S 118
112th CONGRESS
1st Session
S. 118
To amend title II of the Social Security Act to allow workers
who attain age 65 after 1981 and before 1992 to choose either lump sum
payments over four years totaling $5,000 or an improved benefit computation
formula under a new 10-year rule governing the transition to the changes
in benefit computation rules enacted in the Social Security Amendments
of 1977, and for other purposes.
IN THE SENATE OF THE UNITED STATES
January 25 (legislative day, January 5), 2011
Mr. VITTER 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 allow workers
who attain age 65 after 1981 and before 1992 to choose either lump sum
payments over four years totaling $5,000 or an improved benefit computation
formula under a new 10-year rule governing the transition to the changes
in benefit computation rules enacted in the Social Security Amendments
of 1977, 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 `Notch Fairness Act of 2011'.
SEC. 2. NEW GUARANTEED MINIMUM PRIMARY INSURANCE AMOUNT WHERE ELIGIBILITY
ARISES DURING TRANSITIONAL PERIOD.
(a) In General- Section 215(a) of the Social Security Act is amended--
(1) in paragraph (4)(B), by inserting `(with or without the application
of paragraph (8))' after `would be made', and by striking `1984' in
clause (i) and inserting `1989'; and
(2) by adding at the end the following:
`(8)(A) In the case of an individual described in paragraph (4)(B) (subject
to subparagraphs (F) and (G) of this paragraph), the amount of the individual's
primary insurance amount as computed or recomputed under paragraph (1)
shall be deemed equal to the sum of--
`(ii) the applicable transitional increase amount (if any).
`(B) For purposes of subparagraph (A)(ii), the term `applicable transitional
increase amount' means, in the case of any individual, the product derived
by multiplying--
`(i) the excess under former law, by
`(ii) the applicable percentage in relation to the year in which the
individual becomes eligible for old-age insurance benefits, as determined
by the following table:
`If the individual becomes
The applicable
eligible for such benefits in:
percentage is:
1979
--55
1980
--45
1981
--35
1982
--32
1983
--25
1984
--20
1985
--16
1986
--10
1987
--3
1988
--5.
`(C) For purposes of subparagraph (B), the term `excess under former
law' means, in the case of any individual, the excess of--
`(i) the applicable former law primary insurance amount, over
`(ii) the amount which would be such individual's primary insurance
amount if computed or recomputed under this section without regard
to this paragraph and paragraphs (4), (5), and (6).
`(D) For purposes of subparagraph (C)(i), the term `applicable former
law primary insurance amount' means, in the case of any individual,
the amount which would be such individual's primary insurance amount
if it were--
`(i) computed or recomputed (pursuant to paragraph (4)(B)(i)) under
section 215(a) as in effect in December 1978, or
`(ii) computed or recomputed (pursuant to paragraph (4)(B)(ii)) as
provided by subsection (d),
(as applicable) and modified as provided by subparagraph (E).
`(E) In determining the amount which would be an individual's primary
insurance amount as provided in subparagraph (D)--
`(i) subsection (b)(4) shall not apply;
`(ii) section 215(b) as in effect in December 1978 shall apply, except
that section 215(b)(2)(C) (as then in effect) shall be deemed to provide
that an individual's `computation base years' may include only calendar
years in the period after 1950 (or 1936 if applicable) and ending
with the calendar year in which such individual attains age 61, plus
the 3 calendar years after such period for which the total of such
individual's wages and self-employment income is the largest; and
`(iii) subdivision (I) in the last sentence of paragraph (4) shall
be applied as though the words `without regard to any increases in
that table' in such subdivision read `including any increases in that
table'.
`(F) This paragraph shall apply in the case of any individual only if
such application results in a primary insurance amount for such individual
that is greater than it would be if computed or recomputed under paragraph
(4)(B) without regard to this paragraph.
`(G)(i) This paragraph shall apply in the case of any individual subject
to any timely election to receive lump sum payments under this subparagraph.
`(ii) A written election to receive lump sum payments under this subparagraph,
in lieu of the application of this paragraph to the computation of the
primary insurance amount of an individual described in paragraph (4)(B),
may be filed with the Commissioner of Social Security in such form and
manner as shall be prescribed in regulations of the Commissioner. Any
such election may be filed by such individual or, in the event of such
individual's death before any such election is filed by such individual,
by any other beneficiary entitled to benefits under section 202 on the
basis of such individual's wages and self-employment income. Any such
election filed after December 31, 2011, shall be null and void and of
no effect.
`(iii) Upon receipt by the Commissioner of a timely election filed by
the individual described in paragraph (4)(B) in accordance with clause
(ii)--
`(I) the Commissioner shall certify receipt of such election to the
Secretary of the Treasury, and the Secretary of the Treasury, after
receipt of such certification, shall pay such individual, from amounts
in the Federal Old-Age and Survivors Insurance Trust Fund, a total
amount equal to $5,000, in 4 annual lump sum installments of $1,250,
the first of which shall be made during fiscal year 2012 not later
than July 1, 2012, and
`(II) subparagraph (A) shall not apply in determining such individual's
primary insurance amount.
`(iv) Upon receipt by the Commissioner as of December 31, 2011, of a
timely election filed in accordance with clause (ii) by at least one
beneficiary entitled to benefits on the basis of the wages and self-employment
income of a deceased individual described in paragraph (4)(B), if such
deceased individual has filed no timely election in accordance with
clause (ii)--
`(I) the Commissioner shall certify receipt of all such elections
received as of such date to the Secretary of the Treasury, and the
Secretary of the Treasury, after receipt of such certification, shall
pay each beneficiary filing such a timely election, from amounts in
the Federal Old-Age and Survivors Insurance Trust Fund, a total amount
equal to $5,000 (or, in the case of two or more such beneficiaries,
such amount distributed evenly among such beneficiaries), in four
equal annual lump sum installments, the first of which shall be made
during fiscal year 2012 not later than July 1, 2012, and
`(II) solely for purposes of determining the amount of such beneficiary's
benefits, subparagraph (A) shall be deemed not to apply in determining
the deceased individual's primary insurance amount.'.
(b) Effective Date and Related Rules-
(1) APPLICABILITY OF AMENDMENTS-
(A) IN GENERAL- Except as provided in paragraph (2), the amendments
made by this Act shall be effective as though they had been included
or reflected in section 201 of the Social Security Amendments of
1977.
(B) APPLICABILITY- No monthly benefit or primary insurance amount
under title II of the Social Security Act shall be increased by
reason of such amendments for any month before July 2012.
(2) RECOMPUTATION TO REFLECT BENEFIT INCREASES- In any case in which
an individual is entitled to monthly insurance benefits under title
II of the Social Security Act for June 2012, if such benefits are
based on a primary insurance amount computed--
(A) under section 215 of such Act as in effect (by reason of the
Social Security Amendments of 1977) after December 1978, or
(B) under section 215 of such Act as in effect prior to January
1979 by reason of subsection (a)(4)(B) of such section (as amended
by the Social Security Amendments of 1977),
the Commissioner of Social Security (notwithstanding section 215(f)(1)
of the Social Security Act) shall recompute such primary insurance
amount so as to take into account the amendments made by this Act.
END
