[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3401 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3401

 To amend title II of the Social Security Act to replace the windfall 
 elimination provision with a formula equalizing benefits for certain 
    individuals with noncovered employment, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 5, 2020

 Mr. Cruz (for himself and Mr. Cassidy) 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 replace the windfall 
 elimination provision with a formula equalizing benefits for certain 
    individuals with noncovered employment, 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 ``Equal Treatment of Public Servants 
Act of 2020''.

SEC. 2. REPLACEMENT OF THE WINDFALL ELIMINATION PROVISION WITH A 
              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 2060,
            ``(ii) who subsequently becomes entitled to such benefit, 
        and
            ``(iii) who has earnings derived from noncovered service 
        performed in a year after 1977,
the primary insurance amount of such individual shall be 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 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 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 
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.
    ``(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) in clause (i)--
                    (A) by striking ``after 1985'' and inserting 
                ``after 1985 and before 2061''; and
                    (B) by striking ``or'' at the end;
            (2) in clause (ii)--
                    (A) by striking ``after 1985'' each place it 
                appears and inserting ``after 1985 and before 2061''; 
                and
                    (B) by adding ``or'' at the end;
            (3) by inserting after clause (ii) the following:
            ``(iii) is an individual described in paragraph (8)(E),''; 
        and
            (4) by striking ``hereafter in this paragraph and in 
        subsection (d)(3)'' and inserting ``in this paragraph, 
        paragraphs (8) and (9), and subsection (d)(3)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to monthly insurance benefits payable on or after 
January 1, 2022.

SEC. 3. BENEFIT CALCULATION DURING TRANSITION PERIOD.

    (a) In General.--Section 215(a) of the Social Security Act (42 
U.S.C. 415(a)), as amended by section 2, is further amended by 
inserting after paragraph (8) the following:
    ``(9)(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 2021 and before 2061,
            ``(ii) who subsequently becomes entitled to such benefit, 
        and
            ``(iii) who has earnings derived from noncovered service 
        performed in a year after 1977,
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 that would be computed or recomputed under 
paragraph (8) if the individual were an individual described in 
subparagraph (A) of such paragraph.''.
    (b) Conforming Amendment.--Section 215(a)(7)(A) of such Act (42 
U.S.C. 415(a)(7)(A)), as amended by section 2(b), is further amended by 
striking ``shall be computed or recomputed'' and inserting ``shall, 
subject to paragraph (9), 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, 2022.

SEC. 4. ADDITIONAL MONTHLY PAYMENT FOR 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 sections 2 and 3, is further amended by adding at the end 
the following:
    ``(10)(A) For any month in a calendar year after 2019, the 
Commissioner of Social Security shall, subject to subparagraphs (C) and 
(D), make an additional monthly payment of $100 to each individual who 
is an eligible individual for such month, and an additional monthly 
payment of $50 to each individual (other than an eligible individual) 
who is entitled to a benefit under section 202 for such month on the 
basis of the wages and self-employment income of such eligible 
individual.
    ``(B) For purposes of this paragraph, the term `eligible 
individual' for a month means an individual who--
            ``(i)(I) first becomes eligible for an old-age or 
        disability insurance benefit under this title before 2022; or
            ``(II) is an individual described in paragraph (8)(E); 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).
    ``(C) 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 the individual's 
receipt of other income or benefits for such month or the application 
of section 203(a) or due to the adjustment or recovery of an 
overpayment under section 204.
    ``(D)(i) An individual is not entitled to receive more than one 
additional monthly payment for a month under this paragraph.
    ``(ii) An eligible individual who is entitled to a benefit under 
section 202 on the basis of the wages and self-employment income of 
another eligible individual for a month shall receive an additional 
monthly payment under this paragraph in the amount of $100 for such 
month.
    ``(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 of the dollar amounts in subparagraph 
(A) shall be increased by the same percentage for months beginning with 
such month.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to monthly insurance benefits payable on or after 
January 1, 2020.

SEC. 5. REPORTING OF NONCOVERED EARNINGS ON SOCIAL SECURITY ACCOUNT 
              STATEMENTS.

    (a) In General.--Section 1143(a)(2) of the Social Security Act (42 
U.S.C. 1320b-13(a)(2)) is amended--
            (1) by redesignating subparagraphs (B) through (E) as 
        subparagraphs (C) through (F); and
            (2) 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;''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to Social Security account statements issued on or 
after January 1, 2020.

SEC. 6. STUDY ON PARTNERING WITH STATE AND LOCAL PENSION SYSTEMS.

    (a) Study.--
            (1) In general.--The Commissioner of Social Security shall 
        study and test the administrative feasibility of partnering 
        with State and local pension systems, or other governmental 
        entities, to improve the collection and sharing of information 
        relating to State and local noncovered pensions.
            (2) Coordination with state and local pension systems.--In 
        conducting the study described in paragraph (1), the 
        Commissioner shall coordinate with State and local pension 
        systems that reflect the diversity of systems and individual 
        experiences to explore the development of automated data 
        exchange agreements that facilitate reporting of information 
        relating to noncovered pensions.
    (b) Report.--The Commissioner of Social Security shall conclude the 
study described in subsection (a) not later than 4 years after the date 
of enactment of this Act. As soon as possible after conclusion of the 
study and not later than 4\1/2\ years after the date of enactment of 
this Act, the Commissioner shall submit to the Committee on Ways and 
Means of the House of Representatives and the Committee on Finance of 
the Senate a report on the results of the study. Such report shall 
include the following:
            (1) A discussion of how the automated data exchange 
        agreements could be implemented to cover noncovered pensions 
        nationally, including the range of implementation timelines 
        across State and local pension systems, or with other 
        governmental entities.
            (2) An analysis of the barriers to developing automated 
        data exchange agreements and lessons learned that can help 
        address these barriers.
            (3) A description of alternative methods for obtaining 
        information related to noncovered pensions, and an analysis of 
        the barriers to obtaining noncovered pension data through such 
        methods.
            (4) An explanation of how coverage information is obtained 
        by the Social Security Administration when an individual 
        purchases service credits to apply to a new covered or 
        noncovered pension after moving from another covered or 
        noncovered pension within the State or in another State.
            (5) An estimate of the total amount, as of the date of the 
        enactment of this Act, of noncovered pensions not reported to 
        the Social Security Administration as a result of noncompliance 
        with voluntary reporting policies.
    (c) State and Local Pension Information To Be Requested by the 
Commissioner.--Section 202 of the Social Security Act (42 U.S.C. 402) 
is amended by inserting after subsection (l) the following:
    ``(m) State and Local Pension Information To Be Requested by the 
Commissioner.--
            ``(1) The Commissioner may partner with States to request 
        information, including the information specified in paragraph 
        (2), with respect to any designated distribution (as defined in 
        section 3405(e)(1) of the Internal Revenue Code of 1986) from 
        an employer deferred compensation plan (as defined in section 
        3405(e)(5) of such Code) of the State (or political subdivision 
        thereof) to a participant of such plan in any case in which any 
        portion of such participant's earnings for service under such 
        plan did not constitute `employment' as defined in section 210 
        for purposes of this title.
            ``(2) The information specified in this paragraph is the 
        following:
                    ``(A) The name and Social Security account number 
                of the participant receiving the designated 
                distribution.
                    ``(B) The dollar amount of the designated 
                distribution and the date paid.
                    ``(C) The date on which the participant initially 
                became eligible for a designated distribution under the 
                plan and, if different, the date of payment of the 
                initial designated distribution.
                    ``(D) The dates of each period of service under the 
                plan that did not constitute `employment' as defined in 
                section 210 for purposes of this title, and the dates 
                of any other period of service under the plan.''.
    (d) Definitions.--In this section--
            (1) the term ``noncovered pension'' means a pension any 
        part of which is based on noncovered service (within the 
        meaning of section 215(a)(7) of the Social Security Act (42 
        U.S.C. 415(a)(7))); and
            (2) the term ``covered pension'' means any other pension.
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