H.R.10:
Railroad Retirement and Survivors' Improvement Act of 2001 (Enrolled Bill (Sent to President)):
One Hundred Seventh Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday, the third day of January, two thousand and one
An Act :
To modernize the financing of the railroad retirement system and to provide enhanced benefits to employees and beneficiaries.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Railroad Retirement and Survivors' Improvement Act of 2001.
(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents:
TITLE I--AMENDMENTS TO RAILROAD RETIREMENT ACT OF 1974:
Sec. 101. Expansion of widow's and widower's benefits.
Sec. 102. Retirement age restoration.
Sec. 103. Vesting requirement.
Sec. 104. Repeal of railroad retirement maximum.
Sec. 105. Investment of railroad retirement assets.
Sec. 106. Elimination of supplemental annuity account.
Sec. 107. Transfer authority revisions.
Sec. 108. Annual ratio projections and certifications by the Railroad Retirement Board.
TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Sec. 201. Amendments to the Internal Revenue Code of 1986.
Sec. 202. Exemption from tax for National Railroad Retirement Investment Trust.
Sec. 203. Repeal of supplemental annuity tax.
Sec. 204. Employer, employee representative, and employee tier 2 tax rate adjustments.
TITLE I--AMENDMENTS TO RAILROAD RETIREMENT ACT OF 1974
SEC. 101. EXPANSION OF WIDOW'S AND WIDOWER'S BENEFITS.
(a) IN GENERAL- Section 4(g) of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(g)) is amended by adding at the end the following new subdivision:
'(10)(i) If for any month the unreduced annuity provided under this section for a widow or widower is less than the widow's or widower's initial minimum amount computed pursuant to paragraph (ii) of this subdivision, the unreduced annuity shall be increased to that initial minimum amount. For the purposes of this subdivision, the unreduced annuity is the annuity without regard to any deduction on account of work, without regard to any reduction for entitlement to an annuity under section 2(a)(1) of this Act, without regard to any reduction for entitlement to a benefit under title II of the Social Security Act, and without regard to any reduction for entitlement to a public service pension pursuant to section 202(e)(7), 202(f)(2), or 202(g)(4) of the Social Security Act.
(ii) For the purposes of this subdivision, the widow or widower's initial minimum amount is the amount of the unreduced annuity computed at the time an annuity is awarded to that widow or widower, except that:
(A) in subsection (g)(1)(i) `100 per centum' shall be substituted for `50 per centum'; and
(B) in subsection (g)(2)(ii) `130 per centum' shall be substituted for `80 per centum' both places it appears:
`(iii) If a widow or widower who was previously entitled to a widow's or widower's annuity under section 2(d)(1)(ii) of this Act becomes entitled to a widow's or widower's annuity under section 2(d)(1)(i) of this Act, a new initial minimum amount shall be computed at the time of award of the widow's or widower's annuity under section 2(d)(1)(i) of this Act.
(b) EFFECTIVE DATE
(1) IN GENERAL- The amendment made by this section shall take effect on the first day of the first month that begins more than 30 days after enactment, and shall apply to annuity amounts accruing for months after the effective date in the case of annuities awarded
(A) on or after that date; and
(B) before that date, but only if the annuity amount under section 4(g) of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(g)) was computed under such section, as amended by the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35; 95 Stat. 357).
(2) SPECIAL RULE FOR ANNUITIES AWARDED BEFORE THE EFFECTIVE DATE- In applying the amendment made by this section to annuities awarded before the effective date, the calculation of the initial minimum amount under new section 4(g)(10)(ii) of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(g)(10)(ii)), as added by subsection (a), shall be made as of the date of the award of the widow's or widower's annuity.
SEC. 102. RETIREMENT AGE RESTORATION.
(a) EMPLOYEE ANNUITIES- Section 3(a)(2) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)(2)) is amended by inserting after '(2)' the following new sentence: For purposes of this subsection, individuals entitled to an annuity under section 2(a)(1)(ii) of this Act shall, except for the purposes of recomputations in accordance with section 215(f) of the Social Security Act, be deemed to have attained retirement age (as defined by section 216(l) of the Social Security Act).
(b) SPOUSE AND SURVIVOR ANNUITIES- Section 4(a)(2) of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(a)(2)) is amended by striking `if an' and all that follows through section 2(c)(1) of this Act' and inserting `a spouse entitled to an annuity under section 2(c)(1)(ii)(B) of this Act
(c) CONFORMING REPEALS- Sections 3(a)(3), 4(a)(3), and 4(a)(4) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)(3), 231c(a)(3), and 231c(a)(4)) are repealed.
(d) EFFECTIVE DATES
(1) GENERALLY- Except as provided in paragraph (2), the amendments made by this section shall apply to annuities that begin to accrue on or after January 1, 2002
(2) EXCEPTION- The amount of the annuity provided for a spouse under section 4(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(a)) shall be computed under section 4(a)(3) of such Act, as in effect on December 31, 2001, if the annuity amount provided under section 3(a) of such Act (45 U.S.C. 231b(a)) for the individual on whose employment record the spouse annuity is based was computed under section 3(a)(3) of such Act, as in effect on December 31, 2001.
SEC. 103. VESTING REQUIREMENT.
(a) CERTAIN ANNUITIES FOR INDIVIDUALS- Section 2(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231a(a)) is amended:
(1) by inserting in subdivision (1) `(or, for purposes of paragraphs (i), (iii), and (v), five years of service, all of which accrues after December 31, 1995)' after `ten years of service'; and
(2) by adding at the end the following new subdivision:
`(4) An individual who is entitled to an annuity under paragraph (v) of subdivision (1), but who does not have at least ten years of service, shall, prior to the month in which the individual attains age 62, be entitled only to an annuity amount computed under section 3(a) of this Act (without regard to section 3(a)(2) of this Act) or section 3(f)(3) of this Act. Upon attainment of age 62, such an individual may also be entitled to an annuity amount computed under section 3(b), but such annuity amount shall be reduced for early retirement in the same manner as if the individual were entitled to an annuity under section 2(a)(1)(iii).'
(b) COMPUTATION RULE FOR INDIVIDUALS' ANNUITIES- Section 3(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)), as amended by section 102 of this Act, is further amended by adding at the end the following new subdivision:
`(3) If an individual entitled to an annuity under section 2(a)(1)(i) or (iii) of this Act on the basis of less than ten years of service is entitled to a benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act which began to accrue before the annuity under section 2(a)(1)(i) or (iii) of this Act, the annuity amount provided such individual under this subsection, shall be computed as though the annuity under this Act began to accrue on the later of (A) the date on which the benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act began, or (B) the date on which the individual first met the conditions for entitlement to an age reduced annuity under this Act other than the conditions set forth in sections 2(e)(1) and 2(e)(2) of this Act and the requirement that an application be filed.
(c) SURVIVORS' ANNUITIES- Section 2(d)(1) of the Railroad Retirement Act of 1974 (45 U.S.C. 231a(d)(1)) is amended by inserting `(or five years of service, all of which accrues after December 31, 1995)' after `ten years of service'.
(d) LIMITATION ON ANNUITY AMOUNTS- Section 2 of the Railroad Retirement Act of 1974 (45 U.S.C. 231a) is amended by adding at the end the following new subsection:
`(i) An individual entitled to an annuity under this section who has completed five years of service, all of which accrues after 1995, but who has not completed ten years of service, and the spouse, divorced spouse, and survivors of such individual, shall not be entitled to an annuity amount provided under section 3(a), section 4(a), or section 4(f) of this Act unless the individual, or the individual's spouse, divorced spouse, or survivors, would be entitled to a benefit under title II of the Social Security Act on the basis of the individual's employment record under both this Act and title II of the Social Security Act.'.
(e) COMPUTATION RULE FOR SPOUSES' ANNUITIES- Section 4(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(a)), as amended by section 102 of this Act, is further amended by adding at the end the following new subdivision:
`(3) If a spouse entitled to an annuity under section 2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), or section 2(c)(2) of this Act or a divorced spouse entitled to an annuity under section 2(c)(4) of this Act on the basis of the employment record of an employee who will have completed less than 10 years of service is entitled to a benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act which began to accrue before the annuity under section 2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), section 2(c)(2), or section 2(c)(4) of this Act, the annuity amount provided under this subsection shall be computed as though the annuity under this Act began to accrue on the later of (A) the date on which the benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act began or (B) the first date on which the annuitant met the conditions for entitlement to an age reduced annuity under this Act other than the conditions set forth in sections 2(e)(1) and 2(e)(2) of this Act and the requirement that an application be filed.'.
(f) APPLICATION DEEMING PROVISION- Section 5(b) of the Railroad Retirement Act of 1974 (45 U.S.C. 231d(b)) is amended by striking the second sentence and inserting the following new sentence: `An application filed with the Board for an employee annuity, spouse annuity, or divorced spouse annuity on the basis of the employment record of an employee who will have completed less than ten years of service shall be deemed to be an application for any benefit to which such applicant may be entitled under this Act or section 202(a), section 202(b), or section 202(c) of the Social Security Act. An application filed with the Board for an annuity on the basis of the employment record of an employee who will have completed ten years of service shall, unless the applicant specified otherwise, be deemed to be an application for any benefit to which such applicant may be entitled under this Act or title II of the Social Security Act.'.
(g) CREDITING SERVICE UNDER THE SOCIAL SECURITY ACT- Section 18(2) of the Railroad Retirement Act of 1974 (45 U.S.C. 231q(2)) is amended--
(1) by inserting `(or less than five years of service, all of which accrues after December 31, 1995)' after `ten years of service' every place it appears; and
(2) by inserting `(or five or more years of service, all of which accrues after December 31, 1995)' after `ten or more years of service'.
(h) AUTOMATIC BENEFIT ELIGIBILITY ADJUSTMENTS- Section 19 of the Railroad Retirement Act of 1974 (45 U.S.C. 231r) is amended--
(1) by inserting `(or five or more years of service, all of which accrues after December 31, 1995)' after `ten years of service' in subsection (c); and
(2) by inserting `(or five or more years of service, all of which accrues after December 31, 1995)' after `ten years of service' in subsection (d)(2)
(i) CONFORMING AMENDMENTS-
(1) Section 6(e)(1) of the Railroad Retirement Act of 1974 (45 U.S.C. 231e(1)) is amended by inserting `(or five or more years of service, all of which accrues after December 31, 1995)' after `ten years of service'.
(2) Section 7(b)(2)(A) of the Railroad Retirement Act of 1974 (45 U.S.C. 231f(b)(2)(A)) is amended by inserting (or five or more years of service, all of which accrues after December 31, 1995)' after `ten years of service'.
(3) Section 205(i) of the Social Security Act (42 U.S.C. 405(i)) is amended by inserting `(or five or more years of service, all of which accrues after December 31, 1995)' after `ten years of service'.
(4) Section 6(b)(2) of the Railroad Retirement Act of 1974 (45 U.S.C. 231e(b)(2)) is amended by inserting `(or five or more years of service, all of which accrues after December 31, 1995)' after `ten years of service' the second place it appears.
(j) EFFECTIVE DATE- The amendments made by this section shall take effect on January 1, 2002.
SEC. 104. REPEAL OF RAILROAD RETIREMENT MAXIMUM.
(a) EMPLOYEE ANNUITIES-
(1) IN GENERAL- Section 3(f) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(f)) is amended--
(A) by striking subdivision (1); and
(B) by redesignating subdivisions (2) and (3) as subdivisions (1) and (2), respectively.
(2) CONFORMING AMENDMENTS-
(A) The first sentence of section 3(f)(1) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(f)(1)), as redesignated by paragraph (1)(B), is amended by striking `, without regard to the provisions of subdivision (1) of this subsection,'.
(B) Paragraphs (i) and (ii) of section 7(d)(2) of the Railroad Retirement Act of 1974 (45 U.S.C. 231f(d)(2)) are each amended by striking `section 3(f)(3)' and inserting `section 3(f)(2)'.
(b) SPOUSE AND SURVIVOR ANNUITIES- Section 4 of the Railroad Retirement Act of 1974 (45 U.S.C. 231c) is amended by striking subsection (c).
(c) EFFECTIVE DATE- The amendments made by this section shall take effect on January 1, 2002, and shall apply to annuity amounts accruing for months after December 2001
SEC. 105. INVESTMENT OF RAILROAD RETIREMENT ASSETS.
(a) ESTABLISHMENT OF NATIONAL RAILROAD RETIREMENT INVESTMENT TRUST- Section 15 of the Railroad Retirement Act of 1974 (45 U.S.C. 231n) is amended by inserting after subsection (i) the following new subsection:
`(j) NATIONAL RAILROAD RETIREMENT INVESTMENT TRUST-
`(1) ESTABLISHMENT- The National Railroad Retirement Investment Trust (hereinafter in this subsection referred to as the `Trust') is hereby established as a trust domiciled in the District of Columbia and shall, to the extent not inconsistent with this Act, be subject to the laws of the District of Columbia applicable to such trusts. The Trust shall manage and invest its assets in the manner set forth in this subsection.
`(2) NOT A FEDERAL AGENCY OR INSTRUMENTALITY- The Trust is not a department, agency, or instrumentality of the Government of the United States and shall not be subject to title 31, United States Code.
`(3) BOARD OF TRUSTEES-
`(A) GENERALLY-
`(i) MEMBERSHIP- The Trust shall have a Board of Trustees, consisting of 7 members. Three shall represent the interests of labor, 3 shall represent the interests of management, and 1 shall be an independent Trustee. The members of the Board of Trustees shall not be considered officers or employees of the Government of the United States
`(ii) SELECTION-
`(I) The 3 members representing the interests of labor shall be selected by the joint recommendation of labor organizations, national in scope, organized in accordance with section 2 of the Railway Labor Act, and representing at least 2/3 of all active employees, represented by such national labor organizations, covered under this Act.
`(II) The 3 members representing the interests of management shall be selected by the joint recommendation of carriers as defined in section 1 of the Railway Labor Act employing at least 2/3 of all active employees covered under this Act.
`(III) The independent member shall be selected by a majority of the other 6 members of the Board of Trustees.
A member of the Board of Trustees may be removed in the same manner and by the same constituency that selected that member.
`(iii) DISPUTE RESOLUTION- In the event that the parties specified in subclause (I), (II), or (III) of the previous clause cannot agree on the selection of Trustees within 60 days of the date of enactment or 60 days from any subsequent date that a position of the Board of Trustees becomes vacant, an impartial umpire to decide such dispute shall, on the petition of a party to the dispute, be appointed by the District Court of the United States for the District of Columbia
`(B) QUALIFICATIONS- Members of the Board of Trustees shall be appointed only from among persons who have experience and expertise in the management of financial investments and pension plans. No member of the Railroad Retirement Board shall be eligible to be a member of the Board of Trustees.
`(C) TERMS- Except as provided in this subparagraph, each member shall be appointed for a 3-year term. The initial members appointed under this paragraph shall be divided into equal groups so nearly as may be, of which one group will be appointed for a 1-year term, one for a 2-year term, and one for a 3-year term. The Trustee initially selected pursuant to clause (ii)(III) shall be appointed to a 3-year term. A vacancy in the Board of Trustees shall not affect the powers of the Board of Trustees and shall be filled in the same manner as the selection of the member whose departure caused the vacancy. Upon the expiration of a term of a member of the Board of Trustees, that member shall continue to serve until a successor is appointed.