[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 633 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 633

To amend title II of the Social Security Act to require that investment 
  decisions regarding the social security trust funds be made on the 
 basis of the best interests of beneficiaries, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 16, 1999

 Mr. Ashcroft introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend title II of the Social Security Act to require that investment 
  decisions regarding the social security trust funds be made on the 
 basis of the best interests of beneficiaries, and for other purposes.

    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 Trust Funds 
Management Act of 1999''.

SEC. 2. INVESTMENT OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST 
              FUND AND THE FEDERAL DISABILITY INSURANCE TRUST FUND.

    (a) In General.--Section 201(d) of the Social Security Act (42 
U.S.C. 401(d)) is amended to read as follows:
    ``(d)(1) Subject to paragraphs (2) and (3), it shall be the duty of 
the Managing Trustee to invest such portion of the Trust Funds as is 
not, in the judgment of the Trustee, required to meet current 
withdrawals. The Managing Trustee may purchase interest-bearing 
obligations of the United States or obligations guaranteed as to both 
principal and interest by the United States, on original issue or at 
the market price.
    ``(2)(A) If the Managing Trustee, after consultation with the 
Commissioner of Social Security, determines that the purchase of 
obligations issued in accordance with paragraph (4) is in the best 
interest of paying current and future benefits under this title, and 
will not jeopardize the payment of such benefits, the Managing Trustee 
may purchase such obligations.
    ``(B) If the Commissioner of Social Security does not concur with 
the investment decisions of the Managing Trustee, or believes that 
other investment strategies are appropriate, the Commissioner shall 
promptly so inform the President and Congress in writing.
    ``(3) In investing contributions made to the Trust Funds, the 
Managing Trustee may not invest such contributions in private financial 
markets. Neither the Managing Trustee nor any other officer or employee 
of the Federal Government shall direct private pension plans as to what 
type of investments to make or in which financial markets to invest.
    ``(4) The purposes for which obligations of the United States may 
be issued under chapter 31 of title 31, United States Code, are hereby 
extended to authorize the issuance at par of public-debt obligations 
for purchase by the Trust Funds. Such obligations issued for purchase 
by the Trust Funds shall have maturities fixed with due regard for the 
needs of the Trust Funds and shall bear interest at a rate equal to the 
average market yield (computed by the Managing Trustee on the basis of 
market quotations as of the end of the calendar month next preceding 
the date of such issue) on all marketable interest-bearing obligations 
of the United States then forming a part of the public debt which are 
not due or callable until after the expiration of four years from the 
end of such calendar month; except that where such average market yield 
is not a multiple of one-eighth of 1 percent, the rate of interest of 
such obligations shall be the multiple of one-eighth of 1 percent 
nearest such market yield. Each obligation issued for purchase by the 
Trust Funds under this subsection shall be evidenced by a paper 
instrument in the form of a bond, note, or certificate of indebtedness 
issued by the Secretary of the Treasury setting forth the principal 
amount, date of maturity, and interest rate of the obligation, and 
stating on its face that the obligation shall be incontestable in the 
hands of the Trust Fund to which it is issued, that the obligation is 
supported by the full faith and credit of the United States, and that 
the United States is pledged to the payment of the obligation with 
respect to both principal and interest.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

 SEC. 3. INFORMATION REQUIREMENTS FOR SOCIAL SECURITY ACCOUNT 
              STATEMENTS.

    (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) in subparagraph (B), by inserting ``, including 
                a separate estimate of the amount of interest earned on 
                the contributions,'' after ``disability insurance'';
                    (B) in subparagraph (C)--
                            (i) by inserting ``, including a separate 
                        estimate of the amount of interest earned on 
                        the contributions,'' after ``hospital 
                        insurance''; and
                            (ii) by striking ``and'' after the 
                        semicolon;
                    (C) in subparagraph (D), by striking the period at 
                the end and inserting a semicolon;
                    (D) by redesignating subparagraphs (A), (B), (C), 
                and (D) as subparagraphs (B), (C), (D), and (E), 
                respectively;
                    (E) by inserting after the matter preceding 
                subparagraph (B), as redesignated by subparagraph (D), 
                the following:
            ``(A) the name, age, gender, mailing address, and marital 
        status of the eligible individual;'';
                    (F) by adding at the end the following:
            ``(F) the total amount of the employer and employee 
        contributions for the eligible individual for old-age and 
        survivors insurance benefits, as of the end of the month 
        preceding the date of the statement, in both actual dollars and 
        dollars adjusted for inflation;
            ``(G) the projected value of--
                    ``(i) the aggregate amount of the employer and 
                employee contributions for old-age and survivors 
                insurance benefits that are expected to be made by or 
                on behalf of the individual prior to the individual 
                attaining retirement age, in both actual dollars and 
                dollars adjusted for inflation;
                    ``(ii) the annual amount of old-age and survivors 
                insurance benefits that are expected to be payable on 
                the eligible individual's account for a single 
                individual and for a married couple, in dollars 
                adjusted for inflation;
                    ``(iii) the total amount of old-age and survivors 
                insurance benefits payable on the eligible individual's 
                account for the individual's life expectancy, in 
                dollars adjusted for inflation, identifying--
                            ``(I) the life expectancy assumed;
                            ``(II) the amount of benefits received on 
                        the basis of each $1 of contributions made by 
                        or on behalf of the individual; and
                            ``(III) the projected annual rate of return 
                        for the individual, taking into account the 
                        date on which the contributions are made in the 
                        eligible individual's account and the date on 
                        which the benefits are paid;
                    ``(iv) the total amount of old-age and survivors 
                insurance benefits that would have accumulated on the 
                eligible individual's account on the date on which the 
                individual attains retirement age if the contributions 
                for such individual had been invested in Treasury 10-
                year saving bonds at the prevailing interest rate for 
                such bonds as of the end of the month preceding the 
                date of the statement, and, alternatively, in the 
                Standard and Poor's 500, or an equivalent portfolio of 
                common stock equities that are based on a broad index 
                of United States market performance, in dollars 
                adjusted for inflation, identifying--
                            ``(I) the date of retirement assumed;
                            ``(II) the interest rate used for the 
                        projection; and
                            ``(III) the amount that would be received 
                        on the basis of each $1 of contributions made 
                        by or on behalf of the individual;
            ``(H) the average annual rate of return, adjusted for 
        inflation, on the Treasury 10-year saving bond as of the date 
        of the statement;
            ``(I) the average annual rate of return, adjusted for 
        inflation, on the Standard and Poor's 500, or an equivalent 
        portfolio of common stock equities that are based on a broad 
        index of United States market performance, for the preceding 25 
        years;
            ``(J) a brief statement that identifies--
                    ``(i) the balance of the trust fund accounts as of 
                the end of the month preceding the date of the 
                statement;
                    ``(ii) the annual estimated balance of the trust 
                fund accounts for each of the succeeding 30 years; and
                    ``(iii) the assumptions used to provide the 
                information described in clauses (i) and (ii), 
                including the rates of return and the nature of the 
                investments of such trust fund accounts; and
            ``(K) a simple 1-page summary and comparison of the 
        information that is provided to an eligible individual under 
        subparagraphs (G), (H), and (I).''; and
            (2) by striking paragraph (3) and inserting the following:
    ``(3) The estimated amounts required to be provided in a statement 
under this section shall be determined by the Commissioner using a 
general methodology for making such estimates, as formulated and 
published at the beginning of each calendar year by the Board of 
Trustees of the trust fund accounts. A description of the general 
methodology used shall be provided to the eligible individual as part 
of the statement required under this section.
    ``(4) The Commissioner of Social Security shall notify an 
individual who receives a social security account statement under this 
section that the individual may request that the information described 
in paragraph (2) be determined on the basis of relevant information 
provided by the individual, including information regarding the 
individual's future income, marital status, date of retirement, or 
race.
    ``(5) For purposes of this section--
            ``(A) the term `dollars adjusted for inflation' means--
                    ``(i) dollars in constant or real value terms on 
                the date on which the statement is issued; and
                    ``(ii) an amount that is adjusted on the basis of 
                the Consumer Price Index.
            ``(B) the term `eligible individual' means an individual 
        who--
                    ``(i) has a social security account number;
                    ``(ii) has attained age 25 or over; and
                    ``(iii) has wages or net earnings from self-
                employment; and
            ``(C) the term `trust fund account' means--
                    ``(i) the Federal Old-Age and Survivors Insurance 
                Trust Fund; and
                    ``(ii) the Federal Disability Insurance Trust 
                Fund.''.
    (b) Mandatory Provision of Statements Through Means Such As the 
Internet.--Section 1143(c)(2) of the Social Security Act (42 U.S.C. 
1320b-13(c)(2)) is amended--
            (1) in the first sentence, by inserting ``(which shall 
        include the Internet as soon as the Commissioner of Social 
        Security determines that adequate measures are in place to 
        protect the confidentiality of the information contained in the 
        statement)'' before the period; and
            (2) by striking the second and third sentences.
    (c) Technical Amendment.--Section 1143 of the Social Security Act 
(42 U.S.C. 1320b-13) is amended by striking ``Secretary'' each place it 
appears and inserting ``Commissioner of Social Security''.
    (d) Effective Date.--The amendments made by this Act shall apply to 
statements provided for fiscal years beginning with fiscal year 2000.
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