I
104TH CONGRESS
2D SESSION
H. R. 4215
To provide for the establishment and maintenance of personal social security
investment accounts for all Americans under the social security system.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 26, 1996
Mr. PETRI introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committee on Government
Reform and Oversight, and Rules, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To provide for the establishment and maintenance of per-
sonal social security investment accounts for all Ameri-
cans under the social 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 1996’’.
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 follow-
ing:
‘‘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 251(a).
‘‘(2) INVESTMENT
ACCOUNT.—The term ‘in-
vestment account’ means a personal social security
investment account established under section 251(a).
‘‘(3) TRUST
FUND.—The term ‘Trust Fund’
means the Social Security Investment Trust Fund
established under section 259.
‘‘(4) EXECUTIVE DIRECTOR.—The term ‘Execu-
tive Director’ means the Executive Director under
‘‘(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 provided in section
103(a)(3)(D) of the Employee Retirement Income
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 subparagraphs (B) and (C), respectively, of section
254(a)(1) shall sign an acknowledgement prescribed by
the Executive Director which states that the account hold-
er understands 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.
‘‘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 221 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 interest,
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-