39

1 (without regard to the requirement that an individual's years 2 of service be ten or more) under section 2 (a) (1) of the Rail3 road Retirement Act of 1937 as in effect on December 31, 4 1974, on the basis of his compensation and years of service 5 prior to January 1, 1975, deeming such individual (i) to be 6 eligible for such an annuity and (ii) to be entitled to no other 7 benefit under either that Act or the Social Security Act ex8 cept a benefit under the Social Security Act in the amount 9 computed in accordance with the provisions of subclause (ii) 10 of clause (C) of subsection (h) (1) or (h) (2) of this sec11 tion, minus (B) the amount of the old-age insurance benefit 12 to which such individual would have been entitled (before 13 any deductions on account of work and subject to the last 14 sentence of this subdivision) under the Social Security Act 15 as in effect on December 31, 1974, if all his service as an 16 employee after December 31, 1936, and before January 1, 17 1975, were included in the term 'employment' as defined in 18 that Act, and if such individual (i) were age 65 and other19 wise eligible for such a benefit and (ii) had no wages or self20 employment income under that Act other than wages derived 21 from service as an employee after December 31, 1936, and 22 before January 1, 1975. For purposes of computing amounts 23 under clause (A) of this subdivision, the Board shall have 24 the authority to approximate the effect of the reductions pre25 scribed by sections 3 (a) (2) and 3 (a) (3) of the Railroad

40

1

2

Retirement Act of 1937 in cases where the individual is en

titled to a benefit under subsection (h) (1) or (b) (2) of

3 this section. For purposes of this subdivision. 18 benefit 4 computation years' shall be used in calculating an individual's 5 'average monthly wage', except in computing increases in 6 amounts determined under clause (A) of this subdivision 7 pursuant to section 3 (a) (6) of the Railroad Retirement Act 8 of 1937.

9

"(2) The amount computed under subdivision (1) of this subsection shall be increased by 65 per centum of the 11 percentage increase obtained by comparing the unadjusted 12 Consumer Price Index for the month of September 1976 13 with the unadjusted Consumer Price Index for the September 14 immediately preceding the earlier of (A) the calendar year 15 in which the individual's annuity under section 2 (a) (1) of 16 this Act begins to accrue or (B) the calendar year 1981. 17 "(c) If an individual entitled to an annuity under sec18 tion 2 (a) (1) of this Act will have rendered service as an 19 employee to an employer, or as an employee representative, 20 subsequent to December 31, 1974, the amount of the an21 nuity of such individual provided under the preceding sub22 sections of this section shall be increased by $1.50 for each 23 of the first ten years of service that the individual has prior 24 to January 1, 1975, and by $1.00 for each year of service

41

1 prior to January 1, 1975, that the individual has in excess

2 of ten years.

3

"(d) (1) The amount of the annuity of an individual 4 provided under the preceding subsections of this section shall

5 be increased according to the following formula:

6

7

I=Y (.005A+4)

"(2) The amount computed under subdivision (1) of

8 this subsection shall be increased according to the following

11

"(3) The amount computed under subdivisions (1) and (2) of this subsection shall be further increased according

13 to the following formula:

14

I=.005Y[.65BC— (B–D)]

15 In no event shall this subdivision result in a decrease in the

16 amounts computed under subdivisions (1) and (2).

17

"(4) For purposes of the formulae set forth in this

18 subsection:

"I' represents the amount of increase in dollars; "'A' represents the employee's average monthly

compensation for service after 1974;

"'Y' represents the number of years of service of the employee after 1974;

"'C' represents the percentage increase (converted

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

42

to a decimal fraction) obtained by comparing the unadjusted Consumer Price Index for the month of Septem

ber 1976 with the unadjusted Consumer Price Index

for the September immediately preceding the earlier

of the calendar year in which the individual's annuity

under section 2 (a) (1) of this Act begins to accrue, or the calendar year 1981;

"'B' represents the employee's average monthly compensation for his years of service after 1974 (disregarding, for this purpose, compensation for any month after 1980 in excess of one-twelfth of the maximum taxable 'wages' as defined in section 3121 of the Internal Revenue Code of 1954 for the calendar year 1980);

"D' represents the employee's average monthly compensation for his years of service after 1974 (disregarding, for this purpose, compensation for any month after 1976 in excess of one-twelfth of the maximum tax

able 'wages' as defined in section 3121 of the Internal

Revenue Code for the calendar year 1976).

"(e) The supplemental annuity of an individual under

21 section 2(b) of this Act shall be $23 plus an additional

22 amount of $4 for each year of service that the individual has

23 in excess of 25 years, but in no case shall the supplemental 24 annuity exceed $43.

"(f) (1) If the total amount of an individual's annuity

43

1 and supplemental annuity computed under the preceding 2 subsections of this section would, before any reductions on 3 account of age, before any reduction due to such individual's 4 entitlement to a monthly insurance benefit under the Social 5 Security Act, and disregarding any increases in such total 6 amount which become effective after the date on which such 7 individual's annuity under section 2 (a) (1) of this Act 8 begins to accrue, exceed an amount equal to the sum of 9 (A) 100 per centum of his 'final average monthly compen10 sation' up to an amount equal to 50 per centum of one 11 twelfth of the maximum annual taxable 'wages' (as defined 12 in section 3121 of the Internal Revenue Code of 1954) for 13 the calendar year in which such individual's annuity under 14 section 2 (a) (1) of this Act begins to accrue, plue (B) 80 15 per centum of so much of his 'final average monthly com16 pensation' as exceeds 50 per centum of one-twelfth of the 17 maximum annual taxable 'wages' (as defined in section 3121 18 of the Internal Revenue Code of 1954) for the calendar 19 year in which such individual's annuity under section 2 (a) 20 (1) of this Act begins to accrue, the supplemental annuity 21 of such individual first, and then, if necessary, the annuity 22 amount of such individual as computed under subsections. 23 (b), (c), and (d) of this section, shall be reduced until 24 such total amount of such individual's annuity and supple25 mental annuity equals such sum or until such supplemental