I 
109TH CONGRESS 
1ST SESSION 
H. R. 440
To amend title II of the Social Security Act to provide for individual security 
accounts funded by employee and employer Social Security payroll deduc-
tions, to extend the solvency of the old-age, survivors, and disability 
insurance program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 1, 2005
Mr. KOLBE (for himself and Mr. BOYD) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Rules, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To amend title II of the Social Security Act to provide 
for individual security accounts funded by employee and 
employer Social Security payroll deductions, to extend 
the solvency of the old-age, survivors, and disability in-
surance program, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Bipartisan Retirement Security Act of 2005’’.
(b) TABLE OF CONTENTS.—The table of contents is 
as follows:
Sec. 1. Short title and table of contents. 
Sec. 2. Individual security accounts. 
Sec. 3. Minimum social security benefit. 
Sec. 4. Reduction in the amount of certain transfers to medicare trust fund. 
Sec. 5. Revised formula for average indexed monthly earnings. 
Sec. 6. Actuarial adjustment for retirement. 
Sec. 7. Corrections for CPI overstatement in cost-of-living indexation. 
Sec. 8. Adjustments to bend points in determining primary insurance amounts. 
Sec. 9. Adjustment to benefit formula factors. 
Sec. 10. Modification to PIA formula to reflect changes to life expectancy. 
Sec. 11. Treatment of disabled beneficiaries. 
Sec. 12. Maintenance of benefit and contribution base. 
Sec. 13. Acceleration of increase in social security eligibility age. 
Sec. 14. Mechanism for remedying unforeseen deterioration in social security 
solvency. 
Sec. 15. Increase in widow’s and widower’s insurance benefits. 
Sec. 16. Limitation on benefits of married couple to level of maximum worker 
benefits.
SEC. 2. INDIVIDUAL SECURITY ACCOUNTS. 
(a) ESTABLISHMENT AND MAINTENANCE OF INDI-
VIDUAL SECURITY ACCOUNTS.—
(1) IN GENERAL.—Title II of the Social Secu-
rity Act (42 U.S.C. 401 et seq.) is amended—
(A) by inserting before section 201 the fol-
lowing: 
‘‘PART A—INSURANCE BENEFITS’’; and 
(B) by adding at the end the following: 
‘‘PART B—INDIVIDUAL SECURITY SYSTEM 
‘‘Subpart 1—Individual Security Accounts 
‘‘FEDERALLY-ADMINISTERED INDIVIDUAL SECURITY 
ACCOUNT 
‘‘SEC. 251. (a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—Within 30 days after cred-
iting the first contribution under subsection (b) with 
respect to an eligible individual, the Commissioner of 
Social Security shall establish an individual security 
account for such individual in the Individual Secu-
rity Fund. Each account shall be identified to its ac-
count holder by means of the account holder’s social 
security account number. 
‘‘(2) ELIGIBLE INDIVIDUAL.—For purposes of 
this part, the term ‘eligible individual’ means any in-
dividual born after December 31, 1949. 
‘‘(b) CONTRIBUTIONS.—
‘‘(1) IN
GENERAL.—The Secretary of the 
Treasury shall transfer from the Federal Old-Age 
and Survivors Insurance Trust Fund, for crediting 
by the Commissioner of Social Security to the indi-
vidual security account of an eligible individual, an 
amount equal to the sum of any amount received by 
such Secretary on behalf of such individual under 
section 3101(a)(2) or 1401(a)(2) of the Internal 
Revenue Code of 1986. 
‘‘(2) OTHER CONTRIBUTIONS.—For provisions 
relating to additional contributions credited to indi-
vidual security accounts, see sections 54(d) and 
6402(l) of the Internal Revenue Code of 1986.
‘‘(c) CREDITING REQUIREMENTS.—Except as other-
wise provided in section 252, contributions under sub-
section (b) on behalf of an eligible individual shall be cred-
ited—
‘‘(1) to the individual security account estab-
lished for such individual under subsection (a); and 
‘‘(2) in accordance with the allocation in effect 
with respect to such individual under subsection (d). 
‘‘(d) ALLOCATION AND OTHER DESIGNATIONS.—
‘‘(1) IN GENERAL.—The Commissioner of So-
cial Security shall prescribe regulations in accord-
ance with which any eligible individual who is em-
ployed or self-employed may designate—
‘‘(A) in the event that 2 or more invest-
ment options are available in the Individual Se-
curity Fund—
‘‘(i) the option or options to which 
such individual wishes to have such indi-
vidual’s contributions under subsection (b) 
credited; and 
‘‘(ii) if such individual designates 
more than 1 option under clause (i), how 
such individual wishes for those contribu-
tions to be allocated; and
‘‘(B) the amount of wages or self-employ-
ment income such individual wishes to des-
ignate for purposes of section 3101(a)(2)(C) or 
1401(a)(2)(C) of the Internal Revenue Code of 
1986 (as applicable), if any. 
‘‘(2) DEFAULT ALLOCATION.—In the absence of 
a required designation under paragraph (1)(A), con-
tributions on behalf of the individual involved shall 
be allocated in such manner as the Commissioner of 
Social Security shall prescribe, taking into account 
the competing objectives of maximizing returns on 
investments and minimizing the risk involved with 
such investments. 
‘‘(3) FORM OF DESIGNATION.—Any designation 
under paragraph (1) shall be made in such manner 
and at such intervals as the Commissioner of Social 
Security may prescribe in order to ensure ease of ad-
ministration and to avoid creating an undue burden 
on employers. 
‘‘(4) SPECIAL RULE FOR 2007.—Not later than 
December 31, 2007, any eligible individual who is 
employed or self-employed as of such date shall exe-
cute all designations required under paragraph (1). 
‘‘(e) PERIODIC STATEMENTS TO ACCOUNT HOLD-
ER.—
‘‘(1) IN
GENERAL.—The Individual Security 
Fund Board shall prescribe regulations under which 
each individual for whom an individual security ac-
count is maintained under this section shall be fur-
nished with—
‘‘(A) a periodic statement relating to the 
individual’s account, including, for any report-
ing period as of the end of which the individ-
ual’s account balance is at least equal to the 
minimum balance amount (within the meaning 
of section 252), clear and conspicuous notice to 
that effect; 
‘‘(B) a summary description of any invest-
ment options or other choices which may be 
available to such individual under this section 
or under section 252 (as applicable); and 
‘‘(C) any forms and information necessary 
to make a designation under subsection (d) or 
section 252 (as applicable). 
‘‘(2) INFORMED
DECISIONMAKING.—All infor-
mation, materials, and other matter furnished under 
this subsection shall be furnished to the account 
holder at such times and in such manner as the 
Board considers appropriate in order to permit in-
formed decisionmaking.
‘‘PRIVATELY-ADMINISTERED INDIVIDUAL SECURITY 
ACCOUNT 
‘‘SEC. 252. (a) DEFINITIONS.—For purposes of this 
part—
‘‘(1) MINIMUM DEPOSIT AMOUNT.—
‘‘(A) IN GENERAL.—The term ‘minimum 
deposit amount’ means an amount equal to 
$7,500, as adjusted under subparagraph (B). 
‘‘(B) ADJUSTMENT.—The Secretary of the 
Treasury shall adjust annually (effective for pe-
riods beginning after December 2006) the dol-
lar amount set forth in subparagraph (A) under 
procedures providing for adjustments in the 
same manner and to the same extent as adjust-
ments are provided for under the procedures 
used to adjust benefit amounts under section 
215(i)(2)(A), except that any amount so ad-
justed that is not a multiple of $10 shall be 
rounded to the nearest multiple of $10. 
‘‘(2) FEDERALLY-ADMINISTERED
INDIVIDUAL 
SECURITY ACCOUNT.—The term ‘Federally-adminis-
tered individual security account’ means an indi-
vidual security account maintained, in accordance 
with applicable provisions of this part, in the Indi-
vidual Security Fund.
‘‘(3) PRIVATELY-ADMINISTERED
INDIVIDUAL 
SECURITY ACCOUNT.—The term ‘privately-adminis-
tered individual security account’ means an indi-
vidual security account maintained, in accordance 
with applicable provisions of this part, by a certified 
institution. 
‘‘(4) CERTIFIED INSTITUTION.—The term ‘cer-
tified institution’ refers to an investment firm, credit 
union, insurance company, or other certified institu-
tion under subpart 3. 
‘‘(b) OPTION TO DESIGNATE A PRIVATELY-ADMINIS-
TERED INDIVIDUAL SECURITY ACCOUNT.—
‘‘(1) IN
GENERAL.—Under regulations pre-
scribed by the Individual Security Fund Board, 
whenever the balance in an individual’s Federally-
administered individual security account is at least 
equal to the minimum deposit amount, such indi-
vidual shall be eligible to designate a privately-ad-
ministered individual security account (established 
and maintained on such individual’s behalf) to serve 
as such individual’s individual security account 
under this part, in lieu of such individual’s Feder-
ally-administered individual security account. 
‘‘(2) EFFECT
OF
DESIGNATION.—If an indi-
vidual makes a designation under paragraph (1)—
‘‘(A) the entire balance in the individual’s 
Federally-administered individual security ac-
count shall be promptly transferred to the pri-
vately-administered individual security account 
specified by such individual in such designation; 
and 
‘‘(B) that privately-administered individual 
security account shall, for all purposes, be 
treated as the electing individual’s individual se-
curity account, subject to paragraph (4). 
‘‘(3) REGULATORY MANAGEMENT OF PRIVATE 
INVESTMENT.—A designation under this subsection 
shall not be effective unless it is made in such time, 
form, and manner as the Individual Security Fund 
Board prescribes. The Individual Security Fund 
Board shall—
‘‘(A) maintain individual account records, 
and 
‘‘(B) combine account transactions with 
certified institutions maintaining privately-ad-
ministered individual security accounts in ag-
gregate amounts, 
in the same manner as is applicable with respect to 
records and account transactions with respect to 
Federally administered individual security accounts.
‘‘(4) SUBSEQUENT DESIGNATIONS.—The Indi-
vidual Security Fund Board shall provide by regula-
tion opportunity for subsequent designation, from 
time to time, of another individual security account 
in lieu of the account previously designated under 
this section, subject to the following: 
‘‘(A) OPTIONS
AVAILABLE.—The account 
designated under this paragraph may be either 
within—
‘‘(i) another certified institution, sub-
ject to subparagraph (B); or 
‘‘(ii) the Individual Security Fund. 
‘‘(B) MINIMUM
BALANCE.—In order to 
make a designation referred to in subparagraph 
(A)(i), the balance in the individual’s individual 
security account must be at least equal to the 
minimum deposit amount. No minimum balance 
requirement under this subparagraph shall 
apply in the case of a designation referred to in 
subparagraph (A)(ii). 
‘‘(C) ONLY 1 ACCOUNT PERMITTED AT ANY 
TIME.—An individual may not, at any time, 
concurrently maintain—
‘‘(i) a privately-administered indi-
vidual security account with each of 2 or 
more certified institutions; or 
‘‘(ii) a privately-administered and a 
Federally-administered individual security 
account. 
‘‘(D) EFFECT.—A designation under this 
paragraph has (with respect to the individual’s 
respective accounts, before and after such des-
ignation) the same effect as results following a 
designation under paragraph (2) (with respect 
to the Federally-administered and privately-ad-
ministered accounts involved). 
‘‘DISTRIBUTIONS FROM INDIVIDUAL SECURITY ACCOUNTS 
‘‘SEC. 253. (a) DATE
OF EARLIEST DISTRIBU-
TION.—Except as provided in subsection (c), distributions 
may not be made from the Federally-administered or pri-
vately-administered individual security account of an eligi-
ble individual (as the case may be) before the earlier of—
‘‘(1) the date the eligible individual attains nor-
mal retirement age, as determined under section 216 
(or early retirement age, as so determined, if elected 
by such individual), or 
‘‘(2) the date on which funds in the eligible in-
dividual’s account are sufficient to provide a month-
ly payment over the life expectancy of the eligible in-