[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 990 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 990

   To provide for investment in private sector securities markets of 
amounts held in the Federal Old-Age and Survivors Insurance Trust Fund 
   for payment of benefits under title II of the Social Security Act.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 4, 1999

  Mr. Bartlett of Maryland (for himself, Mr. Markey, Mr. Pomeroy, Mr. 
   Duncan, and Mr. Matsui) introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To provide for investment in private sector securities markets of 
amounts held in the Federal Old-Age and Survivors Insurance Trust Fund 
   for payment of benefits under title II of the Social Security Act.

    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 ``Social Security Investment Fund Act 
of 1999''.

SEC. 2. ESTABLISHMENT OF THE SOCIAL SECURITY INVESTMENT BOARD AND 
              EXECUTIVE DIRECTOR.

    (a) In General.--Title VII of the Social Security Act is amended by 
adding after section 712 (42 U.S.C. 913) the following new section:

         ``social security investment board; executive director

                   ``Social Security Investment Board

    ``Sec. 713. (a)(1) There is established in the executive branch of 
the Government an independent agency to be known as the Social Security 
Investment Board.
    ``(2) The Board shall be composed of--
            ``(A) 3 members appointed by the President, of whom 1 shall 
        be designated by the President as Chairman; and
            ``(B) 2 members appointed by the President, of whom--
                    ``(i) 1 shall be appointed by the President after 
                taking into consideration the recommendation made by 
                the Speaker of the House of Representatives in 
                consultation with the minority leader of the House of 
                Representatives; and
                    ``(ii) 1 shall be appointed by the President after 
                taking into consideration the recommendation made by 
                the majority leader of the Senate in consultation with 
                the minority leader of the Senate.
    ``(3) Appointments under paragraph (2) shall be made by and with 
the advice and consent of the Senate.
    ``(4) Members of the Board shall have substantial experience, 
training, and expertise in the management of financial investments and 
the exercise of fiduciary duties.
    ``(5)(A) A member of the Board shall be appointed for a term of 10 
years, subject only to removal by the President for cause, except that 
of the members first appointed--
            ``(i) the Chairman shall be appointed for a term of 4 
        years;
            ``(ii) one of the members appointed under paragraph (2)(B) 
        shall be appointed for a term of 2 years;
            ``(iii) the remaining member appointed under paragraph 
        (2)(B) shall be appointed for a term of 6 years;
            ``(iv) one of the members appointed under paragraph (2)(A) 
        shall be appointed for a term of 8 years; and
            ``(v) the remaining member appointed under paragraph (2)(A) 
        shall be appointed for a term of 10 years.
    ``(B)(i) A vacancy on the Board shall be filled in the manner in 
which the original appointment was made and shall be subject to any 
conditions which applied with respect to the original appointment.
    ``(ii) An individual chosen to fill a vacancy shall be appointed 
for the unexpired term of the member replaced.
    ``(iii) The term of any member shall not expire before the date on 
which the member's successor takes office.
    ``(6) The Board shall--
            ``(A) establish policies for investments under part B of 
        title II of amounts in the Social Security Investment Fund in 
        the Common Stock Index Fund established pursuant to section 252 
        and policies for the selection and retention of investment 
        managers to manage such investments;
            ``(B) review the performance of investments of amounts in 
        the Social Security Investment Fund; and
            ``(C) review and approve the budget of the Board.
    ``(7) The Board shall develop investment policies under paragraph 
(6)(A) which provide for--
            ``(A) prudent investments suitable for accumulating funds 
        for payment of benefits under title II; and
            ``(B) low administrative costs.
    ``(8)(A) The Board may--
            ``(i) adopt, alter, and use a seal;
            ``(ii) except as provided in subparagraph (B), establish 
        policies with which the Executive Director is required to 
        comply under section 252; and
            ``(iii) take such other actions as may be necessary to 
        carry out the functions of the Board.
    ``(B) The policies of the Board may not require the Executive 
Director to invest or to cause to be invested any sums in the Social 
Security Investment Fund in a specific asset or to dispose of or cause 
to be disposed of any specific asset of the Fund.
    ``(9)(A) The Board shall meet--
            ``(i) not less than once during each month; and
            ``(ii) at additional times at the call of the Chairman.
    ``(B)(i) The Board shall perform the functions and exercise the 
powers of the Board on a majority vote of a quorum of the Board.
    ``(ii) A vacancy on the Board shall not impair the authority of a 
quorum of the Board to perform the functions and exercise the powers of 
the Board.
    ``(C) Three members of the Board shall constitute a quorum for the 
transaction of business.
    ``(D)(i) Each member of the Board who is not an officer or employee 
of the Federal Government shall be compensated at the daily rate of 
basic pay for level IV of the Executive Schedule for each day during 
which such member is engaged in performing a function of the Board.
    ``(ii) A member of the Board shall be paid travel, per diem, and 
other necessary expenses under subchapter I of chapter 57 of title 5, 
United States Code, while traveling away from such member's home or 
regular place of business in the performance of the duties of the 
Board.
    ``(iii) Payments authorized under this paragraph shall be paid from 
the Social Security Investment Fund.
    ``(E) The accrued annual leave of any officer or employee of the 
Federal Government who is a member of the Board shall not be charged 
for any time used in performing services for the Board.
    ``(10) The members of the Board shall discharge their 
responsibilities solely in the interest of the Social Security 
Investment Fund.
    ``(11) The Board shall prepare and submit to the President, and, at 
the same time, to the appropriate committees of Congress, an annual 
budget of the expenses and other items relating to the Board which 
shall be included as a separate item in the budget required to be 
transmitted to the Congress under section 1105 of title 31, United 
States Code.
    ``(12) The Board shall submit an annual report to the President and 
to each House of the Congress regarding the financial and operating 
condition of the Social Security Investment Fund. Such report may 
include legislative recommendations of the Board relating to any of its 
functions under this section, part B of title II, or any other 
provision of law.

                          ``Executive Director

    ``(b)(1) The Board shall appoint, without regard to the provisions 
of law governing appointments in the competitive service, an Executive 
Director of the Social Security Investment Board, by action agreed to 
by a majority of the members of the Board.
    ``(2) The Executive Director shall have substantial experience, 
training, and expertise in the management of financial investments and 
the exercise of fiduciary duties.
    ``(3) The Executive Director shall--
            ``(A) carry out the policies established by the Board;
            ``(B) carry out the provisions of section 252, relating to 
        investment of the Social Security Investment Fund in common 
        stock;
            ``(C) administer the provisions of part B of title II;
            ``(D) prescribe such regulations (other than regulations 
        relating to fiduciary responsibilities) as may be necessary for 
        the administration of part B of title II; and
            ``(E) meet from time to time with, and provide information 
        to, the Board of Trustees of the Federal Old-Age and Survivors 
        Insurance Trust Fund upon request of the Board of Trustees 
        regarding matters relating to the Social Security Investment 
        Fund.
    ``(4) The Executive Director may--
            ``(A) prescribe such regulations as may be necessary to 
        carry out the responsibilities of the Executive Director under 
        this subsection, other than regulations relating to fiduciary 
        responsibilities;
            ``(B) appoint such personnel as may be necessary to carry 
        out the provisions of part B of title II;
            ``(C) in accordance with the policies of the Board, procure 
        the services of experts and consultants under section 3109 of 
        title 5, United States Code;
            ``(D) secure directly from any agency or instrumentality of 
        the Federal Government any information necessary to carry out 
        the provisions of part B of title II and policies of the Board;
            ``(E) make such payments out of sums in the Social Security 
        Investment Fund as the Executive Director determines are 
        necessary to carry out the provisions of part B of title II and 
        the policies of the Board;
            ``(F) pay the compensation, per diem, and travel expenses 
        of individuals appointed under subparagraphs (B), (C), and (G) 
        of this paragraph from amounts otherwise available in the 
        Social Security Investment Fund;
            ``(G) accept and use the services of individuals employed 
        intermittently in the Government service and reimburse such 
        individuals for travel expenses, as authorized by section 5703 
        of title 5, United States Code, including per diem as 
        authorized by section 5702 of such title; and
            ``(H) take such other actions as are appropriate to carry 
        out the functions of the Executive Director under part B of 
        title II.
    ``(5) The Executive Director shall discharge his or her 
responsibilities solely in the interest of the Social Security 
Investment Fund.

                          ``Inspector General

    ``(c) There shall be in the Office of the Board an Inspector 
General appointed by the President, by and with the advice and consent 
of the Senate, in accordance with section 3(a) of the Inspector General 
Act of 1978.''.
    (b) Conforming Amendments.--Section 11 of the Inspector General Act 
of 1978 (5 U.S.C. App.) is amended--
            (1) in paragraph (1), by striking the second of the two 
        semicolons following ``Community Service'', by striking ``and'' 
        before ``the chief executive'', by striking ``and'' before 
        ``the Chairperson'', by striking ``or'' before ``the 
        Commissioner'', and by inserting ``or the Chairman of the 
        Social Security Investment Board;'' before ``as the case may 
        be''; and
            (2) in paragraph (2), by striking ``or'' before ``the 
        Veterans' Administration'', by striking ``or'' before ``the 
        Social Security Administration'', and by inserting ``, or the 
        Social Security Investment Board'' after ``the Social Security 
        Administration''.

SEC. 3. SOCIAL SECURITY INVESTMENT PROGRAM.

    (a) In General.--Title II of the Social Security Act is amended--
            (1) by inserting before section 201 (42 U.S.C. 401) the 
        following:

   ``Part A--Old-Age, Survivors, and Disability Insurance Benefits'';

        and
            (2) by adding after section 233 (42 U.S.C. 433) the 
        following new part:

              ``Part B--Social Security Investment Program

                   ``social security investment fund

    ``Sec. 251. (a) In General.--There is hereby created on the books 
of the Treasury of the United States a trust fund to be known as the 
`Social Security Investment Fund'. The Social Security Investment Fund 
shall consist of such amounts as may be appropriated to, or deposited 
in, the Social Security Investment Fund as provided in this part. Such 
Fund shall be available--
            ``(1) for investment in accordance with this part,
            ``(2) to be transferred to the Managing Trustee of the 
        Federal Old-Age and Survivors Insurance Trust Fund in 
        accordance with this part, and
            ``(3) subject to subsection (c), to pay the administrative 
        expenses of the Social Security Investment Board and the 
        Executive Director of the Board (including compensation for the 
        officers and employees of the Board).
    ``(b) Maintenance of Prescribed Balance in Social Security 
Investment Fund.--
            ``(1) In general.--Except as otherwise provided in this 
        section, the Managing Trustee of the Federal Old-Age and 
        Survivors Insurance Trust Fund shall transfer from the Trust 
        Fund to the Social Security Investment Fund during each of the 
        fiscal years 2001 through 2015 amounts equivalent to 100 
        percent of the prescribed transfer for such fiscal year 
        specified in paragraph (2). The amounts shall be transferred 
        from time to time from the Trust Fund to the Social Security 
        Investment Fund, such amounts to be determined on the basis of 
        estimates by the Managing Trustee; and proper adjustments shall 
        be made in amounts subsequently transferred to the extent prior 
        estimates were in excess of or were less than actual amounts.
            ``(2) Prescribed transfer.--For purposes of paragraph (1), 
        the `prescribed transfer' for a fiscal year shall be the amount 
        specified for the fiscal year in the following table:

``For the fiscal year--             The prescribed transfer is--
    2001...........................
                                             $34.2 billion. 
    2002...........................
                                             $28.4 billion. 
    2003...........................
                                             $37.2 billion. 
    2004...........................
                                             $36.7 billion. 
    2005...........................
                                             $44.5 billion. 
    2006...........................
                                             $49.4 billion. 
    2007...........................
                                             $62.5 billion. 
    2008...........................
                                             $73.5 billion. 
    2009...........................
                                             $85.4 billion. 
    2010...........................
                                             $97.7 billion. 
    2011...........................
                                            $107.7 billion. 
    2012...........................
                                            $117.6 billion. 
    2013...........................
                                            $126.0 billion. 
    2014...........................
                                            $133.0 billion. 
    2015...........................
                                            $136.3 billion.
            ``(3) Maintenance of balance of social security investment 
        fund at level necessary to ensure 6-year increase in trust fund 
        solvency.--
                    ``(A) Annual determinations by managing trustee.--
                The Managing Trustee of the Federal Old-Age and 
                Survivors Insurance Trust Fund shall determine at the 
                beginning of each of the fiscal years beginning with or 
                after fiscal year 2002 whether the then current balance 
                in the Social Security Investment Fund has resulted in 
                an increase of--
                            ``(i) at least 6 years in the number of 
                        years for which (under the actuarial 
                        assumptions used in the most recent annual 
                        report of the Board of Trustees of the Trust 
                        Fund, and taking into account amounts in the 
                        Social Security Investment Fund made available 
                        under this subsection to the Trust Fund) the 
                        Trust Fund is in close actuarial balance, over
                            ``(ii) the number of years for which (under 
                        such assumptions) the Trust Fund would have 
                        been in close actuarial balance if amounts 
                        previously transferred to the Social Security 
                        Investment Fund had not been transferred but 
                        had been retained in the Trust Fund and 
                        invested as provided in section 201(d).
                Upon determining at the beginning of any such fiscal 
                year that the then current balance in the Social 
                Security Investment Fund has resulted in the 6-year 
                increase described in clause (i), the Managing Trustee 
                shall certify such determination to the Social Security 
                Investment Board, the Comptroller General of the United 
                States, and each House of the Congress.
                    ``(B) Transfers between funds to maintain 6 
                additional years of solvency.--
                            ``(i) In general.--In any case in which the 
                        Managing Trustee determines under subparagraph 
                        (A) at the beginning of any fiscal year that 
                        the then current balance in the Social Security 
                        Investment Fund has resulted in the 6-year 
                        increase described in subparagraph (A)(ii), 
                        effective for such fiscal year and subsequent 
                        fiscal years--
                                    ``(I) paragraph (1) shall not 
                                apply, and
                                    ``(II) amounts shall be transferred 
                                between the Social Security Investment 
                                Fund and the Federal Old-Age and 
                                Survivors Insurance Trust Fund only in 
                                accordance with this paragraph, and 
                                only to the extent necessary to ensure, 
                                to the maximum extent practicable, that 
                                the balance in the Social Security 
                                Investment Fund does not exceed the 
                                minimum level necessary for such 6-year 
                                increase to be maintained.
                            ``(ii) Transfers from the social security 
                        investment fund.--Upon any determination made 
                        by the Managing Trustee that a transfer of any 
                        amount from the Social Security Investment Fund 
                        to the Federal Old-Age and Survivors Insurance 
                        Trust Fund is necessary in order to comply with 
                        clause (i), the Managing Trustee shall certify 
                        such determination to the Executive Director 
                        and, upon receipt of such certification, the 
                        Executive Director shall transfer such amount 
                        from the Social Security Investment Fund to the 
                        Trust Fund.
    ``(d) Special Rules Effective upon Depletion of Federal Old-Age and 
Survivors Insurance Trust Fund.--
            ``(1) In general.--At the beginning of fiscal year 2002 and 
        each subsequent fiscal year, the Managing Trustee of the 
        Federal Old-Age and Survivors Insurance Trust Fund shall 
        determine whether, under reasonable assumptions, the balance in 
        the Trust Fund would, but for the provisions of this 
        subsection, be reduced during such fiscal year to the amount 
        which is necessary for such fiscal year to meet current 
        withdrawals from the Trust Fund under part A. Upon so 
        determining that such balance would be reduced to such an 
        amount during such fiscal year, the Managing Trustee shall 
        certify such determination to the Social Security Investment 
        Board, the Comptroller General of the United States, and each 
        House of the Congress.
            ``(2) Transfers upon certification.--In any case in which 
        the Managing Trustee issues a certification under paragraph (1) 
        at the beginning of any fiscal year--
                    ``(A) subsection (b) shall cease to be effective 
                with respect to any transfers thereunder for such 
                fiscal year and subsequent fiscal years, and
                    ``(B) effective for such fiscal year and subsequent 
                fiscal years, upon any determination made by the 
                Managing Trustee that a transfer of any amount from the 
                Social Security Investment Fund to the Federal Old-Age 
                and Survivors Insurance Trust Fund is necessary to 
                ensure that amounts are available for current 
                withdrawals from the Trust Fund, the Managing Trustee 
                shall certify such determination to the Executive 
                Director and, upon receipt of such certification, the 
                Executive Director shall transfer such amount from the 
                Social Security Investment Fund to the Trust Fund.
            ``(3) Authorization of appropriations for administrative 
        expenses upon termination of transfers.--There is authorized to 
        be appropriated, for the fiscal year referred to in 
paragraph (2) and subsequent fiscal years, from amounts in the general 
fund of the Treasury which are not otherwise appropriated, such sums as 
are necessary to pay the administrative expenses of the Social Security 
Investment Board and the Executive Director of the Board.

    ``investment of social security investment fund in common stock

    ``Sec. 252. (a) In General.--The Social Security Investment Board 
shall establish for the Social Security Investment Fund a Common Stock 
Index Fund under which sums shall be invested as provided in subsection 
(b). Any interest or dividends earned on such investments, and the 
proceeds from any liquidation of such investments, including capital 
gain derived from such liquidation, shall be credited to and form a 
part of the Social Security Investment Fund.
    ``(b) Common Stock Index Fund.--
            ``(1) In general.--The Common Stock Index Fund shall 
        consist of amounts invested in common stock which is selected 
        by qualified professional asset managers as provided in this 
        subsection.
            ``(2) Selection of index and portfolio design.--
                    ``(A) Selection of index.--The Social Security 
                Investment Board shall select for purposes of this 
                subsection one or more indices each of which is 
                comprised of common stock the aggregate market value of 
                which is a reasonably complete representation of all 
                publicly held companies whose shares are traded on the 
                United States equity markets.
                    ``(B) Portfolio design.--Amounts held in the Common 
                Stock Index Fund shall be invested in portfolios 
                designed to replicate the performance of the indices 
                selected under subparagraph (A). Each portfolio shall 
                consist solely of stock purchased in a registered 
                public offering or in a secondary market transaction 
                and shall be designed such that, to the extent 
                practicable and consistent with the effective 
                management of such Fund, the percentage of the amount 
                of such Fund in each portfolio 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 the corresponding index. The 
                shares of any company shall not be included or excluded 
                from investments under this subsection because of 
                political, social, or religious considerations.
            ``(3) No voting rights in securities.--The Social Security 
        Investment Board and the Executive Director may not--
                    ``(A) exercise voting rights associated with the 
                ownership of securities by the Social Security 
                Investment Fund, or
                    ``(B) direct the manner in which any voting rights 
                are exercised on behalf of the Social Security 
                Investment Fund by any qualified professional asset 
                manager pursuant to this section.
    ``(c) Qualified Professional Asset Managers.--
            ``(1) Selection.--The services of qualified professional 
        asset managers shall be procured by the Executive Director for 
        purposes of this section in a competitive bidding process which 
        shall be established in regulations which shall be prescribed 
        by the Social Security Investment Board.
            ``(2) Definition.--For purposes of this section, the term 
        `qualified professional asset manager' means--
                    ``(A) a bank, as defined in section 202(a)(2) of 
                the Investment Advisers Act of 1940 (15 U.S.C. 80b-
                2(a)(2)) which--
                            ``(i) has the power to manage, acquire, or 
                        dispose of assets of a plan;
                            ``(ii) has, as of the last day of its 
                        latest fiscal year ending before the date of a 
                        determination for the purpose of this 
                        subparagraph, equity capital in excess of 
                        $10,000,000; and
                            ``(iii) has, on the last day of its latest 
                        fiscal year ending before the date of a 
                        determination for the purpose of this 
                        subparagraph, total client assets under its 
                        discretionary management and control for 
                        investment in excess of $100,000,000;
                    ``(B) a savings association, the accounts of which 
                are insured by the Federal Deposit Insurance 
                Corporation, which--
                            ``(i) has applied for and been granted 
                        trust powers to manage, acquire, or dispose of 
                        assets of a plan by a State or Government 
                        authority having supervision over savings 
                        associations;
                            ``(ii) has, as of the last day of its 
                        latest fiscal year ending before the date of a 
                        determination for the purpose of this 
                        subparagraph, equity capital or net worth in 
                        excess of $10,000,000; and
                            ``(iii) has, on the last day of its latest 
                        fiscal year ending before the date of a 
                        determination for the purpose of this 
                        subparagraph, total client assets under its 
                        discretionary management and control for 
                        investment in excess of $100,000,000;
                    ``(C) an insurance company which--
                            ``(i) is qualified under the laws of more 
                        than one State to manage, acquire, or dispose 
                        of any assets of a plan;
                            ``(ii) has, as of the last day of its 
                        latest fiscal year ending before the date of a 
                        determination for the purpose of this 
                        subparagraph, net worth in excess of 
                        $10,000,000;
                            ``(iii) is subject to supervision and 
                        examination by a State authority having 
                        supervision over insurance companies; and
                            ``(iv) has, on the last day of its latest 
                        fiscal year ending before the date of a 
                        determination for the purpose of this 
                        subparagraph, total client assets under its 
                        discretionary management and control for 
                        investment in excess of $100,000,000; or
                    ``(D) an investment adviser registered under 
                section 203 of the Investment Advisers Act of 1940 (15 
                U.S.C. 80b-3) if the investment adviser has, on the 
                last day of its latest fiscal year ending before the 
                date of a determination for the purpose of this 
                subparagraph, total client assets under its 
                discretionary management and control for investment in 
                excess of $100,000,000, and--
                            ``(i) the investment adviser has, on such 
                        day, shareholder's or partner's equity in 
                        excess of $10,000,000; or
                            ``(ii) payment of all of the investment 
                        adviser's liabilities, including any 
                        liabilities which may arise by reason of a 
                        breach or violation of a duty described in 
                        section 254, is unconditionally guaranteed by--
                                    ``(I) a person who directly or 
                                indirectly, through one or more 
                                intermediaries, controls, is controlled 
                                by, or is under common control with the 
                                investment adviser and who has, on the 
                                last day of the person's latest fiscal 
                                year ending before the date of a 
                                determination for the purpose of this 
                                subparagraph, shareholder's or 
                                partner's equity in an amount which, 
                                when added to the amount of the 
                                shareholder's or partner's equity of 
                                the investment adviser on such day, 
                                exceeds $10,000,000;
                                    ``(II) a qualified professional 
                                asset manager described in paragraph 
                                (1), (2), or (3); or
                                    ``(III) a broker or dealer 
                                registered under section 15 of the 
                                Securities Exchange Act of 1934 (15 
                                U.S.C. 78o) that has, on the last day 
                                of the broker's or dealer's latest 
                                fiscal year ending before the date of a 
                                determination for the purpose of this 
                                subparagraph, net worth in excess of 
                                $10,000,000.
        For purposes of subparagraph (D), the term `shareholder's or 
        partner's equity', when used with respect to an investment 
        adviser, or a person who is affiliated with the investment 
        adviser in a manner described in clause (ii)(I) of subparagraph 
        (D), means the equity shown in the most recent balance sheet 
        prepared for such investment adviser or affiliated person, in 
        accordance with generally accepted accounting principles, 
        within 2 years before the date on which the investment 
        adviser's status as a qualified professional asset manager is 
        determined for the purposes of this section.

              ``engagement of qualified public accountant

    ``Sec. 253. (a) In General.--The Social Security Investment Board 
shall annually engage, on behalf of the Social Security Investment 
Fund, an independent qualified public accountant, who shall conduct an 
examination of all accounts and other books and records maintained in 
the administration of this part (including all applicable financial 
statements) as the public accountant considers necessary to enable the 
public accountant to make the determination required by subsection (b). 
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.
    ``(b) Examination and Report.--The public accountant conducting an 
examination under subsection (a) shall determine whether the accounts, 
books, and records referred to in such subsection 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 subsection during 
the preceding year. The public accountant shall transmit to the Board a 
report on his examination, including his determination under this 
subsection.
    ``(c) Definition.--For the purposes of this section, the term 
`qualified public accountant' shall have the same meaning as is 
provided in section 103(a)(3)(D) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1023(a)(3)(D)).

                      ``fiduciary responsibilities

    ``Sec. 254. (a) In General.--Under regulations of the Secretary of 
Labor, the provisions of section 8477 of title 5, United States Code 
(relating to fiduciary responsibilities; liability and penalties) and 
section 8478 of such title (relating to bonding) shall apply in 
connection with the amounts maintained in the Common Stock Index Fund 
of the Social Security Investment Fund in the same manner and to the 
same extent as such provisions apply in connection with the Thrift 
Savings Fund.
    ``(b) Investigative Authority.--Any authority available to the 
Secretary of Labor under section 504 of the Employee Retirement Income 
Security Act of 1974 is hereby made available to the Secretary of 
Labor, and any officer designated by the Secretary of Labor, to 
determine whether any person has violated, or is about to violate, any 
provision applicable under subsection (a).
    ``(c) Exculpatory Provisions; Insurance.--
            ``(1) In general.--Any provision in an agreement or 
        instrument which purports to relieve a fiduciary from 
        responsibility or liability for any responsibility, obligation, 
        or duty under this part shall be void.
            ``(2) Insurance.--Amounts in the Social Security Investment 
        Fund available for administrative expenses shall be available 
        and may be used at the discretion of the Social Security 
        Investment Board to purchase insurance to cover potential 
        liability of persons who serve in a fiduciary capacity with 
        respect to amounts maintained in the Common Stock Index Fund of 
        the Social Security Investment Fund, without regard to whether 
        a policy of insurance permits recourse by the insurer against 
        the fiduciary in the case of a breach of a fiduciary 
        obligation.

            ``diversification through investment management

    ``Sec. 255. The Social Security Investment Board shall prescribe 
policies governing investment of the Social Security Investment Fund 
which shall ensure--
            ``(1) that the management of investments on behalf of the 
        Fund undertaken in the course of carrying out the investment 
        responsibilities of the Executive Director of the Fund is 
        exercised by qualified professional asset managers pursuant to 
        section 252 in such manner as to ensure that not fewer than 3 
        such managers are each engaged in the management of a 
        substantial portion of such investments,
            ``(2) that investments managed on behalf of the Fund by any 
        such qualified professional asset manager do not represent more 
        than 1 percent of the total equity interest in any person, and
            ``(3) that each investment manager will vote on any matter 
        the shares of any issuer held by the Fund under the management 
        of such investment manager in conformity with the voting on 
        such matter of all other shares of such issuer.''.
    (b) Conforming Amendment.--Section 201(d) of such Act (42 U.S.C. 
401(d)) is amended in the first sentence by striking ``withdrawals'' 
and inserting ``withdrawals, or, in the case of the Federal Old-Age and 
Survivors Insurance Trust Fund, to meet the transfer requirements under 
section 251(b)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to fiscal years beginning on or after October 1, 
2000.
                                 <all>