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 Retire-
ment 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 ad-
justments.
TITLE I—AMENDMENTS TO RAIL-
ROAD RETIREMENT ACT OF
1974
SEC. 101. EXPANSION OF WIDOW’S AND WIDOWER’S BENE-
FITS.
(a) IN GENERAL.—Section 4(g) of the Railroad Re-
tirement 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 pro-
vided under this section for a widow or widower is less
than the widow’s or widower’s initial minimum amount
computed pursuant to paragraph (ii) of this subdivision,
the unreduced annuity shall be increased to that initial
minimum amount. For the purposes of this subdivision,
the unreduced annuity is the annuity without regard to
any deduction on account of work, without regard to any
reduction for entitlement to an annuity under section
2(a)(1) of this Act, without regard to any reduction for
entitlement to a benefit under title II of the Social Secu-
rity Act, and without regard to any reduction for entitle-
ment to a public service pension pursuant to section
202(e)(7), 202(f)(2), or 202(g)(4) of the Social Security
Act.
‘‘(ii) For the purposes of this subdivision, the widow
or widower’s initial minimum amount is the amount of the
unreduced annuity computed at the time an annuity is
awarded to that widow or widower, except that—
‘‘(A) in subsection (g)(1)(i) ‘100 per centum’
shall be substituted for ‘50 per centum’; and
‘‘(B) in subsection (g)(2)(ii) ‘130 per centum’
shall be substituted for ‘80 per centum’ both places
it appears.
‘‘(iii) If a widow or widower who was previously enti-
tled 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 en-
actment, and shall apply to annuity amounts accru-
ing 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 annu-
ity 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 award-
ed before the effective date, the calculation of the
initial 
minimum 
amount 
under 
new 
section
4(g)(10)(ii) of the Railroad Retirement Act of 1974
(45 U.S.C. 231c(g)(10)(ii)), as added by subsection
(a), shall be made as of the date of the award of the
widow’s or widower’s annuity.
SEC. 102. RETIREMENT AGE RESTORATION.
(a) EMPLOYEE ANNUITIES.—Section 3(a)(2) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)(2))
is amended by inserting after ‘‘(2)’’ the following new sen-
tence: ‘‘For purposes of this subsection, individuals enti-
tled to an annuity under section 2(a)(1)(ii) of this Act
shall, except for the purposes of recomputations in accord-
ance with section 215(f) of the Social Security Act, be
deemed to have attained retirement age (as defined by sec-
tion 216(l) of the Social Security Act).’’.
(b) SPOUSE
AND SURVIVOR ANNUITIES.—Section
4(a)(2) of the Railroad Retirement Act of 1974 (45 U.S.C.
231c(a)(2)) is amended by striking ‘‘if an’’ and all that
follows through ‘‘section 2(c)(1) of this Act’’ and inserting
‘‘a spouse entitled to an annuity under section
2(c)(1)(ii)(B) of this Act’’.
(c) 
CONFORMING
REPEALS.—Sections 
3(a)(3),
4(a)(3), and 4(a)(4) of the Railroad Retirement Act of
1974 (45 U.S.C. 231b(a)(3), 231c(a)(3), and 231c(a)(4))
are repealed.
(d) EFFECTIVE DATES.—
(1) GENERALLY.—Except as provided in para-
graph (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 Rail-
road 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 employ-
ment record the spouse annuity is based was com-
puted 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 pur-
poses 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 sub-
division:
‘‘(4) An individual who is entitled to an annuity
under paragraph (v) of subdivision (1), but who does not
have at least ten years of service, shall, prior to the month
in which the individual attains age 62, be entitled only
to an annuity amount computed under section 3(a) of this
Act (without regard to section 3(a)(2) of this Act) or sec-
tion 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 sec-
tion 2(a)(1)(iii).’’.
(b) COMPUTATION RULE FOR INDIVIDUALS’ ANNU-
ITIES.—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 fol-
lowing new subdivision:
‘‘(3) If an individual entitled to an annuity under sec-
tion 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 Se-
curity Act which began to accrue before the annuity under
section 2(a)(1)(i) or (iii) of this Act, the annuity amount
provided such individual under this subsection, shall be
computed as though the annuity under this Act began to
1995)’’ after ‘‘ten years of service’’ every place it ap-
pears; and
(2) by inserting ‘‘(or five or more years of serv-
ice, all of which accrues after December 31, 1995)’’
after ‘‘ten or more years of service’’.
(h) AUTOMATIC
BENEFIT
ELIGIBILITY
ADJUST-
MENTS.—Section 19 of the Railroad Retirement Act of
1974 (45 U.S.C. 231r) is amended—
(1) by inserting ‘‘(or five or more years of serv-
ice, all of which accrues after December 31, 1995)’’
after ‘‘ten years of service’’ in subsection (c); and
(2) by inserting ‘‘(or five or more years of serv-
ice, all of which accrues after December 31, 1995)’’
after ‘‘ten years of service’’ in subsection (d)(2).
(i) CONFORMING AMENDMENTS.—
(1) Section 6(e)(1) of the Railroad Retirement
Act of 1974 (45 U.S.C. 231e(1)) is amended by in-
serting ‘‘(or five or more years of service, all of
which accrues after December 31, 1995)’’ after ‘‘ten
years of service’’.
(2) Section 7(b)(2)(A) of the Railroad Retire-
ment Act of 1974 (45 U.S.C. 231f(b)(2)(A)) is
amended by inserting ‘‘(or five or more years of
service, all of which accrues after December 31,
1995)’’ after ‘‘ten years of service’’.
(3) Section 205(i) of the Social Security Act
(42 U.S.C. 405(i)) is amended by inserting ‘‘(or five
or more years of service, all of which accrues after
December 31, 1995)’’ after ‘‘ten years of service’’.
(4) Section 6(b)(2) of the Railroad Retirement
Act of 1974 (45 U.S.C. 231e(b)(2)) is amended by
inserting ‘‘(or five or more years of service, all of
which accrues after December 31, 1995)’’ after ‘‘ten
years of service’’ the second place it appears.
(j) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 2002.
SEC. 104. REPEAL OF RAILROAD RETIREMENT MAXIMUM.
(a) EMPLOYEE ANNUITIES.—
(1) IN GENERAL.—Section 3(f) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231b(f)) is
amended—
(A) by striking subdivision (1); and
(B) by redesignating subdivisions (2) and
(3) as subdivisions (1) and (2), respectively.
(2) CONFORMING AMENDMENTS.—
(A) The first sentence of section 3(f)(1) of
the Railroad Retirement Act of 1974 (45
U.S.C. 231b(f)(1)), as redesignated by para-
graph (1)(B), is amended by striking ‘‘, without
regard to the provisions of subdivision (1) of
this subsection,’’.
(B) Paragraphs (i) and (ii) of section
7(d)(2) of the Railroad Retirement Act of 1974
(45 U.S.C. 231f(d)(2)) are each amended by
striking ‘‘section 3(f)(3)’’ and inserting ‘‘section
3(f)(2)’’.
(b) SPOUSE AND SURVIVOR ANNUITIES.—Section 4
of the Railroad Retirement Act of 1974 (45 U.S.C. 231c)
is amended by striking subsection (c).
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 2002, and shall
apply to annuity amounts accruing for months after De-
cember 2001.
SEC. 105. INVESTMENT OF RAILROAD RETIREMENT ASSETS.
(a) ESTABLISHMENT OF NATIONAL RAILROAD RE-
TIREMENT INVESTMENT TRUST.—Section 15 of the Rail-
road Retirement Act of 1974 (45 U.S.C. 231n) is amend-
ed by inserting after subsection (i) the following new sub-
section:
‘‘(j) NATIONAL RAILROAD RETIREMENT INVEST-
MENT TRUST.—
‘‘(1) ESTABLISHMENT.—The National Railroad
Retirement Investment Trust (hereinafter in this
subsection referred to as the ‘Trust’) is hereby es-
tablished as a trust domiciled in the District of Co-
lumbia and shall, to the extent not inconsistent with
this Act, be subject to the laws of the District of Co-
lumbia applicable to such trusts. The Trust shall
manage and invest its assets in the manner set forth
in this subsection.
‘‘(2) NOT A FEDERAL AGENCY OR INSTRUMEN-
TALITY.—The Trust is not a department, agency, or
instrumentality of the Government of the United
States and shall not be subject to title 31, United
States Code.
‘‘(3) BOARD OF TRUSTEES.—
‘‘(A) GENERALLY.—
‘‘(i) MEMBERSHIP.—The Trust shall
have a Board of Trustees, consisting of 7
members. Three shall represent the inter-
ests of labor, 3 shall represent the interests
of management, and 1 shall be an inde-
pendent Trustee. The members of the
Board of Trustees shall not be considered
officers or employees of the Government of
the United States.
‘‘(ii) SELECTION.—
‘‘(I) The 3 members representing
the interests of labor shall be selected
by the joint recommendation of labor
organizations, national in scope, orga-
nized in accordance with section 2 of
the Railway Labor Act, and rep-
resenting at least 2⁄3 of all active em-
ployees, represented by such national
labor organizations, covered under
this Act.
‘‘(II) 
The 
members 
rep-
resenting the interests of management
shall be selected by the joint rec-
ommendation of carriers as defined in
section 1 of the Railway Labor Act
employing at least 2⁄3 of all active em-
ployees covered under this Act.
‘‘(III) The independent member
shall be selected by a majority of the
other 6 members of the Board of
Trustees.
A member of the Board of Trustees may
be removed in the same manner and by the
same constituency that selected that mem-
ber.
‘‘(iii) DISPUTE RESOLUTION.—In the
event that the parties specified in sub-