107-4
August 2, 2001
House Passage of H.R. 1140
The Railroad
Retirement and Survivors' Improvement Act of 2001
On July 31, 2001, the House of Representatives, by a vote of
384-33, passed H.R. 1140, the Railroad Retirement and Survivors'
Improvement Act of 2001.
Under the bill, Social Security benefit payments will be
certified for payment by the Railroad Retirement Board (RRB) on the
records of workers with either 10 years of service covered under the
Railroad Retirement Act or 5 years of such covered service accrued
after December 31, 1995. (SSA will have to identify and review any
cases now paid by SSA that may have to be certified for payment by
the RRB effective January 1, 2002.) The bill would have no apparent
effect on the interchange between the Social Security Equivalent
Benefit Account and the Social Security trust funds. (This
interchange reflects the difference between benefits and revenue
that would result each year if employees and retirees who have been
covered under tier 1 of the Railroad Retirement program had instead
been covered under OASDI.) The bill would have no effect on the
long-range financial status of the Social Security program.
Specific bill provisions follow:
Amendments to Railroad Retirement Act of 1974
- Amends the Railroad Retirement Act of 1974 to increase
benefits to railroad employees and their beneficiaries and to
revise financing of the pension part (tier 2) of the railroad
retirement system.
- Provides for a guaranteed initial minimum amount for surviving
spouses of deceased railroad employees. Bases such amount on the
tier 1 and tier 2 benefit that would have been payable to the
employee at the time of the award of the surviving spouse's
annuity.
- Repeals the reduction in tier 1 annuity components for
employees and spouses prior to age 62, thus providing for full
tier 1 annuities to employees at age 60 with 30 years of service
and to spouses of employees with 30 years of service at age 60.
- Reduces the vesting requirement for railroad retirement
benefits for employees and survivors to 5 (currently 10) years of
service, based on service after 1995. Sets forth computation
formulas for individual annuities through railroad retirement and
Social Security benefit systems.
- Repeals a maximum limit on annuity benefits payable to an
employee and spouse under the railroad retirement system.
- Establishes a Railroad Retirement Trust Fund (the Fund) and a
Railroad Retirement Investment Trust to manage and invest Fund
assets.
- Abolishes the Railroad Retirement Supplemental Annuity Account
and provides for transfer of its funds to the Fund. Provides for
transfer to the Fund of certain portions of the Railroad
Retirement Account and of Social Security Equivalent Benefit
account funds.
- Transfers to the disbursing agent from the Dual Benefits
Payments Account the amount necessary to make dual benefit
payments.
- Requires the Railroad Retirement Board to calculate the ratio
of assets to benefits to determine annual tier 2 tax rates for
employers, employee representatives, and employees.
Amendments to the Internal Revenue Code of 1986
- Amends the Internal Revenue Code to exempt the Fund from
taxation.
- Repeals a supplemental annuity tax that railroad employers pay
to finance a benefit for long-time rail employees.
- Provides for adjustments to railroad employers, employee
representatives, and employee tier 2 tax rates.
A companion bill, S. 697, was introduced in the Senate by Senator
Hatch (R., UT) on April 4, 2001, and was referred to the Committee
on Finance. The Senate bill currently has 71 cosponsors. |
|