Strengthening Social Security Act of 1999 - Amends the Internal Revenue Code and title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to require covered employers to have a plan for withholding certain contributions from the wages of their eligible employees for investment according to the individual employee's personal investment plan. Defines personal investment plan as: (1) any personal investment retirement plan restricted to certain contribution deposits in the Personal Investment Fund, established in the Treasury by this Act; or (2) any individual retirement plan restricted to certain contribution deposits and administered or issued by a bank. Requires the Personal Investment Fund to be governed by a Personal Investment Fund Board under a system similar to the Thrift Savings Program for Federal employees. Covers self-employed individuals. Applies this Act only to employees who have not attained age 55.
Specifies reduced social security tax rates for plan participants. Sets forth civil penalties for employers who fail to establish such a withholding plan or to observe certain requirements with respect to it.
Provides for the adjustment of the primary insurance amount for plan participants and for specified graduated increases in normal and early retirement ages.
Directs the Bureau of Labor Statistics to reduce by .5 percentage point the annual percentage change in the Consumer Price Indexes used with respect to the OASDI cost-of-living adjustment calculations.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 251 Introduced in House (IH)]
106th CONGRESS
1st Session
H. R. 251
To amend the Internal Revenue Code of 1986 and the Social Security Act
to provide for personal investment plans funded by employee Social
Security payroll deductions, to extend the solvency of the old-age,
survivors, and disability insurance program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 6, 1999
Mr. Sanford introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and the Workforce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 and the Social Security Act
to provide for personal investment plans funded by employee Social
Security payroll deductions, to extend the solvency of the old-age,
survivors, and disability insurance program, 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 ``Strengthening Social Security Act of
1999''.
SEC. 2. PORTION OF SOCIAL SECURITY TAXES ON EMPLOYEES DEPOSITED INTO
PERSONAL INVESTMENT PLANS.
(a) Dedication of Employee Taxes and Self-Employment Taxes.--
(1) Tax on employees.--Section 3101(a) of the Internal
Revenue Code of 1986 (relating to OASDI tax on employees) is
amended--
(A) by striking the period at the end of the table
and inserting a semicolon; and
(B) by adding after and below the table the
following: ``except that, in the case of an eligible
employee (as defined in section 255(3) of the Social
Security Act), the rate of tax under this subsection
shall be 5.2 percent with respect to wages paid on or
after December 31, 1999, for pay periods ending after
such date.''.
(2) Self-employment tax.--Section 1401(a) of such Code
(relating to OASDI tax on self-employment income) is amended--
(A) by striking the period at the end of the table
and inserting a semicolon; and
(B) by adding after and below the table the
following: ``except that, in the case of an eligible
self-employed individual (as defined in section 255(4)
of the Social Security Act), the rate of tax under this
subsection shall be 11.4 percent of the amount of the
self-employment income in the case of a taxable year
beginning after December 31, 1999.''.
(3) Effective date.--
(A) Employee tax.--The amendments made by paragraph
(1) apply to remuneration paid after December 31, 1999.
(B) Self-employment tax.--The amendments made by
paragraph (2) apply to taxable years beginning after
December 31, 1999.
(b) Personal Investment Plans.--
(1) In general.--Title II of the Social Security Act (42
U.S.C. 401 et seq.) is amended--
(A) by inserting before section 201 the following:
``Part A--Insurance Benefits'';
and
(B) by adding at the end the following:
``Part B--Personal Investment Plans
``personal investment payroll deduction plans
``Sec. 251. (a) In General.--Each person who is a covered employer
for a calendar year shall have in effect a personal investment payroll
deduction plan for such calendar year for such person's eligible
employees.
``(b) Personal Investment Payroll Deduction Plans.--For purposes of
this part, the term `personal investment payroll deduction plan' means
a written plan of an employer--
``(1) which applies only with respect to wages of eligible
employees,
``(2) under which the personal investment plan
contributions will be deducted from the employee's wages and
paid to the Social Security Administration with respect to a
personal investment plan designated in accordance with section
252(a),
``(3) under which the employer is required to pay the
amount so deducted with respect to the specified personal
investment plan within 10 business days after the payment of
the wages from which the amount was deducted,
``(4) under which the employer receives no compensation for
the cost of administering such plan, and
``(5) under which the employer does not make any
endorsement with respect to any personal investment plan.
``(c) Amounts Deducted May Be Accumulated by Employer in Certain
Cases.--If, under the terms of a personal investment plan designated
under section 252(a), contributions below a specified amount will not
be accepted, the requirements of subsection (b)(2) shall be treated as
met if amounts deducted from the wages of such employee are accumulated
by the employer and paid to such plan not later than 10 business days
after the first day on which the accumulated amount exceeds such
specified amount.
``designation of personal investment plans under payroll deduction plan
``Sec. 252. (a) In General.--Except as provided in subsection (b),
the personal investment plan to which the personal investment plan
contributions with respect to any employee are required to be paid
under section 251 shall be a personal investment plan designated by the
employee to the employer not later than 10 business days after the date
on which the employee becomes an employee of such employer. Any such
designation shall be made in such form and manner as may be prescribed
in regulations of the Commissioner of Social Security.
``(b) Designation in Absence of Timely Designation by Employee.--In
any case in which no timely designation of the personal investment plan
is made, the employer shall make the designation of the personal
investment plan in accordance with regulations of the Commissioner of
Social Security.
``participation by self-employed individuals
``Sec. 253. (a) In General.--Each eligible self-employed individual
who receives self-employment income in any taxable year, shall, in such
form and manner as shall be prescribed in regulations of the
Commissioner of Social Security, deposit with the Social Security
Administration with respect to a personal investment plan maintained by
such individual the personal investment plan contribution for such
taxable year. Such deposit shall be made within 10 business days after
the receipt by such individual of such self-employment income.
``(b) Amounts Payable May Be Accumulated in Certain Cases.--If,
under the terms of a personal investment plan maintained under
subsection (a), contributions below a specified amount will not be
accepted, the requirements of subsection (a) shall be treated as met if
amounts otherwise payable under subsection (a) are accumulated by the
individual and paid to such plan not later than 10 business days after
the first day on which the accumulated amount exceeds such specified
amount.
``designation of plans of surviving spouses and surviving divorced
spouses
``Sec. 254. (a) In General.--Except as otherwise provided in this
section, in the case of a deceased individual with respect to whom a
personal investment plan was established and maintained pursuant to
section 252 or 253, the trustee of such plan shall transfer the balance
in such plan to a personal investment plan maintained by an eligible
survivor if such plan is designated by the eligible survivor to the
trustee not later than 20 business days after the date of such
individual's death. Any such designation shall be made in such form and
manner as may be prescribed in regulations of the Commissioner of
Social Security.
``(b) Exception in Case of Written Consent To Transfer to Another
Beneficiary.--In any case in which the eligible survivor of a deceased
individual has consented in writing to a transfer by such individual of
the balance in such individual's personal investment plan to another
beneficiary, the trustee of such plan shall transfer the balance in
such plan to such beneficiary within the period of 20 business days
following the date of such individual's death.
``(c) Designation in Absence of Timely Designation or Consent by
Eligible Survivor.--In any case in which, upon the expiration of the
20-day period described in subsection (a), there is an eligible
survivor but no timely designation is made by the eligible survivor
under subsection (a) and no consent has been made pursuant to
subsection (b), the trustee shall make the designation of the personal
investment plan under subsection (a) on behalf of such eligible
survivor, in accordance with regulations of the Commissioner of Social
Security.
``(d) Disposition of Plan Balance if no Eligible Survivor Exists.--
In any case in which, upon the expiration of the 20-day period
described in subsection (a), no timely designation under subsection (c)
has been made and there is no eligible survivor, the trustee of the
deceased individual's plan shall transfer the balance in such plan to
the estate of the decreased individual.
``(e) Period for Transfer by Trustee.--In the case of a transfer by
a trustee under subsection (a), (c), or (d), the trustee shall transfer
the balance in the personal investment plan of the deceased individual
within the period of 20 business days following the expiration of the
20-day period described in such subsection.
``definitions
``Sec. 255. For purposes of this part--
``(1) Personal investment plan.--The term `personal
investment plan' means--
``(A) any personal investment retirement plan in
the Personal Investment Fund (established under section
257) which is administered by the Personal Investment
Board, or
``(B) any individual retirement plan (as defined in
section 7701(a)(37) of the Internal Revenue Code of
1986) which is administered or issued by a bank or
other person referred to in section 408(a)(2) of such
Code, under terms which restrict deposits to personal
investment plan contributions made to the plan pursuant
to section 251 or 253 and transfers made to the plan
pursuant to section 254, and under which distributions
may only be made on or after the date on which the
individual attains age 59\1/2\, made to a beneficiary
(or to the estate of the individual) on or after the
death of the individual, or attributable to the
individual's becoming disabled within the meaning of
section 223(d).
``(2) Covered employer.--The term `covered employer' means,
for any calendar year, any person on whom an excise tax is
imposed under section 3111 of the Internal Revenue Code of 1986
with respect to having an individual in the person's employ to
whom wages are paid by such person during such calendar year.
``(3) Eligible employee.--The term `eligible employee'
means in connection with any person who is a covered employer
for any calendar year beginning after December 31, 1999, any
individual--
``(A) with respect to whose employment by such
employer during such calendar year there is imposed an
excise tax under section 3111 of the Internal Revenue
Code of 1986, and
``(B) who does not attain age 55 during such
calendar year.
``(4) Eligible self-employed individual.--The term
`eligible self-employed individual' means any individual--
``(A) on whose self-employment income for a taxable
year beginning after December 31, 1999, there is
imposed a tax under section 1401(a) of the Internal
Revenue Code of 1986, and
``(B) who does not attain age 55 during such
taxable year.
``(5) Personal investment plan contribution.--The term
`personal investment plan contribution' means--
``(A) with respect to any eligible employee of a
covered employer, an amount equal to 1 percent of the
wages received by such employee with respect to
employment by such employer, and
``(B) with respect to the self-employment income of
an individual for any taxable year, an amount equal to
1 percent of such income for such taxable year.
``(6) Eligible survivor.--The term `eligible survivor' of a
deceased individual means such individual's spouse or, if there
is no such spouse, such individual's last surviving divorced
spouse. Such term shall not include any such surviving divorced
spouse who is married on the date of the deceased individual's
death.
``(7) Business day.--The term `business day' means any day
other than a Saturday, Sunday, or legal holiday in the area
involved.
``penalties
``Sec. 256. (a) Failure To Establish Personal Investment Payroll
Deduction Plan.--Any covered employer who fails to meet the
requirements of section 251 for any calendar year shall be subject to a
civil penalty of not to exceed the greater of--
``(1) $5,000 or
``(2) $100 for each eligible employee of such employer as
of the beginning of such calendar year.
``(b) Failure To Make Deductions Required Under Plan.--Any covered
employer who fails to deduct an amount from the wages of an eligible
employee in accordance with a personal investment payroll deduction
plan shall be subject to a civil penalty of not to exceed $500 for each
such failure.
``(c) Failure by Employer To Make Timely Payments to Personal
Investment Plan.--If an amount deducted from the wages of an eligible
employee under a personal investment payroll deduction plan is not paid
to the Social Security Administration with respect to the specified
personal investment plan within the time prescribed by section 251--
``(1) the employer shall be subject to a civil penalty of
not to exceed 50 percent of the amount so deducted, and
``(2) shall be liable to the employee for interest on the
amount so deducted at the underpayment rate determined under
section 6621 of the Internal Revenue Code of 1986 from the last
day by which such amount was required to be so paid to the date
on which such amount is paid into the specified personal
investment plan.
``(d) Failure by Eligible Self-employed Individual To Make Timely
Payments to Personal Investment Plan.--If a personal investment plan
contribution is not paid by an eligible self-employed individual to the
Social Security Administration with respect to a personal investment
plan maintained by the individual within the time prescribed by section
253, such individual shall be subject to a civil penalty of not to
exceed 50 percent of the amount of such contribution.
``(e) Failure by Trustee To Make Timely Transfers.--If the balance
in the personal investment plan of a deceased individual is not
transferred by the trustee within the time prescribed by section 254--
``(1) the trustee shall be subject to a civil penalty of
not to exceed 50 percent of the amount of the balance, and
``(2) shall be liable for interest on the balance at the
underpayment rate determined under section 6621 of the Internal
Revenue Code of 1986 from the last day by which such balance
was required to be so transferred to the date on which such
balance is transferred.
``(f) Rules for Application of Section.--
``(1) Penalties assessed by commissioner.--Any civil
penalty assessed by this section shall be imposed by the
Commissioner of Social Security and collected in a civil
action.
``(2) Compromises.--The Commissioner may compromise the
amount of any civil penalty imposed by this section.
``(3) Authority to waive penalty in certain cases.--The
Commissioner may waive the application of this section with
respect to any failure if the Commissioner determines that such
failure is due to reasonable cause and not to intentional
disregard of rules and regulations.
``personal investment fund
``Sec. 257. (a) Establishment.--There is established and maintained
in the Treasury of the United States a Personal Investment Fund in the
same manner as the Thrift Savings Fund under sections 8437, 8438, and
8439 of title 5, United States Code.
``(b) Personal Investment Fund Board.--
``(1) In general.--There is established and operated in the
Social Security Administration a Personal Investment Fund Board
in the same manner as the Federal Retirement Thrift Investment
Board under subchapter VII of chapter 84 of title 5, United
States Code.
``(2) Specific investment duties.--The Personal Investment
Fund shall be managed by the Personal Investment Fund Board in
the same manner as the Thrift Savings Fund is managed under
subchapter VIII of chapter 84 of title 5, United States
Code.''.
(2) Amounts deducted to be shown on w-2 statements.--
Section 6051(a) of the Internal Revenue Code of 1986 (relating
to receipts for employees), as amended by section 301(c)(3) of
the Health Insurance Portability and Accountability Act of
1996, is amended--
(A) in paragraph (10), by striking `and';
(B) in paragraph (11), by striking the period and
inserting ``, and''; and
(C) by inserting after paragraph (11) the
following:
``(12) the total amount deducted from the employee's wages
under a personal investment payroll deduction plan established
under part B of title II of the Social Security Act.''.
(3) Exemption from erisa requirements.--Section 4(b) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1003(b)) is amended--
(A) in paragraph (4), by striking ``or'';
(B) in paragraph (5), by striking the period and
inserting ``; or''; and
(C) by inserting after paragraph (5) the following:
``(6) such plan is a personal investment payroll deduction
plan established under part B of title II of the Social
Security Act that does not provide for employer
contributions.''.
(4) Effective date and notice requirements.--
(A) Effective date.--The amendments made by this
subsection (and any personal investment payroll
deduction plan required thereunder) apply with respect
to wages paid after December 31, 1997, for pay periods
ending after such date and self-employment income for
taxable years beginning after such date.
(B) Notice requirments.--
(i) In general.--Not later than October 1,
1999, the Commissioner of Social Security
shall--
(I) send to the last known address
of each eligible individual a
description of the program established
by the amendments made by this section,
which shall be written in the form of a
pamphlet in language which may be
readily understood by the average
worker,
(II) provide for toll-free access
by telephone from all localities in the
United States to the Social Security
Administration through which
individuals may obtain information and
answers to questions regarding such
program, and
(III) provide information to the
media in all localities of the United
States about such program and such
toll-free access by telephone.
(ii) Eligible individual.--For purposes of
this subparagraph, the term ``eligible
individual'' means an individual who, as of the
date of the pamphlet sent pursuant to clause
(i), is indicated within the records of the
Social Security Administration as--
(I) not having attained age 55, and
(II) being credited with 1 or more
quarters of coverage under section 213
of the Social Security Act (42 U.S.C.
413).
(iii) Matters to be included.--The
Commissioner shall include with the pamphlet
sent to each eligible individual pursuant to
clause (i)--
(I) a statement of the number of
quarters of coverage indicated in the
records of the Social Security
Administration as of the date of the
description as credited to such
individual under section 213 of such
Act and the date as of which such
records may be considered accurate, and
(II) the number of toll-free access
by telephone established by the
Commissioner pursuant to clause (i).
(c) Adjustments to Primary Insurance Amounts.--
(1) In general.--Section 215 of the Social Security Act (42
U.S.C. 415) is amended by adding at the end the following:
``Adjustment of Primary Insurance Amount of Eligible Employees and
Eligible Self-Employed Individuals Under Part B
``(j)(1) Except as provided in paragraph (2), in the case of an
individual who is--
``(A) an eligible employee, as defined under section
255(3), or
``(B) an eligible self-employed individual, as defined
under section 255(4),
such individual's primary insurance amount shall be determined under
subsection (a)(1)(A) (before subsequent adjustments made under
subsection (i)), by substituting the first, second, and third primary
insurance amount factors determined in the following table for the
primary insurance amount factors ``90'', ``32'', and ``15'' in clauses
(i), (ii), and (iii), respectively:
------------------------------------------------------------------------
The PIA factors for such
individual are--
`If individual's age in 2000 is: --------------------------
First Second Third
------------------------------------------------------------------------
25 and under................................. 90 23 9
26 to 35..................................... 90 26 12
35 to 45..................................... 90 29 13
45 to 55..................................... 90 30 14
55 and over.................................. 90 32 15
------------------------------------------------------------------------
``(2)(A) In the case of an individual described in
paragraph (1) who has not attained age 55 in 1998 and who
becomes entitled to disability insurance benefits under section
223 or dies before attaining age 62, such individual's second
and third primary insurance amount factors shall equal such
factors contained in the table in paragraph (1) for individuals
who have attained age 55 or over in 2000, reduced by the amount
described in subparagraph (B).
``(B) The amount described in this subparagraph is equal
to--
``(i) the excess of--
``(I) the second (or third) primary
insurance amount factor contained in the table
in paragraph (1) for individuals who have
attained age 55 or over in 2000, over
``(II) the second (or third) primary
insurance amount factor contained in such table
for individuals of the age of the individual in
2000; multiplied by--
``(ii) the fraction--
``(I) the numerator of which is the number
of years such individual is alive and not
disabled after age 21 (or after 2000, if later)
and before age 62, and
``(II) the denominator of which is 40 (or
the number of years after 2000 and before the
year the individual attains age 62, if
less).''.
(2) Conforming amendment to railroad retirement act of
1974.--Section 1 of the Railroad Retirement Act of 1974 (45
U.S.C. 231) is amended by adding at the end the following:
``(s) In applying applicable provisions of the Social Security Act
for purposes of determining the amount of the annuity to which an
individual is entitled under this Act, such individual shall not be
treated as an `eligible individual' as defined in section 253(4) of the
Social Security Act.''.
(3) Effective date.--The amendments made by this subsection
apply with respect to months after December 1999.
SEC. 3. PHASED-IN INCREASE IN SOCIAL SECURITY RETIREMENT AGES.
(a) Normal Retirement Age.--Section 216(l) of the Social Security
Act (42 U.S.C. 416(l)) is amended--
(1) in paragraph (1), by striking subparagraphs (B), (C),
(D), and (E) and inserting the following:
``(B)(i)(I) except as provided in clause (ii), with
respect to an individual who attains age 62 after
December 31, 1999, and before January 1, 2029, 65 years
of age plus \2/12\ of the number of months in the
period beginning with January 2000 and ending with
December of the year in which the individual attains
age 62,
``(II) with respect to an individual who attains
age 62 after December 31, 2028, 70 years of age, and
``(III) with respect to an individual who attains
age 62 after December 31, 2029, 70 years of age plus
\1/24\ of the number of months in the period beginning
with January 2030 and ending with December of the year
in which the individual attains age 62 (rounded down to
a full month); and
``(ii)(I) in the case of widow's or widower's
insurance benefits, with respect to an individual who
attains age 60 after December 31, 1999, and before
January 1, 2029, 63 years of age plus \2/12\ of the
number of months in the period beginning with January
2000 and ending with December of the year in which the
individual attains age 60,
``(II) with respect to an individual who attains
age 60 after December 31, 2028, 68 years of age, and
``(III) with respect to an individual who attains
age 60 after December 31, 2029, 68 years of age plus
\1/24\ of the number of months in the period beginning
with January 2030 and ending with December of the year
in which the individual attains age 60 (rounded down to
a full month).''; and
(2) by striking paragraph (3).
(b) Early Retirement Age.--Section 216(L)(2) of the Social Security
Act (42 U.S.C. 416(l)(2)) is amended to read as follows:
``(2) The term `early retirement age' means--
``(A) except as otherwise provided in this
paragraph, age 62 in the case of an old-age,
wife's, or husband's insurance benefit, and age
60 in the case of a widow's or widower's
insurance benefit;
``(B)(i)(I) except as provided in clause
(ii), with respect to an individual who attains
age 62 after December 31, 1999, and before
January 1, 2017, 62 years of age plus \2/12\ of
the number of months in the period beginning
with January 2000 and ending with December of
the year in which the individual attains age
62,
``(II) with respect to an individual who
attains age 62 after December 31, 2016, 65
years of age, and
``(III) with respect to an individual who
attains age 62 after December 31, 2029, 65
years of age plus \1/24\ of the number of
months in the period beginning with January
2030 and ending with December of the year in
which the individual attains age 62 (rounded
down to a full month); and
``(ii)(I) in the case of widow's and
widower's insurance benefits, with respect to
an individual who attains age 60 after December
31, 1999, and before January 1, 2017, 60 years
of age plus \2/12\ of the number of months in
the period beginning with January 2000 and
ending with December of the year in which the
individual attains age 60,
``(II) with respect to such an individual
who attains age 60 after December 31, 2016, 63
years of age, and
``(III) with respect to such an individual
who attains age 60 after December 31, 2029, 63
years of age plus \1/24\ of the number of
months in the period beginning with January
2030 and ending with December of the year in
which the individual attains age 60 (rounded
down to a full month).''.
(c) Reduction in Benefits for Early Retirees Maintained at Current
Level.--Section 202(q)(9)(A) of the Social Security Act (42 U.S.C.
402(q)(9)(A)) is amended by inserting `, but in no event shall be
greater than 30 percent' before the semicolon.
SEC. 4. MODIFICATION OF CPI CALCULATION FOR SOCIAL SECURITY COLAS.
Notwithstanding any other provisions of title II of the Social
Security Act, with respect to calculations made after December 31,
1999, with respect to any cost-of-living calculation under such title,
the Bureau of Labor Statistics of the Department of Labor shall reduce
the annual percentage change in the Consumer Price Indexes, as
determined without regard to this section, by 0.5 percentage point.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Social Security.
Referred to the Subcommittee on Employer-Employee Relations.
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