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applicable to parents under this Act. In all cases, however, any reductions in social security benefit eligibilty requirements would be applicable to a person covered under this Act only if such reductions would benefit that person. Furthermore, reductions in the social security benefit eligibility requirements applicable to divorced vives, surviving divorced wives, surviving divorced mothers, and children of living employees would have no effect on benefit entitlement under this Act since such persons are not provided annuities under the Railroad Retirement Act. Nor will a person be entitled to an annuity by reason of subsection (a) if he does not satisfy a requirement contained in the 1974 Act of a kind which was either not imposed by the Social Security Act on December 31, 1974, or was not liberalized by the amending legislation. Thus, for example, a dependent parent who is not eligible for an annuity because some other survivor is receiving an annuity (the Social Security Act contains no such restriction) would not become entitled to an annuity merely because of an amendment to the Social Security Act reducing the eligibility requirements for parent's insurance benefits under that Act.

Finally, under the second proviso of subsection (a), the annuity amounts which would be payable under the Railroad Retirement Act by reason of the provisions of this subsection would be only those amounts as are determined under section 3(a), with respect to employees, section 4(a), with respect to spouses, and section 4(f), with respect to survivors. These amounts are the amounts which would have been payable to the respective beneficiaries under the Social Security Act if railroad service after 1936 had been covered under that Act.

Pursuant to the provisions of subsection (b) of section 19, if monthly insurance benefits are provided under the Social Security Act to a class of beneficiaries (such as, for example, dependent brothers and sisters) not previously entitled to such benefits thereunder, every person who is a member of that class of beneficiaries will also be entitled to an annuity under section 2 of the Railroad Retirement Act. The amount of the annuity provided in any such case would be the amount of the monthly insurance benefit to which the person would have been entitled under the Social Security Act if railroad service after 1936 had been covered under that Act. The provisions of subsection (b), like the provisions of subsection (a), would not operate to entitle divorced wives, surviving divorced wives, surviving divorced mothers, or children of living employees to annuities under the Railroad Retirement Act since any change in the conditions of entitlement to, or the amounts of, benefits payable to such persons under the Social Security Act would not create a "class of beneficiaries" not entitled to social security benefits prior to January 1, 1975.

Any changes in health care benefits applicable to persons covered under the Social Security Act, are made applicable to those covered under the Railroad Retirement Act by subsection (c) of section 19. The Board will have the same authority to determine the rights of employees with 10 years of service, and those deriving from such employees, to health care benefits provided by this subsection as is given to the Secretary of Ilealth, Education, and Welfare with respect to individuals covered under the Social Security Act.

Subsection (d) assures that the provisions of subsections (a) and (b) of section 19 will not operate to provide annuities to an employee, and those deriving from him, who have less than ten years of service or to survivors in a case where the employee did not have a current connection with the railroad industry at the time of his death. That subsection further provides that annuities or other benefits will not be paid under the 1974 Act by reason of the provisions of section 19 if such annuities or other benefits would duplicate a benefit payable under another Act of Congress on the basis of an employee's railroad service and earnings; that the dual benefits provided by the 197+ Act will be reduced if the Social Security Act is amended to remove the restrictions on the receipt of dual benefits now contained in that Act; and that benefits payable pursuant to some other provision of the 1974 Act will be reduced if such benefits duplicate benefits provided pursuant to the provisions of section 19. Section 20

Pursuant to section 20, the invalidity of one provision of this Act will not affect the other provisions of the Act. Section 21

Section 21 provides that this Ict is to be known as the Railroad Retirement Act of 1974.

TITLE II-TRANSITIOXAN PROVISIONS Section 201

This section provides that if an employee, spouse, or survivor filed an application, and met the eligibility conditions, for benefits under the 1937 let prior to the effective date of the Railroad Retirement Act of 1974 (which effective date is January 1, 1975), his or her benefit claim will be adjudicated under the provisions of the 1937 Act, even though the actual adjudication by the Board is not made until after the 1974 Act becomes effective. Section 201 further provides that no benefit will be awarded under the 1937 Act on the basis of an application filed on or after the effective date of the 1974 Act.

The second proviso of this section provides that all annuities, supplemental annuities, and pensions under either the 1937 Act or the Railroad Retirement Act of 193.) will cease after December 31, 1974. Benefits for annuitants and pensioners under those Acts are provided by subsequent sections of this title beginning January 1, 1975. Section 2012

Section 202 provides annuities for individuals who would have been entitled to annuities under the Railroad Retirement Act of 1935 for the month of January 1975 (the date on which the provisions of the 1974 Act and of this title become effective), if this Act had not been enacted. Subsection (a) provides an annuity under section 2(a) (1) of the 1974 Act equal to the monthly benefit the individual would have received under the Social Security Act if his railroad service (all of which was performed prior to 1937) had been creditable under that Act, less the amount of any monthly insurance benefit to which the individual is entitled (before work deductions) under the Social Security Act.

Subsection (b) of section 202 provides that the annuity amount provided by subsection (a) will be increased by an amount equal to the amount, if any, by which his annuity under the 1935 Act exceeded his annuity provided under subsection (a) of this section. Thus, every 1935 Act annuitant is assured that his total monthly benefit under this Act will at least equal his total monthly benefits prior to the effective date of this Act. The benefits under this section will begin January 1, 1975, the day after which all annuities under the 1935 Act terminated, and will cease with the month preceding the month in which the beneficiary dies, as do the annuities provided other retired employees under section 2 of the 1974 Act. Since 1935 Act annuitants are provided annuities under the 1974 Act and are over age 65, they will be entitled to Medicare coverage as qualified railroad retirement beneficiaries. Section 20.3

This section provides annuities for individuals who were, for the month of December 1974, entitled to pensions under section 6 of the 1937 Act similar to those provided by section 202 for former 1935 Act annuitants. As with respect to 1935 Act annuitants, subsection (a) provides a social-security-level annuity amount for 1937 Act pensioners, and subsection (b) provides an additional annuity amount to assure that a pensioner's total monthly benefit under this Act will be no less than his total monthly benefits prior to the effective date of this Act.

Since pensions for a particular month under the 1937 Act, unlike annuities, were payable on the first day of that month, the annuities under this Act to former pensioners are also payable on the first day of the month for which they are due, thereby avoiding a situation whereby a pensioner would receive no benefit check on January 1, 1975. Thus, for example, a former pensioner's benefit for January 1975 will be paid on January 1, 1975, since he will have received his pension for the month of December 1974 on December 1, 1974, while a former 1937 Act or 1935 Act annuitant's benefit for the month of January 1975 will be paid on February 1, 1975, since such an annuitant will have received his annuity for the month of December 1974 on January 1, 1975. Section 204

Subsection (a) of section 204 provides annuities under section 2(a) (1) of the Railroad Retirement Act of 1974 for retired employees who are receiving an annuity under the 1937 Act at the time the 1974 Act becomes effective. The first paragraph of this subsection provides that that portion of such an employee's annuity as is determined under section 3(a) of the 1974 Act (which provides the social-security-level component of an employee's annuity) will initially be in the amount determined under a provision contained in section 3(a) (6) of the 1937 Act which produces an amount equal to the monthly benefit the employee would have received under the Social Security Act if railroad service after 1936 had been creditable under that Act. This amount will be reduced by the amount of any monthly social security benefit to which the employee is entitled (before work deduction). Since such amounts will have already been computed for purposes of the 1937 Act, it will not be necessary to compute a social-securitylevel amount for each railroad retirement annuitant when this Act berome's effective.

Pursuant to the provisions of the second paragraph of section 4a), the portion of such an employee's annuity as is determined un ler section 3(b)(1) of the 1974 Act (which provides the basic comjment of an employee's annuity based on railroad service prior to 1970) will, in the case of an employee who is not entitled to a dual amount under paragraph (3), be in an amount, if any, by which his annuity under the 1937 Act exceerls the annuity amount provided under paragraph (1). If the employee is entitled to a dual amount under paragraph (3), the annuity component provided under section

b)(1) will initially be equal to the difference between the emplovee's railroad retirement annuity for the month of December 1974 and a social-security-level benefit computed on the basis of the employee's railroad service only. Under the proviso of this paragraph, if an employee's 1937 Act annuity was computed under the social vyurity minimum guaranty provision (which is contained in the first proviso of section 3(e) of the 1937 Act), the amount of such emplovee's 1937 Act annuity used in computing his 1974 Act annuity will be the amount of the annuity he would have received under the 1937 Act if no other person had been included in the computation of his annuity.

Since certain individuals, particularly children of living employees, were not eligible for benefits under the 1937 Act, the annuity payments to some employees under the social security minimum guaranty proVrson included the amounts which would have been pavable to their children under the Social Security Act if railroad service had been Truditable thereunder. To include these amounts in determining the permanent base of an employee's annuity would be inappropriate since auch amounts would be eliininated from the computation under the guaranty provision when the children attained age 18 or otherwise teame ineligible for social security benefits. Furthermore, since the guaranty provision contained in section 3(f) (2) will be applicable to annuities in the amounts provided under paragraphs (1) and (2) of benytion 204(a), the employee's annuity under the 1974 Act is subject to an increase to take account of children in the same manner as was his annuity under the 1937 Act.

Dual benefits are provided, by paragraph (3) of section 204(a), to emplove annuitants who were either receiving social security benefits on December 31, 1974, or were fully insured under the Social Security Act on that date. Such an employee's dual benefit will be computed under the provisions of section 3(h) (1) of the 1974 Act, but in no crent can this dual benefit be less mor more than an amount nerpary in order to make his total annuity under the 1974 Act plus his social security benefit equal the total of the 1937 Act railroad retirement annuity plus the social security benefit to which he is entitled for the month of January 1975.

Subxlivision (+) provides entitlement to a cual benefit, the amount of which will be determined under the provisions of section 3(h) (3) of the 1974 let, to employee annuitants who were either receiving wife, husband's, widow's, or widower's insurance benefits under the Social Security Act on December 31, 1974, or were insured for such benefits on that date.

40-231 (PL. 2) 0 - 74 - 5

Subsection (b) provides, in effect, that a male annuitant age 60 with 30 years of service who was awarded an annuity under the 1937 Act but who could not have been eligible for an unreduced age annuity under section 2(a)2 of that Act because his annuity first began to accrue prior to July 1, 1974, will not be entitled to an unreduced age annuity under section 2(a)(1)(ii) of the 1974 Act. Section 205

Subsection (a) of section 205 provides that an employee receiving a supplemental annuity under section 3 (j) of the 1937 Act will receive a supplemental annuity in the same amount under the 1974 Act. Thus, despite the fact supplemental annuities under the 1974 Act are smaller in amount than comparable supplemental annuities under the 1937 Act, an employee already receiving a supplemental annuity at the time the 1974 Act becomes effective is assured that the amount of such annuity will not be reduced.

Subsection (b) of this section provides that if an employee has, at any time, been awarded an annuity under section 2(a) of the 1937 Act but could not have become eligible for a supplemental annuity under that Act even if the 1974 Act had not been enacted, such employee cannot be eligible for a supplemental annuity under the 1974 Act. The major effect of this provision will be to deny supplemental annuities to employees whose 1937 Act annuities were first awarded prior to July 1, 1966, since such employees could not be eligible for 1937 Act supplemental annuities. Section 206

Spouses of employees who are receiving annuities under the 1937 Act at the time the 1974 Act becomes effective are provided annuities under section 2(c) of the latter Art by subsection (a) of section 206. The first paragraph of this subsection provides that the social-securitylevel component of a spouse's annuity (which is computed under section 4(a) of the 1974 Act) will be determined in the same manner as the comparable component of the employee's annuity on which it is based, i.e., by using the amount determined pursuant to the provision of section 3(a) (6) discussed in the explanation of paragraph (1) of section 204(a). This amount will be reduced by the amount of any social security wife's or husband's insurance benefit to which the spouse is entitled.

Paragraph (2) of section 206(a) provides that the portion of a spouse's annuity as is determined under section 4(b) of the 1974 Act (which provides the component of a spouse's annuity based on the employee's railroad service alone) will be equal to 30 percent of the amount of the employee's annuity provided by paragraph (2) of sertion 204(a).

The first proviso of this paragraph, however, assures that, in the case of a spouse who is not entitled to a dual amount under paragraph (3), a spouse's annuity under the 1974 Act for the month of January 1975 will not exceed her spouse's annuity for the month of December 1974 under the 1937 Act; for this purpose, however, increases in some spouses' annuities which are to become effective on January 1, 1975, be

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