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1974/10/12 HR15301 Railroad Retirement Act of 1974 (vetoed) (3)
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1974/10/12 HR15301 Railroad Retirement Act of 1974 (vetoed) (3)
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This file contains material on the act that was overridden on 10/16/1974.
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The original documents are located in Box 9, folder "1974/10/12 HR15301 Railroad
Retirement Act of 1974 (vetoed) (3)" of the White House Records Office: Legislation Case
Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
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copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Digitized from Box 9 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
LIBRARY
H.R. 15301
FORD
Ainety-third Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the twenty-first day of January,
one thousand nine hundred and seventy-four
An Act
To amend the Railroad Retirement Act of 1937 to revise the retirement system
for employees of employers covered thereunder, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
TITLE I-THE RAILROAD RETIREMENT ACT OF 1974
That the Railroad Retirement Act of 1937 is amended to read as
follows:
"DEFINITIONS
"SECTION 1. For the purposes of this Act-
"(a) (1) The term 'employer' shall include-
(i) any express company, sleeping-car company, and carrier
by railroad, subject to part I of the Interstate Commerce Act;
(ii) any company which is directly or indirectly owned or
controlled by, or under common control with, one or more
employers as defined in paragraph (i) of this subdivision, and
which operates any equipment or facility or performs any service
(except trucking service, casual service, and the casual operation
of equipment or facilities) in connection with the transportation
of passengers or property by railroad, or the receipt, delivery,
elevation, transfer in transit, refrigeration or icing, storage, or
handling of property transported by railroad;
(iii) any receiver, trustee, or other individual or body, judicial
or otherwise, when in the possession of the property or operating
all or any part of the busin GS of any employer as defined in
paragraph (i) or (ii) of this subdivision;
(iv) any railroad association, traffic association, tariff bureau,
demurrage bureau, weighing and inspection bureau, collection
agency, and any other association, bureau, agency, or organiza-
tion which is controlled and maintained wholly or principally by
two or more employers as defined in paragraph (i), (ii), or (iii)
of this subdivision and which is engaged in the performance of
services in connection with or incidental to railroad transpor-
tation; and
"(v) any railway labor organization, national in scope, which
has been or may be organized in accordance with the provisions
of the Railway Labor Act, as amended, and its State and National
legislative committees, general committees, insurance depart-
ments, and local lodges and divisions, established pursuant to the
constitution or bylaws of such organization.
"(2) Notwithstanding the provisions of subdivision (1) of this
subsection, the term 'employer' shall not include-
" (i) any company by reason of its being engaged in the
mining of coal, the supplying of coal to an employer where
delivery is not bevond the mine tipple, and the operation of
equipment or facilities therefor, or in any of such activities;
and
'(ii) any street, interurban, or suburban electric railway,
unless such railway is operating as a part of a general diesel-
railroad system of transportation, but shall not exclude any
part of the general diesel-railroad system of transportation
now or hereafter operated by any other motive power. The
Interstate Commerce Commission is hereby authorized and
directed upon request of the Board, or upon complaint of any
DRARI
H. R. 15301-2
party interested, to determine after hearing whether any line
operated by electric power falls within the terms of this
paragraph.
"(b) (1) The term 'employee' means (i) any individual in the service
of one or more employers for compensation, (ii) any individual who
is in the employment relation to one or more employers, and (iii) an
employee representative: Provided, however, That the term 'employee'
shall include an employee of a local lodge or division defined as an
employer in subsection (a) only if he was in the service of or in the
employment relation to an employer as defined in paragraph (i) of
subsection (a) (1) on or after August 29, 1935.
"(2) The term 'employee' shall not include any individual while
such individual is engaged in the physical operations consisting of
the mining of coal, the preparation of coal, the handling (other than
movement by rail with standard railroad locomotives) of coal not
beyond the mine tipple, or the loading of coal at the tipple.
" (c) The term 'employee representative' means any officer or official
representative of a railway labor organization other than a labor
organization included in the term 'employer' as defined in subsection
(a) who before or after August 29, 1935, was in the service of an
employer as defined in subsection (a) and who is duly authorized and
designated to represent employees in accordance with the Railway
Labor Act, as amended, and any individual who is regularly assigned
to or regularly employed by such officer or official representative in
connection with the duties of his office.
"(d) (1) An individual is in the service of an employer whether
his service is rendered within or without the United States if-
(i) (A) he is subject to the continuing authority of the
employer to supervise and direct the manner of rendition of his
service, or (B) he is rendering professional or technical services
and is integrated into the staff of the employer, or (C) he is
rendering, on the property used in the employer's operations,
personal services the rendition of which is integrated into the
employer's operations; and
(ii) he renders such service for compensation, or a method of
computing the monthly compensation for such service is pro-
vided in section 3(j).
"(2) Notwithstanding the provisions of subdivision (1) of this
subsection-
(i) an individual shall be deemed to be in the service of an
employer, other than a local lodge or division or a general com-
mittee of a railway-labor-organization employer, not conducting
the principal part of its business in the United States only when he
is rendering service to it in the United States;
(ii) an individual shall be deemed to be in the service of a
local lodge or division of a railway-labor-organization employer
not conducting the principal part of its business in the United
States only if (A) all, or substantially all, the individuals con-
stituting the membership of such local lodge or division are
employees of an employer conducting the principal part of its
business in the United:States; or (B) the headquarters of such
local lodge or division is located in the United States; and
'(iii) an individual shall be deemed to be in the service of a
general committee of a railway-labor-organization employer not
conducting the principal part of its business in the United States
only if (A) he is representing a local lodge or division described
in clause (A) or (B) of paragraph (ii) ; or (B) all, or substan-
tially all, the individuals represented by such general committee
are employees of an employer conducting the principal part of its
business in the United States; or (C) he acts in the capacity of a
H. R. 15301-3
general chairman or an assistant general chairman of a general
committee which represents individuals rendering service in the
United States to an employer, but in such case if his office or
headquarters is not located in the United States and the individ-
uals represented by such general committee are employees of
an employer not conducting the principal part of its business
in the United States, only such proportion of the remunera-
tion for such service shall be regarded as compensation as the
proportion which the mileage in the United States under the
jurisdiction of such general committee bears to the total mileage
under its jurisdiction, unless such mileage formula is inapplicable,
in which case the Board may prescribe such other formula as it
finds to be equitable, and if the application of such mileage for-
mula, or such other formula as the Board may prescribe, would
result in the compensation of the individual being less than 10
per centum of his remuneration for such service no part of such
remuneration shall be regarded as compensation.
(3) Notwithstanding the provisions of subdivisions (1) and (2)
of this subsection, an individual not a citizen or resident of the United
States shall not be deemed to be in the service of an employer when
rendering service outside the United States to an employer who is
required under the laws applicable in the place where the service is
rendered to employ therein, in whole or in part, citizens or residents
thereof. For purposes of this subdivision, the laws applicable on
August 29, 1935, in the place where the service is rendered shall be
deemed to have been applicable there at all times prior to that date.
"(e) (1) An individual shall be deemed to have been in the employ-
ment relation to an employer on August 29, 1935, if---
(i) he was on that date on leave of absence from his employ-
ment, expressly granted to him by the employer by whom he
was employed, or by a duly authorized representative of such
employer, and the grant of such leave of absence will have been
established to the satisfaction of the Board before July 1947;
(iii) he was in the service of an employer after August 29, 1935,
and before January 1946 in each of six calendar months, whether
or not consecutive;
'(iii) before August 29, 1935, he did not retire and was not
retired or discharged from the service of the last employer by
whom he was employed or its corporate or operating successor,
but (A) solely by reason of his physical or mental disability he
ceased before August 29, 1935, to be in the service of such employer
and thereafter remained continuously disabled until he attained
age sixty-five or until August 1945, or (B) solely for such last
stated reason an employer by whom he was employed before
August 29, 1935, or an employer who is its successor did not on or
after August 29, 1935, and before August 1945 call him to return
to service, or (C) if he was SO called he was solely for such reason
unable to render service in six calendar months as provided in
paragraph (ii) ;or
(iv) he was on August 29, 1935, absent from the service of an
employer by reason of a discharge which, within one year after
the effective date thereof, was protested, to an appropriate labor
representative or to the employer, as wrongful, and which was
followed within ten years of the effective date thereof by his
reinstatement in good faith to his former service with all his
senority rights.
"(2) Notwithstanding the provisions of subdivision (1) of this sub-
section, an individual shall not be deemed to have been in the employ-
ment relation to an employer on August 29, 1935, if before that date
LIBRARY
FORD
H. R. 15301-4
he was granted a pension or gratuity on the basis of which a pension
was awarded to him pursuant to section 6 of the Railroad Retirement
Act of 1937, or if during the last payroll period before August 29, 1935,
in which he rendered service to an employer he was not in the service
of an employer, in accordance with subsection (d), with respect to any
service in such payroll period, or if he could have been in the employ-
ment relation to an employer only by reason of his having been,
either before or after August 29, 1935, in the service of a local lodge or
division defined as an employer in subsection (a).
"(f) (1) The term 'years of service' shall mean the number of years
an individual as an employee shall have rendered service to one or more
employers for compensation or received remuneration for time lost,
and shall be computed in accordance with the provisions of section
3(i). Twelve calendar months, consecutive or otherwise, in each of
which an employee has rendered such service or received such wages
for time lost, shall constitute a year of service. Ultimate fractions shall
be taken at their actual value, except that if the individual will have
had not less than one hundred twenty-six months of service, an ulti-
mate fraction of six months or more shall be taken as one year.
(2) Where service prior to August 29, 1935, may be included in the
computation of years of service as provided in subdivision (3) of
section 3(i), it may be included as to-
"(i) service rendered to a person which was an employer on
August 29, 1935, irrespective of whether such person was an
employer at the time such service was rendered;
(ii) service rendered to any express company, sleeping-car
company, or carrier by railroad which was a predecessor of a com-
pany which, on August 29, 1935, was an employer as defined in
paragraph (i) of subsection (a) (1), irrespective of whether such
predecessor was an employer at the time such service was
rendered; and
(iiii) service rendered to a person not an employer in the per-
formance of operations involving the use of standard railroad
equipment if such operations were performed by an employer on
August 29, 1935.
"(g) (1) For purposes of section 3(i) (2) of this Act, an individual
shall be deemed to have been in 'military service' when commissioned
or enrolled in the active service of the land or naval forces of the
United States and until resignation or discharge therefrom; and the
service of any individual in any reserve component of the land or naval
forces of the United States, while serving in the land or naval forces
of the United States for any period, even though less than thirty days,
shall be deemed to have been active service in such force during such
period.
"(2) For purposes of section 3(i) (2) of this Act, a 'war service
period' shall mean (A) any war period, or (B) with respect to any
particular individual, any period during which such individual (i)
having been in military service at the end of a war period, was
required to continue in military service, or (ii) was required by call
of the President, or by any Act of Congress or regulation, order, or
proclamation pursuant thereto, to enter and continue in military serv-
ice, or (C) any period after September 7, 1939, with respect to which
a state of national emergency was duly declared to exist which requires
a strengthening of the national defense.
"(3) For purposes of section 3(i) (2) of this Act, a 'war period' shall
be deemed to have begun on whichever of the following dates is the
earliest: (A) the date on which the Congress of the United States
declared war; or (B) the date as of which the Congress of the United
States declared that a state of war has existed; or (C) the date on
LIBRARY
FORD
H. R. 15301-5
which war was declared by one or more foreign states against the
United States; or (D) the date on which any part of the United States
or any territory under its jurisdiction was invaded or attacked by any
armed force of one or more foreign states; or (E) the date on which
the United States engaged in armed hostilities for the purpose of
preserving the Union or of maintaining in any State of the Union a
republican form of government.
(4) For purposes of section 3(i) (2) of this Act, a 'war period'
shall be deemed to have ended on the date on which hostilities ceased.
(h) (1) The term 'compensation' means any form of money remu-
neration paid to an individual for services rendered as an employee to
one or more employers, or as an employee representative, including
remuneration paid for time lost as an employee, but remuneration
paid for time lost shall be deemed earned in the month in which such
time is lost. A payment made by an employer to an individual through
the employer's payroll shall be presumed, in the absence of evidence to
the contrary, to be compensation for service rendered by such individ-
ual as an employee of the employer in the period with respect to which
the payment is made. Compensation earned in any calendar month
before 1947 shall be deemed paid in such month regardless of whether
or when payment will have been in fact made, and compensation
earned in any calendar year after 1946 but paid after the end of such
calendar year shall be deemed to be compensation paid in the calendar
year in which it will have been earned if it is SO reported by the
employer before February 1 of the next succeeding calendar year or
if the employee establishes, subject to the provisions of section 9, the
period during which such compensation will have been earned.
(2) An employee shall be deemed to be paid 'for time lost' the
amount he is paid by an employer with respect to an identifiable
period of absence from the active service of the employer, including
absence on account of personal injury, and the amount he is paid by
the employer for loss of earnings resulting from his displacement to a
less remunerative position or occupation. If a payment is made by an
employer with respect to a personal injury and includes pay for time
lost, the total payment shall be deemed to be paid for time lost unless,
at the time of payment, a part of such payment is specifically appor-
tioned to factors other than time lost, in which event only such part
of the payment as is not SO apportioned shall be deemed to be paid for
time lost.
(3) Solely for purposes of determining amounts to be included in
the compensation of an employee, the term 'compensation' shall also
include cash tips received by an employee in any calendar month in
the course of his employment by an employer unless the amount of
such cash tips is less than $20.
"(4) Tips included as compensation by reason of the provisions of
subdivision (3) shall be deemed to be paid at the time a written state-
ment including such tips is furnished to the employer pursuant to
section 6053 (a) of the Internal Revenue Code of 1954 or, if no state-
ment including such tips is SO furnished, at the time received. Tips SO
deemed to be paid in any month shall be deemed paid for services
rendered in such month.
(5) In determining compensation, there shall be attributable as
compensation paid to an employee in calendar months in which he is in
military service creditable under section 3(i) (2), in addition to any
other compensation paid to him with respect to such months-
(i) for each such calendar month prior to 1968, $160;
" (ii) for each such calendar month after 1967 and prior to
1975, $260; and
H. 15301-6
(iii) for each such calendar month after 1974, the amount
which is creditable as such individual's 'wages' under the third
paragraph of section 209 of the Social Security Act.
"(6) Notwithstanding the provisions of the preceding subdivisions
of this subsection, the term 'compensation' shall not include-
"(i) tips, except as is provided under subdivision (3) of this
subsection;
"(ii) the voluntary payment by an employer, without deduc-
tion from the remuneration of the employee, of any tax now or
hereafter imposed with respect to the compensation of such
employee;
"(iii) remuneration for service which is performed by a non-
resident alien individual for the period he is temporarily present
in the United States as a nonimmigrant under subparagraph (F)
or (J) of section 101(a) (15) of the Immigration and Nationality
Act, as amended, and which is performed to carry out the pur-
pose specified in subparagraph (F) or (J), as the case may be;
"(iv) remuneration earned in the service of a local lodge or
division of a railway-labor-organization employer with respect
to any calendar month in which the amount of such remunera-
tion is less than $25; and
"(v) remuneration for service as a delegate to a national
or international convention of a railway-labor-organization
employer if the individual rendering such service has not previ-
ously rendered service, other than as such a delegate, which may
be included in his 'years of service'.
" (i) The term 'Board' means the Railroad Retirement Board.
(j) The term 'company' includes corporations, associations, and
joint-stock companies.
(k) The term 'employee' includes an officer of an employer.
(1) The term 'person' means an individual, a partnership, an asso-
ciation, a joint-stock company, a corporation, or the United States or
any other governmental body.
"
(m) The term 'United States,' when used in a geographical sense,
means the States and the District of Columbia.
(n) The term 'Social Security Act' means the Social Security Act
as amended from time to time.
"(o) An individual shall be deemed to have 'a current connection
with the railroad industry' at the time an annuity begins to accrue
to him and at death if, in any thirty consecutive calendar months
before the month in which an annuity under this Act begins to accrue
to him, or the month in which he dies if that first occurs, he will have
been in service as an employee in not less than twelve calendar months
and, if such thirty calendar months do not immediately precede such
month, he will not have been engaged in any regular employment
other than employment for an employer or employment with the
Department of Transportation, the Interstate Commerce Commission,
the National Mediation Board, or the Railroad Retirement Board in
the period before such month and after the end of such thirty months.
For the purposes of section 2(d) only, an individual shall be deemed
also to have a 'current connection with the railroad industry' if he
will have completed ten years of service and (A) he would be neither
fully nor currently insured under the Social Security Act if his
service as an employee after December 31, 1936, were included in the
term 'employment' as defined in that Act, or (B) he has no quarters
of coverage under the Social Security Act.
"(p) The term 'annuity' means a monthly sum which is payable on
the first day of each calendar month for the accrual during the pre-
ceding calendar month.
H. R. 15301-7
"(q) The terms 'quarter' and 'calendar quarter' shall mean a period
of three calendar months ending on March 31, June 30, Septem-
ber 30, or December 31.
"(r) For purposes of this Act, a person shall be considered to be
permanently insured under the Social Security Act on December 31,
1974, if he or she would be fully insured within the meaning of sec-
tion 214 (a) of that Act when he or she attains age 62 solely on the
basis of his or her quarters of coverage under that Act acquired prior
to January 1, 1975.
"ANNUITY ELIGIBILITY REQUIREMENTS
"SEC. 2. (a) (1) The following-described individuals, if they shall
have completed ten years of service and shall have filed application for
annuities, shall, subject to the conditions set forth in subsections (e),
(f), and (h), be entitled to annuities in the amounts provided under
section 3 of this Act-
(i) individuals who have attained the age of sixty-five;
" (ii) individuals who have attained the age of sixty and have
completed thirty years of service;
(iii) individuals who have attained the age of sixty-two and
have completed less than thirty years of service, but the annuity of
such individuals shall be reduced by 1/180 for each calendar month
that he or she is under age sixty-five when the annuity begins to
accrue;
"(iv) individuals who have a current connection with the rail-
road industry, whose permanent physical or mental condition is
such as to be disabling for work in their regular occupation, and
who (A) have completed twenty years of service or (B) have
attained the age of sixty; and
"(v) individuals whose permanent physical or mental condi-
tion is such that they are unable to engage in any regular employ-
ment.
"(2) For the purposes of paragraph (iv) of subdivision (1); the
Board, with the cooperation of employers and employees, shall secure
the establishment of standards determining the physical and mental
conditions which permanently disqualify employees for work in the
several occupations in the railroad industry, and the Board, employers,
and employees shall cooperate in the promotion of the greatest practi-
cable degree of uniformity in the standards applied by the several
employers. An individual's condition shall be deemed to be disabling
for work in his regular occupation if he will have been disqualified
by his employer for service in his regular occupation in accordance
with the applicable standards SO established; if the employee will
not have been SO disqualified by his employer, the Board shall deter-
mine whether his condition is disabling for work in his regular occu-
pation in accordance with the standards generally established; and,
if the employee's regular occupation is not one with respect to which
standards will have been established, the standards relating to a reason-
ably comparable occupation shall be used. If there is no such compara-
ble occupation, the Board shall determine whether the employee's
condition is disabling for work in his regular occupation by deter-
mining whether under the practices generally prevailing in industries
in which such occupation exists such condition is a permanent disquali-
fication for work in such occupation. For purposes of this subdivision
and paragraph (iv) of subdivision (1), an employee's 'regular occupa-
tion' shall be deemed to be the occupation in which he will have been
engaged in more calendar months than the calendar months in which
he will have been engaged in any other occupation during the last
H. R. 15301-8
preceding five calendar years, whether or not consecutive, in each of
which years he will have earned wages or salary, except that, if an
employee establishes that during the last fifteen consecutive calendar
years he will have been engaged in another occupation in one-half or
more of all the months in which he will have earned wages or salary,
he may claim such other occupation as his regular occupation.
(3) Such satisfactory proof shall be made from time to time as
prescribed by the Board, of the disability provided for in paragraph
(iv) or (v) of subdivision (1) and of the continuance of such disability
(according to the standards applied in the establishment of such
disability) until the employee attains the age of sixty-five. If the
individual fails to comply with the requirements prescribed by the
Board as to proof of the continuance of the disability until he attains
the age of sixty-five years, his right to an annuity by reason of such
disability shall, except for good cause shown to the Board, cease, but
without prejudice to his rights to any subsequent annuity to which
he may be entitled.
(b) (1) An individual who—
(i) has attained age 60 and completed thirty years of service
or attained age 65;
" (ii) has completed twenty-five years of service;
'(iii) is entitled to the payment of an annuity under sub-
section (a) (1) and
'(iv) had a current connection with the railroad industry at
the time such annuity began to accrue;
shall, subject to the conditions set forth in subdivision (2) of this sub-
section and in subsections (e) and (h), be entitled to a supplemental
annuity in the amount provided under section 3 of this Act: Provided,
however, That in cases where an individual's annuity under subsec-
tion (a) (1) begins to accrue on other than the first day of the month,
the amount of any supplemental annuity to which he is entitled for
that month shall be reduced by one-thirtieth for each day with respect
to which he is not entitled to an annuity under subsection (a) (1).
'(2) No individual shall be entitled to a supplemental annuity
provided by this subsection for any period after he renders any
service as an employee for compensation after his supplemental an-
nuity closing date, which is the last day of the month following the
month in which he attains age 65: Provided, however, That the sup-
plemental annuity closing date of an individual who attained age 65
prior to January 1, 1975, shall be determined under section 3(j) (4)
of the Railroad Retirement Act of 1937 Provided further, That for
an employee whose supplemental annuity closing date occurs after he
has completed at least 23 years of service but before he has completed
25 years of service and before he would have been entitled (upon
filing an application therefor) to monthly insurance benefits under
section 202 (a) of the Social Security Act if he had no service as an
employee under this Act, such closing date shall be extended to the
earlier of (A) the day before the first day of the first month for which
he would (on application) be entitled to monthly insurance benefits
under section 202(a) of the Social Security Act if he had no service
as an employee under this Act, or (B) the last day of the first month
for which he qualifies for a supplemental annuity under this subsection.
" (3) The provisions of subdivision (2) shall not supersede the provi-
sions of any agreement reached through collective bargaining which
provides for mandatory retirement at an age less than the applicable
supplemental annuity closing date determined under such subdivision.
" (c) (1) The spouse of an individual, if-
(i) such individual (A) is entitled to an annuity under sub-
section (a) (1) and (B) has attained the age of 60 and has com-
H. R. 15301-9
pleted thirty years of service or has attained the age of 62, and
"(ii) such spouse (A) has attained the age of 65, or (B) has
attained the age of 60 and such individual has completed thirty
years of service, or (C), in the case of a wife, has in her care
(individually or jointly with her husband) a child who meets the
qualifications prescribed in paragraph (iii) of subsection (d) (1)
(without regard to the provisions of clause (B) of such
paragraph),
shall, subject to the conditions set forth in subsections (e), (f), and
(h), be entitled to a spouse's annuity, if he or she has filed application
therefor, in the amount provided under section 4 of this Act.
"(2) A spouse who would be entitled to an annuity under subdi-
vision (1) if he or she had attained the age of 65 may elect upon or
after attaining the age of 62 to receive such annuity, but the annuity
in any such case shall be reduced by 1/180 for each calendar month
that the spouse is under age 65 when the annuity begins to accrue.
(3) For the purposes of this Act, the term 'spouse' shall mean the
wife or husband of an annuitant under subsection (a) (1) who (i) was
married to such annuitant for a period of not less than one year
immediately preceding the day on which the application for a spouse's
annuity is filed, or in the month prior to his or her marriage to such
annuitant was eligible for an annuity under paragraph (i) or (iv) of
subsection (d) (1) or, on the basis of disability, under paragraph (iii)
thereof, or is the parent of such annuitant's son or daughter, if, as
of the day on which the application for a spouse's annuity is filed, such
wife or husband and such annuitant were members of the same house-
hold, or such wife or husband was receiving regular contributions
from such annuitant toward her or his support, or such annuitant has
been ordered by any court to contribute to the support of such wife or
husband; and (ii) in the case of a husband, was receiving at least one-
half of his support from his wife at the time his wife's annuity under
subsection (a) (1) began.
(d) (1) The following. described survivors of a deceased employee
who will have completed ten years of service and will have had a cur-
rent connection with the railroad industry at the time of his death
shall, subject to the conditions set forth in subsections (g) and (h),
be entitled to annuities, if they have filed application therefor, in
the amounts provided under section 4 of this Act-
(i) a widow (as defined in section 216 (c) and (k) of the Social
Security Act) or widower (as defined in section 216 (g) and
(k) of the Social Security Act) of such a deceased employee who
has not remarried and who (A) will have attained the age of sixty
or (B) will have attained the age of fifty but will not have attained
age sixty and is under a disability which began before the end of
the period prescribed in subdivision (2), and who, in the case
of a widower, was receiving at least one-half of his support from
the deceased employee at the time of her death or at the time her
annuity under subsection (a) (1) began;
(ii) a widow (as defined in section 216 (c) and (k) of the
Social Security Act) of such a deceased employee who has not
remarried and who (A) is not entitled to an annuity under para-
graph (i), and (B) at the time of filing an application for an
annuity under this paragraph, will have in her care a child of
such deceased employee, which child is entitled to an annuity
under paragraph (iii) (other than an annuity payable to a child
who has attained age 18 and is not under a disability)
(iii) a child (as defined in section 216 (e) and (k) of the
Social Security Act) of such a deceased employee who (A) will
be less than eighteen years of age, or (B) will be less than twenty-
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H. R. 15301-10
two years of age and a full-time student at an educational insti-
tution, or (C) will, without regard to his age, be under a disability
which began before he attained age twenty-two or before the
close of the eighty-fourth month following the month in which
his most recent entitlement to an annuity under this paragraph
terminated because he ceased to be under a disability, and who is
unmarried and was dependent upon the employee at the time of
the employee's death; and
(iv) a parent (as defined in section 202(h) (3) of the Social
Security Act) of such a deceased employee who (A) will have
attained the age of sixty and (B) will have received at least one-
half of his or her support from such deceased employee at the
time of the employees' death and (C) will not have remarried
after the employee's death: Provided, however, That no parent
will be entitled to an annuity under this paragraph on the basis
of the deceased employee's compensation and years of service in
any case where such employee died leaving a widow or widower
or a child who is, or who might in the future become, entitled to
an annuity under this subsection.
"(2) The period referred to in clause (B) of subdivision (1) (i)
is the period (i) beginning with the latest of (A) the month of the
employee's death, (B) in the case of a widow, the last month for
which she was entitled to an annuity under paragraph (ii) of sub-
division (1) as the widow of the deceased employee, or (C) the month
in which the widow's or widower's previous entitlement to an annuity
as the widow or widower of the deceased employee terminated because
her or his disability had ceased and (ii) ending with the month before
the month in which she or he attains age sixty, or, if earlier, with the
close of the eighty-fourth month following the month with which
such period began.
'(3) For purposes of paragraph (i) or (iii) of subdivision (1). a
widow, widower, or child shall be under a disability if her or his
permanent physical or mental condition is such that she or he is unable
to engage in any regular employment. The provisions of subsection
(a) (3) of this section as to the proof of disability shall apply with
regard to determinations with respect to disability under subdivision
(1).
(4) In determining for purposes of this subsection and subdivision
(3) of subsection (c) whether an applicant is the wife, husband, widow,
widower, child, or parent of a deceased employee as claimed, the rules
set forth in section 216(h) of the Social Security Act shall be applied
deeming, for this purpose, individuals entitled to an annuity under
subsection (c) to be entitled to benefits under subsection (b) or (c)
of section 202 of the Social Security Act and individuals entitled to
an annuity under paragraph (i) or (ii) of subsection (d) (1) to be
entitled to a benefit under subsection (e), (f), or (g) of section 202
of the Social Security Act. For purposes of paragraph (iii) of sub-
division (1), a child shall be deemed to have been dependent upon
his parent employee if the conditions set forth in section 202(d) (3),
(4), or (9) of the Social Security Act are fulfilled. The provisions of
paragraph (7) of section 202(d) of the Social Security Act (defining
the terms 'full-time student' and 'educational institution') shall be
applied by the Board in the administration of this subsection as if
the references therein to the Secretary were references to the Board.
A child who attains age twenty-two at a time when he is a full-time
student (as defined in subparagraph (A) of paragraph (7) of section
202 (d) of the Social Security Act and without the application of sub-
paragraph (B) of such paragraph) but has not (at such time) com-
pleted the requirements for, or received, a degree from a four-year
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H. R. 15301-11
college or university shall be deemed (for purposes of determining
his continuing or initial entitlement to an annuity under this subsec-
tion) not to have attained such age until the first day of the first month
following the end of the quarter or semester in which he is enrolled
at such time (or, if the educational institution in which he is enrolled
is not operated on a quarter or semester system, until the first day of
the first month following the completion of the course in which he is
enrolled or until the first day of the third month beginning after such
time, whichever first occurs).
(e) (1) No individual shall be entitled to an annuity under sub-
section (a) (1) until he shall have ceased to render compensated service
to any person, whether or not an employer as defined in section 1 (a)
(but with the right to engage in other employment to the extent not
prohibited by subdivision (3) or (4) of this subsection or by subsec-
tion (f)). As used in this subsection, the term 'compensated service'
shall not include any service as an elected public official of the United
States, a State, or any political subdivision of a State.
(2) An annuity under subsection (a) (1) shall be paid only if the
applicant shall have relinquished such rights as he may have to return
to the service of an employer and of the person, or persons, by whom
he was last employed: Provided, however, That this requirement shall
not apply to individuals mentioned in paragraphs (iv) and (v) of
subsection (a) (1) prior to attaining age sixty-five: Provided further,
That, notwithstanding the provisions of the preceding proviso and of
clause (i) of subsection (c) (1) of this section, an annuity shall be
paid to the spouse of an individual only if such individual shall have
satisfied the requirements of this subdivision without regard to the
preceding proviso: And provided further, That, notwithstanding the
provisions of the first proviso of this subdivision and of clause (iii)
of subsection (b) (1) of this section, a supplemental annuity shall be
paid to an individual only if such individual shall have satisfied the
requirements of this subdivision without regard to the first proviso
thereof.
'(3) No annuity under subsection (a) (1) or supplemental annuity
under subsection (b) (1) shall be paid with respect to any month in
which an individual in receipt of an annuity or supplemental annuity
thereunder shall render compensated service to an employer or to the
last person, or persons, by whom he was employed prior to the date
on which the annuity under subsection (a) (1) began to accrue.
Individuals receiving annuities under subsection (a) (1) shall report
to the Board immediately all such compensated service.
(4) No annuity under paragraph (iv) or (v) of subsection (a) (1)
shall be paid to an individual with respect to any month in which the
individual is under age sixty-five and is paid more than $200 in earn-
ings from employment or self-employment of any form: Provided,
however, That for purposes of this subdivision, if a payment in any one
calendar month is for accruals in more than one calendar month, such
payment shall be deemed to have been paid in each of the months in
which accrued to the extent accrued in such month. Any such individ-
ual under the age of sixty-five shall report to the Board any such
payment of earnings for such employment or self-employment before
receipt and acceptance of an annuity for the second month following
the month of such payment. A deduction shall be imposed, with respect
to any such individual who fails to make such report, in the annuity or
annuities otherwise due the individual, in an amount equal to the
amount of the annuity for each month in which he is paid such earn-
ings in such employment or self-employment, except that the first
deduction imposed pursuant to this sentence shall in no case exceed an
amount equal to the amount of the annuity otherwise due for the first
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H. R. 15301-12
month with respect to which the deduction is imposed. If pursuant to
the first sentence of this subdivision an annuity was not paid to an
individual with respect to one or more months in any calendar year,
and it is subsequently established that the total amount of such
individual's earnings during such year as determined in accordance
with that sentence (but exclusive of earnings for services described in
subdivision (3)) did not exceed $2,400, the annuity with respect to
such month or months, and any deduction imposed by reason of the
failure to report earnings for such month or months under the third
sentence of this subdivision, shall then be payable. If the total amount
of such individual's earnings during such year (exclusive of earnings
for services described in subdivision (3)) is in excess of $2,400, the
number of months in such year with respect to which an annuity is not
payable by reason of such first and third sentences shall not exceed
one month for each $200 of such excess, treating the last $100 or more
of such excess as $200; and if the amount of the annuity has changed
during such year, any payments of annuities which become payable
solely by reason of the limitations contained in this sentence shall be
made first with respect to the month or months for which the annuity
is larger.
"(5) The annuity of a spouse under subsection (c) shall, with
respect to any month, be subject to the same provisions of this subsec-
tion as the individual's annuity. In addition, the annuity of a spouse
under subsection (c) shall not be payable for any month if the indi-
vidual's annuity under subsection (a) (1) is not payable for such
month by reason of the provisions of this subsection.
"(f) (1) That portion of the individual's annuity as is computed
under section 3(a) of this Act on the basis of (A) his compensation
and years of service subsequent to December 31, 1974, and (B) his
wages and self-employment income derived from employment and
self-employment under the Social Security Act and that portion of
the individual's annuity as is computed under section 3(h) of this Act
shall be subject to deductions on account of work pursuant to the pro-
visions of section 203 of the Social Security Act in the same manner
as if such portion of such annuity were a monthly insurance benefit
under that Act: Provided, however, That the provisions of this sub-
division shall be applicable to the annuity of an individual only if
such individual would be fully insured under the Social Security Act
on the basis of wages and self-employment income derived from
employment and self-employment under that Act and on the basis of
compensation derived from service as an employee after December 31,
1974, if such service as an employee had been included in the term
'employment' as defined in that Act. Any person in receipt of an an-
nuity subject to deduction under this subsection shall report to the
Board the receipt of excess earnings as defined in paragraph (3) of
section 203 (f) of the Social Security Act.
"(2) That portion of the spouse's annuity under subsection (c)
which is derived from the portion of the individual's annuity subject
to deductions under subdivision (1) and that portion of the spouse's
annuity as is computed under section 4(e) of this Act shall be subject
to deductions on account of work pursuant to the provisions of sec-
tion 203 of the Social Security Act in the same manner as if such
portion of such spouse's annuity were a monthly insurance benefit
under that Act. In addition, such portion of the spouse's annuity shall
be subject to deductions if the individual's annuity is subject to deduc-
tions under subdivision (1) in the same manner as if such portion
of such spouse's annuity were a monthly insurance benefit under the
Social Security Act.
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H. R. 15301-13
(g) (1) No annuity shall be paid to a survivor under subsection (d)
with respect to any month in which such survivor renders service for
compensation as an employee of an employer. Survivors receiving
annuities under subsection (d) shall report to the Board immediately
all such service for compensation.
(2) Deductions, in amounts and at such time or times as the Board
shall determine, shall be made from any payments to which a sur-
vivor is entitled under subsection (d) until the total of such deductions
equals such survivor's annuity under that subsection for any month,
if for such month such survivor is under the age of seventy-two and
is charged with excess earnings under section 203(f) of the Social
Security Act or, having engaged in any activity outside the United
States, would be charged under such section (f) with any excess
earnings derived from such activity if it had been an activity within
the United States. For purposes of this subdivision the Board shall
have the authority to take such actions and to make such determina-
tions and such suspensions of payment of benefits in the manner and
to the extent that the Secretary of Health, Education, and Welfare
would be authorized to take or to make under section 203 (h) (3) of
the Social Security Act if the survivors were receiving the annuities to
which this subdivision applies under section 202 of such Act Provided,
however, That in determining a survivor's excess earnings for a year
for the purposes of this subdivision there shall not be included his
income from employment or self-employment during months begin-
ning with the month with respect to which he ceases to be qualified
for an annuity. Survivors receiving annuities under subsection (d)
shall report to the Board the receipt of excess earnings described in
this subdivision.
(h) (1) In the event military service credited under section (i) (2)
of this Act is or has been used as the basis or as a partial basis for a
pension, disability compensation, or any other gratuitous benefits pay-
able on a periodic basis under any other Act of Congress, any annuity
of an individual under subsection (a) (1) which is based in part on
such military service shall be reduced, with respect to a calendar month
for all or part of which such other benefit is also payable, by (i) the
proportion which the number of years of service by which such military
service increases the years of service bears to the total years of
service, or (ii) the aggregate amount of such pension or other benefit
with respect to that month, whichever would result in the smaller
reduction: Provided, however, That in no case shall the reduction
under this subdivision operate to reduce the annuity of an individual
under subsection (a) (1) below the amount it would have been if mili-
tary service had not been included in the individual's years of service. If
the annuity of an individual under subsection (a) (1) is reduced for any
month by reason of this subdivision, any annuity payable to the spouse
of such individual for such month under subsection (c) shall be
reduced proportionately.
(2) The supplemental annuity provided an individual by subsection
(b) shall, with respect to any month, be reduced by the amount of the
supplemental pension, attributable to the employer's contribution,
that such individual is entitled to receive for that month under any
other supplemental pension plan: Provided, however, That the maxi-
mum of such reduction shall be equal to the amount of the supplemental
annuity less any amount by which the supplemental pension is reduced
by reason of the supplemental annuity.
(3) If a spouse entitled to an annuity under subsection (c) or a
survivor entitled to an annuity under subsection (d) for any month is
also entitled to annuity under subsection (a) (1) for such month, the
annuity under subsection (c) or (d) shall be reduced, but not below
H. R. 15301-14
zero, by an amount equal to the annuity under subsection (a) (1) : Pro-
vided, however, That the provisions of this subdivision shall not apply
if either the spouse or survivor or the individual upon whose earnings
record the spouse's or survivor's annuity under subsection (c) or (d)
is based rendered service as an employee to an employer, or as an
employee representative, prior to January 1, 1975.
"(4) If an annuitant is entitled to more than one annuity under
subsections (c) and (d) for a month, such annuitant shall be entitled
to only the larger of such annuities for such month, except that, if such
annuitant SO elects, he shall instead be entitled to only the smaller of
such annuities for such month.
"COMPUTATION OF EMPLOYEE NUITIES
"SEC. 3. (a) (1) The annuity of an individual under section 2(a) (1)
of this Act shall be in an amount equal to the amount (before any
reduction on account of age and before any deductions on account of
work) of the old-age insurance benefit or disability insurance benefit
to which such individual would have been entitled under the Social
Security Act if all of his or her service as an employee after December
31, 1936, had been included in the term 'employment' as defined in
that Act.
"(2) For purposes of this subsection, individuals entitled to an
annuity under paragraph (ii) of section 2(a) (1) of this Act shall,
except for purposes of recomputations in accordance with the provi-
sions of section 215 (f) of the Social Security Act, be deemed to have
attained age 65, and individuals entitled to an annuity under para-
graph (iv) or (v) of such section 2(a) (1) shall be deemed to be
entitled to a disability insurance benefit under section 223 of the
Social Security Act.
"(b) (1) The amount of the annuity of an individual provided
under subsection (a) of this section shall be increased by an amount
equal to (A) the amount of the annuity to which such individual
would have been entitled (without regard to the requirement that an
individual's years of service be ten or more) under section 2(a) (1)
of the Railroad Retirement Act of 1937 as in effect on December 31,
1974, on the basis of his compensation and years of service prior to
January 1, 1975, deeming such individual (i) to be eligible for such
an annuity and (ii) to be entitled to no other benefit under either that
Act or the Social Security Act except a benefit under the Social
Security Act in the amount computed in accordance with the provi-
sions of subclause (ii) of clause (C) of subsection (h) (1) or (h) (2)
of this section, minus (B) the amount of the old-age insurance benefit
to which such individual would have been entitled (before any deduc-
tions on account of work and subject to the last sentence of this sub-
division) under the Social Security Act as in effect on December 31,
1974, if all his service as an employee after December 31, 1936, and
before January 1, 1975, were included in the term 'employment' as
defined in that Act, and if such individual (i) were age 65 and other-
wise eligible for such a benefit and (ii) had no wages or self-
employment income under that Act other than wages derived from
service as an employee after December 31, 1936, and before January 1,
1975. For purposes of computing amounts under clause (A) of this
subdivision, the Board shall have the authority to approximate the
effect of the reductions prescribed by sections 3(a) (2) and 3(a) (3)
of the Railroad Retirement Act of 1937 in cases where the individual
is entitled to a benefit under subsection (h) (1) or (h) (2) of this
section. For purposes of this subdivision, 18 'benefit computation years'
shall be used in calculating an individual's 'average monthly wage',
H. R. 15301-15
except in computing increases in amounts determined under clause
(A) of this subdivision pursuant to section 3 (a) (6) of the Railroad
Retirement Act of 1937.
"(2) The amount computed under subdivision (1) of this subsection
shall be increased by 65 per centum of the percentage increase obtained
by comparing the unadjusted Consumer Price Index for the month of
September 1976 with the unadjusted Consumer Price Index for the
September immediately preceding the earlier of (A) the calendar
year in which the individual's annuity under section 2(a) (1) of this
Act begins to accrue or (B) the calendar year 1981.
(c) If an individual entitled to an annuity under section (a) (1)
of this Act will have rendered service as an employee to an employer, or
as an employee representative, subsequent to December 31, 1974, the
amount of the annuity of such individual provided under the preceding
subsections of this section shall be increased by $1.50 for each of the
first ten years of service that the individual has prior to January 1,
1975, and by $1.00 for each year of service prior to January 1, 1975,
that the individual has in excess of ten years.
"(d) (1) The amount of the annuity of an individual provided under
the preceding subsections of this section shall be increased according
to the following formula:
I=Y (.005A+4)
"(2) Thé amount computed under subdivision (1) of this subsection
shall be increased according to the following formula:
I=2.6YC
(3) The amount computed under subdivisions (1) and (2) of this
subsection shall be further increased according to the following
formula:
I=.005Y[.65BC-(B-D)]
In no event shall this subdivision result in a decrease in the amounts
computed under subdivisions (1) and (2).
"(4) For purposes of the formulae set forth in this subsection:
'I' represents the amount of increase in dollars;
'A' represents the employee's average monthly compensation
for service after 1974;
" 'Y' represents the number of years of service of the employee
after 1974;
" 'C' represents the percentage increase (converted to a decimal
fraction) obtained by comparing the unadjusted Consumer Price
Index for the month of September 1976 with the unadjusted Con-
sumer Price Index for the September immediately preceding the
earlier of the calendar year in which the individual's annuity
under section 2(a) (1) of this Act begins to accrue, or the calendar
year 1981;
" 'B' represents the employee's average monthly compensation
for his years of service after 1974 (disregarding, for this purpose,
compensation for any month after 1980 in excess of one-twelfth of
the maximum taxable 'wages' as defined in section 3121 of the
Internal Revenue Code of 1954 for the calendar year 1980) ;
" 'D' represents the employee's average monthly compensation
for his years of service after 1974 (disregarding, for this purpose,
compensation for any month after 1976 in excess of one-twelfth of
the maximum taxable 'wages' as defined in section 3121 of the
Internal Revenue Code for the calendar year 1976).
"(e) The supplemental annuity of an individual under section 2(b)
of this Act shall be $23 plus an additional amount of $4 for each year
H. R. 15301-16
of service that the individual has in excess of 25 years, but in no case
shall the supplemental annuity exceed $43.
"(f) (1) If the total amount of an individual's annuity and supple-
mental annuity computed under the preceding subsections of this sec-
tion would, before any reductions on account of age, before any
reduction due to such individual's entitlement to a monthly insurance
benefit under the Social Security Act, and disregarding any increases
in such total amount which become effective after the date on which
such begins to accrue, exceed an amount equal to the sum of individ-
ual's annuity under section 2(a) (1) of this Act (A) 100 per centum
of his 'final average monthly compensation' up to an amount equal to
50 per centum of one-twelfth of the maximum annual taxable 'wages'
(as defined in section 3121 of the Internal Revenue Code of 1954)
for the calendar year in which such individual's annuity under sec-
tion 2(a) (1) of this Act begins to accrue, plus (B) 80 per centum of
SO much of his 'final average monthly compensation' as exceeds 50 per
centum of one-twelfth of the maximum annual taxable 'wages' (as
defined in section 3121 of the Internal Revenue Code of 1954) for the
calendar year in which such individual's annuity under section 2(a)
(1) of this Act begins to accrue, the supplemental annuity of such
individual first, and then, if necessary, the annuity amount of such
individual as computed under subsections (b), (c), and (d) of this
section, shall be reduced until such total amount of such individual's
annuity and supplemental annuity equals such sum or until such sup-
plemental annuity and such annuity amount computed under subsec-
tions (b), (c), and (d) of this section are reduced to zero, whichever
occurs first Provided, however, That the provisions of this subdivision
shall not operate to reduce the total amount of an individual's annuity
and supplemental annuity computed under the preceding subsections
of this section below $1,200. For purposes of this subdivision, the 'final
average monthly compensation' of an individual shall be determined
by dividing the total compensation received by such individual in the
two calendar years, consecutive or otherwise, in which he was credited
with the highest total compensation during the ten-year period end-
ing with December 31 of the year in which such individual's annuity
under section 2(a) (1) of this Act begins to accrue by 24. For pur-
poses of this subdivision, the term 'compensation' shall include 'com-
pensation' as defined in section 1(h) of this Act, 'wages' as defined
in section 209 of the Social Security Act, self-employment income' as
defined in section 211 (b) of the Social Security Act, and wages deemed
to have been paid under section 217 or 229 of the Social Security Act
on account of military service: Provided, however, That in no case
shall the compensation with respect to any calendar month exceed
the limitation on the compensation for such month prescribed in sub-
section (j) of this section. Wages and self-employment income included
as compensation for purposes of this subdivision shall, in the absence
of evidence to the contrary, be presumed to have been paid in equal
proportions with respect to all months in the calendar quarter in
which credited, in the case of wages, or in equal proportions with
respect to all months in the calendar year in which credited, in the case
of self-employment income.
'(2) If, in the case of an individual whose annuity under section
2(a) (1) of this Act began to accrue prior to January 1, 1983, the
annuity (before any reduction due to such individual's entitlement to
a monthly insurance benefit under the Social Security Act and dis-
regarding any amount provided by subsection (h) of this section)
plus the supplemental annuity to which such individual is entitled
for any month under this Act, together with the annuity, if any, of
the spouse of such individual (before any reduction due to such
H. R. 15301-17
spouse's entitlement to a wife's or husband's insurance benefit under
the Social Security Act and disregarding any amount provided by
section 4(e) of this Act), before any reductions under the provisions
of section (f) of this Act, is less than the total amount which would
have been payable to such individual and his spouse for such month,
on the basis of the individual's compensation and years of service,
under the provisions of the Railroad Retirement Act of 1937 as in
effect on December 31, 1974, disregarding, for purposes of the com-
putations under such Railroad Retirement Act of 1937, compensation
for any month after December 31, 1974, in excess of one-twelfth of
the maximum annual taxable 'wages' (as defined in section 3121 of the
Internal Revenue Code of 1954) for the calendar year 1974, the
annuity of such individual and the annuity of such spouse, if any,
shall be increased, without regard to the provisions of subdivision (1)
of this subsection, proportionately SO as to equal such total amount.
For the purpose of computing amounts under this subdivision, the
Board shall have the authority to approximate the effect of the
reductions prescribed by sections 3 (a) (2) and 3(a) (3) of the Railroad
Retirement Act of 1937. For purposes of computing amounts payable
under the Railroad Retirement Act of 1937, any increases in the
amounts determined under the first proviso of section 3(e) of such
Act which would have become effective after December 31, 1974,
shall be disregarded.
"(3) If for any month in which an annuity accrues and is payable
under this Act the annuity to which an individual is entitled under this
Act (or would have been entitled except for a reduction pursuant to a
joint and survivor election), together with the annuity, if any, of the
spouse of such individual, is less than the total amount, or the addi-
tional amount, which would have been payable to all persons for such
month under the Social Security Act if such individual's service as an
employee after December 31, 1936, were included in the term 'employ-
ment' as defined in that Act, such annuity or annuities shall be
increased proportionately to such total amount, or such additional
amount: Provided, however, That if an annuity accrues to an individ-
ual or a spouse for a part of a month, the amount payable for such part
of a month under this subdivision shall be one-thirtieth of the amount
payable under this subdivision for an entire month, multiplied by the
number of days in such part of a month. For purposes of this subdivi-
sion, (i) persons not entitled to an annuity under section 2 of this Act
shall not be included in the computation under this subdivision except a
spouse who could qualify for an annuity under section 2(c) of this Act
if the individual from whom the spouse's annuity under this Act would
derive had attained age 60 or 62, as the case may be, and such individ-
ual's children who meet the definition as such contained in section 216
(e) of the Social Security Act; (ii) after an annuity has been certified
for payment and this subdivision was inapplicable after allowing for
any waiting period under section 223 (c) (2) of the Social Security Act,
and after having considered the inclusion of all persons who were then
eligible for inclusion in the computation under this subdivision, or
was then applicable but later became inapplicable, any recertification
in such annuity under this subdivision shall not take into account per-
sons not entitled to an annuity under section 2 of this Act except a
spouse who could qualify for an annuity under section 2(c) of this Act
when she attains age 60 or 62, as the case may be, if the individual from
whom the spouse's annuity would derive had attained age 60 or 62, as
the case may be, and who was married to such individual at the time he
applied for his annuity; and (iii) in computing the amount to be paid
under this subdivision the only benefits under title II of the Social
H. R. 15301-18
Security Act which shall be considered shall be those to which the
persons included in the computation are entitled.
"(g) Those portions of the annuity of an individual as are computed
under subsections (b) and (d) of this section shall, if such individual's
annuity under section 2(a) (1) of this Act began to accrue on or before
the date on which the applicable increase under this subsection becomes
effective, be increased by 32.5 per centum of the percentage increase,
if any (rounded to the nearest one-tenth of 1 percent), obtained by
comparing (A) the unadjusted Consumer Price Index for the calendar
quarter ending March 31, 1977, with such index for the calendar quar-
ter ending March 31, 1976, (B) the unadjusted Consumer Price Index
for the calendar quarter ending March 31, 1978, with the higher of
(i) such index for the calendar quarter ending March 31, 1977, or
(ii) such index for the calendar quarter ending March 31, 1976, (C)
the unadjusted Consumer Price Index for the calendar quarter ending
March 31, 1979, with the highest of (i) such index for the calendar
quarter ending March 31, 1978, (ii) such index for the calendar
quarter ending March 31, 1977, or (iii) such index for the calendar
quarter ending March 31, 1976, and (D) the unadjusted Consumer
Price Index for the calendar quarter ending March 31, 1980, with
the highest of (i) such index for the calendar quarter ending March 31,
1979, (ii) such index for the calendar quarter ending March 31, 1978,
(iii) such index for the calendar quarter ending March 31, 1977, or
(iv) such index for the calendar quarter ending March 31, 1976. The
unadjusted Consumer Price Index for any calendar quarter shall be
the arithmetical mean of such index for the three months in such
quarter. The increases provided under clauses (A), (B), (C), and
(D) of this subsection shall be effective on June 1, 1977, June 1, 1978,
June 1, 1979, and June 1, 1980, respectively.
(h) (1) The amount of the annuity provided under subsections (a)
through (d) of this section of an individual who (A) will have (i)
rendered service as an employee to an employer, or as an employee
representative, during the calendar year 1974, or (ii) had a current
connection with the railroad industry on December 31, 1974, or at the
time his annuity under section 2(a) (1) of this Act began to accrue,
or (iii) completed twenty-five years of service prior to January 1,
1975, and (B) will have (i) completed ten years of service prior to
January 1, 1975, and (ii) been permanently insured under the Social
Security Act on December 31, 1974, shall be increased by an amount
equal to the amount by which (C) the sum of (i) the primary insur-
ance amount to which such individual would have been entitled, upon
the attainment of age 65 (or, if later, for January 1975), under the
provisions of the Social Security Act as in effect on December 31, 1974,
if his service as an employee after December 31, 1936, and prior to
January 1, 1975, were included in the term 'employment' as defined in
that Act and if he had no wages or self-employment income under that
Act other than wages derived from such service as an employee, and
(ii) the primary insurance amount to which such individual would
have been entitled, upon the attainment of age 65 (or, if later, for
January 1975), under the provisions of the Social Security Act as in
effect on December 31, 1974, on the basis of his wages and self-employ-
ment income derived from employment and self-employment under
that Act prior to January 1, 1975, exceeds (D) the primary insurance
amount to which such individual would have been entitled, upon the
attainment of age 65 (or, if later, for January 1975), under the pro-
visions of the Social Security Act as in effect on December 31, 1974, on
the basis of his wages and self-employment income derived from
employment and self-employment under that Act prior to January 1,
1975, and on the basis of compensation derived from service as an
H. R. 15301-19
employee fter December 31, 1936, and prior to January 1, 1975, if such
service as an employee had been included in the term 'employment'
as defined in that Act.
"(2) The amount of the annuity provided under subsections (a)
through (d) of this section to an individual who (A) will not have
met the conditions set forth in subclause (i), (ii), or (iii) of clause
(A) of subdivision (1) of this subsection, but (B) will have (i) com-
pleted ten years of service prior to January 1, 1975, and (ii) been
permanently insured under the Social Security Act as of December 31
of the calendar year prior to 1975 in which he last rendered service
as an employee to an employer, or as an employee representative, shall
be increased by an amount equal to the amount by which (C) the sum
of (i) the primary insurance amount to which such individual would
have been entitled, upon the attainment of age 65 (or, if later, for
January 1975), under the provisions of the Social Security Act as in
effect on December 31, 1974, if his service as an employee after Decem-
ber 31, 1936, and prior to January 1, 1975, were included in the term
'employment' as defined in that Act and if he had no wages or self-
employment income under that Act other than wages derived from
such service as an employee, and (ii) the primary insurance amount
to which such individual would have been entitled, upon the attain-
ment of age 65 (or, if later, for January 1975), under the provisions of
the Social Security Act as in effect on December 31, 1974, on the basis
of his wages and self-employment income derived from employment
and self-employment under that Act as of December 31 of the calendar
year prior to 1975 in which he last performed service as an employee
under this Act, exceeds (D) the primary insurance amount to which
such individual would have been entitled, upon the attainment of age
65 (or, if later, for January 1975), under the provisions of the Social
Security Act as in effect on December 31, 1974, on the basis of his
wages and self-employment income derived from employment and
self-employment under that Act as of December 31 of the calendar
year prior to 1975 in which he last performed service as an employee
under this Act and on the basis of compensation derived from service
as an employee after December 31, 1936, and prior to January 1, 1975, if
such service as an employee had been included in the term 'employ-
ment' as defined in that Act.
"(3) The amount of the annuity provided under subsections (a)
through (d) of this section of an individual who (A) will have (i)
rendered service as an employee to an employer, or as an employee
representative, during the calendar year 1974, or (ii) had a current
connection with the railroad industry on December 31, 1974, or at the
time his annuity under section 2(a) (1) of this Act began to accrue, or
(iii) completed twenty-five years of service prior to January 1, 1975,
and (B) will have completed ten years of service prior to January 1,
1975, and is the wife, husband, widow, or widower of a person who will
have been permanently insured under the Social Security Act on
December 31, 1974, shall be increased by an amount equal to the smaller
of (C) the wife's, husband's, widow's, or widower's insurance benefit
to which such individual would have been entitled, upon attaining age
65 (or, if later, for January 1975), under the provisions of the Social
Security Act as in effect on December 31, 1974, on the basis of such
person's wages and self-employment income derived from employment
and self-employment under that Act prior to January 1, 1975, or
(D) the primary insurance amount to which such individual would
have been entitled upon attaining age 65 (or, if later, for January
1975), under the provisions of the Social Security Act as in effect on
December 31, 1974, on the basis of such individual's wages and self-
employment income derived from employment and self-employment
H. R. 15301-20
under that Act prior to January 1, 1975, and on the basis of compensa-
tion derived from service as an employee after December 31, 1936, and
prior to January 1, 1975, if such service as an employee had been
included in the term 'employment' as defined in that Act.
"(4) The amount of the annuity provided under subsections (a)
through (d) of this section of an individual who (A) will not have
met the conditions set forth in subclause (i), (ii), or (iii) of clause
(A) of subdivision (3) of this subsection, but (B) will have com-
pleted ten years of service prior to January 1, 1975, and is the wife,
husband, widow, or widower of a person who will have been perma-
nently insured under the Social Security Act as of December 31 of the
calendar year prior to 1975 in which such individual last rendered serv-
ice as an employee to an employer, or as an employee representative,
shall be increased by an amount equal to the smaller of (C) the wife's,
husband's, widow's, or widower's insurance benefit to which such indi-
vidual would have been entitled, upon attaining age 65 (or, if later, for
January 1975), under the provisions of the Social Security Act as in
effect on December 31, 1974, on the basis of such person's wages and
self-employment income derived from employment and self-employ-
ment under that Act as of December 31 of the calendar year prior to
1975 in which such individual last performed service as an employee
under this Act or (D) the primary insurance amount to which such
individual would have been entitled upon attaining age 65 (or, if later,
for January 1975), under the provisions of the Social Security Act as
in effect on December 31, 1974, on the basis of such individual's wages
and self-employment income derived from employment and self-
employment under that Act as of December 31 of the calendar year
prior to 1975 in which such individual last performed service as an
employee under this Act and on the basis of compensation derived
from service as an employee after December 31, 1936, and prior to
January 1, 1975, if such service as an employee had been included in
the term 'employment' as defined in that Act.
(5) The amount computed under subdivision (1), (2), (3), or (4)
of this subsection shall be increased by the same percentage, or per-
centages, as benefits under the Social Security Act are increased, or
would have been increased had there been no general benefit increases
under the Social Security Act, pursuant to the automatic cost-of-living
provisions of section 215(i) of that Act, during the period from Janu-
ary 1, 1975, to the date on which the individual's annuity under section
2(a) (1) of this Act began to accrue.
(i) (1) The 'years of service' of an individual shall include all his
service subsequent to December 31, 1936.
(2) The 'years of service' of an individual shall also include his
voluntary or involuntary military service, within or without the
United States, during any war service period: Provided, however,
That such military service shall be included only if, prior to the
beginning of his military service and in the same calendar year in
which such military service began, or in the next preceding calendar
year, the individual rendered service for compensation to an employer
or to a person service to which is otherwise creditable under this Act,
or lost time as an employee for which he received remuneration, or
was serving as an employee representative: Provided further, That
such military service shall be included only subject to and in accordance
with the provisions of subdivisions (1) and (3) of this subsection in
the same manner as though military service were service rendered
as an employee: And provided further, That such military service
rendered after December 1956 shall not be included with respect to any
month if (A) any benefits are payable for that month under the Social
Security Act on the basis of such individual's wages and self-employ-
LIBRANY
H. R. 15301-21
ment income, (B) such military service was included in the computa-
tion of such benefits, and (C) the inclusion of such military service in
the computation of such benefits resulted (for that month) in benefits
not otherwise payable or in an increase in the benefits otherwise pay-
able: And provided further, That an individual who entered military
service prior to a war service period shall not be regarded as having
been in military service in a war service period with respect to any
part of the period for which he entered such military service.
"(3) The years of service' of an individual who was an employee
on August 29, 1935, shall, if the total number of his 'years of service'
as determined under subdivisions (1) and (2) is less than thirty,
also include his service prior to January 1, 1937, but not SO as to make
his total years of service exceed thirty Provided, however, That with
respect to any such individual who rendered service to any employer
subsequent to December 31, 1936, and who on August 29, 1935, was
not an employee of an employer conducting the principal part of its
business in the United States, no greater proportion of his service
rendered prior to January 1, 1937, shall be included in his 'years of
service' than the proportion which his total compensation (with-
out regard to any limitation on the amount of compensation other-
wise provided in this Act) for service subsequent to December 31,
1936, rendered anywhere to an employer conducting the principal part
of its business in the United States or rendered in the United States
to any other employer bears to his total compensation (without regard
to any limitation on the amount of compensation otherwise provided
in this Act) for service rendered anywhere to an employer subsequent
to December 31, 1936. Where the 'years of service' include only part
of the service prior to January 1, 1937, the part included shall be taken
in reverse order beginning with the last calendar month of such service.
"(j) The 'average monthly compensation' shall be the average com-
pensation paid to an employee with respect to calendar months
included in his 'years of service', except (1) that with respect to service
prior to January 1, 1937, the monthly compensation shall be the aver-
age compensation paid to an employee with respect to calendar months
included in his years of service in the years 1924-1931, and (2) the
amount of compensation paid or attributable as paid to him with
respect to each month of service before September 1941 as a station
employee whose duties consisted of or included the carrying of pas-
sengers' hand baggage and otherwise assisting passengers at passenger
stations and whose remuneration for service to the employer was, in
whole or in substantial part, in the forms of tips, shall be the
monthly average of the compensation paid to him as a station employee
in his months of service in the period September 1940 through August
1941 Provided, however, That where service in the period 1924
through 1931 in the one case, or in the period September 1940 through
August 1941 in the other case, is, in the judgment of the Board, insuffi-
cient to constitute a fair and equitable basis for determing the amount
of compensation paid or attributable as paid to him in each month of
service before 1937, or September 1941, respectively, the Board shall
determine the amount of such compensation for each such month in
such manner as in its judgment shall be fair and equitable. In com-
puting the monthly compensation, no part of any month's compensa-
tion in excess of $300 for any month before July 1, 1954, or in excess
of $350 for any month after June 30, 1954, and before June 1, 1959, or
in excess of $400 for any month after May 31, 1959, and before Novem-
ber 1, 1963, or in excess of $450 for any month after October 31, 1963,
and before October 1, 1965, or in excess of (i) $450, or (ii) an amount
equal to one-twelfth of the current maximum annual taxable 'wages' as
H. R. 15301-22
defined in section 3121 of the Internal Revenue Code of 1954, whichever
is greater, for any month after September 30, 1965, shall be recognized.
If the employee earned compensation in service after June 30, 1937, and
after the last day of the calendar year in which he attained age sixty-
five, such compensation and service shall be disregarded in computing
the average monthly compensation if the result of taking such compen-
sation into account in such computation would be to diminish his
annuity. If the 'average monthly compensation' computed under this
subsection is not a multiple of $1, it shall be rounded to the next lower
multiple of $1. Where an employee claims credit for months of service
rendered within two years prior to his retirement from the service of an
employer, with respect to which the employer's return pursuant to sec-
tion 9 of this Act has not been entered on the records of the Board
before the employee's annuity could otherwise be certified for payment,
the Board may, in its discretion (subject to subsequent adjustment at
the request of the employee) include such months in the computation of
the annuity without further verification and may consider the com-
pensation for such months to be the average of the compensation for
months in the last period for which the employer has filed a return of
the compensation of such employee and such return has been entered
on the records of the Board.
"(k) The annuity of an individual who shall have been an employee
representative shall be determined in the same manner and with the
same effect as if the employee organization by which the shall have been
employed were an employer.
(1) In cases where an annuity awarded under paragraph (iii) of
section 2(a) (1) or under section 2(c) (2) of this Act is increased either
by a change in the law or by a recomputation, the reduction for the
increase in the anunity shall be determined separately and the period
with respect to which the reduction applies shall be determined as if
such increase were a separate annuity payable for and after the first
month for which such increase is effective.
"(m) The annuity of any individual under subsection (a) of this
section for any month shall be reduced, but not below zero, by the
amount of any monthly benefit payable to that individual for that
month under title II of the Social Security Act.
"COMPUTATION OF SPOUSE AND SURVIVOR ANNUITIES
"SEC. 4. (a) (1) The annuity of a spouse of an individual under sec-
tion 2(c) of this Act shall be in an amount equal to the amount (before
any reduction on account of age and before any deductions on account
of work) of the wife's insurance benefit or the husband's insurance
benefit to which such spouse would have been entitled under the Social
Security Act if such individual's service as an employee after Decem-
ber 31, 1936, had been included in the term 'employment' as defined in
that Act.
(2) For purposes of this subsection, spouses entitled to an annuity
under clause (B) of paragraph (ii) of section (c) (1) of this Act
shall be deemed to have attained age 65.
"(b) The amount of the annuity of a spouse of an individual
provided under subsection (a) of this section shall be increased
by an amount equal to 50 per centum of that portion of the indi-
vidual's annuity as is computed under subsections (b), (c), and (d)
of section 3 of this Act: Provided, however, That if the spouse is
entitled to an annuity amount provided by subsection (e) (1) or (e)
(2) of this section, the amount of such spouse's annuity provided by
the preceding provisions of this subsection shall be reduced by the
amount by which the amount computed in accordance with the
H. R. 15301-23
provisions of clause (C) of subsection (e) (1) or (e) (2) of this
section was increased by the Social Security Amendments of 1965,
1967, and 1969, disregarding (A) the amount of any such increase
resulting from the Social Security Amendments of 1967 equal to,
or less than, the excess of $5 over 5.8 per centum of the lesser of (i)
the amount computed under clause (C) of subsection (e) (1) or
(e) (2) of this section before any increases derived from legislation
enacted after the Social Security Amendments of 1967 or (ii) the
amount of the spouse's annuity to which such spouse would have been
entitled under section 2(e) of the Railroad Retirement Act of 1937,
without regard to section (a) (2) of that Act or to increases derived
from legislation enacted after 1968 and before any reduction on
account of age, on the basis of the individual's compensation and years
of service prior to January 1, 1975, and (B) the amount of any such
increase resulting from the Social Security Amendments of 1969 equal
to, or less than, $5: Provided further, That if the spouse is entitled
to an annuity under section 2(a) (1) of this Act, the amount of the
annuity of such spouse under this subsection shall, subject to the third
proviso of this subsection, be increased by an amount equal to the
amount by which the amount of the annuity of such spouse provided
under subsection (a) of this section was reduced by reason of the
provisions of subsection (i) (2) of this section: And provided fur-
ther, That if the total of (A) the amount of the spouse's annuity
provided under subsection (a) of this section (before any reduction
due to such spouse's entitlement to a wife's or husband's insurance
benefit under the Social Security Act), or, in the case of a spouse
entitled to an annuity under section 2(a) (1) of this Act or to an old-
age insurance benefit or a disability insurance benefit under section
202 or 223 of the Social Security Act, the amount to which such spouse
would be entitled under subsection (a) if she or he were not entitled
to an annuity under section 2(a) (1) of this Act or to an old-age insur-
ance benefit or a disability insurance benefit under section 202 or 223
of the Social Security Act, plus (B) the amount of her or his annuity
under this subsection would, with respect to any month, before any
reductions on account of age, exceed 110 per centum of an amount
equal to the maximum amount which could be paid to anyone, with
respect to such month, as a wife's insurance benefit under section
202(b) of the Social Security Act, the amount of the annuity of such
spouse under this subsection shall be reduced until the total of such
annuity amounts equals 110 per centum of such amount. The Board
shall have the authority to approximate the amount of any reduction
prescribed by the first proviso of this subsection.
"(c) If (A) the total amount of the annuity of a spouse of an
individual as computed under the preceding subsections of this section
as of the date on which the annuity of such individual under section
(a) (1) of this Act began to accrue (before any reduction due to such
spouse's entitlement to a wife's or husband's insurance benefit under
the Social Security Act) plus (B) the total amount of the annuity and
supplemental annuity of the individual (before any reduction due
to such individual's entitlement to a monthly insurance benefit under
the Social Security Act) subject to the provisions of section 3(f) (1)
of this Act would, before any reductions in the amounts specified in
clauses (A) and (B) on account of age and disregarding any increases
in such amounts which become effective after the date on which the
individual's annuity under section 2(a) (1) of this Act began to
accrue, exceed the amount determined under clauses (A) and (B) of
section 3(f) (1) of this Act, the portion of the annuity of such spouse
determined under subsection (b) of this section as of the date on
which the individual's annuity under section 2(a) (1) began to accrue
H. R. 15301-24
shall be reduced until the sum of the amounts specified in clauses (A)
and (B) of this subsection equals the amount determined under clauses
(A) and (B) of section 3 (f) (1) or until such amount under subsection
(b) is reduced to zero, whichever occurs first. If, after such amount
under subsection (b) is reduced to zero, the sum of the remaining
amounts specified in clauses (A) and (B) of this subsection still
exceeds the amount determined under clauses (A) and (B) of section
3(f) (1), the supplemental annuity of the individual first, and then,
if necessary, the annuity amount of the individual computed under
subsections (b), (c), and (d) of section 3 as of the date on which
the individual's annuity under section 2(a) (1) began to accrue, shall
be reduced until the amounts specified in clauses (A) and (B) of this
subsection equals the amount determined under clauses (A) and (B)
of section 3(f) (1) or until such supplemental annuity and such
annuity amount are reduced to zero, whichever occurs first. Notwith-
standing the preceding provisions of this subsection, the provisions
of this subsection shall not operate to reduce the total of the amounts
specified in clauses (A) and (B) of this subsection below $1,200.
"(d) That portion of the annuity of the spouse of an individual
as is determined under subsections (b) and (c) of this section shall
be increased by the same percentage, or percentages, as the individual's
annuity is, or has been, increased pursuant to the provisions of section
3(g) of this Act.
(e) (1) The amount of the annuity of the spouse of an individual
determined under subsections (a) and (b) of this section, if (A) such
individual will have (i) rendered service as an employee to an employ-
er, or as an employee representative, during the calendar year
1974, or (ii) had a current connection with the railroad industry on
December 31, 1974, or at the time his annuity under section 2(a) (1)
of this Act began to accrue, or (iii) completed twenty-five years of
service prior to January 1, 1975, and (B) such individual will have
completed ten years of service prior to January 1, 1975, and such spouse
will have been permanently insured under the Social Security Act on
December 31, 1974, shall be increased by an amount equal to the smaller
of (C) the primary insurance amount to which such spouse would
have been entitled, upon attaining age 65, under the provisions of the
Social Security Act as in effect on December 31, 1974, on the basis of
her or his wages and self-employment income derived from employ-
ment and self-employment under that Act prior to January 1, 1975,
or (D) the wife's or husband's insurance benefit to which such spouse
would have been entitled, upon attaining age 65, under the provisions
of the Social Security Act as in effect on December 31, 1974, if such
individual's service as an employee after December 31, 1936, and prior
to January 1, 1975, were included in the term 'employment' as defined
in that Act, if such individual had no wages or self-employment income
under the Act other than wages derived from such service as an
employee, and if such spouse were entitled to no other benefit under
that Act: Provided, however, That the increase under the provisions
of this subdivision shall not be less than 50 per centum of the portion
of the annuity, if any, of such individual determined under the provi-
sions of section 3 (h) (1) of this Act prior to any increases under the
provisions of section 3 (h) (5) of this Act.
"(2) The amount of the annuity of the spouse of an individual
determined under subsections (a) and (b) of this section, if (A)
such individual will not have met the conditions set forth in subclause
(i), (ii), or (iii) of clause (A) of subdivision (1) of this subsection,
but (B) such individual will have completed ten years of service prior
to January 1, 1975, and such spouse will have been permanently insured
under the Social Security Act as of December 31 of the calendar
LIBRARY
FORU
H. R. 15301-25
,
year prior to 1975 in which such individual last rendered service as an
employee, shall be increased by an amount equal to the smaller of
(C) the primary insurance amount to which such spouse would have
been entitled, upon attaining age 65, under the provisions of the Social
Security Act as in effect on December 31, 1974, on the basis of his
or her wages and self-employment income derived from employment
and self-employment under that Act as of December 31 of the calen-
dar year prior to 1975 in which such individual last rendered service
as an employee or (D) the wife's or husband's insurance benefit to
which such spouse would have been entitled, upon attaining age 65,
under the provisions of the Social Security Act as in effect on Decem-
ber 31, 1974, if such individual's service as an employee after Decem-
ber 31, 1936, and prior to January 1, 1975, were included in the term
'employment' as defined in that Act, if such individual had no wages
or self-employment income under that Act other than wages derived
from such service as an employee, and if such spouse were entitled to
no other benefit under that Act: Provided, however, That the increase
under the provisions of this subdivision shall not be less than 50 per
centum of the portion of the annuity, if any, of such individual deter-
mined under the provisions of section 3(h) (2) of this Act prior to any
increases under the provisions of section 3(h) (5) of this Act.
"(3) The amount of the annuity of the spouse of an individual
determined under subsections (a) and (b) of this section, if (A) such
individual is entitled to an amount determined under the provisions of
section (h) (1) or 3(h) (2) of this Act and (B) such spouse is not
entitled to an amount determined under the provisions of subdivision
(1) or (2) of this subsection, shall be increased by an amount equal
to 50 per centum of the portion of the annuity of such individual deter-
mined under the provisions of section 3(h) (1) or 3(h) (2) of this
Act prior to any increases under the provisions of section 3(h) (5) of
this Act.
(4) The amount determined under the provisions of subdivision
(1), (2), or (3) of this subsection shall be increased by the same per-
centage or percentages, as wife's and husband's insurance benefits
under section 202 of the Social Security Act are increased, or would
have been increased had there been no general benefit increases under
the Social Security Act, pursuant to the automatic cost-of-living pro-
visions of section 215(i) of that Act, during the period from January
1, 1975, to the date on which the individual's annuity under section
2(a) (1) of this Act began to accrue.
(f) (1) The annuity of a survivor of a deceased employee under
section 2(d) of this Act shall be in an amount equal to the amount
(before any deductions on account of work) of the widow's insurance
benefit, widower's insurance benefit, mother's insurance benefit, par-
ent's insurance benefit, or child's insurance benefit, whichever is appli-
cable, to which he or she would have been entitled under the Social
Security Act if such deceased employee's service as an employee
after December 31, 1936, had been included in the term 'employment'
as defined in that Act.
"(2) For purposes of this subsection-
"(i) a widow or widower or a parent who is entitled to an
annuity based on age under section 2(d) (1) of this Act and who
has not attained age 62 shall be deemed to be age 62: Provided,
however, That the provisions of this paragraph shall not apply
in the case of a widow or widower who was entitled to an annuity
under section 2(d) (1) on the basis of disability for the month
before the month in which he or she attained age 60, and
(ii) a widow or widower or a child who is entitled to an
annuity under section 2(d) (1) of this Act on the basis of dis-
ability shall be deemed to be entitled to a widow's insurance
H. R. 15301-26
benefit, a widower's insurance benefit, or a child's insurance benefit
under the Social Security Act on the basis of disability.
"(g) The annuity of a survivor of a deceased employee determined
under subsection (f) of this section shall, with respect to any month,
be increased by an amount equal to 30 per centum of the amount of the
annuity (before any deductions on account of work) to which such
survivor is entitled for such month under the provisions of subsection
(f) of this section, or to which such survivor would have been entitled
for such month under such subsection if such survivor were entitled to
no other monthly benefit under section 2 of this Act or under the Social
Security Act: Provided, however, That, if a widow or widower of a
deceased employee is not entitled to an annuity under section 2(a) (1)
of this Act or to an old-age insurance benefit or a disability insurance
benefit under the Social Security Act, the amount of the annuity to
which such widow or widower is entitled under this subsection shall
not be less than an amount which would cause the total of the annuity
amounts to which such widow or widower is entitled (before any
deductions on account of work) under this subsection and subsection
(f) of this section to equal the total of the annuity amounts to which
such widow or widower was entitled (or would have been entitled
except for the provisions of sections 2(e) and 2(f) of this Act) as a
spouse under subsections (a) and (b) of this section (after any reduc-
tion on account of age) in the month preceding the employee's death
Provided further, That, if a widow or widower of a deceased employee
is entitled to an annuity under section 2(a) (1) of this Act or to an old-
age insurance benefit or a disability insurance benefit under the Social
Security Act, the amount of the annuity to which such widow or
widower is entitled under this subsection shall not be less than an
amount which would cause (A) the total of the annuity amounts to
which such widow or widower is entitled (after any reductions pur-
suant to section 202(k) or 202(q) of the Social Security Act or subsec-
tion (i) (2) of this section but before any deductions on account of
work) under this subsection and subsection (f) of this section to equal
(B) (i) the total of the.annuity amounts, if any, to which such widow
or widower was entitled (or would have been entitled except for the
provisions of sections 2(e) and 2(f) of this Act) as a spouse under
subsections (a) and (b) of this section (after any reduction on account
of age) in the month preceding the employee's death less (ii), if such
widow or widower is entitled to an old-age insurance benefit or a dis-
ability insurance benefit under the Social Security Act but was not
entitled to such a benefit in the month preceding the employee's death,
the amount by which the annuity amount payable under subsection (a)
of this section to such widow or widower as a spouse in the month
preceding the employee's death would have been reduced by reason of
section 202 (k) or 202(q) of the Social Security Act if such widow or
widower had been entitled to an old-age insurance benefit or a dis-
ability insurance benefit under the Social Security Act in the month
preceding the employee's death in an amount equal to the amount of
such benefit at the time such benefit first began to accrue to such widow
or widower.
(h) (1) The amount of the annuity of the widow or widower of a
deceased employee determined under subsections (f) and (g) of this
section, if such deceased employee will have completed ten years of
service prior to January 1, 1975, and such widow or widower will have
been permanently insured under the Social Security Act on December
31, 1974, shall be increased by an amount equal to the amount, if any,
by which (A) the sum of (i) the widow's or widower's insurance
annuity to which such widow or widower would have been entitled,
upon attaining age 65, under section (a) of the Railroad Retirement
H. R. 15301-27
Act of 1937 as in effect on December 31, 1974 (without regard to the
proviso of that section or the first proviso of section 3 (e) of that Act),
on the basis of the deceased employee's remuneration and service prior
to January 1, 1975, and (ii) the primary insurance amount to which
such widow or widower would have been entitled, upon attaining age
65, under the provisions of the Social Security Act as in effect on
December 31, 1974, on the basis of her or his wages and self-employ-
ment income derived from employment and self-employment under
that Act prior to January 1, 1975, exceeds (B) 130 per centum of the
amount of the widow's or widower's insurance benefit to which such
widow or widower would have been entitled, upon attaining age 65,
under the provisions of the Social Security Act as in effect on Decem-
ber 31, 1974, on the basis of the deceased employee's wages and self-
employment income derived from employment and self-employment
under that Act prior to January 1, 1975, and on the basis of compensa-
tion derived from service as an employee after December 31, 1936, and
before January 1, 1975, if the deceased employees' service as an
employee after December 31, 1936, and before January 1, 1975, had
been included in such employment and if such widow or widower were
entitled to no other monthly benefit under section 2 of this Act or under
the Social Security Act.
(2) The amount determined under the provisions of subdivision (1)
of this subsection shall be increased by the same percentage, or per-
centages, as widow's and widower's insurance benefits under section
202 of the Social Security Act are increased, or would have been
increased had there been no general benefit increase under the Social
Security Act, pursuant to the automatic cost-of-living provisions of
section 215(i) of that Act, during the period from January 1, 1975, to
the earlier of the date of the deceased employee's death or the date on
which the deceased employee's annuity under section 2(a) (1) of this
Act began to accrue.
"(i) (1) The annuity of any spouse under subsection (a) of this
section for any month shall be reduced, but not below zero, by the
amount of any wife's or husband's insurance benefit payable to such
spouse for that month under title II of the Social Security Act.
"(2) If a spouse entitled to an annuity under section 2(c) of this
Act or a survivor entitled to an annuity under section 2(d) of this Act
for any month is also entitled to an annuity under section 2(a) (1) of
this Act for such month, the annuity amount of such spouse deter-
mined under subsection (a) of this section or of such survivor under
subsection (f) of this section shall, after any reduction pursuant to
subdivision (1) of this subsection, be reduced by the amount of the
annuity of such spouse or such survivor determined under section 3 (a)
of this Act.
"ANNUITY BEGINNING AND ENDING DATES
"Sec. 5. (a) An annuity under section 2 of this Act shall begin with
the month in which eligibility therefor was otherwise acquired, but-
(i) not earlier than the date specified in the application there-
for;
(ii) not earlier than the first day of the twelfth month before
the month in which the application therefor was filed and
(iii) in the case of an applicant otherwise eligible for an
annuity under section 2(a) (1) or 2(c) not earlier than the date
following the last day of compensated service of the applicant.
"(b) An application for any payment under this Act shall be made
and filed in such manner and form as the Board may prescribe. An
application filed with the Board for an annuity under this Act shall,
unless the applicant specifies otherwise, be deemed to be an application
H. R. 15301-28
for any benefit to which such applicant may be entitled under this Act
or the Social Security Act. An individual who was entitled to an
annuity under paragraph (iv) or (v) of section 2(a) (1) of this Act for
the month preceding the month in which he attained the age of 65,
shall be deemed to have filed an application for an annuity under para-
graph (i) of section 2(a) (1) on the date on which he attained age 65,
and a widow or widower who was entitled to an annuity under section
2(d) (1) of this Act on the basis of disability for the month preceding
the month in which she or he attained age 60, shall be deemed to have
filed an application for an annuity under such section 2(d) (1) on the
basis of age on the date on which she or he attained age 60.
(c) (1) An individual's entitlement to an annuity under paragraph
(i), (ii), or (iii) of section 2(a) (1) or to a supplemental annuity under
section 2(b) shall end with the month preceding the month in which
he dies.
"(2) An individual's entitlement to an annuity under paragraph
(iv) or (v) of section 2(a) (1) shall end on (A) the last day of the
second month following the month in which he ceases to be disabled
as provided for purposes of such paragraphs, (B) the last day of the
month preceding the month in which he attains age 65 or (C) the last
day of the month preceding the month in which he dies, whichever
first occurs.
'(3) The entitlement of a spouse of an individual to an annuity
under section 2(c) shall end on the last day of the month preceding
the month in which (A) the spouse or the individual dies, (B) the
spouse and the individual are absolutely divorced, or (C) in the case
of a wife who does not satisfy the requirements of clause (ii) (A) or
(ii) (B) of section 2(c) (1) (other than a wife who is receiving such
annuity by reason of an election under section 2(c) (2)), such wife
no longer has in her care a child described in clause (ii) (C) of section
2(c) (1), whichever first occurs.
(4) The entitlement of a widow or widower of a deceased employee
to an annuity under paragraph (i) of section 2(d) (1) on the basis
of age shall end on (A) the last day of the month preceding the month
in which she or he dies or (B) the last day of the month preceding the
month in which she or he remarries after the employee's death, which-
ever first occurs.
"(5) The entitlement of a widow or widower of a deceased employee
to an annuity under paragraph (i) of section 2(d) (1) on the basis
of disability shall end on (A) the last day of the month preceding the
month in which she or he dies, (B) the last day of the month preceding
the month in which she or he remarries after the employee's death, (C)
the last day of the second month following the month in which she or
he ceases to be disabled as provided for purposes of such paragraph,
or (D) the last day of the month preceding the month in which she
or he attains age 60, whichever first occurs.
"(6) The entitlement of a widow of a deceased employee to an annu-
ity under paragraph (ii) of section 2(d) (1) shall end on (A) the last
day of the month preceding the month in which she dies, (B) the last
day of the month preceding the month in which she remarries after
the employee's death, or (C) the last day of the month preceding the
month in which she no longer has in her care a child described in
clause (B) of such paragraph (ii), whichever first occurs.
"(7) The entitlement of a child of a deceased employee to an annu-
ity under paragraph (iii) of section 2(d) (1) shall end on (A) the last
day of the month preceding the month in which he or she dies, (B)
the last day of the month preceding the month in which he or she
marries, (C) the last day of the month preceding the month in which
he or she attains age 18 and does not meet the qualifications set forth
H. R. 15301-29
in clause (B) or (C) of such paragraph (iii), (D) the last day of
the month preceding (i) the month during no part of which he or
she is a full-time student or (ii) the month in which he or she attains
age 22, and does not meet the qualifications set forth in clause (A)
or (C) of such paragraph (iii), or (E) the last day of the second
month following the month in which he or she ceases to be disabled
for purposes of such paragraph (iii) and does not meet the qualifica-
tions set forth in clause (A) or (B) of such paragraph (iii), which-
ever first occurs. A child whose entitlement to an annuity under
paragraph (iii) of section 2(d) (1) terminated by reason of clause (E)
of this subdivision because he or she ceased to be disabled and who
again becomes disabled as provided in clause (C) of such paragraph
(iii), may become reentitled to an annuity on the basis of such dis-
ability upon his or her application for such reentitlement. A child
whose entitlement to an annuity under paragraph (iii) of section
2(d) (1) terminated with the month preceding the month in which he
or she attained age 18, or with a subsequent month, may again become
entitled to such an annuity (providing no event to disqualify the child
has occurred) beginning with the first month thereafter in which
he or she meets the qualifications set forth in clause (B) or (C) of
such paragraph (iii), if he or she has filed an application for such
reentitlement.
"(8) The entitlement of a parent of a deceased employee to an
annuity under paragraph (iv) of section 2(d) (1) shall end on the
last day of the month preceding the month in which (A) such parent
dies or (B) such parent remarries after the employee's death, which-
ever first occurs.
"LUMP-SUM PAYMENTS
"SEC. 6. (a) (1) Annuities under section 2(a) (1) and supplemental
annuities under section 2(b) which will have become due an individ-
ual but will not have been paid at the time of such individual's death
shall be payable to the person, if any, who is determined by the Board
to be such individual's widow or widower and to have been living with
such individual at the time of such individual's death and who will not
have died before receiving payment of such annuities. If there be no
such widow or widower, such annuities shall be payable to any person
or persons, equitably entitled thereto, to the extent and in the propor-
tions that he or they shall have paid the expenses of burial of such indi-
vidual, and to the extent that he or they will not have been reimbursed
under subsection (b) of this section for having paid such expenses. If
there be no person or persons SO entitled, or if the total of such annui-
ties exceeds the amount payable under this subdivision to such person
or persons, such total, or the remainder thereof, as the case may be,
shall be paid to the children, grandchildren, parents, or brothers and
sisters of the deceased individual in the same manner as if such annui-
ties were a lump sum payable under subsection (c) (1) of this section.
(2) Annuities under section 2(d) which will have become due a
survivor of an employee but will not have been paid at the time of such
survivor's death shall be payable to the person, if any, who is deter-
mined by the Board to be such employee's widow or widower and to
have been living with such employee at the time of the employee's death
and who will not have died before receiving payment of such annuities.
If there be no such widow or widower, such annuities shall be payable
to the children, grandchildren, parents, or brothers and sisters of the
deceased employee in the same manner as if such unpaid annuities
were a lump sum payable under subsection (c) (1) of this section.
"(3) Annuities under section 2(c) which will have become due a
spouse of an individual but which will not have been paid at the time
H. R. 15301-30
of such spouse's death shall be payable to the individual from whose
employment such annuities derived and who will not have died before
receiving payment of such annuities. If there be no such individual,
such annuities shall be paid as provided in the last two sentences of sub-
division (1) of this subsection as if such annuities were annuities due
to an individual but unpaid at the time of such individual's death.
"(4) Applications for accrued and unpaid annuities provided for in
the preceding subdivisions of this subsection shall be filed prior to the
expiration of two years after the death of the person to whom such
annuities were originally due.
"(5) If there is no person to whom all or any part of the payments
described in subdivision (1), (2), or (3) can be made, such payment
or part thereof shall escheat to the credit of the Railroad Retirement
Account.
"(6) For the purposes of this subsection and subsection (c) of this
section, a widow or widower of an individual shall be deemed to have
been living with the individual at the time of the individual's death if
the applicable conditions set forth in section 216(h) (2) or (3) of the
Social Security Act, as in effect before 1957, are fulfilled.
"(7) In determining for purposes of this subsection and subsec-
tions (c) and (d) of this section whether an applicant is the widow,
widower, child, or parent of an employee as claimed, the rules set
forth in section 216 (h) of the Social Security Act shall be applied. In
determining for purposes of this subsection and subsections (c) and
(d) of this section whether an applicant is the grandchild, brother, or
sister of an employee as claimed, the Board shall apply such law as
would be applied in determining the devolution of intestate personal
property by the courts of the State in which such employee was domi-
ciled at the time of his death, or if such employee was not SO domi-
ciled in any State, by the courts of the District of Columbia. Applicants
who according to such law would have the same status relative to
taking personal property as a grandchild, brother, or sister shall be
deemed such.
(b) (1) Upon the death of an individual who will have completed
ten years of service prior to January 1, 1975, and will have had a cur-
rent connection with the railroad industry at the time of his death, a
lump-sum payment shall be made in accordance with the provisions of
section (f) (1) of the Railroad Retirement Act of 1937 as in effect on
December 31, 1974, in an amount, if any, which would have been pay-
able under such section 5(f) (1) on the basis of (A) the individual's
compensation after December 31, 1936, and prior to January 1, 1975,
and (B) the individual's wages (as defined in section 209 of the Social
Security Act) prior to January 1, 1975. Any lump sum payable under
this subdivision shall be in an amount computed as if the individual
had died on January 1, 1975.
"(2) Upon the death of an individual who will not have completed
ten years of service prior to January 1, 1975, but who (i) will have
completed ten years of service at the time of his death, (ii) will have
had a current connection with the railroad industry at the time of
his death, and (iii) will have died leaving no widow, widower, child,
or parent who would on proper application therefor be entitled to
receive an annuity under section 2(d) of this Act for the month in
which such death occurred, a lump-sum death payment shall be made
in accordance with the provisions of section 202(i) of the Social
Security Act in an amount equal to the amount which would have
been payable under such section 202(i) if such individual's service
as an employee after December 31, 1936, were included in the term
'employment' as defined in that Act. If a lump sum would be payable
to a widow or widower under this subdivision except for the fact that
a survivor will have been entitled to receive an annuity for the month
H. R. 15301-31
in which the individual will have died, but within one year after the
individual's death there will not have accrued to survivors of the
individual, by reason of his death, annuities which, after all deduc-
tions pursuant to sections 2(g) and 2(h) of this Act, are equal to
such lump sum, a payment equal to the amount by which such lump
sum exceeds such annuities SO accrued after such deductions shall
then nevertheless be made under this subdivision to the widow or
widower to whom a lump sum would have been payable under this
subdivision except for the fact that a monthly benefit under section
2(d) of this Act was payable for the month in which the individual
died, if such widow or widower will not have died before receiving
payment of such lump sum.
(c) (1) Whenever it shall appear, with respect to the death of an
employee, that no benefits, or no further benefits (other than benefits
payable to a widow, widower, or parent under either this Act or
the Social Security Act upon attaining the age of eligibility therefor
at a future date) will be payable under this Act or under the Social
Security Act, a lump sum in an amount computed under subdivision
(2) of this subsection shall be paid to such person or persons as the
deceased employee may have designated by a writing filed with the
Board prior to his or her death, or if there be no designation, to the
following person (or, if more than one, in equal shares to the persons)
whose relationship to the deceased employee will have been determined
by the Board and who will not have died before receiving payment
of the lump sum provided for in this subdivision-
"(i) the widow or widower of the deceased employee who was
living with such employee at the time of such employee's death; or
(ii) if there be no such widow or widower, to any child or
children of such employee; or
(iii) if there be no such widow, widower, or child, to any
grandchild or grandchildren of such employee; or
(iv) if there be no such widow, widower, child, or grandchild,
to any parent or parents of such employee; or
(v) if there be no such widow, widower, child, grandchild,
or parent, to any brother or sister of such employee; or
(vi) if there be no such widow, widower, child, grandchild,
parent, brother, or sister, to the estate of such employee:
Provided, however, That if the employee is survived by a widow,
widower, or parent who may upon attaining the age of eligibility be
entitled to benefits under this Act or under the Social Security Act,
such lump sum shall not be paid unless such widow, widower, or parent
makes and files with the Board an irrevocable election, in such form
as the Board may prescribe, to have such lump sum be paid in lieu
of all benefits to which such widow, widower, or parent might other-
wise become entitled under this Act on the basis of the deceased
employee's compensation and years of service or under the Social Secu-
rity Act on the basis of the deceased employee's wages from (A)
employment with an employer as defined in section 1(a) of this Act or
(B) service as an employee representative as defined in section (c)
of this Act. Any election made and filed by a widow, widower, or
parent pursuant to this subdivision shall be legally effective according
to its terms.
(2) The lump sum provided under subdivision (1) of this sub-
section shall be in an amount equal to (A) the sum of 4 per centum
of the deceased employee's compensation paid after December 31, 1936,
and prior to January 1, 1947, plus 7 per centum of such employee's
compensation paid after December 31, 1946, and before January 1,
1959, plus 71/2 per centum of such employee's compensation paid after
December 31, 1958, and before January 1, 1962, plus 8 per centum of
LIBRARY
FORD
H. R. 15301-32
such employee's compensation paid after December 31, 1961, and
before January 1, 1966, plus an amount equal to the total of all
employee taxes payable by such employee after December 31, 1965,
and before January 1, 1975, under the provisions of section 3201 of
the Railroad Retirement Tax Act (excluding, for this purpose, the
amount of the employee tax attributable to that portion of the tax rate
derived from section 3101 (b) of the Internal Revenue Code of 1954),
plus one-half of 1 per centum of the compensation on which such taxes
were payable, deeming the compensation attributable to creditable
military service after June 30, 1963, and before January 1, 1975, to
be taxable compensation, and one-half of the taxes payable by an
employee representative under section 3211 of the Railroad Retirement
Tax Act to be employee taxes under section 3201 of such Act, minus
(B) the sum of all benefits paid to such employee, and to others deriv-
ing from such employee, during his or her life, or to others by rea-
son of his or her death, under this Act, the Railroad Retirement Act
of 1937, or the Social Security Act (excluding, for this purpose, pay-
ments to providers of services under section (d) of this Act or section
21 of the Railroad Retirement Act of 1937, any amounts by which
that portion of the annuities provided the employee under section (a)
of this Act or his spouse under section 4(a) of this Act were increased
by reason of the employee's wages and self-employment income
derived from employment and self-employment under the Social Secu-
rity Act, that portion of the annuities provided the employee under
section 3(h) of this Act or his spouse under section 4(e) of this Act,
and so much of the benefits paid to the employee and to others deriv-
ing from him or her under the Social Security Act during his or her
lifetime as would have been payable under that Act if such employee
had not rendered service as an employee as defined in section 1 (b) of
this Act). In computing compensation for purposes of this subdivision
there shall be excluded compensation in excess of $300 for any month
before July 1, 1954; compensation in excess of $350 for any month
after June 30, 1954, and before June 1, 1959; compensation in excess
of $400 for any month after May 31, 1959, and before November 1,
1963; compensation in excess of $450 for any month after October 31,
1963, and before October 1, 1965; and compensation in excess of (i)
$450 or (ii) an amount equal to one-twelfth of the current maximum
annual taxable 'wages' as defined in section 3121 of the Internal Reve-
nue Code of 1954, whichever is greater, for any month after Septem-
ber 30, 1965.
(d) (1) Every individual who will have completed ten years of
service at the time of his retirement or death, but does not meet the
qualifications for an annuity amount determined under the provisions
of section 3(h) (1) or 3(h) (2) of this Act, shall, at the time his
annuity under section 2(a) (1) begins to accrue, be entitled to a lump
sum in the amount provided under subdivision (2) of this subsection.
If an individual otherwise eligible for a lump sum under this section
dies before he becomes entitled to an annuity under section 2(a) (1) of
this Act, or before he receives payment of such lump sum, such lump
sum shall be payable to the person, if any, who is determined by the
Board to be such individual's widow or widower and who will not
have died before receiving payment of such lump sum. If there be no
such widow or widower, such lump sum shall be payable to the
children, grandchildren, parents, brothers and sisters, or the estate of
the deceased individual in the same manner as if such lump sum were
a lump sum payable under subsection (c) (1) of this section.
(2) The lump sum provided under subdivision (1) of this sub-
section shall be in an amount equal to the sum of (A) 1.5 per centum
of SO much of such individual's combined earnings for any calendar
H. R. 15301-33
year after 1950 and before 1954 as is in excess of $3,600, plus (B) 2 per
centum of SO much of such individual's combined earnings for any
calendar year after 1953 and before 1957 as is in excess of $4,200, plus
(C) 2.25 per centum of SO much of such individual's combined earn-
ings for any calendar year after 1956 and before 1959 as is in excess
of $4,200, plus (D) 2.5 per centum of SO much of such individual's
combined earnings for the calendar year 1959 as is in excess of $4,800,
plus (E) 3 per centum of SO much of such individual's combined
earnings for each of the calendar years 1960 and 1961 as is in excess
of $4,800, plus (F) 3.125 per centum of SO much of such individual's
combined earnings for the calendar year 1962 as is in excess of $4,800,
plus (G) 3.625 per centum of SO much of such individual's combined
earnings for any calendar year after 1962 and before 1966 as is in
excess of $5,400, plus (H) 4.2 per centum of SO much of such indi-
vidual's combined earnings for the calendar year 1966 as is in excess
of $6,600, plus (I) 4.4 per centum of SO much of such individual's
combined earnings for the calendar year 1967 as is in excess of $6,600,
plus (J) 3.8 per centum of SO much of such individual's combined
earnings for the calendar year 1968 as is in excess of $7,800, plus (K)
4.2 per centum of so much of such individual's combined earnings for
each of the calendar years 1969 and 1970 as is in excess of $7,800, plus
(L) 4.6 per centum of SO much of such individual's combined earnings
for the calendar year 1971 as is in excess of $7,800, plus (M) 4.6 per
centum of SO much of such individual's combined earnings for the
calendar year 1972 as is in excess of $9,000, plus (N) 4.85 per centum
of SO much of such individual's combined earnings for the calendar
year 1973 as is in excess of $10,800, plus (O) 4.95 per centum of SO
much of such individual's combined earnings for the calendar year
1974 as is in excess of $13,200. For purposes of this subsection, the
term 'combined earnings' shall include 'compensation' as defined in
section (h) of the Railroad Retirement Act of 1937, 'wages' as defined
in section 209 of the Social Security Act, and 'self-employment'
income as defined in section 211 (b) of the Social Security Act.
"POWERS AND DUTIES OF THE BOARD
"SEC. 7. (a) This Act shall be administered by the Railroad Retire-
ment Board established by the Railroad Retirement Act of 1937 as an
independent agency in the executive branch of the Government and
composed of three members appointed by the President, by and with
the advice and consent of the Senate. Each member shall hold office
for a term of five years, except that any member appointed to fill a
vacancy occurring prior to the expiration of the term for which his
predecessor was appointed shall be appointed for the remainder of
the term and any member holding office pursuant to appointment
under the Railroad Retirement Act of 1937 when this Act becomes
effective shall hold office until the term for which he was appointed
under such Railroad Retirement Act of 1937 expires. One member
shall be appointed from recommendations made by representatives
of the employees and one member shall be appointed from recom-
mendations made by representatives of employers as defined in para-
graph (i) of section 1(a) (1). of this Act, in both cases as the President
shall direct, SO as to provide representation on the Board satisfactory
to the largest number, respectively, of employees and employers con-
cerned. One member, who shall be the chairman of the Board, shall be
appointed without recommendation by either employers or employees
and shall not be in the employment of or be pecuniarily or otherwise
interested in any employer or organization of employees. Vacancies
in the Board shall not impair the powers or affect the duties of the
H. R. 15301-34
Board or of the remaining members of the Board, of whom a majority
of those in office shall constitute a quorum for the transaction of busi-
ness. Upon the expiration of his term of office a member shall continue
to serve until his successor is appointed and shall have qualified.
'(b) (1) The Board shall have and exercise all the duties and powers
necessary to administer this Act. The Board shall take such steps as
may be necessary to enforce such Act and make awards and certify
payments. Decisions by the Board upon issues of law and fact relating
to annuities or death benefits shall not be subject to review by any
other administrative or accounting officer, agent, or employee of the
United States.
(2) In the case of-
(A) an individual who will have completed ten years of serv-
ice creditable under this Act,
(B) the wife or husband of such an individual,
(C) any survivor of such an individual if such survivor is
entitled, or could upon application become entitled, to an annuity
under section 2 of this Act, and
"(D) any other person entitled to benefits under title II of the
Social Security Act on the basis of the wages and self-employ-
ment income of such an individual (except a survivor of such an
individual where such individual did not have a current connec-
tion with the railroad industry at the time of his death),
the Board shall provide for the payment on behalf of the Managing
Trustee of the Federal Old-Age and Survivors Insurance Trust Fund
and the Federal Disability Insurance Trust Fund of monthly benefits
payable under title II of the Social Security Act which are certified
by the Secretary to it for payment under the provisions of title II of
the Social Security Act.
'(3) If the Board finds that an applicant is entitled to an annuity
or death benefit under the provisions of this Act then the Board shall
make an award fixing the amount of the annuity or benefit, as the case
may be, and shall certify the payment thereof as hereinafter pro-
vided; otherwise the application shall be denied. For purposes of this
section, the Board shall have and exercise such of the powers, duties
and remedies provided in subsections (a), (b), (d), and (n) of section
12 of the Railroad Unemployment Insurance Act as are not incon-
sistent with the express provisions of this Act. The Board is author-
ized to delegate to any member, officer, or employee of the Board any
of the powers conferred upon the Board by the Act, excluding only
the power to prescribe rules and regulations, including the power to
make decisions on applications for annuities or other benefits: Pro-
vided, however, That any person aggrieved by a decision on his appli-
cation for an annuity or other benefit shall have the right to appeal
to the Board. Notice of a decision of the Board, or of an employee
thereof, shall be communicated to the applicant in writing within
thirty days after such decision shall have been made.
"(4) The Board shall from time to time certify to the Secretary of
the Treasury the name and address of each individual entitled to
receive a payment, the amount of such payment, and the time at which
it should be made, and the Secretary of the Treasury through the
Division of Disbursements of the Treasury Department, and prior to
audit by the General Accounting Office, shall make payment in accord-
ance with the certification by the Board.
"(5) The Board shall establish and promulgate rules and regula-
tions to provide for the adjustment of all controversial matters arising
in the administration of this Act. All rules, regulations, or decisions
of the Board shall require the approval of at least two members, and
they shall be entered upon the records of the Board, which shall be a
public record.
H. R. 15301-35
(6) The Board shall gather, keep, compile, and publish in conven-
ient form such records and data as may be necessary to assure proper
administration of this Act, including subdivision (2) of this subsec-
tion. The Board shall have power to require all employers and
employees and any officer, board, commission, or other agency of the
United States to furnish such information and records as shall be
necessary for the administration of this Act, including subdivision (2)
of this subsection. The several district courts of the United States and
the District Court of the United States for the District of Columbia
shall have jurisdiction upon suit by the Board to compel obedience
to any order of the Board issued pursuant to this section. The orders,
writs, and processes of the District Court of the United States for the
District of Columbia in such suits may run and be served anywhere in
the United States. Witnesses summoned before the Board shall be paid
the same fees and mileage that are paid witnesses in the district courts
of the United States. The Board shall make an annual report to the
President of the United States to be submitted to Congress.
(7) The Secretary of Health, Education, and Welfare shall furnish
the Board certified reports of wages, self-employment income, and
periods of service and of other records in his possession, or which he
may secure, pertinent to the administration of this Act. The Board shall
furnish the Secretary of Health, Education, and Welfare certified
reports of records of compensation and periods of service reported to
it pursuant to section 9 of this Act, of determinations under section 2
of this Act, and of other records in its possession, or which it may
secure, pertinent to subsection (c) of this section or to the administra-
tion of the Social Security Act as affected by section 18 of this Act.
Such certified reports shall be conclusive in adjudication as to the mat-
ters covered therein: Provided, however, That if the Board or the
Secretary of Health, Education, and Welfare receives evidence incon-
sistent with a certified report and the application involved is still in
course of adjudication or otherwise open for such evidence such recerti-
fication of such report shall be made as, in the judgment of the Board
or the Secretary of Health, Education, and Welfare, whichever made
the original certification, the evidence warrants. Such recertification
and any subsequent recertification shall be treated in the same manner
and be subject to the same conditions as an original certification.
"(8) Any department or agency of the United States maintaining
records of military service, at the request of the Board, shall certify
to the Board, with respect to any individual, the number of months
of military service which such department or agency finds the indi-
vidual to have had during any period or periods with respect to
which the Board's request is made, the date and manner of entry into
such military service, and the conditions under which such service
was continued. Any department or agency of the United States which
is authorized to make awards of pensions, disability compensation, or
any other gratuitous benefits or allowances payable, on a periodic
basis or otherwise, under any other Act of Congress on the basis of
military service, at the request of the Board, shall certify to the Board,
with respect to any individual, the calendar months for all or part of
which any such pension, compensation, benefit, or allowance is pay-
able to, or with respect to, the individual, the amounts of any such
pension, compensation, benefit, or allowance, and the military service
on which such pension, compensation, benefit, or allowance is based.
Any certification made pursuant to the provisions of this subdivision
shall be conclusive on the Board: Provided, however, That if evidence
inconsistent with any such certification is submitted, and the claim
is in the course of adjudication or is otherwise open for such evidence,
the Board shall refer such evidence to the department or agency which
H. R. 15301-36
made the original certification and such department or agency shall
make such recertification as in its judgment the evidence warrants.
Such recertification, and any subsequent recertification, shall be con-
clusive, made in the same manner, and subject to the same conditions
asan original certification.
"(9) The Board shall maintain such offices, provide such equipment,
furnishings, supplies, services, and facilities, and employ such individ-
uals and provide for their compensation and expenses as may be
necessary for the proper discharge of its functions. All positions to
which such individuals are appointed, except one administrative assist-
ant to each member of the Board, shall be in and under the competi-
tive civil service and shall not be removed or excepted therefrom.
In the employment of such individuals under the civil service laws and
rules the Board shall give preference over all others to individuals who
have had experience in railroad service, if, in the judgment of the
Board, they possess the qualifications necessary for the proper dis-
charge of the duties of the positions to which they are to be appointed.
For purposes of its administration of this Act or the Railroad Unem-
ployment Insurance Act, or both, the Board may place, without regard
to the numerical limitations contained in section 505 of the Classifica-
tion Act of 1949, as amended, four positions in grade GS-16 of the
General Schedule established by that Act, four positions in grade
GS-17 of such schedule, and one position in grade GS-18 of such
schedule.
"(c) (1) Benefit payments determined by the Board to be payable
under this Act shall be made from the Railroad Retirement Account,
except that payments of supplemental annuities under section 2(b)
of this Act shall be made from the Railroad Retirement Supplemental
Account.
"(2) At the close of the fiscal year ending June 30, 1975, and each
fiscal year thereafter, the Board and the Secretary of Health, Educa-
tion, and Welfare shall determine the amounts, if any, which if added
to or subtracted from the Federal Old-Age and Survivors Insurance
Trust Fund, the Federal Disability Insurance Trust Fund, and the
Federal Hospital Insurance Trust Fund would place each such Trust
Fund in the same position in which it would have been if (A) service
as an employee after December 31, 1936, had been included in the term
'employment' as defined in the Social Security Act and in the Federal
Insurance Contributions Act and (B) this Act had not been enacted.
Such determination with respect to each such Trust Fund shall be
made no later than June 15 following the close of the fiscal year. If,
pursuant to any such determination, any amount is to be added to
any such Trust Fund, the Board shall, within ten days after the
determination, certify such amount to the Secretary of the Treasury
for transfer from the Railroad Retirement Account to such Trust
Fund. If, pursuant to any such determination, any amount is to be
subtracted from any such Trust Fund, the Secretary of Health, Edu-
cation, and Welfare shall, within ten days after the determination,
certify such amount to the Secretary of the Treasury for transfer from
such Trust Fund to the Railroad Retirement Account. Any amount SO
certified shall further include interest (at the rate determined in sub-
division (3) for the fiscal year under consideration) payable from the
close of such fiscal year until the date of certification. The Secretary
of the Treasury is authorized and directed to transfer to the Railroad
Retirement Account from the Federal Old-Age and Survivors Insur-
ance Trust Fund, the Federal Disability Insurance Trust Fund, or
the Federal Hospital Insurance Trust Fund or to any such Trust Fund
from the Railroad Retirement Account, as the case may be, such
amounts as, from time to time, may be determined by the Board and
FORD
LIBRARY
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H. R. 15301-37
the Secretary of Health, Education, and Welfare pursuant to the
provisions of this subdivision and certified by the Board or the Secre-
tary of Health, Education, and Welfare for transfer from any such
Trust Fund or from the Railroad Retirement Account.
"(3) For purposes of subdivision (2), for any fiscal year, the rate
of interest to be used shall be equal to the average rate of interest, com-
puted as of May 31 preceding the close of such fiscal year, borne by all
interest-bearing obligations of the United States then forming a part
of the public debt; except that where such average rate is not a multiple
of one-eighth of 1 per centum, the rate of interest shall be the multiple
of one-eighth of 1 per centum next lower than such average rate.
"(d) (1) The Board shall, for purposes of this subsection, have the
same authority to determine the rights of individuals described in sub-
division (2) to have payments made on their behalf for hospital insur-
ance benefits consisting of inpatient hospital services, posthospital
extended care services, posthospital home health services, and out-
patient hospital diagnostic services (all hereinafter referred to as
'services') under section 226, and parts A and C of title XVIII, of the
Social Security Act as the Secretary of Health, Education, and Wel-
fare has under such section and such parts with respect to individuals
to whom such sections and such parts apply. For purposes of section 8,
a determination with respect to the rights of an individual under this
subsection shall, except in the case of a provider of services, be con-
sidered to be a decision with respect to an annuity.
(2) Except as otherwise provided in this subsection, every person
who-
'(i) has attained age 65 and (A) is entitled to an annuity under
this Act or (B) would be entitled to such an annuity had he ceased
compensated service and, in the case of a spouse, had such spouse's
husband or wife ceased compensated service; or
(ii) has not attained age 65 and (A) has been entitled to an
annuity under section 2 of this Act, or under the Railroad Retire-
ment Act of 1937 and section 2 of this Act, or could have been
includible in the computation of an annuity under section 3 (f) (3)
of this Act, for not less than 24 consecutive months and (B) could
have been entitled for 24 consecutive calendar months, and could
currently be entitled, to monthly insurance benefits under section
223 of the Social Security Act or under section 202 of that Act on
the basis of disability if service as an employee after December 31,
1936, had been included in the term 'employment' as defined in that
Act and if an application for disability benefits had been filed,
shall be certified to the Secretary of Health, Education, and Welfare
as a qualified railroad retirement beneficiary under section 226 of the
Social Security Act.
'(3) If an individual entitled to an annuity under paragraph (iv) or
(v) of section 2(a) (1) of this Act would have been insured for dis-
ability insurance benefits as determined under section 223 (c) (1) of
the Social Security Act at the time such annuity began, he shall be
deemed, solely for purposes of paragraph (ii) of subdivision (2), to
be entitled to a disability insurance benefit under section 223 of the
Social Security Act for each month, and beginning with the first
month, in which he would meet the requirements for entitlement to
such a benefit, other than the requirement of being insured for dis-
ability insurance benefits, if service as an employee after December 31,
1936, had been included in the term 'employment' as defined in the
Social Security Act and if an application for disability benefits had
been filed.
"(4) The rights of individuals described in subdivision (2) of this
subsection to have payment made on their behalf for the services
H. R. 15301-38
referred to in subdivision (1) but provided in Canada shall be the
same as those of individuals to whom section 226 and part A of title
XVIII of the Social Security Act apply, and this subdivision shall be
administered by the Board as if the provisions of section 226 and part
A of title XVIII of the Social Security Act were applicable, as if refer-
ences to the Secretary of Health, Education, and Welfare were to the
Board, as if references to the Federal Hospital Insurance Trust Fund
were to the Railroad Retirement Account, as if references to the United
States or a State included Canada or a subdivision thereof, and as if
the provisions of sections 1862 (a) (4), 1863, 1864, 1867, 1868, 1869,
1874(b), and 1875 were not included in such title. The payments for
services herein provided for in Canada shall be made from the Rail-
road Retirement Account (in accordance with, and subject to, the
conditions applicable under section 7(b), in making payment of
other benefits) to the hospital, extended care facility, or home health
agency providing such services in Canada to individuals to whom sub-
division (2) of this subsection applies, but only to the extent that the
amount of payments for services otherwise hereunder provided for an
individual exceeds the amount payable for like services provided pur-
suant to the law in effect in the place in Canada where such services
are furnished. For the purposes of section 10 of this Act, any over-
payment under this subdivision shall be treated as if it were an over-
payment of an annuity.
(5) The Board and the Secretary of Health, Education, and Wel-
fare shall furnish each other with such information, records, and docu-
ments as may be considered necessary to the administration of this
subsection or section 226, and part A of title XVIII, of the Social
Security Act.
(e) The Board is authorized to accept on behalf of the United
States money gifts and bequests made unconditionally to the Rail-
road Retirement Account, to the Railroad Retirement Supplemental
Account, or to the Railroad Unemployment Insurance Account, or to
the Board, or any member, officer, or employee thereof, for the benefit
of such accounts or any activity financed through such accounts. Any
such gift accepted pursuant to the authority granted in this subsection
shall be deposited in the specific account designated by the donor or,
if the donor has made no such specific designation, in the Railroad
Retirement Account.
"COURT JURISDICTION
"SEC. 8. Decisions of the Board determining the rights or liabilities
of any person under this Act shall be subject to judicial review in the
same manner, subject to the same limitations, and all provisions of law
shall apply in the same manner as though the decision were a deter-
mination of corresponding rights or liabilities under the Railroad
Unemployment Insurance Act except that the time within which pro-
ceedings for the review of a decision with respect to an annuity,
supplemental annuity, or lump-sum benefit may be commenced shall
be one year after the decision will have been entered upon the records of
the Board and communicated to the claimant.
"RETURNS OF COMPENSATION
"SEC. 9. Employers shall file with the Board, in such manner and
form and at such times as the Board by rules and regulations may pre-
scribe, returns of compensation of employees, and, if the Board shall
SO require, shall furnish employees with statements of their compen-
sation as reported to the Board. The Board's record of the compensa-
H. R. 15301-39
tion SO returned shall be conclusive as to the amount of compensation
paid to an employee during each period covered by the return, and the
fact that the Board's records show that no return was made of the
compensation claimed to have been paid to an employee during a par-
ticular period shall be taken as conclusive that no compensation was
paid to such employee during that period, unless the error in the
amount of compensation returned in the one case, or the failure to
make return of the compensation in the other case, is called to the
attention of the Board within four years after the day on which return
of the compensation was required to be made.
"ERRONEOUS PAYMENTS
"SEC. 10. (a) If the Board finds that at any time more than the
correct amount of annuities or other benefits has been paid to any
individual under this Act, or payment has been made to an individual
not entitled thereto, recovery by adjustment in subsequent payments
to which such individual, or any other individual on the basis of the
same compensation, wages, or self-employment income, is entitled
under this Act, or the Railroad Unemployment Insurance Act may,
except as otherwise provided in this section, be made under regula-
tions prescribed by the Board. If the individual to whom more than
the correct amount has been paid dies before recovery is completed,
recovery may be made by setoff or adjustments, under regulations
prescribed by the Board, in subsequent payments due, under this
Act, or the Railroad Unemployment Insurance Act, to the estate of
such individual or to any person on the basis of the compensation,
wages, or self-employment income of such individual.
(b) Adjustments under this section may be made either by deduc-
tions from subsequent payments or, with respect to payments which
are to be made during a lifetime or lifetimes, by subtracting the total
amount of annuities or other benefits paid in excess of the proper
amount from the actuarial value, as determined by the Board, of such
payments to be made during a lifetime or lifetimes and recertify-
ing such payments on the basis of the reduced actuarial value. In
the latter case, recovery shall be deemed to have been completed upon
such recertification.
"(c) There shall be no recovery in any case in which more than
the correct amount of annuities or other benefits has been paid under
this Act to an individual or payment has been made to an individual
not entitled thereto who, in the judgment of the Board, is without
fault when, in the judgment of the Board, recovery would be con-
trary to the purpose of the Acts or would be against equity or good
conscience.
"(d) No certifying or disbursing officer shall be held liable for
any amount certified or paid by him in good faith to any person
where the recovery of such amount is waived under subsection (c)
of this section or has been begun but cannot be completed under sub-
section (a) of this section.
"WAIVER OF ANNUITIES
"SEC. 11. Any person awarded an annuity under this Act may
decline to accept all or any part of such annuity by a waiver signed
and filed with the Board. Such a waiver may be revoked in writing at
any time, but no payment of the annuity waived shall be made cover-
ing the period during which such waiver was in effect. Such a waiver
will have no effect on entitlement to, or the amount of, any other
annuity or benefit.
H. R. 15301-40
"INCOMPETENCE
"SEC. 12. (a) Every individual receiving or claiming benefits, or to
whom any right or privilege is extended, under this Act or any other
Act of Congress now or hereafter administered, in whole or in part,
by the Board shall be conclusively presumed to have been competent
until the date on which the Board receives written notice, in a form
and manner acceptable to the Board, that he is an incompetent, or
a minor, for whom a guardian or other person legally vested with the
care of his person or estate has been appointed: Provided, however,
That, regardless of the legal competency or incompetency of an indi-
vidual entitled to a benefit administered by the Board, the Board may,
if it finds the interest of such individual to be served thereby, recog-
nize actions by, and conduct transactions with, and make payments to,
such individual, or recognize actions by, and conduct transactions
with, and make payments to, a relative or some other person for such
individual's use and benefit.
"(b) Every guardian or other person legally vested with the care
of the person or estate of an incompetent or minor who is receiving
or claiming benefits, or to whom any right or privilege is extended,
under this Act or any other Act of Congress now or hereafter admin-
istered, in whole or in part, by the Board shall have power every-
where, in the manner and to the extent prescribed by the Board, but
subject to the provisions of the preceding subsection, to take any
action necessary or appropriate to perfect any right or exercise any
privilege of the incompetent or minor and to conduct all transactions
on his behalf under this or any other Act of Congress now or hereafter
administered, in whole or in part, by the Board. Any payment made
pursuant to the provisions of this section shall be a complete settle-
ment and satisfaction of any claim, right, or interest in and to such
payment.
"PENALTIES
"SEC. 13. (a) Any person who shall knowingly fail or refuse to
make any report or furnish any information required by the Board
in the administration of this Act, including the provisions of section
7(b) (2) thereof, or who shall knowingly make or cause to be made
any false or fraudulent statement or report when a statement or report
is required to be made for the purpose of this Act, or who shall
knowingly make or aid in making any false or fraudulent statement
or claim for the purpose of causing an award or payment to be made,
shall be punished by a fine of not more than $10,000 or by imprisonment
not exceeding one year, or both.
"(b) All fines and penalties imposed by a court pursuant to this
Act shall be paid to the court and be remitted from time to time
by order of the judge to the Treasury of the United States to be
credited to the Railroad Retirement Account.
"EXEMPTION FROM LEGAL PROCESS
"SEC. 14. Notwithstanding any other law of the United States, or
of any State, territory, or the District of Columbia, no annuity or
supplemental annuity shall be assignable or be subject to any tax or
to garnishment, attachment, or other legal process under any circum-
stances whatsoever, nor shall the payment thereof be anticipated:
Provided, however, That the provisions of this section shall not oper-
ate to exclude the amount of any supplemental annuity paid to an
individual under section 2(b) of this Act from income taxable pur-
suant to the Federal income tax provisions of the Internal Revenue
Code of 1954.
H. R. 15301-41
"RAILROAD RETIREMENT ACCOUNT
"SEC. 15. (a) The Railroad Retirement Account established by sec-
tion 5(a) of the Railroad Retirement Act of 1937 shall continue to
be maintained in the Treasury of the United States. There is hereby
authorized to be appropriated to such Account for each fiscal year,
beginning with the fiscal year ending June 30, 1975, to provide for the
payment of benefits to be made from such Account in accordance with
the provisions of section 7(c) (1) of this Act, and to provide for
expenses necessary for the Board in the administration of all pro-
visions of this Act, an amount equal to amounts covered into the
Treasury (minus refunds) during each fiscal year under the Rail-
road Retirement Tax Act, except those portions of the amounts cov-
ered into the Treasury under sections 3211 (b), 3221 (c), and 3221 (d)
of such Tax Act as are necessary to provide sufficient funds to meet
the obligation to pay supplemental annuities at the level provided
under section 3(e) of this Act and, with respect to those entitled to
supplemental annuities under section 205(a) of title II of this Act,
at the level provided under section 205(a). The Board is directed to
determine what portion of the taxes collected under sections 3211 (b),
3221(c), and 3221 (d) of the Railroad Retirement Tax Act is to be
credited to the Railroad Retirement Account pursuant to the pre-
ceding provisions of this subsection and what portion of such taxes
is to be credited to the Railroad Retirement Supplemental Account
pursuant to the provisions of subsection (c) of this section. The Board
shall make such a determination with respect to each calendar quarter
commencing with the quarter beginning January 1, 1975, shall make
each such determination not later than fifteen days before each cal-
endar quarter, and shall, as soon as practicable after each such deter-
mination, advise the Secretary of the Treasury of the determination
made. The Secretary of the Treasury shall credit the amounts covered
into the Treasury under sections 3211 (b), 3221 (c), and 3221(d) of
the Railroad Retirement Tax Act to the Railroad Retirement Account
and the Railroad Retirement Supplemental Account in such propor-
tions as is determined by the Board pursuant to the provisions of this
subsection.
"(b) In addition to the amount authorized to be appropriated in
subsection (a) of this section, there is hereby authorized to be appro-
priated to the Railroad Retirement Account for each fiscal year, begin-
ning with the fiscal year ending June 30, 1975, such amount as the
Board determines to be necessary to meet (A) the additional costs,
resulting from the crediting of military service under this Act, of
benefits payable under section 2 of this Act, but only to the extent
that such Account is not reimbursed for such costs under section 7(c)
(2), (B) the additional administrative expenses resulting from the
crediting of military service under this Act, and (C) any loss in
interest to such Account resulting from the payment of additional
benefits based on military service credited under this Act: Provided,
however, That, in determining the amount to be appropriated to the
Railroad Retirement Account for any fiscal year pursuant to the
provisions of this subsection, there shall not be considered any costs
resulting from the crediting of military service under this Act for
which appropriations to such Account have already been made pursu-
ant to section 4(1) of the Railroad Retirement Act of 1937. Any
determination as to loss in interest to the Railroad Retirement Account
pursuant to clause (C) of the first sentence of this subsection shall
take into account interest from the date each annuity based, in part,
on military service began to accrue or was increased to the date or
dates on which the amount appropriated is credited to the Account.
H. R. 15301-42
The cost resulting from the payment of additional benefits under this
Act based on military service determined pursuant to the preceding
provisions of this subsection shall be adjusted by applying thereto the
ratio of the total net level cost of all benefits under this Act to the
portion of such net level cost remaining after the exclusion of adminis-
trative expenses and interest charges on the unfunded accrued liability
as determined under the last completed actuarial valuation pursuant
to the provisions of subsection (g) of this section. At the close of the
fiscal year ending June 30, 1975, and each fiscal year thereafter, the
Board shall, as promptly as practicable, determine the amount to be
appropriated to the Account pursuant to the provisions of this subsec-
tion, and shall certify such amount to the Secretary of the Treasury
for transfer from the general fund in the Treasury to the Railroad
Retirement Account. When authorized by an appropriation Act, the
Secretary of the Treasury shall transfer to the Railroad Retirement
Account from the general fund in the Treasury such amounts as, from
time to time, may be determined by the Board pursuant to the provi-
sions of this subsection and certified by the Board for transfer to such
Account. In any determination made pursuant to section (c) (2) of
this Act, no further charges shall be made against the Trust Funds
established by title II of the Social Security Act for military service
rendered before January 1, 1957, and with respect to which appropria-
tions authorized by clause (2) of the first sentence of section 4(1) of
the Railroad Retirement Act of 1937 shall have been credited to the
Railroad Retirement Account, but the additional benefit payments
incurred by such Trust Funds by reason of such military service shall
be taken in account in making any such determination.
"(c) The Railroad Retirement Supplemental Account established
by section 15(b) of the Railroad Retirement Act of 1937 shall con-
tinue to be maintained in the Treasury of the United States. There
is hereby authorized to be appropriated to such account for each fiscal
year, beginning with the fiscal year ending June 30, 1975, to provide
for the payment of supplemental annuities under section 2(b) of
this Act, and to provide for the expenses necessary for the Board in
the administration of the payment of such supplemental annuities, an
amount equal to such portions of the amounts covered into the Treas-
ury (minus refunds) during each fiscal year under sections 3211 (b),
3221 (c), and 3221 (d) of the Railroad Retirement Tax Act as are not
appropriated to the Railroad Retirement Account pursuant to the
provisions of subsection (a) of this section.
'(d) There is hereby authorized to be appropriated to the Railroad
Retirement Account for each fiscal year, beginning with the fiscal year
ending June 30, 1976, such sums as the Board determines to be neces-
sary on a level basis to pay before the end of fiscal year 2000 the total
of (A) the amounts of the annuities paid and to be paid after 1974
pursuant to the provisions of sections 3(h), 4(e), and 4(h) of this
Act and pursuant to the provisions of sections 204 (a) (3), 204(a) (4),
206(3), and 207 (3) of title II of this Act, plus (B) any loss in inter-
est to such Account resulting from the payment of such amounts
reduced by (C) such amount as the Board determines, on an estimated
basis, is equal to the excess of (i) the interest which such account will
actually earn in the fiscal years 1976 through 2000 over (ii) the inter-
est which such account would have earned in such fiscal years if the
provisions of subsection (e) of this section were identical to the pro-
visions of section 15(c) of the Railroad Retirement Act of 1937. The
Board shall, at the time of each actuarial valuation made prior to the
fiscal year 2000 pursuant to the provisions of subsection (g) of this
section re-evaluate the amount determined under the preceding sen-
H. R. 15301-43
tence for the purpose of determining the amounts to be appropriated
thereunder.
'(e) At the request and direction of the Board, it shall be the duty
of the Secretary of the Treasury (hereinafter referred to as the 'Sec-
retary') to invest such portion of the amounts credited to the Rail-
road Retirement Account and the Railroad Retirement Supplemental
Account as, in the judgment of the Board, is not immediately required
for the payment of annuities, supplemental annuities, and death bene-
fits. Such investments may be made only in interest-bearing obliga-
tions of the United States or in obligations guaranteed as to both
principal and interest by the United States. For such purpose such
obligations may be acquired (A) on original issue at the issue price;
or (B) by purchase of outstanding obligations at the market price.
The purposes for which obligations of the United States may be
issued under the Second Liberty Bond Act, as amended, are hereby
extended to authorize the issuance at par of special obligations exclu-
sively to the accounts. Such obligations issued for purchase by the
accounts shall have maturities fixed with due regard for the needs
of the accounts, and shall bear interest at a rate equal to the average
market yield, computed as of the end of the calendar month next
preceding the date of such issue, borne by all marketable interest-
bearing notes of the United States then forming a part of the public
debt that are not due or callable until after the expiration of three
years from the end of such calendar month, except that where such
rate is not a multiple of one-eighth of 1 per centum, the rate of
interest on such obligations shall be the multiple of one-eighth of 1
per centum nearest such rate: Provided, That the rate of interest on
such obligations shall in no case be less than 3 per centum per annum.
At the request of the Board the Secretary shall purchase other interest-
bearing obligations of the United States, or obligations guaranteed
as to both principal and interest by the United States, or other obliga-
tions which are lawful investments for trust funds of the United
States, on original issue or at the market price: Provided, That the
interest yield of such obligations shall not be less than the interest
rate determined in accordance with the preceding sentence. At the
request of the Board, the Secretary shall sell at the market price such
obligations in the accounts (other than special obligations issued
exclusively to the accounts) as the Board designates. The Board shall
from time to time request the Secretary to redeem such special obliga-
tions issued exclusively to the accounts as the Board designates and
upon such request the Secretary shall redeem such obligations at par
plus accrued interest. All requests of the Board to the Secretary, pro-
vided for in this subsection, shall be mandatory upon the Secretary.
It shall be the duty of the Board to determine at all times what
proportion of the accounts shall be invested in other than special
obligations issued to the accounts and further to determine which of
such obligations available to the accounts consistent with the foregoing
requirements will provide the greatest rate of return on the funds
invested.
"(f) The Board is hereby authorized and directed to select two
actuaries, one from recommendations made by representatives of
employees and the other from recommendations made by representa-
tives of employers as defined in paragraph (i) of section (a) (1) of
this Act. These actuaries, along with a third who shall be designated
by the Secretary of the Treasury, shall be known as the Actuarial
Advisory Committee with respect to the Railroad Retirement Account.
The actuaries SO selected shall hold membership in the American
Academy of Actuaries and shall be qualified in the evaluation of pen-
GUOS
H. R. 15301-44
sion plans: Provided, however, That these requirements shall not
apply to any actuary who served as a member of the Committee prior
to January 1, 1975. The Committee shall examine the actuarial reports
and estimates made by the Board and shall have authority to recom-
mend to the Board such changes in actuarial methods as they may
deem necessary. The compensation of the members of the Committee,
exclusive of the member designated by the Secretary, shall be fixed
by the Board on a per diem basis.
(g) The Board shall include in its annual report a statement of
the status and the operations of the Railroad Retirement and Railroad
Retirement Supplemental Accounts. At intervals not longer than three
years the Board shall make an estimate of the liabilities created by
this Act and shall include such estimate in its annual report.
"PRIVATE PENSIONS
"SEC. 16. Nothing in this Act shall be taken as restricting or dis-
couraging payment by employers to retired employees of pensions
or gratuities in addition to the annuities paid to such employees under
this Act, nor shall this Act be taken as terminating any trust hereto-
fore created for the payment of such pensions or gratuities. The
annuity, except a supplemental annuity under section 2(b), of an
individual shall not be reduced on account of any pension or gratuity
paid by an employer to such individual.
"FREE TRANSPORTATION
"SEC. 17. It shall not be unlawful for carriers by railroad subject
to this Act to furnish free transportation to individuals receiving
annuities under this Act in the same manner as such transportation
is furnished to employees in their service.
"CREDITING SERVICE UNDER THE SOCIAL SECURITY ACT
"SEC. 18. (1) Except as provided in subdivision (2), the term
'employment' as defined in section 210 of the Social Security Act
shall not include service performed by an individual as an employee
as defined in section 1 (b) of this Act.
"(2) For the purpose of determining (i) monthly insurance benefits
under the Social Security Act to an employee who will have completed
less than ten years of service and to others deriving from him or her
during his or her life and (ii) monthly insurance benefits and lump-
sum death benefits under such Act with respect to the death of an
employee who (A) will have completed less than ten years of service
or (B) will have completed ten or more years of service but will not
have had a current connection with the railroad industry at the time
of his death, and for the purposes of section 203 of that Act, section
210(a) (9) of the Social Security Act and subdivision (1) of this sec-
tion shall not operate to exclude from 'employment' under the Social
Security Act service which would otherwise be included in such
'employment' but for such sections. For such purpose, compensation
paid in a calendar year shall, in the absence of evidence to the contrary,
be presumed to have been paid in equal proportions with respect to all
months in the year in which the employee will have been in service
as an employee. In the application of the Social Security Act pursuant
to this subdivision to service as an employee, all service as defined in
section 1(d) of this Act shall bedeemed to have been performed within
the United States.
H. R. 15301-45
"AUTOMATIC BENEFIT ELIGIBILITY REQUIREMENT
ADJUSTMENTS
"SEC. 19. (a) If title II of the Social Security Act is amended at any
time after December 31, 1974, to reduce the eligibility requirements
for old-age insurance benefits, disability insurance benefits, wife's
insurance benefits payable to a wife, husband's insurance benefits,
child's insurance benefits payable to a child of a deceased individual,
widow's insurance benefits payable to a widow, widower's insurance
benefits, mother's insurance benefits payable to a widow, or parent's
insurance benefits, such reduced eligibility requirements shall be appli-
cable, in accordance with regulations prescribed by the Board, to indi-
viduals, spouses, or survivors, as the case may be, under section 2 of this
Act to the extent that such reduced eligibility requirements would
provide such individuals, spouses, or survivors with entitlement to
annuities under such section 2 to which they would not be entitled
except for such reduced eligibility requirements: Provided, however,
That no annuity shall be paid to any person pursuant to the provisions
of this subsection if that person does not satisfy an eligibility
requirement imposed by section 2 of this Act of a kind not imposed by
the Social Security Act on December 31, 1974, or an eligibility require-
ment imposed by section 2 of this Act of a kind which was imposed
by the Social Security Act on December 31, 1974, but which was not
reduced by the amendment to that Act: Provided further, That the
annuity amounts to which such individuals, spouses, or survivors
will be entitled under this Act by reason of the provisions of this sub-
section shall be only such amounts as are determined under the pro-
visions of section 3(a), 4(a), or 4(f), respectively, of this Act.
"(b) If title II of the Social Security Act is amended at any time
after December 31, 1974, to provide monthly insurance benefits under
that Act to a class of beneficiaries not entitled to such benefits there-
under prior to January 1, 1975, every person who is a member of such
class of beneficiaries shall be entitled to annuities under section 2 of
this Act, in accordance with regulations prescribed by the Board, in
an amount equal to the amount of the monthly insurance benefit to
which such person would have been entitled under the Social Security
Act if service as an employee after December 31, 1936, had been
included in the term 'employment' as defined in that Act.
(c) If section 226 or title XVIII of the Social Security Act is
amended at any time after December 31, 1974, to reduce the conditions
of entitlement to, or to expand the nature of, the benefits payable
thereunder, or if health care benefits in addition to, or in lieu of, the
benefits payable under such section 226 or such title XVIII are pro-
vided by any provision of law which becomes effective at any time
after December 31, 1974, such reductions in the conditions of entitle-
ment to benefits, such expanded benefits, or such additional, or sub-
stituted, health care benefits shall be available to every employee (as
defined in this Act), and those deriving from him, in the same manner,
and to the same extent, as if his service as an employee after Decem-
ber 31, 1936, had been included in the term 'employment' as defined in
the Social Security Act. The Board shall have the same authority, in
accordance with regulations prescribed by it, to determine the rights
of employees who will have completed ten years of service, and of
those deriving from such employees, to benefits provided by reason
of the provisions of this subsection as the Secretary of Health, Educa-
tion, and Welfare has with respect to individuals insured under the
Social Security Act.
"(d) Notwithstanding the provisions of subsections (a), (b), and
(c) of this section-
H. R. 15301-46
"(1) No annuity or other benefit shall be payable to any person
on the basis of the compensation and years of service of an indi-
vidual by reason of the provisions of subsection (a), (b), or (c)
of this section if, and to the extent that, such annuity or other
benefit would duplicate a benefit payable to such person on the
basis of such compensation and years of service under a provision
of the Social Security Act, or any other Act of Congress, which
becomes effective after December 31, 1974.
"(2) No annuity shall be payable to a person by reason of sub-
section (a) or (b) of this section unless the individual upon whose
compensation and years of service such annuity would be based
will have (A) completed ten years of service, and (B) in the case
of a survivor, had a current connection with the railroad industry
at the time of his death.
(3) If the Social Security Act is amended after December 31,
1974, to remove any, or all, restriction on the receipt of more than
one monthly insurance benefit thereunder, annuity amounts pro-
vided a person under section 3 (h), 4(e), or 4(h) of this Act, or
under section 204 (3), 204( (4), 206(3), or 207 (3) of title
II of this Act, shall be reduced (but not below zero) by the amount
of any annuity provided such person under this Act by reason
of such amendment.
"(4) If and to the extent that an annuity or other benefit pay-
able to a person by reason of the provisions of subsection (a), (b),
or (c) of this section duplicates an annuity or other benefit then
payable to such person under other provisions of this Act, such
annuity or other benefit then payable under other provisions of
this Act shall be reduced (but not below zero) by the amount of
the annuity or other benefit payable by reason of subsection (a),
(b), or (c).
"SEPARABILITY
"SEC. 20. If any provision of this Act, or the application thereof to
any person or circumstance, should be held invalid, the remainder of
such Act, or the application of such provision to other persons or
circumstances, shall not be affected thereby.
"SHORT TITLE
"SEC. 21. This Act may be cited as the 'Railroad Retirement Act
of 1974'."
TITLE II-TRANSITIONAL PROVISIONS
SEC. 201. The claims of individuals who, prior to the effective date
of title I of this Act, became eligible for annuities, supplemental an-
nuities, or death benefits under section 2, 3(j), or 5 of the Railroad
Retirement Act of 1937 shall be adjudicated by the Board under that
Act in the same manner and with the same effect as if title I of this
Act had not been enacted: Provided, however, That no annuity, sup-
plemental annuity, or death benefit shall be awarded under the Rail-
road Retirement Act of 1937 on the basis of an application therefor
filed with the Board on or after the effective date of title I of this
Act: Provided further, That no annuity under the Railroad Retire-
ment Act of 1935, no annuity or supplemental annuity under the Rail-
road Retirement Act of 1937, and no pension under section 6 of the
Railroad Retirement Act of 1937 shall be payable for any month after
December 31, 1974.
H. R. 15301-47
SEC. 202. (a) Every individual who would have been entitled to
an annuity under the Railroad Retirement Act of 1935 for the month
of January 1975, if this Act had not been enacted, shall be entitled to
an annuity under paragraph (i) of section 2(a) (1) of the Railroad
Retirement Act of 1974, beginning January 1, 1975, in an amount
determined under the provisions of section 3(a) of such Act, which
amount shall initially be equal to the amount determined under clause
(i) of section 3(a) (6) of the Railroad Retirement Act of 1937 for
the purpose of computing the last increase in such individual's
annuity under the Railroad Retirement Act of 1935 pursuant to the
provisions of section 105 of Public Law 93-69, less the amount of any
monthly insurance benefit to which such individual is actually entitled
(before any deductions on account of work) under the Social Security.
Act.
(b) The amount of the annuity of an individual under subsection
(a) of this section shall be increased by an amount, if any, equal to
the amount by which (i) his annuity under the Railroad Retirement
Act of 1935 for the month of December 1974 exceeds (ii) his annuity
under subsection (a) of this section for the month of January 1975.
SEC. 203. (a) Every individual who would have been entitled to
a pension under section 6 of the Railroad Retirement Act of 1937 for
the month of January 1975, if this Act had not been enacted, shall
be entitled to an annuity under paragraph (i) of section 2(a) (1) of
the Railroad Retirement Act of 1974 in an amount determined under
the provisions of section 3(a) of such Act, which amount shall initially
be equal to the amount determined under clause (i) of section (a) (6)
of the Railroad Retirement Act of 1937 for the purpose of computing
the last increase in such individual's pension under section 6 of the
Railroad Retirement Act of 1937 pursuant to the provisions of section
105 of Public Law 93-69, less the amount of any monthly insurance
benefit to which such individual is actually entitled (before any deduc-
tions on account of work) under the Social Security Act.
(b) The amount of the annuity of an individual under subsection
(a) of this section shall be increased by an amount, if any, equal
to the amount by which (i) his pension under section 6 of the Railroad
Retirement Act of 1937 for the month of December 1974 exceeds (ii)
his annuity under subsection (a) of this section for the month of
January 1975.
(c) The annuities of each individual under the preceding subsections
of this section shall be paid on January 1, 1975, and on the first day
of each calendar month thereafter during his life.
SEC. 204. (a) Every individual who was entitled to an annuity
under section 2(a)1, 2(a)2, 2(a)3, 2(a)4, or 2(a)5 of the Railroad
Retirement Act of 1937 for the month of December 1974, or who
would have been entitled to such an annuity for such month except
for the provisions of section 2(d) of such Act, and who would have
been entitled to such an annuity for the month of January 1975, if
this Act had not been enacted, shall be entitled to an annuity under
paragraph (i), (ii), (iii), (iv), or (v), respectively, of section 2(a) (1)
of the Railroad Retirement Act of 1974, beginning January 1, 1975:
Provided, however, That if an individual who was entitled to an
annuity under section 2(a)4 or 2(a)5 of the Railroad Retirement Act
of 1974 is age 65 or older, on January 1, 1975, such individual shall
be entitled to an annuity under paragraph (i) of section 2(a) (1) of
the Railroad Retirement Act of 1974. For purposes of this subsection-
(1) that portion of the individual's annuity as is provided
under section 3(a) of the Railroad Retirement Act of 1974 shall
initially be in an amount equal to the amount determined under
clause (i) of section 3(a) (6) of the Railroad Retirement Act of
OHOL
H. R. 15301-48
1937 for the purpose of computing the last increase in the amount
of such individual's annuity as computed under the provisions of
section 3(a), and that part of section 3(e) which preceded the
first proviso, of the Railroad Retirement Act of 1937, less the
amount of any monthly insurance benefit to which such individual
is actually entitled (before any deductions on account of work)
under the Social Security Act;
(2) that portion of the individual's annuity as is provided
under section 3(b) (1) of the Railroad Retirement Act of 1974
shall be in an amount, if any, equal to the amount by which (A)
his annuity under section 2(a) of the Railroad Retirement Act of
1937 for the month of December 1974 (before any reduction on
account of age and without regard to section 2(d) of such Act)
exceeds (B) (i), if such individual is entitled to an annuity amount
provided under paragraph (3) of this subsection, the amount of
the annuity which would have been provided such individual
under paragraph (1) of this subsection (before any reduction
due to such individual's entitlement to a monthly insurance benefit
under the Social Security Act) for the month of January 1975 if
he had no wages or self-employment income under the Social Se-
curity Act other than wages derived from service as an employee
under the Railroad Retirement Act of 1974 after December 31,
1936, and before January 1, 1975, or (ii), if such individual is not
entitled to an annuity amount provided under paragraph (3) of
this subsection, the amount of his annuity provided under para-
graph (1) of this subsection (before any reduction due to such
individual's entitlement to a monthly insurance benefit under the
Social Security Act) for the month of January 1975: Provided,
however, That if the annuity of any individual under the Railroad
Retirement Act of 1937 for the month of December 1974 was
computed under the first proviso of section 3 (e) of such Act, the
annuity of such individual for purposes of clause (A) of this para-
graph shall be the annuity which such individual would have
received under such Act for the month of December 1974, if no
other person had been included in the computation of the annuity
of such individual; and
(3) if the individual was entitled to an old-age insurance
benefit or a disability insurance benefit under the Social Security
Act on December 31, 1974, or was fully insured under that Act
on that date, the annuity amounts provided under paragraphs (1)
and (2) of this subsection shall be increased by an amount deter-
mined under the provisions of section 3(h) (1) of the Railroad
Retirement Act of 1974: Provided, however, That, if the individual
was entitled to an old-age insurance benefit or a disability insur-
ance benefit under the Social Security Act on December 31, 1974,
such amount shall not be less nor more than an amount which
would cause the total of the annuity amounts provided the
individual by the provisions of this subsection for the month of
January 1975 to equal the total of the annuity under the Railroad
Retirement Act of 1937 (prior to any reduction on account of age
and without regard to section 2(d) of that Act) plus the old-age
or disability insurance benefit under the Social Security Act
(before any reduction on account of age and deductions on account
of work) which such individual would have received for such
month if this Act had not been enacted.
(4) if the individual was entitled to a wife's, husband's,
widow's, or widower's insurance benefit under the Social Security
Act on December 31, 1974, or is the wife, husband, widow, or
widower of a person who was fully insured under that Act on
H. R. 15301-49
that date, the annuity amounts provided under paragraphs (1)
and (2) of this subsection shall be increased by an amount deter-
mined under the provisions of section 3(h) (3) of the Railroad
Retirement Act of 1974.
(b) An individual who was awarded an annuity under section 2(a)
of the Railroad Retirement Act of 1937, but who could not have become
eligible for an annuity under paragraph 2 of such section, shall not be
eligible for an annuity under parasraph (ii) of section 2(a) (1) of
the Railroad Retirement Act of 1974.
SEC. 205. (a) Every individual who was entitled to a supplemental
annuity under section 3(j) of the Railroad Retirement Act of 1937 for
the month of December 1974, or who would have been entitled to such
a supplemental annuity for such month except for the provisions of
section 2(d) of such Act, and who would have been entitled to such
a supplemental annuity for the month of January 1975, if this Act had
not been enacted, shall be entitled to a supplemental annuity under
section 2(b) (1) of the Railroad Retirement Act of 1974, beginning
January 1, 1975, in an amount, the provisions of section 3(e) of such
Act notwithstanding, equal to the amount of the supplemental annuity
to which such individual was entitled under section ³(j) of the Rail-
road Retirement Act of 1937 for the month of December 1974, or to
which such individual would have been entitled for such month under
such section 3(j) except for the provisions of section 2(d) of such Act.
(b) An individual who was awarded an annuity under section 2(a)
of the Railroad Retirement Act of 1937, but who could not have become
eligible for a supplemental annuity under section 3(j) of such Act if
this Act had not been enacted, shall not be eligible for a supplemental
annuity under section 2(b) of the Railroad Retirement Act of 1974.
SEC. 206. Every spouse who was entitled to an annuity under section
2(e) or 2(h) of the Railroad Retirement Act of 1937 for the month
of December 1974, or who would have been entitled to such an annuity
for such month except for the provisions of section 2(d) of such Act,
and who would have been entitled to such an annuity for the month
of January 1975, if this Act had not been enacted, shall be entitled to
an annuity under section 2(c) of the Railroad Retirement Act of 1974,
beginning January 1, 1975. For purposes of this section-
(1) that portion of the spouse's annuity as is provided under
section 4(a) of the Railroad Retirement Act of 1974 shall initially
be in an amount equal to the amount determined under clause (i)
of section (a) (6) of the Railroad Retirement Act of 1937 for
the purpose of computing the last increase in the amount of such
spouse's annuity as computed under the provisions of section 2
of the Railroad Retirement Act of 1937, less the amount of any
wife's insurance benefit or husband's insurance benefit to which
such spouse is actually entitled (before any deductions on account
of work) under the Social Security Act on the basis of such
individual's wages and self-employment income: Provided, how-
ever, That the amount of such annuity shall be subject to
reduction in accordance with the provisions of section 202 (k) or
202 (q) of the Social Security Act, other than a reduction on
account of age, in the same manner as any wife's insurance benefit
or husband's insurance benefit payable under section 202 of the
Social Security Act and shall also be subject to reduction in
accordance with the provisions of section 4(i) (2) of the Railroad
Retirement Act of 1974;
(2) that portion of the spouse's annuity as is provided under
section 4(b) of the Railroad Retirement Act of 1974 shall be in
an amount, if any, equal to 50 per centum of the individual's
annuity as computed in accordance with the provisions of para-
H. R. 15301-50
graph (2) of section 204(a) of this title Provided, however, That,
in case of a spouse who is not entitled to an annuity amount pro-
vided under paragraph (3) of this section, if (A) the amounts of
the annuity provided a spouse for the month of January 1975 by
the provisions of paragraph (1) (before any reduction due to such
spouse's entitlement to a wife's or husband's insurance benefit
under the Social Security Act) and the preceding provisions of
this paragraph exceed (B) the amount of the annuity to which
such spouse was entitled (before any reduction on account of age)
for the month of December 1974 under section 2(e) or 2(h) of the
Railroad Retirement Act of 1937 (deeming, for this purpose, any
increase in the amount of such annuity which, had this Act not
been enacted, would have become effective January 1, 1975, by
reason of an increase in the maximum amount payable as a wife's
insurance benefit under the Social Security Act to have been
effective for the month of December 1974), or to which such spouse
would have been entitled for such month under such section 2(e)
or 2(h) except for the provisions of section 2(d) of such Act, the
amount of the annuity provided such spouse for the month of
January 1975 by the preceding provisions of this paragraph shall
be reduced until the total of the amounts described in clause (A)
of this proviso equals the amount described in clause (B) : Pro-
vided further, That, if the amount of the annuity of the spouse
provided by paragraph (1) of this section is reduced by reason
of the provisions of section 4(i) (2) of the Railroad Retirement
Act of 1974, the amount of the annuity provided such spouse by
the preceding provisions of this paragraph shall not be less than
an amount which would cause the total of the annuity amounts
provided such spouse under paragraph (1) (before any reduction
pursuant to the provisions of section 202 (k) or 202(q) of the
Social Security Act and before any reduction due to such spouse's
entitlement to a wife's or husband's insurance benefit under the
Social Security Act) and paragraph (2) of this section for the
month of January 1975 to equal the amount of the annuity (before
any reduction on account of age) which such spouse would have
received for such month under section 2(e) or 2(h) of the Rail-
road Retirement Act of 1937 (without regard to the provisions
of section 2(d) of that Act) if this Act had not been enacted and
(3) if the spouse was entitled to an old-age insurance benefit
or a disability insurance benefit under the Social Security Act of
December 31, 1974, or was fully insured under that Act on that
date, or was entitled to a wife's or a husband's insurance benefit
under that Act on that date, the annuity amounts provided under
paragraphs (1) and (2) of this section shall be increased by an
amount determined under the provisions of section 4(e) (1), or,
if the spouse was entitled only to a wife's or husband's insurance
benefit, 4(e) (3) of the Railroad Retirement Act of 1974: Pro-
vided, however, That, if the spouse was entitled to a monthly
insurance benefit under the Social Security Act of December 31,
1974, such amount shall not be less nor more than an amount
which would cause (A) the total of (i) the annuity amounts
provided the spouse by the provisions of this section for the
month of January 1975 plus (ii) the monthly insurance benefit
to which such spouse is entitled for that month under the Social
Security Act (before any reductions on account of age and deduc-
tions on account of work) to equal (B) the total of (i) the
spouse's annuity under the Railroad Retirement Act of 1937
(prior to any reduction on account of age and without regard to
H. R. 15301-51
section 2(d) of that Act) plus (ii) the monthly insurance benefit
under the Social Security Act (before any reduction on account
of age and deductions on account of work) which such spouse
would have received for such month if this Act had not been
enacted.
SEC. 207. Every survivor who was entitled to an annuity under
section 5 of the Railroad Retirement Act of 1937 for the month of
December 1974, or who would have been entitled to such an annuity
for such month except for the provisions of section 5(i) of such Act,
and who would have been entitled to such an annuity for the month
of January 1975, if this Act had not been enacted, shall be entitled to
an annuity under section 2(d) of the Railroad Retirement Act of 1974
beginning January 1, 1975. For purposes of this section-
(1) that portion of the survivor's annuity as is provided under
section 4(f) of the Railroad Retirement Act of 1974 shall ini-
tially be in an amount equal to the amount determined under
clause (i) of section 3(a) (6) of the Railroad Retirement Act of
1937 for the purpose of computing the last increase in the amount
of such survivor's annuity as computed under the provisions of
section 5(q) of the Railroad Retirement Act of 1937: Provided,
however, That the amount of such annuity shall be subject to
reduction in accordance with the provisions of section 202(k) or
202 (q) of the Social Security Act in the same manner as any
widow's insurance benefit. mother's insurance benefit, widower's
insurance benefit, parent's insurance benefit, or child's insurance
benefit payable under section 202 of the Social Security Act and
shall also be subject to reduction in accordance with the provisions
of section 4(i) (2) of the Railroad Retirement Act of 1974;
(2) that portion of the survivor's annuity as is provided under
section 4(g) of the Railroad Retirement Act of 1974 shall ini-
tially be in an amount equal to 30 per centum of the amount com-
puted in accordance with the provisions of paragraph (1) of this
section prior to any reductions, other than reductions on account
of age, in accordance with the provisions of section 202(k) or
202 (q) of the Social Security Act and prior to any reductions in
accordance with the provisions of section 4(i) (2) of the Rail-
road Retirement Act of 1974: Provided, however, That, if such
survivor is not entitled to an annuity amount provided under
paragraph (3) of this section, such amount shall not be less than
an amount which would cause (A) the total of the annuity
amounts provided the survivor by the provisions of this section
for the month of January 1975 to equal (B) the amount of the
annuity which the survivor would have received for such month
under section 5 of the Railroad Retirement Act of 1937 (without
regard to section 5(i) of that Act) if this Act had not been
enacted; and
(3) if the survivor is a widow or widower who was entitled to
an old-age insurance benefit or a disability insurance benefit under
the Social Security Act on December 31, 1974, or was fully insured
under that Act on that date, the annuity amounts provided under
paragraphs (1) and (2) of this section shall be increased by an
amount determined under the provisions of 4(h) (1) of the
Railroad Retirement Act of 1974: Provided, however, That, if
the widow or widower was entitled to a monthly insurance benefit
under the Social Security Act on December 31, 1974, such amount
shall not be less nor more than an amount which would cause (A)
the total of (i) the annuity amounts provided the widow or
widower by the provisions of this section for the month of
H. R. 15301-52
January 1975 plus (ii) the monthly insurance benefit to which
such widow or widower is entitled for that month under the Social
Security Act (before any deductions on account of work) to
equal (B) the total of (i) the widow's or widower's annuity under
the Railroad Retirement Act of 1937 (without regard to section
5(i) of that Act) plus (ii) the monthly insurance benefit under
the Social Security Act (before any deductions on account of
work) which such widow or widower would have received for
such month if this Act had not been enacted.
SEC. 208. For purposes of paragraph (1) of section 204(a), para-
graph (1) of section 206, and paragraph (1) of section 207, the fact that
the amount of the annuity payable to an individual, spouse, or survivor
under the Railroad Retirement Act of 1937 for the month of Decem-
ber 1974 may not (i) in the case of an individual have been computed
under the provisions of section 3(a) of such Act or that part of
section (e) of such Act which precedes the first proviso; (ii) in the
case of a spouse, have been computed under the provisions of section 2
of such Act; or (iii) in the case of a survivor, have been computed
under the provisions of section 5 of such Act, shall be disregarded, and
the amount determined under clause (i) of section 3(a) (6) of such
Act with respect to such individual, spouse, or survivor shall, for
purposes of such paragraphs, be the amount which would have
been determined under such clause (i) if the annuity of such individual
had been computed under the provisions of section 3(a), and that
part of section 3(e) which preceded the first proviso, of such Act;
the annuity of such spouse had been computed under the provisions of
section 2 of such Act; or the annuity of such survivor had been
computed under the provisions of section 5 of such Act.
SEC. 209. (a) Whenever monthly insurance benefits under section
202 of the Social Security Act are increased, the amount of each
annuity provided by section 202 (a), section 203(a), paragraph (1) of
section 204(a), paragraph (1) of section 206, and paragraphs (1) and
(2) of section 207 shall be increased in the same manner, and effective
the same date as other annuities of the same type payable under sec-
tion 2 of the Railroad Retirement Act of 1974 are increased.
(b) The annuity amounts provided by section 202(b), section 203
(b), paragraph (2) of section 204(a), and paragraph (2) of section
206 shall be increased by the same percentage, or percentages, and
effective the same date, or dates, as other annuity amounts of the same
type are increased pursuant to the provisions of section 3(g) of the
Railroad Retirement Act of 1974.
SEC. 210. The election of a joint and survivor annuity made before
July 31, 1946, by an individual to whom an annuity accrues under the
Railroad Retirement Act of 1937 before January 1, 1975, shall be
given effect as though the provisions of law under which the election
was made had continued to be operative unless such election had been
revoked prior to the time the annuity of such individual began to
accrue.
TITLE II-AMENDMENTS TO THE SOCIAL SECURITY
ACT
SEC. 301. Section 202(1) of the Social Security Act is amended-
(1) by striking out "section 5 of the Railroad Retirement Act
of 1937" and inserting in lieu thereof "section 2 of the Railroad
Retirement Act of 1974"; and
(2) by striking out "subsection (f) (1) of such section" and
inserting in lieu thereof "section 6(b) of such Act".
H. R. 15301-53
SEC. 302. (a) Section 205(i) of the Social Security Act is amended
by inserting immediately before the colon preceding the proviso there-
in the following: (except that in the case of (A) an individual who
will have completed ten years of service creditable under the Railroad
Retirement Act of 1937 or the Railroad Retirement Act of 1974, (B)
the wife or husband of such an individual, (C) any survivor of such
an individual if such survivor is entitled, or could upon application
become entitled, to an annuity under section 2 of the Railroad Retire-
ment Act of 1974, and (D) any other person entitled to benefits under
section 202 of this Act on the basis of the wages and self-employment
income of such an individual (except a survivor of such an individual
where such individual did not have a current connection with the rail-
road industry, as defined in the Railroad Retirement Act of 1974, at
the time of his death), such certification shall be made to the Railroad
Retirement Board which shall provide for such payment or payments
to such person on behalf of the Managing Trustee in accordance with
the provisions of the Railroad Retirement Act of 1974)
(b) The amendment made by this section shall apply only with
respect to benefits payable to individuals who first become entitled
to benefits under title II of the Social Security Act after 1974.
SEC. 303. Section 205 (o) of the Social Security Act is amended—
(1) by striking out "section 5 of the Railroad Retirement Act
of 1937" and inserting in lieu thereof "section 2 of the Railroad
Retirement Act of 1974";
(2) by striking out "subsection (f) (1) of such section" and
inserting in lieu thereof "section 6(b) of such Act"; and
(3) by striking out "section 4 of such Act" and inserting in lieu
thereof "section (i) of such Act".
SEC. 304. Sections 216(b), 216(c), 216(f), and 216(g) of the Social
Security Act are each amended by striking out "section 5 of the Rail-
road Retirement Act of 1937" and inserting in lieu thereof "section 2
of the Railroad Retirement Act of 1974".
SEC. 305. (a) Section 226(b) of the Social Security Act is amended
by striking out "section 22 of the Railroad Retirement Act of 1937"
from paragraph (2) and inserting in lieu thereof "section 7(d) of the
Railroad Retirement Act of 1974".
(b) Section 226(d) of such Act is amended by striking out "section
21 or section 22 of the Railroad Retirement Act of 1937" each time it
appears therein and inserting in lieu thereof "section 7(d) of the Rail-
road Retirement Act of 1974".
(c) Section 226(e) of such Act is amended by striking out "Railroad
Retirement Act of 1937" each time it appears therein and inserting in
lieu thereof "Railroad Retirement Act of 1974".
SEC. 306. Section 1840(b) of the Social Security Act is amended by
striking out "or pension under the Railroad Retirement Act of 1937"
from paragraph (1) and inserting in lieu thereof "under the Railroad
Retirement Act of 1974".
SEC. 307. Section 1842 (g) of the Social Security Act is amended by
striking out "section 21 (b) of the Railroad Retirement Act of 1937"
and inserting in lieu thereof "section 7(d) of the Railroad Retirement
Act of 1974".
SEC. 308. Section 1843(b) of the Social Security Act is amended by
striking out "or pension under the Railroad Retirement Act of 1937"
and inserting in lieu thereof "under the Railroad Retirement Act of
1974".
SEC. 309. Section 1870(b) of the Social Security Act is amended by
striking out "Railroad Retirement Act of 1937" each time it appears
therein and inserting in lieu thereof "Railroad Retirement Act of
1974".
H. R. 15301-54
SEC. 310. Section 1874(a) of the Social Security Act is amended by
striking out "Railroad Retirement Act of 1937" and inserting in lieu
thereof "Railroad Retirement Act of 1974".
SEC. 311. Section 210(1) of the Social Security Act is amended-
(1) by striking out "section 4 of the Railroad Retirement Act
of 1937" from paragraph 4(A) and inserting in lieu thereof
"section 3(i) of the Railroad Retirement Act of 1974"; and
(2) by striking out ", as provided in section 4(p) (2) of that
Act", from paragraph (4) (A) thereof.
TITLE IV-AMENDMENTS TO THE RAILROAD
UNEMPLOYMENT INSURANCE ACT
SEC. 401. (a) Section (c) of the Railroad Unemployment Insurance
Act is amended by striking out "Railroad Retirement Act of 1937"
and inserting in lieu thereof "Railroad Retirement Act of 1974" and by
striking out "and section 10(h)".
(b) Section 2(g) of such Act is amended by striking out "section
3 (f) (1) of the Railroad Retirement Act of 1937" each time it appears
therein and inserting in lieu thereof "section 6(a) (1) of the Railroad
Retirement Act of 1974".
SEC. 402. Section 4(a-1) of the Railroad Unemployment Insurance
Act is amended by striking out "or pensions under the Railroad Retire-
ment Act of 1935 or the Railroad Retirement Act of 1937" from para-
graph (ii) and inserting in lieu thereof "under the Railroad
Retirement Act of 1974".
SEC. 403. Section 10 of the Railroad Unemployment Insurance Act
is amended by striking out subsection (h) and all that appears therein.
SEC. 404. Section 11 (c) of the Railroad Unemployment Insurance
Act is amended-
(a) by striking out "Railroad Retirement Act of 1937 and the
Railroad Retirement Act of 1935" and inserting in lieu thereof
"Railroad Retirement Act of 1974"; and
(b) by striking out "such Acts" and inserting in lieu thereof
"such Act".
SEC. 405. Section 12(1) of the Railroad Unemployment Insurance
Act is amended by striking out "section 10(b) (4) of the Railroad
Retirement Act of 1937" and inserting in lieu thereof "subdivisions
(5), (6), and (9) of section 7(b) of the Railroad Retirement Act of
1974".
TITLE V-AMENDMENTS TO THE INTERNAL REVENUE
CODE OF 1954
SEC. 501. (a) Section 3221 (c) of the Internal Revenue Code of 1954
is amended-
(1) by striking out "for appropriation to the Railroad Retire-
ment Supplemental Account provided for in section 15 (b) of the
Railroad Retirement Act of 1937";
(2) by striking out "under section 3(j) of such Act" and
inserting in lieu thereof "at the level provided under section 3(j)
of the Railroad Retirement Act of 1937 as in effect on December 31,
1974"; and
(3) by inserting after "section 3(j) (2) of the Railroad Retire-
ment Act of 1937" "or section 2(h) (2) of the Railroad Retirement
Act of 1974".
(b) Section 3221 (d) of such Code is amended-
H. R. 15301-55
(1) by striking out "section 3(j) of the Railroad Retirement
Act of 1937" and inserting in lieu thereof "section 2(b) of the
Railroad Retirement Act of 1974"; and
(2) by striking out "section 3(j) of such Act" and inserting in
lieu thereof "section 2 (b) of such Act".
SEC. 502. Section 6413(c) of the Internal Revenue Code of 1954 is
amended—
(a) by inserting "or section 3201, or by both such sections,"
after "section 3101" in paragraph (1) thereof: and
(b) by adding at the end of paragraph (1) the following new
sentence: "The term 'wages' as used in this paragraph shall, for
purposes of this paragraph, include 'compensation' as defined in
section 3231 (e).
TITLE VI-MISCELLANEOUS PROVISIONS AND
EFFECTIVE DATES
SEC. 601. Section 3(a) (6) of the Railroad Retirement Act of 1937
is amended by adding at the end thereof the following new sentences:
"If the individual entitled to an increase determined under the pre-
ceding provisions of this paragraph is also entitled to a benefit for the
same month under title II of the Social Security Act, there shall, any
provisions to the contrary notwithstanding, be offset against the total
of the increase, or increases, of such individual determined under the
preceding provisions of this paragraph, any amount by which such
individual's social security benefit was increased during the period
July 1, 1974, through December 31, 1974. For purposes of approxi-
mating any such offsets, the Railroad Retirement Board is authorized
to determine the percentage figure which, when applied against cur-
rent social security benefits, will produce approximately the amount
of the increase, or increases, in social security benefits during the
period July 1, 1974, through December 31, 1974. The amount produced
by applying such percentage figure to the current social security
benefit of an individual shall be the amount utilized in making the
offset prescribed by the provisions of this paragraph."
SEC. 602. (a) The provisions of title I of this Act shall become
effective on January 1, 1975, except as otherwise provided herein:
Provided, however, That annuities awarded under section 2 of the
Railroad Retirement Act of 1974 on the basis of an application there-
for filed with the Board on or after such date may, subject to the
limitations prescribed in section 5(a) of such Act, begin prior to
such date, except that no annuity under paragraph (ii) of section
2(a) (1) of such Act shall begin to accrue to a man prior to July 1,
1974.
(b) The provision of section 1(o) of the Railroad Retirement Act
of 1974 which provides that a "current connection with the railroad
industry" will not be broken by "employment with the Department
of Transportation, the Interstate Commerce Commission, the National
Mediation Board, or the Railroad Retirement Board" shall not be
applicable (A) for purposes of paragraph (iv) of section 2(a) (1) of
such Act, to an individual who became disabled, as provided for pur-
poses of such paragraph, prior to January 1, 1975, (B) for purposes
of section 2(b) (1) of such Act, to an individual whose annuity under
section 2(a) of the Railroad Retirement Act of 1937 or section (a) (1)
of the Railroad Retirement Act of 1974 first began to accrue prior
to January 1, 1975, and (C) for purposes of section 2(d) (1) of such
Act, to a survivor of a deceased employee if such employee died prior
to January 1, 1975.
H. R. 15301-56
(c) The provisions of clause (i) (B) and clause (ii) (B) of section
2(c) (1) of the Railroad Retirement Act of 1974 shall not be applicable
to the spouse of an individual if (A) such individual will have com-
pleted thirty years of service and will have been awarded an annuity
under section 2(a) of the Railroad Retirement Act of 1937 or section
2(a) (1) of the Railroad Retirement Act of 1974 which first began
to accrue prior to July 1, 1974, or (B) such individual will have com-
pleted less than thirty years of service and will have been awarded an
annuity under section 2(a) of the Railroad Retirement Act of 1937 of
section 2(a) (1) of the Railroad Retirement Act of 1974 which first
began to accrue prior to January 1, 1975. For purposes of the entitle-
ment of the spouse of an individual described in clause (A) or (B) of
the preceding sentence to an annuity under such section 2(c) (1), the
provisions of clause (i) (B) of such section 2(c) (1) shall be deemed to
read (B) has attained the age of 65".
(d) The provisions of section 2(b) (1) of the Railroad Retirement
Act of 1974 which permit an individual to become entitled to a supple-
mental annuity thereunder if he "has attained age 60 and completed
thirty years of service" shall not be applicable to an individual who
was awarded an annuity under section 2(a) of the Railroad Retirement
Act of 1937 or section (a) (1) of the Railroad Retirement Act of 1974
which first began to accrue prior to July 1, 1974.
(e) The provisions of section 7(e) of the Railroad Retirement Act
of 1974 shall be effective on the enactment date of this Act and shall
apply with respect to all gifts and bequests covered thereunder, regard-
less of the date on which such gifts or bequests were made.
SEC. 603. The provisions of title II of this Act and the amendments
made by title III and title IV of this Act shall become effective on
January 1, 1975.
SEC. 604. The amendments made by the provisions of title V of this
Act shall become effective on January 1, 1975, and shall apply only
with respect to compensation paid for services rendered on or after
that date.
SEC. 605. The amendment made by section 601 of this Act shall be
effective on the enactment date of this Act and shall apply with respect
to any increase in annuities under the Railroad Retirement Act of 1937
which becomes effective after June 30, 1974.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate
October 12, 1974
Received from the White House a sealed envelope
said to contain H.R. 15301, An Act to amend the Railroad
Retirement Act of 1937 to revise the retirement system
for employees of employers covered thereunder, and for
other purposes, and a veto message thereon.
Clerk of the House of Representatives
Time received
FORD (13248)
FOR IMMEDIATE RELEASE
October 12, 1974
Office of the White House Press Secretary
THE WHITE HOUSE
TO THE HOUSE OF REPRESENTATIVES:
I am returning today without my approval, H.R. 15301,
a bill which would finance a long-standing deficit in the
Railroad Retirement System at the expense of the general
taxpayer.
The Railroad Retirement System, under current law,
is headed toward bankruptcy by the mid-1980s. This
condition arises largely because benefits have been
increased 68 percent since 1970 without requiring the
beneficiaries of the system, railroad employees and
employers, to pay the added costs.
This bill proposes to solve the financial problems of
the Railroad Retirement System by placing a seven billion
dollar burden on the general taxpayer, requiring him to
contribute $285 million to the Railroad Retirement Trust
Fund each year for the next twenty-five years. In return
for his seven billion dollar contribution, the general
taxpayer would earn no entitlement to benefits and would
receive no return on his investment.
At a time when the taxpayer is already carrying the
double burden of taxes and inflation, legislation such
as this is most inappropriate.
Recognizing the financial straits of the Railroad
Retirement System, the Executive Branch in 1970 proposed
and the Congress authorized an. independent study of the
System. After eighteen months of careful work, the study
group recommended that the benefits be financed " on an
assured, fully self-supporting basis by contributions from
the railroad community through the crisis period of the
next 20 to 30 years and then beyond."
Following receipt of the report, the Congress directed
representatives of railroad employees and management to
submit their combined recommendations for restoring financial
soundness to the System, taking into account the report and
the specific recommendations of the Commission.
The bill which is now before me is true neither to
the recommendation of the Commission nor to the charge
placed on the industry by the Congress.
Forcing the general taxpayer to carry an unfair burden
is not the only defect in this bill. It would also establish
a special investment procedure for the Railroad Retirement
Trust Fund.
more
2
Under the bill, the interest paid by the Treasury on
Railroad Retirement investments and Federal securities
would rise when interest rates increase but would not fall
when they decrease. This "heads I win; tails you lose"
arrangement, with the taxpayer being the loser, has been
suggested before, but never adopted. It should not be a
part of the solution to the Railroad Retirement System's
financial problem.
Furthermore, the provisions of the benefit formula are
so complex that they would be extremely difficult to
administer and virtually impossible to explain to the
persons who are supposed to benefit from it. Now is the
time to simplify the benefit structure of the Railroad
Retirement System, not make it more complex. Splitting
administrative responsibility between the Railroad
Retirement System and the Social Security System over
benefits that depend on entitlement under the Social
Security Act is bad law. Full responsibility for admin-
istering Social Security benefits should be vested in
the Social Security Administration, not divided among
agencies with resultant uncertainty as to who should
be held accountable.
I believe it is our obligation to the general taxpayer
to see that the problems of this system are overcome by the
industry and people it serves -- those who have benefitted
from it in the past and will continue to receive its benefits
in the future. Other industries -- other parts of the
transportation industry -- pay for their own pension systems.
There is no justification for singling out the railroads
for special treatment.
There are only two ways this obligation can be met --
by increasing revenues or by limiting benefits or by a
combination of both. Administration spokesmen have
proposed constructive ways to achieve this goal, but our
proposals have not received serious consideration by the
Congress.
We are in need of a better railroad retirement system
and a financially sound one. This bill does not meet that
need. I urge the Congress to reconsider that need and to
develop a new bill which is fair to the taxpayers as well
as to the beneficiaries of the Railroad Retirement System.
This Administration stands ready to help in any way it can.
GERALD R. FORD
THE WHITE HOUSE,
October 12, 1974
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October 1, 1974
Dear Mr. Director:
The following bills were received at the
White House on October lat:
H.R. 15301
H.R. 15323
H.R. 16032
Please let the President have reports and
recommendations as to the approval of these
bills as soon as possible.
Sincerely,
Robert D. Linder
Chief Executive Clerk
The Honorable Roy L. Ash
Director
Office of Management and Budget
Washington, D. C.
FORD ALBRARY