I
106TH CONGRESS
1ST SESSION
H. R. 1897
To provide for the establishment and maintenance of personal Social Security
investment accounts under the Social Security system.
IN THE HOUSE OF REPRESENTATIVES
MAY 20, 1999
Mr. PETRI introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To provide for the establishment and maintenance of per-
sonal Social Security investment accounts under the So-
cial Security system.
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 ‘‘Retirement Security
Act of 1999’’.
SEC. 2. INDIVIDUAL RETIREMENT INVESTMENT PROGRAM
AND PERSONAL SOCIAL SECURITY INVEST-
MENT ACCOUNTS.
(a) IN GENERAL.—Title II of the Social Security Act
is amended—
(1) by inserting before section 201 the fol-
lowing:
‘‘PART A—INSURANCE BENEFITS’’;
and
(2) by adding at the end the following new part:
‘‘PART B—INDIVIDUAL RETIREMENT INVESTMENT
PROGRAM
‘‘DEFINITIONS
‘‘SEC. 251. For purposes of this part—
‘‘(1) ACCOUNT
HOLDER.—The term ‘account
holder’ means an individual for whom a personal So-
cial Security investment account is established under
section 252(b).
‘‘(2) INVESTMENT
ACCOUNT.—The term ‘in-
vestment account’ means a personal Social Security
investment account established under section 252(b).
‘‘(3) TRUST
FUND.—The term ‘Trust Fund’
means the Social Security Investment Trust Fund
established under section 260.
‘‘(4) EXECUTIVE DIRECTOR.—The term ‘Execu-
tive Director’ means the Executive Director under
this part authorized to so serve under section
266(b).
‘‘(5) BOARD.—The term ‘Board’ means the
Board of Trustees of the Trust Fund authorized to
so serve under section 266(a).
‘‘PERSONAL SOCIAL SECURITY INVESTMENT ACCOUNTS
‘‘SEC. 252. (a) CERTIFICATION OF NEW ACCOUNT
HOLDERS.—Upon the issuance of a Social Security ac-
count number under section 205(c)(2) to an individual
born on or after July 1, 2000, the Commissioner of Social
Security shall certify to the Executive Director and the
Secretary of the Treasury the identity and Social Security
account number of such individual.
‘‘(b) ESTABLISHMENT OF PERSONAL SOCIAL SECU-
RITY INVESTMENT ACCOUNTS.—Upon receipt of any cer-
tification under subsection (a) with respect to an indi-
vidual, the Executive Director shall establish a personal
Social Security investment account for such individual.
Amounts in the Social Security Investment Trust Fund
shall be credited by the Executive Director to the invest-
ment account in accordance with this part. The investment
account shall be identified to the account holder by means
of the account holder’s Social Security account number.
The Executive Director shall establish an investment ac-
count for each account holder not later than the later of
January 1, 2001, or 30 days after receipt of the certifi-
cation with respect to the account holder.
‘‘(c) INITIAL CONTRIBUTION.—Upon the establish-
ment of each account holder’s investment account, the
Secretary of the Treasury shall transfer, from amounts
not otherwise appropriated in the general fund of the
Treasury to the Trust Fund, for crediting by the Execu-
tive Director to such investment account under subsection
(b), an amount equal to $1,000.00.
‘‘(d) INVESTMENT ACCOUNT BALANCE.—The bal-
ance in an account holder’s investment account at any
time is the excess of—
‘‘(1) the sum of—
‘‘(A) the contribution made to the Trust
Fund and credited to the investment account
pursuant to subsection (c);
‘‘(B) all contributions made to the Trust
Fund and credited to the investment account
under section 253, and
‘‘(C) the total amount of the allocations
made to and reductions made in the investment
account pursuant to subsection (e),
over
‘‘(2) the amounts paid out of the Trust Fund
with respect to such individual under this part.
‘‘(e) ALLOCATION OF EARNINGS AND LOSSES.—Pur-
suant to regulations prescribed by the Executive Director,
the Executive Director shall allocate to each investment
account an amount equal to the net earnings and net
losses from each investment of sums in the Trust Fund
which are attributable, on a pro rata basis, to sums cred-
ited to such investment account, reduced by an appro-
priate share of the administrative expenses paid out of the
net earnings under section 256(d), as determined by the
Executive Director.
‘‘(f) ENGAGEMENT OF QUALIFIED PUBLIC ACCOUNT-
ANT.—
‘‘(1) IN
GENERAL.—The Executive Director
shall annually engage, on behalf of all account hold-
ers, an independent qualified public accountant, who
shall conduct an examination of all accounts and
other books and records maintained in the adminis-
tration of this part as the public accountant con-
siders necessary to enable the public accountant to
make the determination required by paragraph (2).
The examination shall be conducted in accordance
with generally accepted auditing standards and shall
involve such tests of the accounts, books, and
records as the public accountant considers necessary.
‘‘(2) EXAMINATION AND REPORT.—The public
accountant conducting an examination under para-
graph (1) shall determine whether the accounts,
books, and records referred to in such paragraph
have been maintained in conformity with generally
accepted accounting principles applied on a basis
consistent with the manner in which such principles
were applied during the examination conducted
under such paragraph during the preceding year.
The public accountant shall transmit to the Board
and the Comptroller General of the United States a
report on his examination, including his determina-
tion under this paragraph.
‘‘(3) 
RELIANCE
ON
ACTUARY’S
CERTIFI-
CATIONS.—In making a determination under para-
graph (2), a public accountant may rely on the cor-
rectness of any actuarial matter certified by an en-
rolled actuary if the public accountant states his re-
liance in the report transmitted to the Board under
such paragraph.
‘‘(4) DEFINITION.—For the purposes of this
subsection, the term ‘‘qualified public accountant’’
shall have the same meaning as is provided in sec-
tion 103(a)(3)(D) of the Employee Retirement In-
come 
Security 
Act 
of 
1974 
(29 
U.S.C.
1023(a)(3)(D)).
‘‘(g) INFORMATION REQUIRED TO BE PROVIDED TO
ACCOUNT HOLDERS.—
‘‘(1) IN GENERAL.—The Board shall prescribe
regulations under which each account holder shall be
furnished with—
‘‘(A) a periodic statement relating to the
account holder’s investment account; and
‘‘(B) a summary description of the invest-
ment options under section 254 covering, and
an evaluation of, each such option for at least
the 5-year period preceding the date as of
which such evaluation is made.
‘‘(2) TIMELY PROVISION OF INFORMATION.—In-
formation under this subsection shall be provided at
least 30 calendar days before the date provided for
each election under section 254(c), and in a manner
designed to facilitate informed decisionmaking with
respect to each such election.
‘‘(h) ASSUMPTION OF RISK.—Each account holder
who elects to invest in the Fixed Income Investment Fund
or the Common Stock Index Investment Fund described
in paragraphs (2) and (3), respectively, of section 254(a)
shall sign an acknowledgement prescribed by the Execu-
tive Director which states that the account holder under-
stands that an investment in either such Fund is made
at the account holder’s risk, that the account holder is
not protected by the Government against any loss on such
investment, and that a return on such investment is not
guaranteed by the Government.
‘‘(i) TREATMENT OF MINORS AND INCOMPETENT IN-
DIVIDUALS.—An election under this part to be made by
a minor, or an individual mentally incompetent or under
other legal disability, may be made by the person who is
constituted guardian or other fiduciary by the law of the
State of residence of the individual or is otherwise legally
vested with the care of the individual or his estate. Pay-
ment under this part due a minor, or an individual men-
tally incompetent or under other legal disability, may be
made to the person who is constituted guardian or other
fiduciary by the law of the State of residence of the claim-
ant or is otherwise legally vested with the care of the
claimant or his estate. In any case in which a guardian
or other fiduciary of the individual under legal disability
has not been appointed under the law of the State of resi-
dence of the individual, if any other person, in the judg-
ment of the Executive Director, is responsible for the care
of such individual, any election under this part which may
otherwise be made by such individual may be made by
such person, any payment under this part which is other-
wise payable to such individual may be made to such per-
son, and the payment of an annuity payment under this
part to such person bars recovery by any other person.
‘‘CONTRIBUTIONS TO THE SOCIAL SECURITY INVESTMENT
TRUST FUND
‘‘SEC. 253. (a) IN GENERAL.—The Executive Direc-
tor shall prescribe regulations under which each individual
who is eligible to claim a deduction under section 222 of
the Internal Revenue Code of 1986 for contributions to
a personal Social Security investment account shall be af-
forded a reasonable opportunity to make contributions to
the Trust Fund, for crediting to such account, either from
time to time or under arrangements providing for regular,
periodic contributions. Such arrangements may include ar-
rangements for contributions of wages by employers on be-
half of employees. Any such arrangement shall also pro-
vide individuals a reasonable opportunity to modify the
amount to be contributed under this part, or to terminate
such contributions.
‘‘(b) LIMITATION
ON
CONTRIBUTIONS.—Notwith-
standing any other provision of this section, no contribu-
tion may be made under this section to any account for
any year to the extent that such contribution, when added
to prior contributions to such account for such year, ex-
ceeds $7,000.
‘‘(c) CREDITING PROCEDURES.—Amounts contrib-
uted by (or on behalf of) an account holder under this
section shall be deposited in the Trust Fund to the credit
of that account holder’s investment account in accordance
with such procedures as the Comptroller General of the
United States may, in consultation with the Executive Di-
rector, prescribe in regulations.
‘‘(d) NONFORFEITABILITY OF CONTRIBUTIONS.—All
contributions made under this section shall be fully non-
forfeitable when made.
‘‘INVESTMENT OF SOCIAL SECURITY INVESTMENT TRUST
FUND
‘‘SEC. 254. (a) INVESTMENT FUNDS.—The Board
shall establish—
‘‘(1) a Government Securities Investment Fund
under which sums in the Trust Fund are invested in
securities of the United States Government issued as
provided in subsection (e);
‘‘(2) a Fixed Income Investment Fund under
which sums in the Trust Fund are invested in—
‘‘(A) insurance contracts,
‘‘(B) certificates of deposit, or
‘‘(C) other instruments or obligations se-
lected by qualified professional asset managers,
which return the amount invested and pay in-
terest, at a specified rate or rates, on that
amount during a specified period of time;
‘‘(3) a Common Stock Index Investment Fund
as provided in subsection (b); and
‘‘(4) such other investment fund or funds as the
Board may provide by regulation.
‘‘(b) INDEX GOVERNING COMMON STOCK INDEX IN-
VESTMENT FUNDS.—
‘‘(1) SELECTION OF INDEX.—The Board shall
select an index which is a commonly recognized
index comprised of common stock the aggregate
market value of which is a reasonably complete rep-
resentation of the United States equity markets.
‘‘(2) PORTFOLIO DESIGN.—The Common Stock
Index Investment Fund shall be invested in a port-
folio designed to replicate the performance of the
index selected under paragraph (1). The portfolio
shall be designed such that, to the extent prac-
ticable, the percentage of the Common Stock Index
Investment Fund that is invested in each stock is
the same as the percentage determined by dividing
the aggregate market value of all shares of that
stock by the aggregate market value of all shares of
all stocks included in such index.
‘‘(c) INVESTMENT ACCORDING TO ELECTIONS.—
‘‘(1) IN
GENERAL.—The Executive Director
shall invest the sums available in the Trust Fund for
investment as provided in elections made under sub-
section (d).
‘‘(2) DEFAULT
INVESTMENT
IN
ABSENCE
OF
ELECTION.—If an election has not been made with
respect to any sums in the Trust Fund available for
investment, the Executive Director shall invest such
sums in the Government Securities Investment
Fund.
‘‘(d) SEMIANNUAL ELECTIONS.—
‘‘(1) IN GENERAL.—At least twice each year, an
account holder may elect the investment funds re-
ferred to in subsection (a) into which the sums in
the Trust Fund credited to such account holder’s in-
vestment account are to be invested or reinvested.
‘‘(2) INVESTMENT
ACCORDING
TO
REGULA-
TIONS.—An election may be made under paragraph
(1) only in accordance with regulations prescribed by
the Executive Director and within such period as the
Executive Director shall provide in such regulations.
‘‘(e) ISSUANCE OF SPECIAL OBLIGATIONS.—
‘‘(1) AUTHORIZATION.—The Secretary of the
Treasury is authorized to issue special interest-bear-
ing obligations of the United States for purchase by
the Trust Fund for the Government Securities In-
vestment Fund.
‘‘(2) REQUIREMENTS.—
‘‘(A) IN GENERAL.—Obligations issued for
the purpose of this subsection shall have matu-
rities fixed with due regard to the needs of the
Trust Fund as determined by the Executive Di-
rector, and shall bear interest at a rate equal
to the average market yield (computed by the
Secretary of the Treasury on the basis of mar-
ket quotations as of the end of the calendar
month next preceding the date of issue of such
obligations) on all marketable interest-bearing
obligations of the United States then forming a
part of the public debt which are not due or
callable earlier than 4 years after the end of
such calendar month.
‘‘(B) ROUNDING.—Any average market
yield computed under subparagraph (A) which
is not a multiple of one-eighth of 1 percent,
shall be rounded to the nearest multiple of one-
eighth of 1 percent.
‘‘(f) NO
VOTING
RIGHTS
IN
SECURITIES.—The
Board, the Executive Director, and an account holder may
not exercise voting rights associated with the ownership
of securities by the Social Security Investment Trust
Fund.
‘‘DISTRIBUTIONS FROM THE SOCIAL SECURITY
INVESTMENT TRUST FUND
‘‘SEC. 255. (a) IN GENERAL.—No distribution may
be made from the Social Security Investment Trust Fund
of any amount credited to the investment account of any
account holder, unless such distribution is in the form
of—
‘‘(1) a benefit distribution described in sub-
section (b),
‘‘(2) a distribution described in subsection (c),
or
‘‘(3) a death distribution under subsection (d).
‘‘(b) BENEFIT DISTRIBUTION.—
‘‘(1) IN GENERAL.—A distribution from an in-
vestment account is in the form of a benefit distribu-
tion referred to in subsection (a)(1) if such distribu-
tion constitutes payment (in whole or in part) of a
monthly insurance benefit under part A based on the
wages and self-employment income of the account
holder.
‘‘(2) PAYMENT OF MONTHLY INSURANCE BENE-
FITS.—Notwithstanding section 201(h), benefit pay-
ments required to be made under part A, other than
benefit payments required to be made under section
223 or 226 and benefit payments required to be
holder’s entitlement to old-age insurance benefits
under section 202(a),
‘‘(2) the amount of each distribution is in an
amount, as determined by the Executive Director,
which is not greater than the excess of—
‘‘(A) the balance credited to such account
holder’s investment account, over
‘‘(B) the amount necessary to provide for
benefit distributions as required under sub-
section (a)(1), and
‘‘(3) the distributions shall be paid in the form
of annuities and other payments under section 256.
‘‘(d) DEATH DISTRIBUTION.—
‘‘(1) IN GENERAL.—A distribution from an in-
vestment account is in the form of a death distribu-
tion if such distribution is in the amount remaining
credited to the account holder as of the date of such
account holder’s death and, except as provided in
paragraph (2), is distributed in the same manner as
is provided for distribution of benefit payments
under section 204(d).
‘‘(2) PORTION OF ACCOUNT BALANCE ATTRIB-
UTABLE TO FEDERAL CONTRIBUTION RETURNED TO
UNITED STATES.—The portion of the amount re-
maining credited to the account holder as of the
date of such account holder’s death which is attrib-
utable to the contribution made under section 252(c)
shall be paid to the Secretary of the Treasury for
deposit into the general fund of the Treasury as mis-
cellaneous receipts. For purposes of the preceding
sentence, distributions from a personal social secu-
rity investment account shall be treated as first
made from amounts attributable to the contribution
made under section 252(c) and then from other
amounts.
‘‘ANNUITIES AND LUMP SUM PAYMENTS PAYABLE FROM
THE SOCIAL SECURITY INVESTMENT TRUST FUND
‘‘SEC. 256. (a) IN GENERAL.—An account holder
who is entitled to old-age insurance benefits under section
202(a) is entitled as provided in this section to the amount
of the balance in the account holder’s investment account
available for distribution under this section in accordance
with section 255.
‘‘(b) ALTERNATIVE FORMS OF DISTRIBUTION.—Sub-
ject to section 258, any account holder who is entitled to
old-age insurance benefits under section 202(a) is entitled
and may elect—
‘‘(1) to receive an immediate annuity from the
Trust Fund;
‘‘(2) to defer the commencement of the pay-
ment of an annuity from the Trust Fund until such
date as the account holder specifies, but not later
than April 1 of the year following the year in which
the account holder becomes 701⁄2 years of age;
‘‘(3) to withdraw the amount of the balance in
the account holder’s investment account in the Trust
Fund in one or more substantially equal payments
to be made not less frequently than annually and to
commence before April 1 of the year following the
year in which the account holder becomes 701⁄2
years of age; or
‘‘(4) to transfer the amount of the balance in
the account holder’s investment account in the Trust
Fund to an eligible retirement plan as provided in
subsection (c).
‘‘(c) 
TRANSFERS
TO
ELIGIBLE
RETIREMENT
PLANS.—
‘‘(1) IN
GENERAL.—The Executive Director
shall make each transfer elected under subsection
(b)(4) directly to an eligible retirement plan or plans
(as defined in section 402(c)(8)(B) of the Internal
Revenue Code of 1986) identified by the account
holder for whom the transfer is made.
‘‘(2) TRANSFER
CONTINGENT
UPON
RECEIPT
OF NECESSARY INFORMATION.—A transfer may not
be made for an account holder under paragraph (1)
until the Executive Director receives from such ac-
count holder the information required by the Execu-
tive Director specifically to identify the eligible re-
tirement plan or plans to which the transfer is to be
made.
‘‘(d) MODIFICATION OF ELECTIONS.—
‘‘(1) IN
GENERAL.—Subject to paragraph
(3)(A) and subsections (a) and (d) of section 258,
an account holder may change an election previously
made under this section.
‘‘(2) MODIFICATION
OF
DATE
FOR
DELAYED
DISTRIBUTIONS.—Subject to paragraph (3)(B) and
section 258(d), an account holder who has made an
election pursuant to subsection (b)(2) may modify
the date specified in such election or in a previous
modification under this paragraph.
‘‘(3) LIMITATIONS.—
‘‘(A) MODIFICATIONS DISALLOWED UPON
COMMENCEMENT
OF
DISTRIBUTION.—An ac-
count holder may not change an election under
this section on or after the date on which a
payment is made in accordance with such elec-
tion or, in the case of an election to receive an
annuity, the date on which an annuity contract
is purchased to provide for the annuity elected
by the account holder.
‘‘(B) OTHER
LIMITATIONS.—A modifica-
tion of a date may not be made under para-
graph (2) on or after the date on which an an-
nuity contract is purchased to provide for the
annuity involved, and may not specify a date
for the commencement of an annuity earlier
than 90 days after the date on which the modi-
fication is submitted to the Executive Director
(or such period shorter than 90 days as the Ex-
ecutive Director may by regulation prescribe).
‘‘(e) DEFAULT MEANS OF DISTRIBUTION.—
‘‘(1) LUMP SUM DISTRIBUTIONS OF MINIMAL
AMOUNTS.—Notwithstanding subsection (b), if an
account holder becomes entitled to old-age insurance
benefits under section 202(a) and the balance in
such account holder’s investment account is $3,500
or less, the Executive Director shall pay the balance
to the account holder in a single payment unless the
account holder elects, at such time and otherwise in
such manner as the Executive Director prescribes,
one of the options available under subsection (b).
‘‘(2) 
DEFAULT
ANNUITY
COMMENCEMENT
DATE.—Unless otherwise elected under this section,
and subject to paragraph (1), the balance in an ac-
count holder’s investment account shall be paid as
an annuity commencing for the account holder on
February 1 of the year following the year in which
the account holder becomes entitled to old-age insur-
ance benefits under section 202(a).
‘‘PAYMENT OF ANNUITIES
‘‘SEC. 257. (a) METHODS OF PAYMENT.—The Board
shall prescribe methods of payment of annuities under this
part. The methods of payment prescribed under this sub-
section shall include, but not be limited to—
‘‘(1) a method which provides for the payment
of a monthly annuity only to an annuitant during
the life of the annuitant;
‘‘(2) a method which provides for the payment
of a monthly annuity to an annuitant for the joint
lives of the annuitant and the spouse of the annu-
itant and an appropriate monthly annuity to the one
of them who survives the other of them for the life
of the survivor;
‘‘(3) a method described in paragraph (1) which
provides for automatic adjustments in the amount of
the annuity payable so long as the amount of the
annuity payable in any one year shall not be less
than the amount payable in the previous year;
‘‘(4) a method described in paragraph (2) which
provides for automatic adjustments in the amount of
the annuity payable so long as the amount of the an-
nuity payable in any one year shall not be less than
the amount payable in the previous year; and
‘‘(5) a method which provides for the payment
of a monthly annuity—
‘‘(A) to the annuitant for the joint lives of
the annuitant and an individual who is des-
ignated by the annuitant under regulations pre-
scribed by the Executive Director and (i) is a
former spouse of the annuitant, or (ii) has an
insurable interest in the annuitant; and
‘‘(B) to the one of them who survives the
other of them for the life of the survivor.
‘‘(b) REQUIREMENT OF ELECTION.—Subject to sec-
tion 258(c), under such regulations as the Executive Di-
rector shall prescribe, an account holder who elects under
section 256 to receive an annuity under this part shall
elect, on or before the date on which an annuity contract
is purchased to provide for that annuity, one of the meth-
ods of payment prescribed under subsection (a).
‘‘(c) CONTINUED PERIOD OF 5 YEARS AVAILABILITY
FOR ELIMINATED METHODS.—Notwithstanding an elimi-
nation of a method of payment by the Board, an account
holder may elect the eliminated method if the elimination
of such method became effective less than 5 years before
the date on which the annuity commences.
‘‘(d) CONTRACTS FOR PURCHASE OF ANNUITIES.—
‘‘(1) TIME
LIMIT
FOR
ENTERING
INTO
CON-
TRACT.—Not earlier than 90 days (or such shorter
period as the Executive Director may by regulation
prescribe) before an annuity is to commence under
this part, the Executive Director shall expend the
balance in the annuitant’s account to purchase an
annuity contract from any entity which, in the nor-
mal course of its business, sells and provides annu-
ities.
‘‘(2) ASSURANCE OF PROVISION OF ANNUITY.—
The Executive Director shall assure, by contract en-
tered into with each entity from which an annuity
contract is purchased under paragraph (1), that the
annuity shall be provided in accordance with the
provisions of this part.
‘‘(3) TERMS
AND
CONDITIONS.—An annuity
contract purchased under paragraph (1) shall in-
clude such terms and conditions as the Executive
Director requires for the protection of the annuitant.
‘‘(4) BONDING.—The Executive Director shall
require, from each entity from which an annuity
contract is purchased under paragraph (1), a bond
or proof of financial responsibility sufficient to pro-
tect the annuitant.
‘‘(e) EXEMPTION
FROM
LOCAL
TAXATION
OF
AMOUNTS PAID TO PURCHASE ANNUITIES.—
‘‘(1) IN GENERAL.—No tax, fee, or other mone-
tary payment may be imposed or collected by any
State, or by any political subdivision or other gov-
ernmental authority thereof, on, or with respect to,
any amount paid to purchase an annuity contract
under this section.
‘‘(2) TAXATION OF ISSUER PERMITTED.—Para-
graph (1) shall not be construed to exempt any com-
pany or other entity issuing an annuity contract
under this section from the imposition, payment, or
collection of a tax, fee, or other monetary payment
on the net income or profit accruing to or realized
by that entity from the sale of an annuity contract
under this section if that tax, fee, or payment is ap-
plicable to a broad range of business activity.
‘‘PROTECTIONS FOR SPOUSES AND FORMER SPOUSES
‘‘SEC. 258. (a) REQUIREMENT OF SPOUSAL CON-
SENT.—
‘‘(1) IN GENERAL.—A married account holder
may make an election under subsection (b)(3) or
(b)(4) of section 256 or change an election pre-
viously made under subsection (b)(1) or (b)(2) of
such section only if the account holder and the ac-
count holder’s spouse jointly waive, by written elec-
tion, any right which the spouse may have to a sur-
vivor annuity with respect to such account holder
under section 257 or subsection (b).
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply to an election or change of election by an ac-
count holder who establishes to the satisfaction of
the Executive Director (at the time of the election
or change and in accordance with regulations pre-
scribed by the Executive Director)—
‘‘(A) that the spouse’s whereabouts cannot
be determined; or
‘‘(B) 
that, 
due 
to 
exceptional 
cir-
cumstances, requiring the spouse’s waiver would
otherwise be inappropriate.
‘‘(b) JOINT AND SURVIVOR ANNUITY FORM APPLIES
UNLESS OTHERWISE ELECTED.—
‘‘(1) IN GENERAL.—Notwithstanding any elec-
tion under subsection (b) of section 257, the method
described in subsection (a)(2)(B) of such section (or,
if more than one form of such method is available,
the form which the Board determines to be the one
which provides for a surviving spouse a survivor an-
nuity most closely approximating the annuity of a
surviving spouse under section 8442 of title 5,
United States Code) shall be deemed the applicable
method under such subsection (b) in the case of an
account holder who is married on the date on which
an annuity contract is purchased to provide for the
account holder’s annuity under this part.
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply if—
‘‘(A) a joint waiver of such method is
made, in writing, by the account holder and the
spouse; or
‘‘(B) the account holder waives such meth-
od, in writing, after establishing to the satisfac-
tion of the Executive Director that cir-
cumstances described under subsection (a)(2)
(A) or (B) make the requirement of a joint
waiver inappropriate.
‘‘(c) ELECTIONS AND OTHER CHANGES SUBJECT TO
COURT ORDERS.—
‘‘(1) IN GENERAL.—An election, change of elec-
tion, or modification of the commencement date of
a deferred annuity shall not be effective under this
part to the extent that the election, change, modi-
fication, or transfer conflicts with any court decree,
order, or agreement described in paragraph (2).
‘‘(2) REQUIREMENTS.—A court decree, order,
or agreement referred to in paragraph (1) is, with
respect to an account holder, a court decree of di-
vorce, annulment, or legal separation issued in the
case of the account holder and any former spouse of
the account holder or any court order or court-ap-
proved property settlement agreement incident to
the decree if—
‘‘(A) the decree, order, or agreement ex-
pressly relates to any portion of the balance in
the account holder’s investment account; and
‘‘(B) notice of the decree, order, or agree-
ment was received by the Executive Director
before—
‘‘(i) the date on which payment is
made, or
‘‘(ii) in the case of an annuity, the
date on which an annuity contract is pur-
chased to provide for the annuity,
in accordance with the election, change, modi-
fication, or contribution referred to in para-
graph (1).
‘‘(3) TREATMENT OF 2 OR MORE COURT OR-
DERS.—The Executive Director shall prescribe regu-
lations under which this subsection shall be applied
in any case in which the Executive Director receives
two or more decrees, orders, or agreements referred
to in paragraph (1).
‘‘(d) RIGHTS OF FORMER SPOUSES.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2)
through (7), a former spouse of a deceased account
holder who died as a fully insured individual is enti-
tled to a survivor annuity under this subsection if
and to the extent that—
‘‘(A) an election under section 257(a)(5),
or
‘‘(B) any court decree, order, or agreement
(described in subsection (c)(2), without regard
to subparagraph (B) of such subsection) which
relates to such deceased account holder and
such former spouse,
expressly provides for such survivor annuity.
‘‘(2) WRITTEN NOTICE REQUIRED.—Paragraph
(1) shall apply only to payments made by the Execu-
tive Director after the date on which the Executive
Director receives written notice of the election, de-
cree, order, or agreement, and such additional infor-
mation and documentation as the Executive Director
may require.
‘‘(3) LIMITATION ON AMOUNT.—The amount of
the survivor annuity payable from the Trust Fund
to a former spouse of a deceased account holder
under this section may not exceed the excess, if any,
of—
‘‘(A) the amount of the survivor annuity
determined for a surviving spouse of the de-
ceased account holder under the method de-
scribed in subsection (b)(1), over
‘‘(B) the total amount of all other survivor
annuities payable under part to other former
spouses of such deceased account holder based
on the order of precedence provided in para-
graph (4).
‘‘(4) ORDER OF PRECEDENCE.—If more than
one former spouse of a deceased account holder is
entitled to a survivor annuity pursuant to this sub-
section, the amount of each such survivor annuity
shall be limited appropriately to carry out paragraph
(3) in the order of precedence established for the en-
titlements by the chronological order of the dates on
which elections are properly made pursuant to sec-
tion 257(a)(5) and the dates on which the court de-
crees, orders, or agreements applicable to the entitle-
ment were issued, as the case may be.
‘‘(5) RULES FOR COMMENCEMENT AND TERMI-
NATION
UNDER
COURT
ORDERS.—The commence-
ment and termination of an annuity payable under
this section shall be governed by the terms of the ap-
plicable order, decree, agreement, or election, as the
case may be, except that any such annuity—
‘‘(A) shall not commence before—
‘‘(i) the day after the account holder
dies; or
‘‘(ii) the first day of the second month
beginning after the date on which the Ex-
ecutive Director receives written notice of
the order, decree, agreement, or election,
as the case may be, together with such ad-
ditional information or documentation as
the Executive Director may prescribe;
whichever is later; and
‘‘(B) shall terminate no later than the last
day of the month before the former spouse re-
marries before becoming 55 years of age or
dies.
‘‘(6) RESTRICTION
ON
MODIFICATIONS.—For
purposes of this part, a modification in a decree,
order, agreement, or election referred to in this sec-
tion shall not be effective—
‘‘(A) if such modification is made after the
retirement or death of the account holder or an-
nuitant concerned; and
‘‘(B) to the extent that such modification
involves an annuity under this part.
‘‘(7) COURT
ORDERS
SUBJECT
TO
PREVIOUS
JOINT WAIVERS.—For the purposes of this section,
a court decree, order, or agreement or an election re-
ferred to in subsection (a) shall not be effective, in
the case of a former spouse, to the extent that the
election is inconsistent with any joint waiver pre-
viously executed with respect to such former spouse
under subsection (a)(2) or (b)(2).
‘‘(8) EXCLUSIVE
RECOVERY.—Any payment
under this subsection to any individual bars recovery
by any other individual.
‘‘(e) WAIVERS
AND MODIFICATIONS SUBJECT
TO
PRESCRIBED PROCEDURES.—Waivers and notifications
required by this section and waivers of the requirements
for such waivers and notifications (as authorized by this
section) may be made only in accordance with procedures
prescribed by the Executive Director.
‘‘(f) INAPPLICABILITY TO MINIMAL ACCOUNT BAL-
ANCES.—None of the provisions of this section requiring
notification to, or the consent or waiver of, a spouse or
former spouse of an account holder shall apply in any case
in which the balance in the account holder’s investment
account is $3,500 or less.
‘‘(g) APPLICABLE COURT ORDERS.—The protections
provided by this section are in addition to the protections
provided by section 263.
‘‘ADMINISTRATIVE PROVISIONS
‘‘SEC. 259. (a) PAYMENTS AND TRANSFERS IN AC-
CORDANCE WITH ELECTION.—The Executive Director
shall make or provide for payments and transfers in ac-
cordance with an election of an account holder under sec-
tion 256 or 257(b) or, if applicable, in accordance with
section 258.
‘‘(b) ELECTIONS AND MODIFICATIONS OF DEFERRED
COMMENCEMENT DATES
IN WRITING.—Any election,
change of election, or modification of a deferred annuity
commencement date made under this part shall be in writ-
ing and shall be filed with the Executive Director in ac-
cordance with regulations prescribed by the Executive Di-
rector.
‘‘SOCIAL SECURITY INVESTMENT TRUST FUND
‘‘SEC. 260. (a) IN GENERAL.—There is established
in the Treasury of the United States a Social Security In-
vestment Trust Fund.
‘‘(b) AMOUNT COMPRISING THE TRUST FUND.—The
Trust Fund consists of the sum of all amounts contributed
under sections 252(c) and 253, increased by the total net
earnings from investments of sums in the Trust Fund
under section 254 or reduced by the total net losses from
investments of the Trust Fund under such section, and
reduced by the total amount of payments made from the
Trust Fund (including payments for administrative ex-
penses).
‘‘(c) APPROPRIATION OF TRUST FUND AMOUNTS.—
The sums in the Trust Fund are appropriated and shall
remain available without fiscal year limitation—
‘‘(1) to invest under section 254;
‘‘(2) to make distributions or purchase annuity
contracts under this part;
‘‘(3) to pay the administrative expenses in-
curred in carrying out this part under subsection
(d); and
‘‘(4) to purchase insurance as provided in sub-
section (h)(3)(B).