Public Servants Protection and Fairness Act of 2021
Bill: H.R.2337 | Sponsor: Rep. Neal, Richard E. (D-MA)
Policy area: Social Welfare

Summary:
Public Servants Protection and Fairness Act of 2021
This bill establishes an alternative formula to calculate Social Security retirement benefits for those who receive pensions for certain non-covered employment. (The existing formula is known as the windfall elimination provision.)
The alternative formula adjusts an individual's total lifetime earnings based on the proportion of covered earnings (i.e., earnings subject to Social Security payroll taxes). It applies to individuals who (1) first become eligible for benefits after 2022, (2) have earnings from non-covered service performed after 1977, and (3) have less than 30 years of coverage (i.e., years in which a beneficiary is considered to have contributed a substantial amount into the Social Security trust funds).
Beneficiaries receive the higher benefit amount as calculated under the alternative method or the existing formula. In addition, the bill provides rebates for certain beneficiaries currently impacted by the existing formula.
The Social Security Administration must include non-covered earnings in Social Security account statements, and the Government Accountability Office must study the availability of certain information related to retirement plans maintained by state and local governments.

To amend title II of the Social Security Act to provide an equitable 
Social Security formula for individuals with noncovered employment and 
 to provide relief for individuals currently affected by the Windfall 
                         Elimination Provision.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Public Servants Protection and 
Fairness Act of 2021''.

SEC. 2. ALTERNATIVE FORMULA EQUALIZING BENEFITS FOR CERTAIN INDIVIDUALS 
              WITH NONCOVERED EMPLOYMENT.

    (a) In General.--Section 215(a) of the Social Security Act (42 
U.S.C. 415(a)) is amended by inserting after paragraph (7) the 
following:
    ``(8)(A) In the case of an individual whose primary insurance 
amount would be computed under paragraph (1) of this subsection--
            ``(i) who first becomes eligible for an old-age or 
        disability insurance benefit after 2022 and who subsequently 
        becomes entitled to such benefit;
            ``(ii) who has earnings derived from noncovered service 
        performed in a year after 1977 and is entitled to a monthly 
        periodic payment based on such earnings; and
            ``(iii) who has less than 30 years of coverage (as defined 
        for purposes of paragraph (7)(D)),
the primary insurance amount of such individual shall be the higher of 
the amount computed or recomputed under paragraph (7) without regard to 
this paragraph or the amount computed or recomputed under this 
paragraph.
    ``(B) The primary insurance amount of an individual described in 
subparagraph (A), as computed or recomputed under this paragraph, shall 
be the product derived by multiplying--
            ``(i) the individual's primary insurance amount, as 
        determined under paragraph (1) of this subsection and 
        subparagraph (C) of this paragraph, by
            ``(ii) a fraction--
                    ``(I) the numerator of which is the individual's 
                average indexed monthly earnings (determined without 
                regard to subparagraph (C)), and
                    ``(II) the denominator of which is an amount equal 
                to the individual's average indexed monthly earnings 
                (as determined under subparagraph (C)),
rounded, if not a multiple of $0.10, to the next lower multiple of 
$0.10.
    ``(C)(i) For purposes of determining an individual's primary 
insurance amount and average indexed monthly earnings pursuant to 
clauses (i) and (ii)(II) of subparagraph (B), the individual's average 
indexed monthly earnings shall be determined by treating all recorded 
noncovered earnings (as defined in clause (ii)(I)) derived by the 
individual from noncovered service performed in each year after 1977 as 
`wages' (as defined in section 209 for purposes of this title), which 
shall be treated as included in the individual's adjusted total covered 
earnings (as defined in clause (ii)(II)) for such calendar year 
together with amounts consisting of `wages' (as so defined without 
regard to this subparagraph) paid during such calendar year and self-
employment income (as defined in section 211(b)) for taxable years 
ending with or during such calendar year.
    ``(ii) For purposes of this subparagraph:
            ``(I) The term `recorded noncovered earnings' means 
        earnings derived from noncovered service (other than noncovered 
        service as a member of a uniformed service (as defined in 
        section 210(m))) for which satisfactory evidence is determined 
        by the Commissioner to be available in the records of the 
        Commissioner.
            ``(II) The term `adjusted total covered earnings' means, in 
        connection with an individual for any calendar year, the sum of 
        the wages paid to the individual during such calendar year (as 
        adjusted under subsection (b)(3)) plus the self-employment 
        income derived by the individual during any taxable year ending 
        with or during such calendar year (as adjusted under subsection 
        (b)(3)).
    ``(iii) The Commissioner of Social Security shall provide by 
regulation or other public guidance for methods for determining whether 
satisfactory evidence is available in the records of the Commissioner 
for earnings for noncovered service (other than noncovered service as a 
member of a uniformed service (as defined in section 210(m))) to be 
treated as recorded noncovered earnings. Such methods shall provide for 
reliance on earnings information provided to the Commissioner by 
employers and which, as determined by the Commissioner, constitute a 
reasonable basis for treatment of earnings for noncovered service as 
recorded noncovered earnings. In making determinations under this 
clause, the Commissioner shall also take into account any documentary 
or other evidence of earnings derived from noncovered service by an 
individual which is provided by the individual to the Commissioner and 
which the Commissioner considers appropriate as a reasonable basis for 
treatment of such earnings as recorded noncovered earnings.
    ``(iv) In the case of any individual who, at the time of 
application for old-age or disability insurance benefits under this 
title, has recorded noncovered earnings in an amount the Commissioner 
of Social Security determines may entitle the individual to a monthly 
periodic payment based on such earnings (but whose application does not 
report such a monthly periodic payment), the Commissioner shall 
reconfirm with the individual whether such a monthly periodic payment 
is being paid in order to ensure the proper application of paragraph 
(7) and this paragraph.
    ``(D) Upon the death of an individual whose primary insurance 
amount is computed or recomputed under this paragraph, such primary 
insurance amount shall be computed or recomputed under paragraph (1) of 
this subsection.
    ``(E) In the case of any individual whose primary insurance amount 
would be computed under this paragraph who first becomes entitled after 
1985 to a monthly periodic payment made by a foreign employer or 
foreign country that is based in whole or in part upon noncovered 
service, the primary insurance amount of such individual shall be 
computed or recomputed under paragraph (7) or paragraph (1), as 
applicable, for months beginning with the first month of the 
individual's initial entitlement to such monthly periodic payment.''.
    (b) Conforming Amendments.--Section 215(a)(7)(A) of such Act (42 
U.S.C. 415(a)(7)(A)) is amended--
            (1) by striking ``hereafter in this paragraph and in 
        subsection (d)(3)'' and inserting ``in this paragraph, 
        paragraph (8), and subsection (d)(3)''; and
            (2) by striking ``shall be computed or recomputed'' and 
        inserting ``shall, subject to paragraph (8), be computed or 
        recomputed''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to monthly insurance benefits payable on or after 
January 1, 2023.

SEC. 3. ADDITIONAL MONTHLY PAYMENT FOR CERTAIN INDIVIDUALS WHOSE 
              BENEFIT AMOUNT IS REDUCED BY THE WINDFALL ELIMINATION 
              PROVISION.

    (a) In General.--Section 215(a) of such Act (42 U.S.C. 415(a)), as 
amended by section 2(a), is further amended by adding at the end the 
following:
    ``(9)(A) For any month beginning at least 270 days after the date 
of the enactment of the Public Servants Protection and Fairness Act of 
2021, the Commissioner of Social Security shall, subject to 
subparagraphs (D) and (E), make an additional monthly payment to each 
individual who is an eligible individual for such month, in an amount 
equal to the amount determined under subparagraph (C) with respect to 
such eligible individual.
    ``(B) For purposes of this paragraph, the term `eligible 
individual' for a month means an individual (other than an individual 
described in paragraph (8)(E)) who--
            ``(i) first becomes eligible for an old-age or disability 
        insurance benefit under this title before 2023; and
            ``(ii) is entitled to an old-age or disability insurance 
        benefit under this title for such month based on a primary 
        insurance amount that was computed or recomputed under 
        paragraph (7) (and not subsequently recomputed under any other 
        paragraph of this subsection).
For purposes of clause (i), an individual shall be deemed eligible for 
a benefit for a month if, upon filing application therefor in such 
month, the individual would be entitled to such benefit for such month. 
For purposes of clause (ii), an individual shall be deemed entitled to 
a benefit based on a primary insurance amount that was computed or 
recomputed under paragraph (7) if such benefit would be based on such a 
primary insurance amount but for the application of paragraph (1)(C).
    ``(C)(i) The amount determined under this paragraph with respect to 
an eligible individual is $150, except that in any case in which the 
amount by which the primary insurance amount of such eligible 
individual that would be computed for the individual's initial 
computation month under this subsection without regard to paragraph (7) 
exceeds the primary insurance amount of such eligible individual 
computed for such month under this subsection (taking paragraph (7) 
into account) is less than $150, the amount determined under this 
paragraph shall equal the amount of such excess.
    ``(ii) For purposes of this subparagraph, the term `initial 
computation month' means, with respect to an individual, the later of--
            ``(I) the 1st month beginning at least 270 days after the 
        date of the enactment of the Public Servants Protection and 
        Fairness Act of 2021; or
            ``(II) the 1st month for which the individual's primary 
        insurance amount is computed or recomputed under paragraph (7).
    ``(D) In any case in which this title provides that no monthly 
benefit under section 202 or 223 shall be paid to an individual for a 
month, no additional monthly payment shall be paid to the individual 
for such month. This subparagraph shall not apply in the case of an 
individual whose monthly benefit under section 202 or 223 is reduced, 
regardless of the amount of the reduction, based on--
            ``(i) the individual's receipt of other income or benefits 
        for such month; or
            ``(ii) the adjustment or recovery of an overpayment under 
        section 204.
    ``(E) Except for purposes of adjustment or recovery of an 
overpayment under section 204, an additional monthly payment under this 
paragraph shall not be subject to any reduction or deduction under this 
title.
    ``(F) Whenever benefit amounts under this title are increased by 
any percentage effective with any month as a result of a determination 
made under subsection (i), each additional monthly payment amount 
payable to an eligible individual under this paragraph shall be 
increased by the same percentage for months beginning with such month.
    ``(G) The amount of any additional monthly payment under this 
paragraph shall be disregarded for purposes of determining the 
eligibility or benefit amount of an individual for supplemental 
security income benefits payable under title XVI of the Social Security 
Act, but only if such individual--
            ``(i) is eligible for a cash benefit payable under section 
        1611, section 1619(a), or section 1631(a)(7) for the 1st month 
        beginning at least 270 days after the date of the enactment of 
        the Public Servants Protection and Fairness Act of 2021;
            ``(ii) is an individual described in section 1619(b) for 
        such month; or
            ``(iii) is eligible for a State supplementary payment for 
        such month of the type referred to in section 1616(a) (or 
        payments of the type described in section 212(a) of Public Law 
        93-66) which are paid by the Commissioner under an agreement 
        referred to in section 1616(a) (or section 212(a) of Public Law 
        93-66).''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to monthly insurance benefits payable for months 
beginning at least 270 days after the date of the enactment of this 
Act.

SEC. 4. IMPROVEMENT IN SOCIAL SECURITY ACCOUNT STATEMENTS FOR PUBLIC 
              SERVANTS.

    (a) In General.--Section 1143(a) of the Social Security Act (42 
U.S.C. 1320b-13(a)) is amended--
            (1) in paragraph (2)--
                    (A) by redesignating subparagraphs (B) through (E) 
                as subparagraphs (C) through (F);
                    (B) by inserting after subparagraph (A) the 
                following:
                    ``(B) the amount of earnings derived by the 
                eligible individual from service performed after 1977 
                which did not constitute employment (as defined in 
                section 210), not including service as a member of a 
                uniformed service (as defined in section 210(m)), as 
                shown by the records of the Commissioner at the date of 
                the request;''; and
                    (C) in subparagraph (E) (as redesignated by 
                subparagraph (A)), by inserting ``(in the case of an 
                eligible individual described in paragraph (3)(C)(ii), 
                calculated using a primary insurance amount estimated 
                pursuant to paragraph (8) of section 215(a) and 
                including a notation indicating the use of such method 
                of calculation)'' after ``account''; and
            (2) in paragraph (3)(C)(ii)--
                    (A) by striking ``wages or self-employment income'' 
                and inserting ``wages, self-employment income, and 
                earnings derived from noncovered service (within the 
                meaning of section 215(a)(7))''; and
                    (B) by striking ``of noncovered employment'' and 
                inserting ``that the individual's primary insurance 
                amount will be computed under paragraph (7) or (8) of 
                section 215(a)''.
    (b) Conforming Amendments.--Section 1143 of the Social Security Act 
(42 U.S.C. 1320b-13) is amended--
            (1) in subsection (a)(2)(F) (as redesignated by subsection 
        (a)(1)(A) of this section), by striking ``sections 202(k)(5) 
        and 215(a)(7)'' and all that follows through ``auxiliary 
        benefits'' and inserting ``sections 202(k)(5), 215(a)(7), and 
        215(a)(8)''; and
            (2) in subsection (d)(1)--
                    (A) by striking ``maximum''; and
                    (B) by striking ``section 215(a)(7)'' and inserting 
                ``sections 215(a)(7) and 215(a)(8)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to Social Security account statements issued on or 
after January 1, 2023.

SEC. 5. STUDY ON AVAILABILITY OF INFORMATION RELATING TO RETIREMENT 
              PLANS.

    (a) In General.--The Comptroller General shall conduct a study to 
determine the extent to which State and local governments (or their 
designees) that maintain retirement plans for their employees possess 
or otherwise have access to information sufficient to determine what 
amount of a participant's benefits under such plan are based on 
noncovered service (within the meaning of section 215(a)(7) of the 
Social Security Act (42 U.S.C. 415(a)(7))).
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Comptroller General shall submit a report to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate on the results of the study 
described in subsection (a).

SEC. 6. HOLD HARMLESS FOR THE SOCIAL SECURITY TRUST FUNDS.

    There are appropriated, out of any moneys in the Treasury not 
otherwise appropriated, to each of the Federal Old-Age and Survivors 
Insurance Trust Fund and the Federal Disability Insurance Trust Fund 
for each fiscal year such amounts as the chief actuary of the Social 
Security Administration shall certify are necessary to place each such 
Trust Fund in the same position at the end of such fiscal year as it 
would have been in if the amendments made by this Act had not been 
enacted.
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