H.R.4844 - Railroad Retirement and Survivors' Improvement Act of 2000106th Congress (1999-2000)
Summary: H.R.4844 — 106th Congress (1999-2000)
Railroad Retirement and Survivors' Improvement Act of 2000 - Title I: Amendments to the 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.
Reported to Senate amended (10/03/2000)
(Sec. 101) Increases benefits for widows and widowers by guaranteeing to them all of the tier 2 annuity the employee was entitled to at the time of the death.
(Sec. 102) Makes employees with 30 years of service eligible to retire at age 60 with unreduced tier 1 and tier 2 annuities. Makes spouses of such employees eligible for unreduced annuities at age 60.
(Sec. 103) Reduces the vesting requirement for tier 2 retirement annuities from ten years to five years of service after December 1995.
Makes employees with at least five years of such service, but less than ten years of total service, eligible for a tier 1 disability annuity if their combined railroad retirement and social security earnings credits would satisfy social security eligibility requirements.
Makes spouses, divorced spouses, and survivors of employees with at least five years of such service, but less than ten years of total service, eligible for a tier 1 annuity if they would have been entitled to a social security benefit based on combined service.
(Sec. 104) Repeals a limit on the total amount of monthly railroad retirement benefits payable to an employee and spouse at the time the employee's annuity begins.
(Sec. 105) Establishes a Railroad Retirement Trust Fund (the Fund) and a Railroad Retirement Investment Trust (RRIT) to manage and invest the assets of the Fund. Declares that RRIT is not an agency, department, or instrumentality of the U.S. Government, and that it is to be a trust organized in, and subject to the laws of, the District of Columbia. Requires RRIT to be administered by a Board of Trustees (the Trustees) with seven members (three representing labor, three representing employers, and one representing the general public) with experience and expertise in the management of financial investments and pension plans. Requires the Trustees to be appointed by a unanimous vote of the Railroad Retirement Board (RRB), and authorizes the RRB to remove any Trustee by a unanimous vote. Prohibits RRB members from being Trustees.
Applies specified reporting requirements and fiduciary standards to the RRIT. Requires the Trustees to diversify investments so as to minimize the risk of large losses. Authorizes the Trustees to invest Fund assets in non-Governmental assets. Authorizes the RRB to bring civil actions to enjoin any act or practice by the RRIT, the Trustees, or their employees or agents that violates the Act, or to obtain other appropriate relief to redress such violations or enforce the Act. Directs the Secretary of Labor to enforce certain fiduciary standards applicable to the RRB's appointment of the Trustees. Requires certain expenses of the Trust and the Trustees to be paid from the Trust.
(Sec. 106) Abolishes the Railroad Retirement Supplemental Annuity Account, and provides for transfer of its funds to the Trust. Directs the RRB, as soon as possible after December 31, 2000, to: (1) determine the amount in such Account; and (2) direct the Secretary of the Treasury to transfer such funds to the Trust.
(Sec. 107) Requires the RRB, upon the establishment of the Fund, to determine the portion of the Railroad Retirement Account not needed to pay current administrative expenses and direct the Secretary of the Treasury to transfer that amount to the Trust. Requires the Trust to transfer the necessary amount of funds to pay benefits and related administrative expenses to the disbursing agent.
Transfers to the Trust Social Security Equivalent Benefit account funds not needed to pay current benefits; but requires that such funds be used only to pay benefits or to invest in U.S. Government or Government-guaranteed securities.
Transfers to the disbursing agent from the Dual Benefits Payments Account the amount necessary to make dual benefit payments. Requires the Trustees to consult with the Secretary of the Treasury to develop an appropriate method for transferring or converting existing account obligations.
Sets forth a transitional rule for existing obligations.
(Sec. 108) Requires the RRB to calculate the ratio of assets to benefits to determine annual tier 2 tax rates for employers, employee representatives, and employees. Establishes schedules for: (1) decreasing tax rates if the average account benefits ratio, based on the ratios for the ten most recent fiscal years, is above six; and (2) increasing employer and employee representatives' tax rates if the ratio is below four.
Title II: Amendments to the Internal Revenue Code of 1986 - Amends the Internal Revenue Code to exempt the Railroad Retirement Trust Fund (the Fund) from taxation.
(Sec. 203) Repeals a supplemental annuity tax that railroad employers and employee representatives pay to finance a benefit for long-time rail employees.
(Sec. 204) Provides for adjustments to railroad employers, employee representatives, and employee tier 2 tax rates. Decreases such rates in 2001 and in 2002 for employers and employee representatives. Provides in the years after 2002 for tax rate schedules, based on the ten-year average account benefit ratio, for employers, employee representatives, and employees.