[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 490 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 490

  To amend title II of the Social Security Act to repeal the windfall 
  elimination provision and protect the retirement of public servants.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 26, 2009

Mrs. Hutchison 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 repeal the windfall 
  elimination provision and protect the retirement of public servants.

    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 Servant Retirement Protection 
Act of 2009''.

SEC. 2. REPEAL OF CURRENT WINDFALL ELIMINATION PROVISION.

    Paragraph (7) of section 215(a) of the Social Security Act (42 
U.S.C. 415(a)(7)) is repealed.

SEC. 3. REPLACEMENT OF THE WINDFALL ELIMINATION PROVISION WITH A 
              FORMULA EQUALIZING BENEFITS FOR CERTAIN INDIVIDUALS WITH 
              NON-COVERED EMPLOYMENT.

    (a) Substitution of Proportional Formula for Formula Based on 
Covered Portion of Periodic Benefit.--
            (1) In general.--Section 215(a) of the Social Security Act 
        (as amended by section 2 of this Act) is amended further by 
        inserting after paragraph (6) the following new paragraph:
    ``(7)(A) In the case of an individual whose primary insurance 
amount would be computed under paragraph (1) of this subsection, who--
            ``(i) attains age 62 after 1985 (except where he or she 
        became entitled to a disability insurance benefit before 1986 
        and remained so entitled in any of the 12 months immediately 
        preceding his or her attainment of age 62), or
            ``(ii) would attain age 62 after 1985 and becomes eligible 
        for a disability insurance benefit after 1985,
and who first becomes eligible after 1985 for a monthly periodic 
payment (including a payment determined under subparagraph (F), but 
excluding (I) a payment under the Railroad Retirement Act of 1974 or 
1937, (II) a payment by a social security system of a foreign country 
based on an agreement concluded between the United States and such 
foreign country pursuant to section 233, and (III) a payment based 
wholly on service as a member of a uniformed service (as defined in 
section 210(m)) which is based in whole or in part upon his or her 
earnings for service which did not constitute `employment' as defined 
in section 210 for purposes of this title (hereafter in this paragraph 
and in subsection (d)(3) referred to as `noncovered service')), the 
primary insurance amount of that individual during his or her 
concurrent entitlement to such monthly periodic payment and to old-age 
or disability insurance benefits shall be 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--
            ``(i) in the case of an individual who first performs 
        noncovered service after the 12th calendar month following the 
        date of the enactment of the Public Servant Retirement 
        Protection Act of 2009, the primary insurance amount determined 
        under subparagraph (C), or
            ``(ii) in the case of an individual who has performed 
        noncovered service during or before the 12th calendar month 
        following the date of the enactment of the Public Servant 
        Retirement Protection Act of 2009, the larger of--
                    ``(I) the primary insurance amount determined under 
                subparagraph (C), or
                    ``(II) the primary insurance amount determined 
                under subparagraph (E).
    ``(C) An individual's primary insurance amount determined under 
this subparagraph shall be the product derived by multiplying--
            ``(i) the individual's primary insurance amount, as 
        determined under paragraph (1) of this subsection and 
        subparagraph (D) 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 (D)), and
                    ``(II) the denominator of which is an amount equal 
                to the individual's average indexed monthly earnings 
                (as determined under subparagraph (D)),
rounded, if not a multiple of $0.10, to the next lower multiple of 
$0.10.
    ``(D)(i) For purposes of determining an individual's primary 
insurance amount pursuant to clauses (i) and (ii)(II) of subparagraph 
(C), the individual's average indexed monthly earnings shall be 
determined, subject to clause (ii), by treating all recorded noncovered 
earnings (as defined in clause (iii)(I)) derived by the individual from 
noncovered service performed in each year after 1950 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 (iii)(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) In any case in which some or all of the earnings derived 
from noncovered service performed by an individual during any calendar 
year after 1950 are not recorded noncovered earnings (as defined in 
clause (iii)(I)), for purposes of determining the individual's average 
indexed monthly earnings as described in clause (i), the amount of the 
individual's adjusted total covered earnings (as defined in clause 
(iii)(II)) for such calendar year shall be deemed to be, in lieu of the 
amount determined without regard to this clause, an amount equal to the 
quotient derived by dividing--
            ``(I) the sum of all adjusted total covered earnings 
        (determined without regard to this clause) of the individual 
        for all calendar years after 1950, plus all recorded noncovered 
        earnings which are paid to the individual during such calendar 
        years (after adjustment under subsection (b)(3) as if such 
        earnings were wages), by
            ``(II) the number of calendar years after 1950 for which 
        there are, with respect to the individual, any earnings 
        described in subclause (I).
    ``(iii) 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)).
    ``(iv) The Commissioner of Social Security shall provide by 
regulation 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 which is 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 
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, except that such 
evidence provided by the individual shall be taken into account only to 
the extent that such evidence does not relate to earnings for service 
with respect to which information regarding earnings has already been 
obtained by the Commissioner from the employer and only to the extent 
that such evidence does not result in a reduction in the individual's 
primary insurance amount as calculated under subparagraph (C).
    ``(E)(i) For purposes of determining the primary insurance amount 
under this subparagraph pursuant to subparagraph (B)(ii)(II)--
            ``(I) there shall first be computed an amount equal to the 
        individual's primary insurance amount under paragraph (1) of 
        this subsection, except that for purposes of such computation 
        the percentage of the individual's average indexed monthly 
        earnings established by subparagraph (A)(i) of paragraph (1) 
        shall be the percent specified in clause (ii), and
            ``(II) there shall then be computed (without regard to this 
        paragraph) a second amount, which shall be equal to the 
        individual's primary insurance amount under paragraph (1) of 
        this subsection, except that such second amount shall be 
        reduced by an amount equal to one-half of the portion of the 
        monthly periodic payment which is attributable to noncovered 
        service performed after 1956 (with such attribution being based 
        on the proportionate number of years of such noncovered 
        service) and to which the individual is entitled (or is deemed 
        to be entitled) for the initial month of his or her concurrent 
        entitlement to such monthly periodic payment and old-age or 
        disability insurance benefits.
An individual's primary insurance amount determined under this 
subparagraph shall be the larger of the two amounts computed under this 
clause (before the application of subsection (i)).
    ``(ii) For purposes of clause (i), the percent specified in this 
clause is--
            ``(I) 80.0 percent with respect to individuals who become 
        eligible (as defined in paragraph (3)(B)) for old-age insurance 
        benefits (or became eligible as so defined for disability 
        insurance benefits before attaining age 62) in 1986;
            ``(II) 70.0 percent with respect to individuals who so 
        become eligible in 1987;
            ``(III) 60.0 percent with respect to individuals who so 
        become eligible in 1988;
            ``(IV) 50.0 percent with respect to individuals who so 
        become eligible in 1989; and
            ``(V) 40.0 percent with respect to individuals who so 
        become eligible in 1990 or thereafter.
    ``(F)(i) Any periodic payment which otherwise meets the 
requirements of subparagraph (A), but which is paid on other than a 
monthly basis, shall be allocated on a basis equivalent to a monthly 
payment (as determined by the Commissioner of Social Security), and 
such equivalent monthly payment shall constitute a monthly periodic 
payment for purposes of this paragraph.
    ``(ii) In the case of an individual who has elected to receive a 
periodic payment that has been reduced so as to provide a survivor's 
benefit to any other individual, the payment shall be deemed to be 
increased (for purposes of any computation under this paragraph or 
subsection (d)(3)) by the amount of such reduction.
    ``(iii) For purposes of this paragraph, the term `periodic payment' 
includes a payment payable in a lump sum if it is a commutation of, or 
a substitute for, periodic payments.
    ``(G)(i) In any case in which the primary insurance amount would 
otherwise be calculated under subparagraph (E)--
            ``(I) this paragraph shall not apply in the case of an 
        individual who has 30 years or more of coverage; and
            ``(II) in the case of an individual who has more than 20 
        years of coverage but less than 30 years of coverage (as so 
        defined), the percent specified in the applicable subdivision 
        of subparagraph (E)(ii) shall (if such percent is smaller than 
        the applicable percent specified in the following table) be 
        deemed to be the applicable percent specified in the following 
        table:

``If the number of the                                                 
  individual's years of                                  The applicable
  coverage (as so defined) is:                           percentage is:
        29.....................................................     85 
        28.....................................................     80 
        27.....................................................     75 
        26.....................................................     70 
        25.....................................................     65 
        24.....................................................     60 
        23.....................................................     55 
        22.....................................................     50 
        21.....................................................     45.
    ``(ii) For purposes of clause (i), the term `year of coverage' 
shall have the meaning provided in paragraph (1)(C)(ii), except that 
the reference to `15 percent' therein shall be deemed to be a reference 
to `25 percent'.
    ``(H) An individual's primary insurance amount determined under 
this paragraph shall be deemed to be computed under paragraph (1) of 
this subsection for the purpose of applying other provisions of this 
title.
    ``(I) This paragraph shall not apply in the case of an individual 
whose eligibility for old-age or disability insurance benefits is based 
on an agreement concluded pursuant to section 233 or an individual who 
on January 1, 1984--
            ``(i) is an employee performing service to which social 
        security coverage is extended on that date solely by reason of 
        the amendments made by section 101 of the Social Security 
        Amendments of 1983; or
            ``(ii) is an employee of a nonprofit organization which (on 
        December 31, 1983) did not have in effect a waiver certificate 
        under section 3121(k) of the Internal Revenue Code of 1954 and 
        to the employees of which social security coverage is extended 
        on that date solely by reason of the amendments made by section 
        102 of that Act, unless social security coverage had previously 
        extended to service performed by such individual as an employee 
        of that organization under a waiver certificate which was 
        subsequently (prior to December 31, 1983) terminated.''.
            (2) Conforming amendments.--
                    (A) Section 215(d)(3) of such Act (42 U.S.C. 
                415(d)(3)) is amended--
                            (i) by striking ``subsection (a)(7)(C)'' 
                        each place it appears and inserting 
                        ``subsection (a)(7)(F)'';
                            (ii) by striking ``subparagraph (E)'' and 
                        inserting ``subparagraph (I)''; and
                            (iii) by striking ``subparagraph (D)'' and 
                        inserting ``subparagraph (G)(i)''.
                    (B) Section 215(f)(9)(A) of such Act (42 U.S.C. 
                415(f)(9)(A)) is amended by striking ``(a)(7)(C)'' and 
                inserting ``(a)(7)(F)''.

SEC. 4. EFFECTIVE DATE.

    The amendments made by this Act shall apply with respect to monthly 
insurance benefits for months commencing with or after the 12th 
calendar month following the date of the enactment of this Act. 
Notwithstanding section 215(f) of the Social Security Act, the 
Commissioner of Social Security shall recompute primary insurance 
amounts to the extent necessary to carry out the amendments made by 
this Act.
                                 <all>