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107-9
December 11, 2001
Senate Passage of H.R. 10
The Comprehensive Retirement
Security and Pension Reform Act of 2001
On December 5, 2001, the Senate, by a vote of 90-9, passed an amended
version of H.R. 10, the Comprehensive Retirement Security and Pension
Reform Act of 2001. The Senate amended the bill by striking the existing
text and substituting the language of the House-passed version of H.R.
1140, the Railroad Retirement and Survivors Improvement Act of 2001.
Under the bill, Social Security benefit payments would 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 effect on the long-range financial status of the Social
Security program.
The Senate-passed bill is expected to be returned to the House for
action. Specific bill provisions follow.
Amendments to Railroad Retirement Act of 1974
- Would increase benefits to railroad employees and their
beneficiaries and to revise financing of the pension part (tier 2) of
the railroad retirement system.
- Would provide 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.
- Would repeal 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.
- Would reduce 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.
- Would repeal a maximum limit on annuity benefits payable to an
employee and spouse under the railroad retirement system.
- Would establish a Railroad Retirement Trust Fund (the Fund) and a
Railroad Retirement Investment Trust to manage and invest Fund assets.
- Would abolish 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.
- Would transfer to the disbursing agent from the Dual Benefits
Payments Account the amount necessary to make dual benefit payments.
- Would require 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
- Would amend the Internal Revenue Code to exempt the Fund from
taxation.
- Would repeal a supplemental annuity tax that railroad employers pay
to finance a benefit for long-time rail employees.
- Would provide for adjustments to railroad employers, employee
representatives, and employee tier 2 tax rates.
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