RETIREMENT SYSTEM FOR EMPLOYEES OF CARRIERS SUBJECT TO INTERSTATE COMMERCE ACT TUESDAY, JULY 16, 1935 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The subcommittee met at 2 p. m., Hon. Robert Crosser (chairman) presiding. Mr. CROSSER. The committee will please come to order. [H. R. 8651, 74th Cong., 1st sess.] A BILL To establish a retirement system for employees of carriers subject to the Interstate Commerce Act Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, DEFINITIONS SECTION 1. That as used in this Act (a) The term "carrier includes any express company, sleeping-car company, freight-forwarding company, private car line or carrier by railroad, subject to the Interstate Commerce Act, and any company which may be directly or indirectly owned or controlled by or under common control with any such carrier by railroad and which operates any equipment or facilities or performs any service (other than trucking service), in connection with the transportation of passengers or property by railroad, or the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad, and any receiver, trustee, or other individual or body, judicial or otherwise, when in the possession of and operating the business of any such 66 carrier." (b) The term "employee means (1) each person who at or after the enactment hereof is in the service of a carrier, or who at or after the enactment hereof is in the employment relation to a carrier, and (2) each officer or other official representative of an "employee organization ", herein called "representative", who before or after the effective date has performed service for a carrier, who is duly designated and authorized to represent employees under and in accordance with the Railway Labor Act, and who, during, or immediately following employment by a carrier, was or is engaged in such representative service in behalf of such employees. (c) A person shall be deemed to be in the service of a carrier whenever he may be subject to its continuing authority to supervise and direct the manner of rendition of his service, for which service he receives compensation. (d) A person is in the employment relation to a carrier when furloughed or on leave of absence, and subject to call for service and ready and willing to serve, all in accordance with the established rules and practices usually in effect on railroads. (e) The term "service period" as to a person who is an employee at the effective date of this Act means the total service of such employee for one 1 or more carriers whether or not continuously performed either before or after the effective date. 66 (f) The term service period as to a person who becomes an employee after the effective date means the total service of such employees for one or more carriers, whether or not continuously performed after the effective date. (g) The term "service period" includes as one month every calendar month during which the employee has rendered service to a carrier for compensation and includes as one year every twelve such months. An ultimate fraction of six months or more shall be computed as one year. (h) The term "annuity" means a fixed sum payable at the end of each completed month during retirement, ceasing at death or at resumption of service for which he receives compensation. (i) The term " compensation" means any form of money remuneration for active service, received by an employee from a carrier, including salaries and commissions, but shall not include free transportation nor any payment received on account of sickness, disability, or other form of personal relief. (j) The term "retirement means the status of cessation of compensated service with the right to receive an annuity. (k) The term " age" means age at the latest attained birthday. (1) The term "Board" means the Railroad Retirement Board. (m) The term "effective date" means the first day of the second calendar month after the enactment of this Act. (n) The term "enactment" means the date on which this Act may be approved by the President or be finally passed. RETIREMENT SEC. 2. Retirement shall be compulsory, three months after the effective date, upon employees who shall have attained or thereafter shall attain the age of sixty-five years, except as hereinafter provided. The carrier and an employee by an agreement in writing filed with the Board may extend the time for retirement as to such employee for one year and thereafter in like manner for successive periods of one year each, but not beyond the age of seventy years. Until five years after the effective date, the compulsory retirement shall not apply to an employee who on and after the effective date shall have occupied an official position in the service of a carrier. The requirements of this section shall not apply to employees' representatives. ANNUITIES SEC. 3. The following-described persons shall be paid annuities: (a) A person (without regard to the period of service) who has qualified as an employee, who after the effective date shall have attained the age of sixtyfive years, and who shall have retired and who at the time of the attainment of such age may or may not be in the service of a carrier. (b) A person who shall have completed thirty years of service as an employee and who after the effective date shall have attained the age of fifty-one years or more and who shall have retired. An annuity paid under this subdivision shall be reduced by one-fifteenth of such annuity for each year such person may be less than sixty-five years of age at the time of the first annuity payment. (c) A person who having completed twenty-five years of service as an employee and is retired by the carrier on account of mental or physical disability. The annuities hereinbefore mentioned shall be paid out of any money in the Treasury of the United States of America not otherwise appropriated. An annuity shall begin as of a date to be specified in a written application signed by the person entitled thereto, and approved by the Board, which date shall not be more than sixty days before the filing of the application, nor before the date on which the first annuity shall have become payable. No annuity shall be payable before three months after the effective date. An annuity shall be payable on the 1st day of the month after the month in which the annuity becomes due. An annuity shall not be paid for part of a month. Such annuity shall be based upon the service period of the employee and shall be the sum of the amounts determined by multiplying the total number of years of service by the following percentages of the monthly compensation: 2 per centum of the first $50; 1% per centum of the next $100; and 1 per centum of the compensation in excess of $150. The "monthly compensation" shall be the average of the monthly compensation paid to the employee by the carrier, except that where applicable for service before the effective date the monthly compensation shall be the average of the monthly compensation for all pay-roll periods for which the employee shall have received compensation from any carrier out of eight consecutive calendar years of such services ended December 31, 1931, No part of any monthly compensation in excess of $300 shall be recognized in determining any annuity. No annuity shall be awarded in excess of $120 per month. Any employee who shall be entitled to an annuity with a commuted value determined by the Board of less than $300 shall be paid such value in a lump sum. ANNUITIES TO REPRESENTATIVES SEC. 4. The annuity of a representative shall be determined according to such rules and regulations as the Board shall deem just and reasonable and, as near as may be, shall be the same annuity as if the representative were still in the employ of his last former carrier. PAYMENTS UPON DEATH SEC. 5. If a person receiving or entitled to receive an annuity shall die, the Board, for one year after the first day of the month in which the death may have occurred, shall pay, as herein provided, an annuity equal to one-half of the annuity which such person so dying may have received or be entitled to receive, to the widow or widower of the deceased, or if there be no widow or widower, to such beneficiary, as the deceased employee may have designated, or in the absence of such designation, to the dependent next of kin of the deceased. RETIREMENT BOARD PERSONNEL SEC. 6. (a) There is hereby established as an independent agency in the executive branch of the Government a Railroad Retirement Board, to be composed of three members appointed by the President, by and with the advice and consent of the Senate. Each member shall hold office for a term of five years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of the term and the terms of office of the members first taking office after the date of enactment of this Act shall expire, as designated by the President, one at the end of two years, one at the end of three years, and one at the end of four years, after the date of enactment of this Act. One member shall be appointed from recommendations made by representatives of the employees and one member shall be appointed from recommendations made by representatives of the carriers, in both cases as the President shall direct, so as to provide representation on the Board satisfactory to the largest number, respectively, of employees and carriers concerned. One member, who shall be the chairman of the Board, shall be appointed initially, for a term of two years without recommendation by either carriers or employees and shall not be in the employment of or be pecuniarily or otherwise interested in any carrier or organization of employees. Vacancies in the Board shall not impair the powers nor affect the duties of the Board nor of the remaining members of the Board of whom a majority of those in office shall constitute a quorum for the transaction of business. Each of said members shall receive a salary of $10,000 per year, together with necessary traveling expenses and subsistence expenses, or per diem allowance in lieu thereof, while away from the principal office of the Board on duties required by this act. The Board shall maintain such offices, provide such equipment, furnishings, supplies, services, and facilities, and employ such persons as may be necessary for the proper discharge of its duties, and fix the compensation of any persons so employed. DUTIES (b) The Board shall have and exercise all the duties and powers necessary to administer this Act. The Board shall take such steps as may be necessary to enforce this Act and make and certify awards and payments. The Board shall establish and promulgate rules and regulations and provide for the adjustment of all controversial matters, with power as a Board or through any member or subordinate designated therefor, to require and compel the attendance of witnesses, administer oaths, take testimony, and make all necessary investigations in any matter involving annuities or other payments, and shall maintain such offices, provide such equipment, furnishings, supplies, services, and facilities, and employ such persons and provide for their compensation and expenses, as may be necessary to the proper discharge of its functions. All rules, regulations, or decisions of the Board shall require the approval of at least two members and shall be entered upon the records of the Board which shall be a public record. The Board shall gather, keep, compile, and publish in convenient form such records and data as may be necessary, and at intervals of not more than two years shall cause to be made actuarial surveys and analyses, to determine from time to time the payments to be required to provide for all annuities, other disbursements, and expenses, and to assure proper administration and the adequacy and permanency of the retirement system hereby established. The Board shall have power to require all carriers and employees and any officer, board, commission, or other agency of the United States to furnish such information and records as shall be necessary for the administration of this Act. The Board shall make an annual report to the President of the United States to be submitted to Congress. Witnesses summoned before the Board shall be paid the same fees and mileage that are paid witnesses in the courts of the United States. SPECIAL REPORT SEC. 7. Not less than four years from the effective date of this Act, the Board, in a special report to the President of the United States to be submitted to Congress, shall make specific recommendations for such changes in the retirement system hereby created as shall assure the adequacy of said retirement system on the basis of its experience and all information and experience then available. For this purpose the Board shall from time to time make such investigations and actuarial studies as shall provide th fullest information practicable for such report and recommendations. COURT JURISDICTION SEC. 8. The several District Courts of the United States and the Supreme Court of the District of Columbia, respectively, shall have jurisdiction to entertain an application and to grant appropriate relief in the following cases which may arise under the provisions of this Act: (a) An application by an employee in or to the district court of any district wherein the Board may have established an office, to compel the Board to set aside an action or decision claimed to be in violation of a legally enforceable right of the applicant, or to take action, or to make a decision necessary for the enforcement of a legal right of the applicant. (b) The jurisdiction herein specifically conferred upon the said Federal courts shall not be held exclusive of any jurisdiction otherwise possessed by said courts to entertain actions at law or suits in equity in aid of the enforcement of rights or obligations arising under the provisions of this Act. (c) The Railroad Retirement Board, as hereinbefore established, shall be and constitute a body corporate and be capable of suing and being sued as such. EXEMPTIONS SEC. 9. No annuity payment shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, nor shall the payment thereof be anticipated. PENALTIES SEC. 10. Any officer or agent of a carrier, as the word "carrier" is hereinbefore defined, or any employee as such word is hereinbefore defined, or any person whether or not of the character hereinbefore defined, who shall willfully fail or refuse to make any report or furnish any information required by the Board in the administration of this Act, or who shall knowingly make any false or fraudulent statement or report in response to any report or statement required to be made for the purpose of this Act, or who shall knowingly make or aid in making any false or fraudulent statement or claim for the purpose of receiving any award or payment under this Act, or who shall fail or refuse to retire from service as hereinbefore required, shall be punished by a fine of not less than $100 nor more than $10,000 or by imprisonment not exceeding one year. SEPARABILITY SEC. 11. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act or application of such provision to other persons or circumstances shall not be affected thereby. APPROPRIATION AUTHORIZED SEC. 12. The appropriation of the sum of $50,000,000 out of any money in the Treasury of the United States not otherwise appropriated, for the purpose of carrying this Act into effect for the fiscal year beginning July 1, 1935, is hereby authorized. STATEMENT OF EDWIN A. KRAUTHOFF, REPRESENTING THE 21 STANDARD RAILROAD LABOR ORGANIZATIONS AND THE RAILWAY LABOR EXECUTIVES ASSOCIATIONS Mr. CROSSER. Who is to control the time for the proponents of this bill? Mr. KRAUTHOFF. Mr. Shea, chairman of the committee, has the matter in charge. I wanted to explain the reason why you have a mimeographed copy of the bill. Mr. CROSSER. That is what I wanted to know. Mr. KRAUTHOFF. As a result of the hearings that were had before the Senate Committee on Interstate Commerce we felt it wise to offer certain amendments to the bill, and in order to properly do that we wrote the bill in its amended form, and the mimeographed form now before you is the bill we offer. Mr. CROSSER. It contains the amendments adopted in the Senate? Mr. KRAUTHOFF. No; they were not accepted. Mr. CROSSER. They were offered? Mr. KRAUTHOFF. They were offered, but not yet acted on; and we hope this mimeographed copy will be reported as the committee substitute for the retirement bill which is before you. Mr. CROSSER. All right. You may proceed. Mr. MARTIN. Has the bill been offered in the House? Mr. CROSSER. Yes. Mr. KRAUTHOFF. We shall, of course, in the course of the hearings bring that out. Mr. CROSSER. I think that you had better go on with the hearings, and we will discuss this other matter later. Mr. KRAUTHOFF. We shall explain the difference between the printed copy and the mimeographed copy. Mr. CROSSER. We wish to have you hear Mr. Shea. STATEMENT OF TIMOTHY SHEA, VICE PRESIDENT OF THE BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN, AND CHAIRMAN OF THE LEGISLATIVE COMMITTEE REPRESENTING THE RAILWAY LABOR EXECUTIVES' ASSOCIATION Mr. SHEA. Mr. Chairman, my name is Timothy Shea. Mr. Chairman and members of the committee, the railroad retirement bill (H. R. 8651) now before your committee has been prepared and is being submitted by the legislative committee of the |