Sec. 205. Rules governing investment of Trust Funds in common stock
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Title II of the Social Security Act ( 42 U.S.C. 401 et seq. ) is amended by adding at the end the following new section: The Independent Social Security Investment Oversight Board shall select, for purposes of investment of amounts held in a Common Stock Investment Fund, an index which is a commonly recognized index comprised of common stock the aggregate market value of which is a reasonably complete representation of the United States equity markets. Amounts held in a Common Stock Investment Fund shall be invested in a portfolio designed to replicate the performance of the index selected under paragraph (1).
The portfolio shall be designed such that, to the extent practicable, the percentage of the balance in such Account that is invested in each stock is the same as the percentage determined by dividing the aggregate market value of all shares of that stock by the aggregate market value of all shares of all stocks included in such index. The Independent Social Security Investment Oversight Board and the Managing Trustee of the Trust Funds may not exercise voting rights associated with the ownership of securities by the Trust Funds.
The Independent Social Security Investment Oversight Board shall annually engage, on behalf of the Trust Funds, an independent qualified public accountant, who shall conduct an examination of all accounts and other books and records maintained in the administration of this section as the public accountant considers necessary to enable the public accountant to make the determination required by paragraph (2). The examination shall be conducted in accordance with generally accepted auditing standards and shall involve such tests of the accounts, books, and records as the public accountant considers necessary.
The public accountant conducting an examination under paragraph
(1)shall determine whether the accounts, books, and records referred to in paragraph
(1)have been maintained in conformity with generally accepted accounting principles applied on a basis consistent with the manner in which such principles were applied during the examination conducted under paragraph
(1)during each preceding year. The public accountant shall transmit to the Board, the Comptroller General of the United States, and each House of the Congress a report on his examination, including his determination under this paragraph. The Board shall make publicly available, by posting on the Internet and such other means as the Board may determine, each report received under the preceding sentence. For the purposes of this subsection, the term qualified public accountant shall have the same meaning as is provided in section 103(a)(3)(D) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1023(a)(3)(D) ). Under regulations of the Secretary of Labor, the provisions of sections 8477 and 8478 of title 5, United States Code, shall apply in connection with the amounts maintained in a Common Stock Investment Fund in the same manner and to the same extent as such provisions apply in connection with the Thrift Savings Fund. Any authority available to the Secretary of Labor under section 504 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1134 ) is hereby made available to the Secretary of Labor, and any officer designated by the Secretary of Labor, to determine whether any person has violated, or is about to violate, any provision applicable under paragraph (1). Any provision in an agreement or instrument which purports to relieve a fiduciary from responsibility or liability for any responsibility, obligation, or duty under this section shall be void. Amounts held in the Trust Funds available for administrative expenses shall be available and may be used at the discretion of the Independent Social Security Investment Oversight Board to purchase insurance to cover potential liability of persons who serve in a fiduciary capacity with respect to amounts maintained in a Common Stock Investment Fund, without regard to whether a policy of insurance permits recourse by the insurer against the fiduciary in the case of a breach of a fiduciary obligation. In this section, the term Common Stock Investment Fund means the Common Stock Old-Age Investment Fund of the Federal Old-Age and Survivors Insurance Trust Fund and the Common Stock Disability Investment Fund of the Federal Disability Insurance Trust Fund. .
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Sec. 205
Rules governing investment of Trust Funds in common stock
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