appoint an alternative trustee if
one has not been appointed under such subsection
and authorize him) to assume trusteeship of the per-
sonal retirement account, and provide for its liquida-
tion, in accordance with the provisions of this sec-
tion, and a transfer of its assets to a successor per-
sonal retirement account, in accordance with para-
graph (2).
‘‘(2) TRANSFER TO SUCCESSOR ACCOUNT.—In
any case in which a personal retirement account is
closed under this section, the Commission shall pro-
vide by regulation for procedures under which selec-
tion for the account holder of an appropriate suc-
cessor personal retirement account is facilitated and
a trustee-to-trustee transfer of the balance in the
closed account to the successor account is made.
Whenever an alternative trustee appointed under
this section is exercising trusteeship authority over
a personal retirement account with discretion as to
the date upon which transfer of the assets from the
account to a successor account is to be performed,
the alternative trustee shall notify the Commission
at least 10 days before the date on which he pro-
poses to perform such transfer. The original trustee
of the closed account shall be liable to the trustee of
the successor account for the costs of the transfer.
‘‘(d) TRUSTEESHIP
WITHOUT
CLOSING.—If the
Commission and the institution agree that trusteeship
over the personal retirement account should be assumed
by an alternative trustee appointed under this section and
agree to the appointment of an alternative trustee without
proceeding in accordance with the requirements of sub-
section (c), the alternative trustee shall have the power
‘‘(E) to do such other acts as he deems
necessary to continue operation of the account
without increasing risk of loss to the account
holder, if such acts may be done under the doc-
uments governing the account; and
‘‘(F) to require the institution to furnish
any information with respect to the account
which the alternative trustee may reasonably
need in order to administer the account.
‘‘(2) 
TIME
LIMITATION
ON
ALTERNATIVE
TRUSTEESHIP WHERE CLOSING DOES NOT ENSUE.—
If the court to which application is made under sub-
section (c) dismisses the application with prejudice,
or if the Commission fails to apply for a decree
under subsection (c) within 30 days after the date
on which the alternative trustee is appointed under
subsection (b), the alternative trustee shall transfer
all assets and records of the account held by him to
the institution which had been serving as trustee of
the account within 3 business days after such dis-
missal or the expiration of such 30-day period, and
shall not be liable to the institution or any other per-
son for his acts as alternative trustee except for will-
ful misconduct, or for conduct in violation of any
other provision of this part. The 30-day period re-
ferred to in this paragraph may be extended as pro-
vided by agreement between the institution and the
Commission or by court order obtained by the Com-
mission.
‘‘(3) ADDITIONAL POWERS UPON CLOSING.—If
the court to which an application is made under sub-
section (c) issues the decree requested in such appli-
cation, in addition to the powers described in para-
graph (1), the alternative trustee shall have the
power—
‘‘(A) to collect for the account any
amounts due the account;
‘‘(B) to commence, prosecute, or defend on
behalf of the institution or the account any suit
or proceeding involving the account;
‘‘(C) to issue, publish, or file such notices,
statements, and reports as may be required by
the Commission or any order of the court;
‘‘(D) to liquidate the assets of the account
and perform the transfer of such assets to a
successor personal retirement account as pro-
vided in subsection (c)(2);
‘‘(E) to recover payments inappropriately
made from the account; and
‘‘(F) to do such other acts as may be nec-
essary to comply with this part or any order of
the court and to protect the interests of the ac-
count holder of the closed account.
‘‘(4) NOTICE
OF
PROCEEDINGS.—As soon as
practicable after his appointment, the alternative
trustee shall give notice to interested parties of the
institution of proceedings under this section to de-
termine whether the account should be closed or to
close the account, whichever is applicable. For pur-
poses of this paragraph, the term ‘interested party’
means—
‘‘(A) the institution,
‘‘(B) the account holder with respect to the
account was maintained, including the bene-
ficiary of the account holder who is deceased,
‘‘(C) each person who may be liable for
payments to the account.
‘‘(5) ADDITIONAL DUTIES.—Except to the ex-
tent inconsistent with the provisions of this part, or
as may be otherwise ordered by the court, an alter-
native trustee appointed under this section shall be
subject to the same duties as those of a trustee
under section 704 of title 11, United States Code,
and shall be, with respect to the account, a fiduciary
within the meaning of paragraph (21) of section 3
of the Employee Retirement Income Security Act of
1974 and under section 4975(e) of the Internal Rev-
enue Code of 1986 (except to the extent that the
provisions of this part are inconsistent with the re-
quirements applicable under part 4 of subtitle B of
title I of such Act and of such section 4975).
‘‘(f) COORDINATION WITH BANKRUPTCY OR OTHER
INSOLVENCY PROCEEDINGS.—An application by the Com-
mission under this section may be filed notwithstanding
the pendency in the same or any other court of any bank-
ruptcy, mortgage foreclosure, or equity receivership pro-
ceeding, or any proceeding to reorganize, conserve, or liq-
uidate the personal retirement account or the institution,
or its assets, or any proceeding to enforce a lien against
assets of the account or the institution.
‘‘(g) COURT JURISDICTION.—Upon the filing of an
application for the appointment of an alternative trustee
or the issuance of a decree under this section, the court
to which an application is made shall have exclusive juris-
diction of the account involved and its assets wherever lo-
cated with the powers, to the extent consistent with the
purposes of this section, of a court of the United States
having jurisdiction over cases under chapter 11 of title 11
of the United States Code. Pending an adjudication under
subsection (c), such court shall stay, and upon appoint-
ment by it of an alternative trustee, as provided in this
section, such court shall continue the stay of, any pending
mortgage foreclosure, equity receivership, or other pro-
ceeding to reorganize, conserve, or liquidate the account
or its assets and any other suit against any receiver, con-
servator, or trustee of the account or the institution, or
its assets. Pending such adjudication and upon the ap-
pointment by it of such alternative trustee, the court may
stay any proceeding to enforce a lien against property of
the account or the institution or any other suit against
the account or the institution.
‘‘(h) VENUE AND PROCESS.—An action under this
section may be brought in the judicial district where the
institution serving as trustee of the personal retirement
account is located or does business or where any asset of
the account or the institution is situated. A district court
in which such action is brought may issue process with
respect to such action in any other judicial district.
‘‘(i) COMPENSATION AND PERSONNEL FOR ALTER-
NATIVE TRUSTEES.—
‘‘(1) COMPENSATION.—The amount of com-
pensation paid to each alternative trustee appointed
under the provisions of this section shall require the
prior approval of the Commission, and, in the case
of an alternative trustee appointed by a court, the
consent of that court.
‘‘(2) APPOINTMENT AND RETENTION OF PER-
SONNEL.—Alternative trustees appointed under this
section shall appoint, retain, and compensate ac-
countants, actuaries, and other professional service
personnel in accordance with regulations prescribed
by the Commission.
‘‘Subpart 3—Investment Standards, Reporting and
Disclosure Requirements, and Fiduciary Duties
‘‘INVESTMENT STANDARDS
‘‘SEC. 271. (a) REQUIRED FORMS
OF INVEST-
MENT.—Under the terms governing a personal retirement
account, amounts held in the account shall be invested,
at the option of the account holder, in any of not fewer
than 3 forms of investment, consisting of—
‘‘(1) a broad-based portfolio of common stock,
‘‘(2) a portfolio consisting of United States
Treasury bills issued under chapter 31 of title 31,
United States Code, savings bonds or similar obliga-
tions issued under such chapter which are indexed to
inflation, or any combination of the foregoing, and
‘‘(3) a broad-based portfolio of private sector
obligations.
‘‘(b) REQUIRED CHOICE
OF PORTFOLIOS.—Under
the terms governing a personal retirement account, the ac-
count holder shall be provided with not fewer than 5 and
not more than 15 portfolio options, assembled so as to
provide the account holder, in combination, at least the
options required under subsection (a). Each such portfolio
shall be approved by the Securities and Exchange Com-
mission under this section.
‘‘(c) DEFAULT PORTFOLIO SELECTIONS.—Among
the approved portfolio options required under subsection
(b), one option shall be the default option, as so designated
by the certified institution serving as trustee of the ac-
count. The certified institution may designate 2 or more
different default options for 2 or more groups of account
holders, respectively, categorized by age. Any such default
option shall apply unless an alternative selection is made
by the account holder under subsection (b). Application
of any such default option in the case of any account hold-
er in the absence of an alternative selection by the account
holder shall be deemed to comply with applicable fiduciary
standards.
‘‘(d) APPROVAL
OF PORTFOLIOS.—A portfolio of-
fered for a personal retirement account may be approved
by the Commission only if—
‘‘(1) to the extent that the portfolio provides an
investment form described in paragraph (1) or (3) of
subsection (a), the portfolio replicates the assets of
a broad-based index of equities or obligations meet-
ing requirements which shall be prescribed in regula-
tions of the Commission,
‘‘(2) the portfolio is managed exclusively by the
investment manager so as to minimize risk on the
part of the individual investor,
‘‘(3) the portfolio is constructed so as not to
present an unreasonable risk of loss inconsistent
with saving for retirement, and
‘‘(4) any charge for administrative expenses in
connection with the account (including any fee
charged in connection with management of the port-
folio) is expressed in terms of a flat fee for a fixed
period of time, except that additional charges may
be required, in accordance with regulations of the
Commission, on a reasonable basis and at reasonable
margins, as may be necessary to allow for—
‘‘(A) reasonable payment of appropriate
management fees to investment managers, and
‘‘(B) costs relating to accounting for vol-
untary contributions to the account,
if such additional charges are set forth separately
and clearly identified as such.
‘‘(e) SPECIAL RULES.—
‘‘(1) LIMITS ON ASSET REALLOCATIONS.—The
Commission shall establish by regulation reasonable
limits on the frequency of changes in allocations of
assets in personal retirement accounts to invest-
ments permitted under this section.
‘‘(2) INVESTMENT
OF
ACCOUNTS
WITH
DE
MINIMIS BALANCES.—In the case of a personal re-
tirement account with a balance of less than $500,
the certified institution serving as trustee of such ac-
count may provide for investment of such balance
solely in accordance with policies established by such
institution. The Commission shall prescribe regula-
tions which shall set forth standards which such
policies must meet and shall provide for adequate
disclosure of such policies to the account holder.
‘‘REPORTING AND DISCLOSURE REQUIREMENTS
‘‘SEC. 272. (a) IN GENERAL.—In the case of a per-
sonal retirement account which does not form part of an
individual account plan covered under part 1 of subtitle
B of title I of the Employee Retirement Income Security
Act of 1974, rules similar to the rules of such part 1 appli-
cable to individual account plans covered under such part
1 shall apply with respect to such account and the terms
of any arrangement under which such account is main-
tained, to the extent that the application of such rules to
personal retirement accounts is determined by the Securi-
ties and Exchange Commission by regulation to be appro-
priate. Compliance with the requirements of this sub-
section may be by electronic means in the case of personal
retirement account holders having reasonable access there-
to, if such electronic means meets requirements which
shall be prescribed in regulations of the Commission and
receipt of information by the account holder by electronic
means is elected by the account holder in accordance with
such regulations.
‘‘(b) GENERAL REQUIREMENTS.—In applying under
subsection (a) the rules of part 1 of subtitle B of title
I of the Employee Retirement Income Security Act of
1974 in the case of a personal retirement account de-
scribed in subsection (a), references in such part to the
Secretary of Labor shall be deemed to be references to
the Securities and Exchange Commission, references in
such part to a participant or beneficiary in connection with
an individual account plan covered under such part shall
be deemed to be references to the account holder with re-
spect to the personal retirement account, and references
in such part to the plan administrator or plan sponsor in
connection with an individual account plan covered under
such part shall be deemed to be references to the trustee
of the personal retirement account.
‘‘(c) COORDINATION
OF
REPORTING
REQUIRE-
MENTS.—The Securities and Exchange Commission and
the Secretary of Labor shall jointly issue regulations so
as to ensure that requirements of part 1 of subtitle B of
title I of the Employee Retirement Income Security Act
of 1974 applicable to any trustee that is a certified institu-
tion and the requirements of this section are mutually con-
sistent and to minimize administrative expense. Separate
inclusion of information relating to a personal retirement
account maintained by a certified institution in an annual
report filed by such institution pursuant to section 103
of the Employee Retirement Income Security Act of 1974
shall be treated as meeting the annual reporting require-
ment under this subsection relating to such personal re-
tirement account. The Secretary of Labor and the Securi-
ties and Exchange Commission shall provide for prompt
transmission to the Commission of a copy of any such an-
nual report filed by a certified institution with such Sec-
retary relating to the personal retirement account.
‘‘(d) SPECIFIC TRUSTEE REQUIREMENTS.—The re-
quirements of this section relating to the trustee of a per-
sonal retirement account under this section shall not be
treated as met unless the trustee—
‘‘(1) submits to the Securities and Exchange
Commission periodic evaluations of the investment
options available to personal retirement account
holders in accordance with regulations which shall be
prescribed by the Commission and makes such eval-
uations reasonably available to the personal retire-
ment account holders in accordance with such regu-
lations, and
‘‘(2) the trustee provides to the personal retire-
ment account holder—
‘‘(A) in connection with the designation of
the account under section 252 and at least
semi-annually thereafter, in language under-
standable by the typical account holder, infor-
mation describing the investment options avail-
able to the account holder which shall be speci-
fied in regulations of the Securities and Ex-
change Commission and which shall be suffi-
cient to enable a reasonably educated selection
of portfolio options offered by the trustee,
‘‘(B) on an annual basis, a disclosure of all
fees and other charges imposed by the trustee
with respect to the personal retirement account,
‘‘(C) on a quarterly basis, an accounting of
all activity of the personal retirement account
during the preceding quarter, and
‘‘(D) on an annual basis, an accounting of
all activity of the personal retirement account
during the preceding year.
‘‘FIDUCIARY DUTIES
‘‘SEC. 273. (a) IN GENERAL.—In the case of a per-
sonal retirement account which does not form part of an
individual account plan covered under part 4 of subtitle
B of title I of the Employee Retirement Income Security
Act of 1974, rules similar to the rules of such part 4 appli-
cable to individual account plans covered under such part
4 shall apply with respect to a personal retirement account
and the terms of any arrangement under which such ac-
count is maintained.
‘‘(b) GENERAL REQUIREMENTS.—In applying under
subsection (a) the rules of part 4 of subtitle B of title
I of the Employee Retirement Income Security Act of
1974 in the case of a personal retirement account, ref-
erences in such part to the Secretary of Labor shall be
deemed to be references to the Securities and Exchange
Commission, references in such part to a participants or
beneficiary in connection with an individual account plan
covered under such part shall be deemed to be references
to the account holder with respect to the personal retire-
ment account, and references in such part to the plan ad-
ministrator or plan sponsor in connection with an indi-
vidual account plan covered under such part shall be
deemed to be references to the trustee of the personal re-
tirement account.
‘‘(c) LIMITATION ON LIABILITY.—Any account holder
who issues an instruction to the trustee of the account
directing an investment of funds held in the account shall
sign an acknowledgement prescribed by the Securities and
Exchange Commission which states that the account hold-
er understands that an investment of any amount in the
account is made at the account holder’s risk, that the ac-
count holder is not protected by the Government or by
the trustee against any loss on such investment, and that
a return on such investment is not guaranteed by the Gov-
ernment or by the trustee. Notwithstanding the preceding
provisions of this section and any other provision of Fed-
eral or State law, the trustee of a personal retirement ac-
count shall not be liable for losses suffered in connection
with any investment of assets held in the account unless
it is shown by clear and convincing evidence that the trust-
ee did not act in the manner in which a reasonable trustee
would act under the circumstances then prevailing in eval-
uating the risk and reward properties of the investment
option involved.
‘‘Subpart 4—Enforcement
‘‘CAUSE OF ACTION
‘‘SEC. 281. The account holder with respect to a per-
sonal retirement account who is adversely affected by an
act or practice of any party (other than the Securities and
Exchange Commission, the Social Security Administra-
tion, the Department of the Treasury, or any officer or
employee of any of the foregoing) in violation of any provi-
sion of this part, may bring an action—
‘‘(1) to enjoin such act or practice, or
‘‘(2) to obtain other appropriate equitable relief
(A) to redress such violation or (B) to enforce such
provision.
‘‘JURISDICTION AND VENUE
‘‘SEC. 282. Civil actions under this subpart may be
brought in the district courts of the United States in the
district where the personal retirement account is adminis-
tered, where the violation took place, or where a defendant
resides or may be found, and process may be served in
any district where a defendant resides or may be found.
The district courts of the United State shall have jurisdic-
tion, without regard to the amount in controversy or the
citizenship of the parties, to grant the relief provided for
in section 281 in any action.
‘‘RIGHT OF SECURITIES AND EXCHANGE COMMISSION TO
INTERVENE
‘‘SEC. 283. A copy of the complaint or notice of ap-
peal in any action under this subpart shall be served upon
the Securities and Exchange Commission by certified mail.
The Commission shall each have the right to intervene in
any action.
‘‘AWARDS OF COSTS AND EXPENSES
‘‘SEC. 284. In any action brought under this subpart,
the court in its discretion may award all or a portion of
the costs and expenses incurred in connection with such
action, including reasonable attorney’s fees, to any party
who prevails or substantially prevails in such action.
‘‘LIMITATION ON ACTIONS
‘‘SEC. 285. (a) IN GENERAL.—Except as provided in
subsection (c), an action under this subpart may not be
brought after the later of—
‘‘(1) 6 years after the date on which the cause
of action arose, or
‘‘(2) 3 years after the applicable date specified
in subsection (b).
‘‘(b) APPLICABLE DATE.—The applicable date speci-
fied in this subsection is the earliest date on which the
plaintiff acquired or should have acquired actual knowl-
edge of the existence of such cause of action.
‘‘(c) CASES OF FRAUD OR CONCEALMENT.—In the
case of fraud or concealment, the period described in sub-
section (a)(2) shall be extended to 6 years after the appli-
cable date specified in subsection (b).
‘‘PENALTY FOR FAILURE TO TIMELY PROVIDE REQUIRED
INFORMATION
‘‘SEC. 286. The Securities and Exchange Commission
may assess a penalty, payable to it, against any person
who fails to provide any notice or other material informa-
tion required under this part or any regulations prescribed
under this part within the applicable time limit specified
therein. Such penalty shall not exceed $1,000 for each day
for which such failure continues.
‘‘ACTIONS BY SECURITIES AND EXCHANGE COMMISSION
‘‘SEC. 287. If any person is assessed under this sub-
part and fails to pay the assessment when due, or any
person otherwise fails to meet any requirement of this
part, the Securities and Exchange Commission may bring
a civil action in any district court of the United States
within the jurisdiction of which such person’s assets are
located or in which such person resides or is found for
the recovery of the amount of the assessment or for appro-
priate equitable relief to redress the violation or enforce
the provisions of this part, and process may be served in
any other district. The district courts of the United States
shall have jurisdiction over actions brought under this sec-
tion by the Commission without regard to the amount in
controversy.
‘‘CRIMINAL PENALTY FOR FRAUD OR INTENTIONAL MIS-
REPRESENTATION
IN
CONNECTION
WITH
INVEST-
MENT OPTIONS
‘‘SEC. 288. Any person who makes, or causes to be
made, a statement or representation of a material fact for
use in selecting an investment option under section 271
that the person knows or should know is false or mis-
leading or knows or should know omits a material fact
or makes such a statement with knowing disregard for the
truth shall upon conviction be fined not more than
$500,000 or imprisoned for not more than 5 years, or
both.’’.
(b) IMPLEMENTATION.—The Securities and Ex-
change Commission, in consultation with the Commis-
sioner of Social Security and the Secretary of the Treas-
ury, shall establish an expedited procedure to ensure time-
ly implementation of the amendments made by this sec-
tion. The Commission shall submit to each House of the
Congress report on the status of such implementation not
later than March 1, 2001. All measures necessary to pre-
pare for full implementation of such amendments shall be
completed by the Commission, the Commissioner, and the
Secretary not later than July 1, 2001.
SEC. 3. PERSONAL RETIREMENT ACCOUNTS.
(a) IN GENERAL.—Subchapter F of chapter 1 of the
Internal Revenue Code of 1986 (relating to exempt organi-
zations) is amended by adding at the end the following
new part:
‘‘PART IX—PERSONAL RETIREMENT ACCOUNTS
‘‘Sec. 531. Personal Retirement Accounts.
‘‘SEC. 531. PERSONAL RETIREMENT ACCOUNTS.
‘‘(a) GENERAL RULE.—A personal retirement ac-
count shall be exempt from taxation under this subtitle.
Notwithstanding the preceding sentence, the personal re-
tirement account shall be subject to the taxes imposed by
section 511 (relating to imposition of tax on unrelated
business income of charitable organizations).
‘‘(b) PERSONAL RETIREMENT ACCOUNT DEFINED.—
For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘personal retire-
ment account’ means a trust which is designated
under section 252 of the Social Security Act as a
personal retirement account and which is created or
organized in the United States for the exclusive ben-
efit of an individual, or the beneficiaries of such in-
dividual, but only if the written governing instru-
ment creating the trust meets the following require-
ments:
‘‘(A) The contribution requirements of sub-
section (c) are met.
‘‘(B) The distribution requirements of sub-
section (d) are met.
‘‘(C) The trustee requirements of sub-
section (f) are met.
‘‘(D) The investment requirements of sub-
part 3 of part B of title II of the Social Secu-
rity Act are met.
‘‘(E) The interest of an individual in the
balance in his account is nonforfeitable.
‘‘(2) AGGREGATION OF ACCOUNTS.—For pur-
poses of determining whether the requirements of
paragraph (1) are met in a taxable year, a prede-
cessor personal retirement account and a successor
personal retirement account of an account holder
shall be treated as 1 account.
‘‘(c) CONTRIBUTION REQUIREMENTS.—
‘‘(1) IN GENERAL.—The requirements of this
subsection are met if, except in the case of a rollover
contribution described in paragraph (2) or sub-
section (e)(4), no contribution will be accepted un-
less it is in cash, and contributions will not be ac-
cepted for the taxable year on behalf of any indi-
vidual in excess of the sum of—
‘‘(A) the Federal contribution under sec-
tion 253 of the Social Security Act,
‘‘(B) the entitlement payment for early
contributions under section 54, and
‘‘(C) $10,000.
‘‘(2) ROLLOVER CONTRIBUTIONS FROM ELIGI-
BLE RETIREMENT PLANS.—
‘‘(A) IN
GENERAL.—A rollover contribu-
tion is described in this paragraph if such con-
tribution is—
‘‘(i) an eligible rollover distribution
out of a qualified trust and excluded from
gross 
income 
under 
section 
402(c),
403(a)(4), or 403(b)(8), determined, for
purposes of this paragraph, by treating the
personal retirement account as a qualified
trust, employee annuity, or annuity con-
tract, as the case may be, or
‘‘(ii) an eligible rollover within the
meaning of section 408(d)(3)) out of an in-
dividual retirement account or individual
retirement annuity, determined, for pur-
poses of this paragraph, by treating the
contribution to the personal retirement ac-
count as a payment into an individual re-
tirement account or individual retirement
annuity.
‘‘(B) INCLUSION
IN
GROSS
INCOME
FOR
ROLLOVER
CONTRIBUTIONS, SPREAD
OVER
4-
YEAR TAXABLE PERIOD.—For purposes of any
rollover contribution described in subparagraph
(A), rules similar to the rules of section
408A(d)(3) shall apply, except that the date in
subparagraph (A)(iii) thereof shall be dis-
regarded. The preceding sentence shall not
apply to a rollover contribution from a Roth
IRA.
‘‘(C) NO ROLLOVER FROM CURRENT DE-
FINED CONTRIBUTION PLAN.—For purposes of
subparagraph (A)(i), amounts may not be rolled
over to a personal retirement account from any
defined contribution plan which is maintained
by the employer of the employee who is the ac-
count holder of the personal retirement account
on the date such rollover is made.
‘‘(d) DISTRIBUTION REQUIREMENTS.—
‘‘(1) IN
GENERAL.—The distribution require-
ments of this paragraph are met if—
‘‘(A)(i) no payment or distribution from
the personal retirement account from amounts
attributable to Federal contributions may be
made from the personal retirement account be-
fore the date the account holder attains age 62,
and
‘‘(ii) on and after the date the account
holder attains age 62, no payment or distribu-
tion from the personal retirement account from
amounts attributable to Federal contributions
may be made in a taxable year if, immediately
after the distribution, the amount remaining in
the account that is attributable to Federal con-
tributions is less than the minimum annuity
amount, and
‘‘(B) no payment or distribution from the
personal retirement account from amounts at-
tributable to voluntary contributions may be
made from the personal retirement account be-
fore the date the account holder attains age
591⁄2.
‘‘(2) EXCEPTIONS.—The requirements of para-
graph (1) shall not be treated as not met solely by
reason of—
‘‘(A) any trustee-to-trustee transfer from a
personal retirement account to a successor per-
sonal retirement account,
‘‘(B) any payment or distribution used to
purchase a minimum annuity or a survivor an-
nuity that meets the requirements of paragraph
(3)(B)(ii),
‘‘(C) any payment or distribution from
amounts attributable to voluntary contributions
by reason of the individual’s being disabled
(within the meaning of section 72(m)(7)),
‘‘(D) any payment or distribution made to
a beneficiary (or to the estate of the employee)
on or after the death of the account holder,
‘‘(E) any payment or distribution which is
a return of contributions described in sub-
section (e)(5),
‘‘(F) any payment or distribution incident
to divorce (within the meaning of subsection
(e)(6)),
‘‘(G) any payment or distribution to which
subsection (e)(7) applies,
‘‘(H) any payment or distribution to which
subsection (e)(8) applies,
‘‘(I) any payment or distribution for ad-
ministrative expenses charged by the trustee of
the personal retirement account meeting the ap-
plicable requirements of section 271(d)(4) of
the Social Security Act, and
‘‘(J) any payment or distribution which
fails to meet the requirements of paragraph (1)
with respect to which the Secretary makes the
good faith determination described in sub-
section (e)(10).
‘‘(3) MINIMUM
ANNUITY
AMOUNT; MINIMUM
ANNUITY.—For purposes of this subsection—
‘‘(A) MINIMUM ANNUITY AMOUNT.—
‘‘(i) IN
GENERAL.—The term ‘min-
imum annuity amount’ means, as of any
date, the amount determined by the trust-
ee (under regulations issued by the Sec-
retary) to be necessary to purchase on
such date an immediate annuity which is a
minimum annuity.
‘‘(ii) REDUCTION
TO
ACCOUNT
FOR
OLD-AGE
INSURANCE
BENEFITS.—In the
case of a personal retirement account hold-
er who is entitled to old-age insurance ben-
efits under section 202 of the Social Secu-
rity Act, the minimum annuity amount de-
termined under clause (i) shall be reduced
by the actuarial present value, as of the
date referred to in clause (iii), of future
old-age insurance benefits payable to such
individual under such section (determined
by using reasonable assumptions which
shall be prescribed by the Commission).
‘‘(iii) IMMEDIATE ANNUITY.—For pur-
poses of clause (i), the term ‘immediate
annuity’ means an annuity—
‘‘(I) which is purchased with a
single premium or annuity consider-
ation,
‘‘(II) the annuity starting date
(as defined in section 72(c)(4)) of
which commences no later than 1 year
from the date of the purchase of the
annuity, and
‘‘(III) which provides for a series
of substantially equal periodic pay-
ments (to be made not less frequently
than annually) during the annuity pe-
riod, subject to adjustment under sub-
paragraph (D).
‘‘(B) MINIMUM ANNUITY.—
‘‘(i) IN
GENERAL.—The term ‘min-
imum annuity’ means an amount deter-
mined under regulations issued by the
Commissioner of Social Security. Such
amount shall be stated on a monthly basis
and shall assume an annuity making pay-
ments over the life (or life expectancy) of
the account holder.
‘‘(ii) JOINT AND SURVIVOR ANNUITY
AND PRERETIREMENT SURVIVOR ANNUITY
REQUIREMENTS.—An annuity shall not be
treated as a minimum annuity within the
meaning of clause (i) unless the require-
ments of section 401(a)(11) applicable to
plans are met with respect to such annuity,
except that, for purposes of this clause, the
minimum required survivor annuity shall
be an amount such that the monthly equiv-
alent thereof is equal to the excess of—
‘‘(I) the widow’s or widower’s in-
surance benefit under section 202 of
the Social Security Act to which the
surviving spouse would have been eli-
gible upon the personal retirement ac-
count holder’s death without the ap-
plication of section 215(a)(8) of such
Act, over
‘‘(II) the amount of such widow’s
or widower’s insurance benefit.
‘‘(C) LIFE EXPECTANCY TABLES.—In de-
termining life expectancy for purposes of sub-
paragraphs (A) and (B), the trustee of a per-
sonal retirement account shall not be treated as
failing to meet the requirements of this para-
graph if the trustee follows life expectancy ta-
bles prescribed by the Commissioner of Social
Security for purposes of this paragraph.
‘‘(e) TAX TREATMENT OF DISTRIBUTIONS.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection—
‘‘(A) AMOUNT
ATTRIBUTABLE
TO
FED-
ERAL CONTRIBUTIONS.—In the case of the por-
tion of any payment or distribution out of a
personal retirement account that is the amount
attributable to Federal contributions—
‘‘(i) 1⁄2 of such portion shall be treat-
ed as a social security benefit under sec-
tion 86, and
‘‘(ii) 1⁄2 of such portion shall not be
includible in gross income.
‘‘(B) AMOUNT
ATTRIBUTABLE
TO
VOL-
UNTARY CONTRIBUTIONS.—The portion of any
payment or distribution out of a personal retire-
ment account that is the amount attributable to
voluntary contributions shall not be includible
in gross income.
‘‘(2) EARLY
WITHDRAWAL
OF
CONTRIBU-
TIONS.—
‘‘(A) IN
GENERAL.—In the case of an
amount paid or distributed out of a personal re-
tirement account to a personal retirement ac-
count holder who—
‘‘(i) in the case of amounts attrib-
utable to Federal contributions, has not at-
tained age 62, and
‘‘(ii) in the case of amounts attrib-
utable to voluntary contributions, has not
attained age 591⁄2,
the tax of such personal retirement account
holder under this chapter for the taxable year
in which such amount is received shall be in-
creased by an amount equal to the applicable
percentage of the portion of such amount which
is includible in gross income.
‘‘(B) 
APPLICABLE
PERCENTAGE.—For
purposes of subparagraph (A), the term ‘appli-
cable percentage’ means—
‘‘(i) 100 percent in the case of
amounts attributable to Federal contribu-
tions, and
‘‘(ii) 10 percent in the case of
amounts attributable to voluntary con-
tributions.
‘‘(C) SPECIAL RULE.—For purposes of this
paragraph, the amount includible in gross in-
come shall be determined under section 72.
‘‘(3) EXCESS DISTRIBUTIONS.—
‘‘(A) IN GENERAL.—In the case of excess
distributions from a personal retirement ac-
count to a personal retirement account holder,
the tax of such personal retirement account
holder under this chapter for the taxable year
in which such amount is received shall be in-
creased by an amount equal to 10 percent of
the portion of such amount which is includible
in gross income.
‘‘(B) EXCESS DISTRIBUTIONS DEFINED.—
For purposes of subparagraph (A), the term
‘excess distribution’ means a distribution from
a personal retirement account that is prohibited
by subsection (d)(1)(A)(ii).
‘‘(C) APPLICABLE
RULES.—Rules similar
to the rules of paragraphs (2) and (3) of sec-
tion 4980A(c) (as in effect before the date of
the enactment of the Taxpayer Relief Act of
1997) shall apply for purposes of subparagraph
(A).
‘‘(4) ROLLOVER CONTRIBUTION TO SUCCESSOR
PERSONAL RETIREMENT ACCOUNT.—
‘‘(A) IN
GENERAL.—Paragraph (1) does
not apply to any amount paid or distributed out
of a personal retirement account of an account
holder to another personal retirement account
of such account holder if such transfer meets
the requirements of subparagraph (B).
‘‘(B) REQUIREMENTS.—A transfer meets
the requirements of this subparagraph if—
‘‘(i) such transfer is a direct trustee-
to-trustee transfer,
‘‘(ii) the entire amount in the account
from which the distribution is made is so
transferred,
‘‘(iii) during the 12-month period end-
ing with the month preceding the month in
which such transfer occurred, not more
than 2 such transfers were made, and
‘‘(iv) during the 3-year period ending
with the month preceding the month in
which such transfer occurred, not more
than 4 such transfers were made.
‘‘(C) INVOLUNTARY TRANSFER.—A trans-
fer of assets as a result of the replacement of
a trustee or closing an account under subpart
II of part B of title II of the Social Security
Act shall not be taken into account for purposes
of clauses (iii) and (iv) of subparagraph (B).
‘‘(5) CONTRIBUTIONS RETURNED BEFORE DUE
DATE OF RETURN.—Paragraph (1) does not apply to
the distribution of any contribution paid during a
taxable year to a personal retirement account if—
‘‘(A) such distribution is received on or be-
fore the day prescribed by law (including exten-
sions of time) for filing such individual’s return
for such taxable year, and
‘‘(B) such distribution is accompanied by
the amount of net income attributable to such
contribution.
In the case of such a distribution, for purposes of
section 61, any net income described in subpara-
graph (B) shall be deemed to have been earned and
receivable in the taxable year in which such con-
tribution is made.
‘‘(6) TRANSFER OF ACCOUNT INCIDENT TO DI-
VORCE.—For purposes of this section, rules similar
to the rules of section 408(d)(6) (relating to transfer
of account incident to divorce) shall apply.
‘‘(7) QUALIFIED FIRST-TIME HOMEBUYER DIS-
TRIBUTION.—The additional tax imposed by para-
graph (3) shall not apply to a distribution from
amounts attributable to voluntary contributions
which is a qualified first-time homebuyer distribu-
tion (as defined in section 72(t)(8)).
‘‘(8) TREATMENT AFTER DEATH OF ACCOUNT
HOLDER.—
‘‘(A) IN
GENERAL.—Paragraph (1) shall
not apply to distributions made on account of
the death of the account holder. For purposes
of this paragraph, rules similar to the rules of
section 401(a)(9) shall apply to the personal re-
tirement account upon the death of the account
holder.
‘‘(B) ACCOUNT
HOLDER
WHO
DIES
BE-
FORE ATTAINING AGE 62.—
‘‘(i) USE OF AMOUNTS TO PAY BENE-
FITS.—In the case of the death of an ac-
count holder who has not attained age 62,
if any beneficiary of the account holder is
either—
‘‘(I) a spouse or former spouse of
the account holder who has not at-
tained age 62 as of the date of such
death, or
‘‘(II) a child of the account hold-
er who meets the requirements of sec-
tion 202(d) of the Social Security Act,
but for the filing of an application for
child’s insurance benefits,
the amounts in the account attributable to
Federal contributions shall be apportioned
in accordance with clause (ii) and trans-
ferred to the personal retirement account
of each such beneficiary and shall be pay-
able as a monthly annuity in accordance
with the entitlement of such beneficiary to
benefits under section 202 of the Social
Security Act.
‘‘(ii) 
DETERMINATION
OF
AMOUNTS.—
‘‘(I) IN GENERAL.—The amount
apportioned to a beneficiary under
clause (i) shall be the amount equal to
the present value of the benefits to
which each beneficiary specified in
clause (i) is entitled under section 202
of the Social Security Act, as deter-
mined by the Commissioner of Social
Security.
‘‘(II) PROPORTIONAL
ALLOCA-
TION.—If amounts attributable to
Federal contributions is less than the
amount required to yield each month-
ly annuity described in clause (ii), the
Commissioner 
shall 
allocate 
such
amounts among all beneficiaries de-
scribed in clause (ii) on a proportional
basis in accordance with regulations
of the Commissioner.
‘‘(iii) INTERIM
PERSONAL
RETIRE-
MENT ACCOUNTS FOR INDIVIDUALS WHO
ARE
NOT
EMPLOYEES.—For purposes of
this subparagraph, the Commissioner shall
provide for the establishment of interim
personal retirement accounts in accordance
with part B of title II of the Social Secu-
rity Act for any beneficiary referred to in
this subparagraph who is not a covered in-
dividual (as defined by section 251 of the
Social Security Act).
‘‘(C) EXCESS AMOUNTS TREATED IN SAME
MANNER AS VOLUNTARY CONTRIBUTIONS.—For
purposes of this paragraph, amounts in the per-
sonal retirement account attributable to Federal
contributions which are in excess of the amount
required under subparagraph (B)(ii)(I) (if any)
shall be treated in the same manner as amounts
attributable to voluntary contributions.
‘‘(9) ADMINISTRATIVE EXPENSES.—Paragraphs
(1), (2), and (3) shall not apply to amounts paid or
distributed for administrative expenses charged by
the trustee of the personal retirement account.
‘‘(10) GOOD FAITH EXCEPTION TO ADDITIONAL
TAX.—The additional tax imposed by paragraph (3)
or (4) shall not apply if the Secretary determines
that—
‘‘(A) the taxpayer in good faith attempted
to meet the requirements to which such para-
graph relates, and
‘‘(B) any failure to meet such require-
ments is due to inadvertent error after the tax-
payer took reasonable steps to comply with such
requirements.
‘‘(f) TRUSTEE REQUIREMENTS.—The requirements
of this subsection are met if the trustee—
‘‘(1) in the case of a personal retirement ac-
count maintained by an employer which has in effect
an individual account plan under a qualified cash or
deferred arrangement (as defined in section 401(k)),
is the trustee of the trust forming part of such plan,
and
‘‘(2) in any case not described in paragraph (1),
has in effect a certification under subpart 2 of part
B of title II of the Social Security Act or is an alter-
native trustee appointed under section 264 of such
Act.
‘‘(g) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) AMOUNT
ATTRIBUTABLE
TO
FEDERAL
CONTRIBUTIONS.—The term ‘amount attributable to
Federal contributions’ means, with respect to any
payment or distribution from a personal retirement
account, the amount determined by multiplying the
total amount of such payment or distribution by the
ratio—
‘‘(A) the numerator of which is the aggre-
gate of the contributions described in subpara-
graphs (A) and (B) of subsection (c)(1) and the
total amount of earnings on such contributions,
and
‘‘(B) the denominator of which is the sum
of the total amount in the personal retirement
account immediately before such payment or
distribution was made.
‘‘(2) AMOUNT ATTRIBUTABLE TO VOLUNTARY
CONTRIBUTIONS.—The term ‘amount attributable to
voluntary contributions’ means, with respect to any
payment or distribution from a personal retirement
account, the amount determined by multiplying the
total amount of such payment or distribution by the
ratio—
‘‘(A) the numerator of which is the aggre-
gate of the contributions described in subsection
(c)(1)(C), the rollover contributions described in
subsection (c)(2), and the total amount of earn-
ings on contributions described in subsection
(c)(1)(C) and subsection (c)(2), and
‘‘(B) the denominator of which is the sum
of the total amount in the personal retirement
account immediately before such payment or
distribution was made.
‘‘(3) SEPARATE ACCOUNTING FOR CONTRIBU-
TIONS
AND
EARNINGS
THEREON
AND
DISTRIBU-
TIONS.—
‘‘(A) IN
GENERAL.—The trustee of any
personal retirement account shall separately ac-
count for—
‘‘(i) contributions under subparagraph
(A) of subsection (c)(1) and earnings
thereon,
‘‘(ii) contributions under subsection
(c)(1)(B) and earnings thereon,
‘‘(iii) contributions under subsection
(c)(1)(C) and earnings thereon, and
‘‘(iv) distributions from amounts ac-
counted for under clauses (i) and (ii).
‘‘(B) SUCCESSOR
ACCOUNTS.—The char-
acter of contributions and earnings separately
accounted for under subparagraph (A) in a
predecessor personal retirement account shall
apply to the successor personal retirement ac-
count (within the meaning of subsection (e)(4)).
‘‘(4) ADDITIONAL RULES ON TAX TREATMENT
OF ACCOUNT.—Rules similar to the rules of para-
graphs (2), (3), and (4) of section 408(e) shall
apply.
‘‘(5) ESTATE
TAX
TREATMENT.—No amount
shall be includible in the gross estate of any indi-
vidual for purposes of chapter 11 by reason of an in-
terest in a personal retirement account.
‘‘(6) COMMUNITY PROPERTY LAWS.—This sec-
tion shall be applied without regard to any commu-
nity property laws.’’.
(b) STUDY RELATING TO REINSURANCE.—The Secu-
rities and Exchange Commission shall conduct a study to
determine the need for, and the feasibility of requiring,
reinsurance relating to personal retirement accounts. In
particular, the study shall address the need for a govern-
mental entity to provide such reinsurance and to which
providers of annuities from personal retirement accounts
would make payments for such reinsurance. The Commis-
sion shall make such recommendations to the Congress re-
lating to such study as the Commission determines appro-
priate.
(c) FEDERAL CONTRIBUTIONS TREATED
AS EM-
PLOYER CONTRIBUTIONS
FOR PURPOSES
OF PENSION
NONDISCRIMINATION RULES.—
(1) IN GENERAL.—Subparagraph (D) of section
401(k)(3) of such Code (relating to application of
participation 
and 
discrimination 
standards) 
is
amended by striking ‘‘and’’ at the end of clause (i),
by striking the period at the end of clause (ii) and
inserting ‘‘, and’’, and by inserting after clause (ii)
the following new clause:
‘‘(iii) shall include contributions de-
scribed in subparagraphs (A) and (B) of
section 531(c)(1).’’.
(2) INFORMATION PROVIDED TO EMPLOYER.—
Paragraph (3) of section 401(k) of such Code (relat-
ing to application of participation and discrimination
standards) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(H) CERTIFICATION
TO
EMPLOYER
RE-
GARDING PERSONAL RETIREMENT ACCOUNT.—
For purposes of subparagraph (D)(iii), an em-
ployee shall, in such manner and on such forms
as the Secretary shall prescribe, certify to the
employer the existence of the personal retire-
ment account of the employee, the number of
such account, the trustee for such account, and
the contributions to such account under sub-
paragraphs (A) and (B) of section 531(c)(1).
Information furnished under this subparagraph
shall be confidential and may not be disclosed
to any person for any purpose other than the
purposes of subparagraph (D)(iii).’’.
(d) CLERICAL AMENDMENT.—The table of parts for
subchapter F of chapter 1 of the Internal Revenue Code
of 1986 is amended by adding after the item relating to
part VIII the following new item:
‘‘Part IX. Personal Retirement accounts.’’.
(e) EFFECTIVE DATE.—The amendments made by
this subsection shall apply to taxable years beginning after
December 31, 2000.
SEC. 4. PRIMARY INSURANCE AMOUNTS.
(a) IN GENERAL.—Section 215(a) of the Social Secu-
rity Act (42 U.S.C. 415(a)) is amended by adding at the
end the following new paragraph:
‘‘(8)(A) Notwithstanding the preceding provisions of
this subsection, solely for purposes of determining monthly
insurance benefits other than disability insurance benefits,
the primary insurance amount (as determined under the
preceding paragraphs of this subsection) of an individual
who is a personal retirement account holder (as defined
in section 251) shall be reduced to the product derived
by multiplying such primary insurance amount by a frac-
tion (not less than zero) equal to 1 minus a fraction—
‘‘(i) the numerator of which is the total of all
deposits (adjusted as provided under subparagraph
(B)) made to the individual’s personal retirement ac-
count pursuant to section 253 of this Act or section
531(e)(8) of the Internal Revenue Code of 1986
prior to the date on which such individual becomes
eligible for such benefits (or dies before becoming el-
igible for such benefits), and
‘‘(ii) the denominator of which is the amount
which would be the actuarial present value as of
such date of the expected future benefits under sec-
tion 202 based on such individual’s wages and self-
employment income if such individual became enti-
tled to old-age insurance benefits on such date (dis-
regarding the reduction under this paragraph and
disregarding, in the case of an individual’s primary
insurance amount determined by reason of such in-
dividual’s death, such individual’s death on such
date).
‘‘(B) For purposes of this paragraph, the total
amount of the deposits referred to in subparagraph (A)(i)
made during each calendar year shall be deemed to be
equal to such amount, plus interest on such amount com-
pounded annually thereafter at the rate equal to the aver-
age market yield (computed by the Secretary of the Treas-
ury on the basis of market quotations as of the end of
the calendar month next preceding the date of each
compounding) on all marketable interest-bearing obliga-
tions of the United States than forming a part of the pub-
lic debt which were not due or callable until after the expi-
ration of four years from the end of such calendar month
(rounded to the nearest one-eighth of one percent).
‘‘(C) The actuarial assumptions and methods used
for purposes of subparagraph (A)(ii) shall be assumptions
and methods which are generally accepted for making ac-
tuarial determinations, except that the Commissioner shall
use reasonable life expectancy tables prescribed by the
Commissioner of Social Security by regulation for pur-
poses of this subparagraph which do not discriminate on
the basis of gender.’’.
(b) CONFORMING AMENDMENT PRESERVING APPRO-
PRIATIONS FOR MEDICARE.—Section 121(e)(1)(B) of the
Social Security Amendments of 1983 (42 U.S.C. 401
note) is amended, in the first sentence, by inserting
‘‘, including the increase in such tax liabilities which
would have occurred if the amendment made by section
4(a) of the Personal Lockbox Act of 2000 had not been
enacted’’ after ‘‘subparagraph (A)(ii)’’.
SEC. 5. CREDIT FOR CONTRIBUTIONS TO PERSONAL RE-
TIREMENT ACCOUNTS.
(a) IN GENERAL.—Part IV of subchapter A of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
credits against tax) is amended by adding at the end the
following new subpart:
‘‘Subpart H—Personal Retirement Account
Contributions Credit
‘‘Sec. 54. Personal retirement account contributions credit.
‘‘SEC. 54. PERSONAL RETIREMENT ACCOUNT CONTRIBU-
TIONS CREDIT.
‘‘(a) IN GENERAL.—
‘‘(1) ENTITLEMENT TO PAYMENT.—Each eligi-
ble individual shall be entitled to have a payment
made on behalf of such individual for any calendar
year (subject to subsection (b)) equal to $300.
‘‘(2) PAYMENT.—Notwithstanding any other
provision of this title, the payment under paragraph
(1) shall be paid by the Secretary (in such manner
as the Secretary shall prescribe) to the personal re-
tirement account of the eligible individual from
amounts available in the Federal Old-Age and Sur-
vivors Insurance Trust Fund.
‘‘(b) LIMITATIONS.—
‘‘(1) PAYMENT
ALLOWED
ONLY
FOR
CAL-
ENDAR YEARS.—A payment under subsection (a) on
behalf of any individual may not be made for any
calendar year if a payment under subsection (a) on
behalf of such individual was made for any 2 prior
calendar years.
‘‘(2) LIMITATION BASED ON WAGES AND SELF-
EMPLOYED INCOME.—The amount which would (but
for this paragraph) be paid under subsection (a) for
the calendar year shall be reduced (but not below
zero) by the amount which bears the same ratio to
the amount which would be so paid as—
‘‘(A) the excess (if any) of—
‘‘(i) the individuals wage and self-em-
ployment income for such calendar year,
over
‘‘(ii) $15,000, bears to
‘‘(B) $10,000.
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible
individual’ means any individual—
‘‘(A) who is a covered employee or covered
self-employed individual for a calendar year
after 2000 under part B of title II of the Social
Security Act, and
‘‘(B) whose wage and self-employment in-
come for the calendar year is greater than
$5,000.
‘‘(2) WAGE AND SELF-EMPLOYMENT INCOME.—
The term ‘wage and self-employment income’ for a
calendar year means with respect to an individual
the sum of—
‘‘(A) wages (as defined in section 3121(a))
received by such individual in the calendar year
with respect to employment (as defined in sec-
tion 3121(b)) on which tax is imposed under
section 3201, and
‘‘(B) self-employment income (as defined
in 1402(b)) of such individual for the taxable
year ending in such calendar year on which tax
is imposed under section 1401.
‘‘(3) PERSONAL RETIREMENT ACCOUNT.—The
term ‘personal retirement account’ has the meaning
given such term by section 531(b).
‘‘(4) INFLATION ADJUSTMENT.—
‘‘(A) IN GENERAL.—In the case of any cal-
endar year after 2001, the $300 in subsection
(a)(1) and the $15,000 amount in subsection
(b)(2)(A)(ii) shall each be increased by an
amount equal to—
‘‘(i) such dollar amount, multiplied by
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar
year 2000’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof.
‘‘(B) ROUNDING.—If any amount deter-
mined under subparagraph (A) with respect to
the $15,000 amount in subsection (b)(2)(A)(ii)
is not a multiple of $50, such amount shall be
rounded to the next lowest multiple of $50.’’.
(b) CONFORMING AMENDMENT.—The table of sub-
parts for part IV of subchapter A of chapter 1 of the In-
ternal Revenue Code of 1986 is amended by adding at the
end the following new item:
‘‘Subpart H. Personal Retirement Account Contributions Credit.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar years beginning after
December 31, 2000.
SEC. 6. EXCISE TAX ON EXCESS CONTRIBUTIONS TO PER-
SONAL RETIREMENT ACCOUNTS.
(a) IN GENERAL.—Section 4973 of the Internal Rev-
enue Code of 1986 (relating to tax imposed on excess con-
tributions) is amended—
(1) in subsection (a) by striking ‘‘or’’ at the end
of paragraph (3), by inserting ‘‘or’’ at the end of
paragraph (4), and by inserting after paragraph (4)
the following:
‘‘(5) a personal retirement account (as defined
in section 531),’’, and
(2) by adding at the end the following new sub-
section:
‘‘(g) EXCESS CONTRIBUTIONS
TO PERSONAL RE-
TIREMENT ACCOUNTS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, in the case of personal retirement accounts, the
term ‘excess contributions’ means the sum of—
‘‘(A) the amount by which the amount con-
tributed for the taxable year to the accounts ex-
ceeds the amount allowable as a contribution
under section 531(c)(1)(C) (without regard to
section 531(c)(1) (A) and (B)) for such taxable
year, and
‘‘(B) the amount determined under this
subsection for the preceding taxable year, re-
duced by the sum of—
‘‘(i) the distributions out of the plans
for the taxable year (other than rollover
distributions) of amounts attributable to
voluntary contributions (as defined in sec-
tion 531(h)(2)), and
‘‘(ii) the excess (if any) of the max-
imum amount which may be contributed to
the plans under section 531(c)(1)(C) for
the taxable year over the amount contrib-
uted to the plans under such section for
the taxable year.
‘‘(2) CONTRIBUTIONS RETURNED BEFORE
DUE DATE.—For purposes of this subsection,
any contribution which is distributed out of the
personal retirement account in a distribution to
which section 531(e)(5) applies shall be treated
as an amount not so contributed.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2000.
SEC. 7. INFORMATION REQUIREMENTS FOR STATEMENTS.
(a) INFORMATION REQUIREMENTS FOR SOCIAL SE-
CURITY ACCOUNT STATEMENT.—Section 1143(a) of the
Social Security Act (42 U.S.C. 1320b–13(a)) is
amended—
(1) in paragraph (2)—
(A) in subparagraph (B), by inserting
‘‘, including a separate estimate of the amount
of interest earned on the contributions,’’ after
‘‘disability insurance’’;
(B) in subparagraph (C)—
(i) by inserting ‘‘, including a separate
estimate of the amount of interest earned
on the contributions,’’ after ‘‘hospital in-
surance’’; and
(ii) by striking ‘‘and’’ after the semi-
colon;
(C) in subparagraph (D), by striking the
period at the end and inserting a semicolon;
(D) by redesignating subparagraphs (A),
(B), (C), and (D) as subparagraphs (B), (C),
(D), and (E), respectively;
(E) by inserting after the matter preceding
subparagraph (B), as redesignated by subpara-
graph (D), the following:
‘‘(A) the name, age, gender, mailing ad-
dress, and marital status of the eligible indi-
vidual;’’;
(F) by adding at the end the following:
‘‘(F) the total amount of the employer and
employee contributions for the eligible indi-
vidual for old-age and survivors insurance bene-
fits, as of the end of the month preceding the
date of the statement, in both actual dollars
and dollars adjusted for inflation;
‘‘(G) the projected value of—
‘‘(i) the aggregate amount of the em-
ployer and employee contributions for old-
age and survivors insurance benefits that
are expected to be made by or on behalf of
the individual prior to the individual at-
taining retirement age, in both actual dol-
lars and dollars adjusted for inflation;
‘‘(ii) the annual amount of old-age
and survivors insurance benefits that are
expected to be payable on the eligible indi-
vidual’s account for a single individual and
for a married couple, in dollars adjusted
for inflation;
‘‘(iii) the total amount of old-age and
survivors insurance benefits payable on the
eligible individual’s account for the individ-
ual’s life expectancy, in dollars adjusted
for inflation, identifying—
‘‘(I) the life expectancy assumed;
‘‘(II) the amount of benefits re-
ceived on the basis of each $1 of con-
tributions made by or on behalf of the
individual; and
‘‘(III) the projected annual rate
of return for the individual, taking
into account the date on which the
contributions are made in the eligible
individual’s account and the date on
which the benefits are paid;
‘‘(iv) the total amount of old-age and
survivors insurance benefits that would
have accumulated on the eligible individ-
ual’s account on the date on which the in-
dividual attains retirement age if the con-
tributions for such individual had been in-
vested in Treasury 10-year saving bonds at
the prevailing interest rate for such bonds
as of the end of the month preceding the
date of the statement, in dollars adjusted
for inflation, identifying—
‘‘(I) the date of retirement as-
sumed;
‘‘(II) the interest rate used for
the projection; and
‘‘(III) the amount that would be
received on the basis of each $1 of
contributions made by or on behalf of
the individual;
‘‘(H) the average annual rate of return,
adjusted for inflation, on the Treasury 10-year
saving bond as of the date of the statement;
‘‘(I) the average annual rate of return, ad-
justed for inflation, on a domestic stock index
selected by the Commissioner of Social Secu-
rity, or an equivalent portfolio of common stock
equities that are based on a broad index of
United States market performance, for the pre-
ceding 25 years;
‘‘(J) a brief statement that identifies—
‘‘(i) the balance of the trust fund ac-
counts as of the end of the month pre-
ceding the date of the statement;
‘‘(ii) the annual estimated balance of
the trust fund accounts for each of the
succeeding 30 years; and
‘‘(iii) the assumptions used to provide
the information described in clauses (i)
and (ii), including the rates of return and
the nature of the investments of such trust
fund accounts; and
‘‘(K) a simple 1-page summary and com-
parison of the information that is provided to
an eligible individual under subparagraphs (G),
(H), and (I).’’; and
(2) by striking paragraph (3) and inserting the
following:
‘‘(3) The estimated amounts required to be pro-
vided in a statement under this section shall be de-
termined by the Commissioner using a general meth-
odology for making such estimates, as formulated
and published at the beginning of each calendar year
by the Board of Trustees of the trust fund accounts.
A description of the general methodology used shall
be provided to the eligible individual as part of the
statement required under this section.
‘‘(4) The Commissioner of Social Security shall
notify an individual who receives a social security ac-
count statement under this section that the indi-
vidual may request that the information described in
paragraph (2) be determined on the basis of relevant
information provided by the individual, including in-
formation regarding the individual’s income, marital
status, date of retirement, or race.
‘‘(5) For purposes of this section—
‘‘(A) the term ‘dollars adjusted for infla-
tion’ means—
‘‘(i) dollars in constant or real value
terms on the date on which the statement
is issued; and
‘‘(ii) an amount that is adjusted on
the basis of the Consumer Price Index.
‘‘(B) the term ‘eligible individual’ means
an individual who—
‘‘(i) has a social security account
number;
‘‘(ii) has attained age 25 or over; and
‘‘(iii) has wages or net earnings from
self-employment; and
‘‘(C) 
the 
term 
‘trust 
fund 
account’
means—
‘‘(i) the Federal Old-Age and Sur-
vivors Insurance Trust Fund; and
‘‘(ii) the Federal Disability Insurance
Trust Fund.’’.
(b) MANDATORY PROVISION OF STATEMENTS.—Sec-
tion 1143(c)(2) of the Social Security Act (42 U.S.C.
1320b–13(c)(2)) is amended by striking ‘‘With respect to’’
and all that follows.
(c) TECHNICAL AMENDMENTS.—Section 1143 of the
Social Security Act (42 U.S.C. 1320b–13) is amended by
striking ‘‘Secretary’’ each place it appears and inserting
‘‘Commissioner of Social Security’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to statements provided for fiscal
years beginning after the date of enactment of this Act.
SEC. 8. PROTECTION OF FEDERAL DISABILITY INSURANCE
TRUST FUND.
Section 201(b) of the Social Security Act (42 U.S.C.
401(b)) is amended by adding at the end (after and below
paragraph (2)) the following:
‘‘In addition to amounts otherwise appropriated under the
preceding provisions of this subsection, there is hereby ap-
propriated for each fiscal year after fiscal year 2000 to
the Federal Disability Insurance Trust Fund, from
amounts in the general fund of the Treasury not otherwise
appropriated, such sums as may as necessary from time
to time to maintain the balance ratio (as defined in section
709(b)) of the Federal Disability Insurance Trust Fund,
for the calendar year commencing during such fiscal year,
at not less than 20 percent. The sums to be appropriated
under the preceding sentence shall be determined by the
Board of Trustees of the Federal Old-Age and Surviviors
Insurance Trust Fund and the Federal Disability Insur-
ance Trust Fund and certified by the Board of Trustees
to each House of the Congress as part of the Board’s re-