H. R. 10
One Hundred Seventh Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, two thousand and one
An Act
To modernize the financing of the railroad retirement system and to provide
enhanced benefits to employees and beneficiaries.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Railroad
Retirement and Survivors’ Improvement Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I—AMENDMENTS TO RAILROAD RETIREMENT ACT OF 1974
Sec. 101. Expansion of widow’s and widower’s benefits.
Sec. 102. Retirement age restoration.
Sec. 103. Vesting requirement.
Sec. 104. Repeal of railroad retirement maximum.
Sec. 105. Investment of railroad retirement assets.
Sec. 106. Elimination of supplemental annuity account.
Sec. 107. Transfer authority revisions.
Sec. 108. Annual ratio projections and certifications by the Railroad Retirement
Board.
TITLE II—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Sec. 201. Amendments to the Internal Revenue Code of 1986.
Sec. 202. Exemption from tax for National Railroad Retirement Investment Trust.
Sec. 203. Repeal of supplemental annuity tax.
Sec. 204. Employer, employee representative, and employee tier 2 tax rate adjust-
ments.
TITLE I—AMENDMENTS TO RAILROAD
RETIREMENT ACT OF 1974
SEC. 101. EXPANSION OF WIDOW’S AND WIDOWER’S BENEFITS.
(a) IN GENERAL.—Section 4(g) of the Railroad Retirement Act
of 1974 (45 U.S.C. 231c(g)) is amended by adding at the end the
following new subdivision:
‘‘(10)(i) If for any month the unreduced annuity provided under
this section for a widow or widower is less than the widow’s or
widower’s initial minimum amount computed pursuant to para-
graph (ii) of this subdivision, the unreduced annuity shall be
increased to that initial minimum amount. For the purposes of
this subdivision, the unreduced annuity is the annuity without
regard to any deduction on account of work, without regard to
any reduction for entitlement to an annuity under section 2(a)(1)
of this Act, without regard to any reduction for entitlement to
H. R. 10—2
a benefit under title II of the Social Security Act, and without
regard to any reduction for entitlement to a public service pension
pursuant to section 202(e)(7), 202(f)(2), or 202(g)(4) of the Social
Security Act.
‘‘(ii) For the purposes of this subdivision, the widow or widower’s
initial minimum amount is the amount of the unreduced annuity
computed at the time an annuity is awarded to that widow or
widower, except that—
‘‘(A) in subsection (g)(1)(i) ‘100 per centum’ shall be sub-
stituted for ‘50 per centum’; and
‘‘(B) in subsection (g)(2)(ii) ‘130 per centum’ shall be sub-
stituted for ‘80 per centum’ both places it appears.
‘‘(iii) If a widow or widower who was previously entitled to
a widow’s or widower’s annuity under section 2(d)(1)(ii) of this
Act becomes entitled to a widow’s or widower’s annuity under
section 2(d)(1)(i) of this Act, a new initial minimum amount shall
be computed at the time of award of the widow’s or widower’s
annuity under section 2(d)(1)(i) of this Act.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendment made by this section
shall take effect on the first day of the first month that begins
more than 30 days after enactment, and shall apply to annuity
amounts accruing for months after the effective date in the
case of annuities awarded—
(A) on or after that date; and
(B) before that date, but only if the annuity amount
under section 4(g) of the Railroad Retirement Act of 1974
(45 U.S.C. 231c(g)) was computed under such section, as
amended by the Omnibus Budget Reconciliation Act of
1981 (Public Law 97–35; 95 Stat. 357).
(2) SPECIAL RULE FOR ANNUITIES AWARDED BEFORE THE
EFFECTIVE DATE.—In applying the amendment made by this
section to annuities awarded before the effective date, the cal-
culation of the initial minimum amount under new section
4(g)(10)(ii) of the Railroad Retirement Act of 1974 (45 U.S.C.
231c(g)(10)(ii)), as added by subsection (a), shall be made as
of the date of the award of the widow’s or widower’s annuity.
SEC. 102. RETIREMENT AGE RESTORATION.
(a) EMPLOYEE ANNUITIES.—Section 3(a)(2) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231b(a)(2)) is amended by
inserting after ‘‘(2)’’ the following new sentence: ‘‘For purposes of
this subsection, individuals entitled to an annuity under section
2(a)(1)(ii) of this Act shall, except for the purposes of recomputations
in accordance with section 215(f) of the Social Security Act, be
deemed to have attained retirement age (as defined by section
216(l) of the Social Security Act).’’.
(b) SPOUSE AND SURVIVOR ANNUITIES.—Section 4(a)(2) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231c(a)(2)) is amended
by striking ‘‘if an’’ and all that follows through ‘‘section 2(c)(1)
of this Act’’ and inserting ‘‘a spouse entitled to an annuity under
section 2(c)(1)(ii)(B) of this Act’’.
(c) CONFORMING REPEALS.—Sections 3(a)(3), 4(a)(3), and 4(a)(4)
of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)(3),
231c(a)(3), and 231c(a)(4)) are repealed.
(d) EFFECTIVE DATES.—
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(1) GENERALLY.—Except as provided in paragraph (2), the
amendments made by this section shall apply to annuities
that begin to accrue on or after January 1, 2002.
(2) EXCEPTION.—The amount of the annuity provided for
a spouse under section 4(a) of the Railroad Retirement Act
of 1974 (45 U.S.C. 231c(a)) shall be computed under section
4(a)(3) of such Act, as in effect on December 31, 2001, if the
annuity amount provided under section 3(a) of such Act (45
U.S.C. 231b(a)) for the individual on whose employment record
the spouse annuity is based was computed under section 3(a)(3)
of such Act, as in effect on December 31, 2001.
SEC. 103. VESTING REQUIREMENT.
(a) CERTAIN ANNUITIES FOR INDIVIDUALS.—Section 2(a) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231a(a)) is amended—
(1) by inserting in subdivision (1) ‘‘(or, for purposes of
paragraphs (i), (iii), and (v), five years of service, all of which
accrues after December 31, 1995)’’ after ‘‘ten years of service’’;
and
(2) by adding at the end the following new subdivision:
‘‘(4) An individual who is entitled to an annuity under para-
graph (v) of subdivision (1), but who does not have at least ten
years of service, shall, prior to the month in which the individual
attains age 62, be entitled only to an annuity amount computed
under section 3(a) of this Act (without regard to section 3(a)(2)
of this Act) or section 3(f)(3) of this Act. Upon attainment of age
62, such an individual may also be entitled to an annuity amount
computed under section 3(b), but such annuity amount shall be
reduced for early retirement in the same manner as if the individual
were entitled to an annuity under section 2(a)(1)(iii).’’.
(b) COMPUTATION RULE FOR INDIVIDUALS’ ANNUITIES.—Section
3(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)),
as amended by section 102 of this Act, is further amended by
adding at the end the following new subdivision:
‘‘(3) If an individual entitled to an annuity under section
2(a)(1)(i) or (iii) of this Act on the basis of less than ten years
of service is entitled to a benefit under section 202(a), section
202(b), or section 202(c) of the Social Security Act which began
to accrue before the annuity under section 2(a)(1)(i) or (iii) of this
Act, the annuity amount provided such individual under this sub-
section, shall be computed as though the annuity under this Act
began to accrue on the later of (A) the date on which the benefit
under section 202(a), section 202(b), or section 202(c) of the Social
Security Act began, or (B) the date on which the individual first
met the conditions for entitlement to an age reduced annuity under
this Act other than the conditions set forth in sections 2(e)(1)
and 2(e)(2) of this Act and the requirement that an application
be filed.’’.
(c) SURVIVORS’ ANNUITIES.—Section 2(d)(1) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231a(d)(1)) is amended by
inserting ‘‘(or five years of service, all of which accrues after
December 31, 1995)’’ after ‘‘ten years of service’’.
(d) LIMITATION ON ANNUITY AMOUNTS.—Section 2 of the Rail-
road Retirement Act of 1974 (45 U.S.C. 231a) is amended by adding
at the end the following new subsection:
‘‘(i) An individual entitled to an annuity under this section
who has completed five years of service, all of which accrues after