part of its business in the United States or rendered in the United States to any other employer as defined in section 1 (a) of this Act bears to his total compensation (including compensation in any month in excess of $300) for service rendered anywhere to an employer after January 1, 1937. (2) In all other cases, the years of service shall include only the service subsequent to December 31, 1936.

(3) Where the years of service include only part of the service prior to January 1, 1937, the part included shall be taken in reverse order beginning with the last calendar month of such service.

(4) In no case shall the years of service include any service rendered after June 30, 1937, by a person who is sixty-five years of age or over, except for the purpose of computing his monthly compensation as provided in subsection (c) of this section.

(c) The "monthly compensation" shall be the average compensation earned by an employee in calendar months included in his "years of service", except (1) that with respect to service prior to January 1, 1937, the monthly compensation shall be the average compensation earned by an employee in calendar months included in his years of service in the years 1924-1931, and (2) that where service in the period 1924-1931 is insufficient to constitute a fair and equitable basis for determining the monthly compensation for service prior to January 1, 1937, the Board may determine the monthly compensation for such service in such manner as in its judgment shall be just and equitable. If the employee earned compensation after June 30, 1937, and after the last day of the month in which he attained age sixty-five, such compensation shall be disregarded if the result of taking such compensation into account would be to diminish his annuity. In computing the monthly compensation, no part of any month's compensation in excess of $300 shall be recognized.

(d) The annuity of a person who shall have been an employee representative shall be determined in the same manner and with the same effect as if the employee organization by which he shall have been employed were an employer as defined in section 1 (a) of this Act.

(e) If the person was an employee when he attained age sixty-five and has completed twenty years of service, the minimum annuity payable to him shall be $40 per month: Provided, however, That if the monthly compensation on which his annuity is based is less than $50, his annuity shall be 80 per centum of such monthly compensation, except that if such 80 per centum is less than $20, the annuity shall be $20 or the same amount as the monthly compensation, whichever is less. In no case shall the value of the annuity be less than the value of the additional old-age benefit he would receive under title II of the Social Security Act if his service as an employee after December 31, 1936, were included in the term "employment" as defined therein.

(f) Annuity payments due a person but not yet paid at death shall be paid to a surviving spouse if such spouse is entitled to an annuity under an election made pursuant to the provisions of section 4 of this Act; otherwise they shall be paid to the same person or persons who may be entitled to receive any death benefit that may be payable under the provisions of section 5 of this Act.

(g) No annuity shall accrue with respect to the calendar month in which an annuitant dies.

(h) After an annuity has begun to accrue, it shall not be subject to recomputation on account of service rendered thereafter to an employer, except as provided in subdivision 3 of section 2 (a).

(i) If an annuity is less than $2.50, it may, in the discretion of the Board, be paid quarterly or in a lump sum equal to its commuted value as determined by the Board.

JOINT AND SURVIVOR ANNUITY

SEC. 4. A person whose annuity shall not have begun to accrue may elect prior to January 1, 1938, or at least five years before the date on which his annuity begins to accrue, or upon furnishing proof of health satisfactory to the Board, to have the value of his annuity apply to the payment of a reduced annuity to him during life and an annuity after his death to his spouse during life equal to, or 75 per centum of, or 50 per centum of such reduced annuity. The amounts of the two annuities shall be such that their combined actuarial value as determined by the Board shall be the same as the actuarial value of the single-life annuity to which the person would otherwise be entitled. Such election shall be irrevocable, except that it shall become inoperative if the person or the spouse dies before the annuity begins to accrue or if the

person's marriage is dissolved or if the person shall be granted an annuity under subdivision (3) of section 2 (a): Provided, however, That the person may, if his marriage is dissolved before the date his annuity begins to accrue, or if his annuity under subdivision (3) of section 2 (a) ceases because of failure to make the required proof of disability, make a new election under the conditions stated in the first sentence of this subsection. The annuity of a spouse under this subsection shall begin to accrue on the first day of the calendar month in which the death of the person occurs.

DEATH BENEFITS

SEC. 5. The following benefits shall be paid with respect to the death of persons who were employees after December 31, 1936:

(a) If the deceased should not be survived by a widow or widower who is entitled to an annuity under an election made pursuant to the provisions of section 4 of this Act, there shall be paid to such person or persons as the deceased may have designated by a writing filed with the Board prior to his death, or if there be no designation, to the legal representative of the deceased, the amount, if any, by which 4 per centum of the aggregate compensation earned by the deceased after December 31, 1936, exceeds the sum of the total of the annuity payments actually made to the deceased plus the total of the annuity payments due the deceased but not yet paid at death. If the person or persons designated to receive the death benefit do not survive the deceased, the death benefit shall be paid to the legal representative of the deceased.

(b) If the deceased should be survived by a widow or widower entitled to an annuity under an election made pursuant to the provisions of section 4, there shall, on the death of the widow or widower, be paid to such person or persons as the deceased may have designated by a writing filed with the Board prior to his death, or if there be no designation, to the legal representative of the deceased, the amount, if any, by which 4 per centum of the aggregate compensation earned by the deceased after December 31, 1936, exceeds the sum of the total of the annuity payments actually made to the deceased plus the total of the annuity payments actually made to the widow or widower under an election made pursuant to the provisions of section 4 of this Act and under the provisions of section 3 (g) of this Act plus the total of the annuity payments due the widow or widower but not yet paid at death. If the person or persons designated to receive the death benefit do not survive the widow or widower, the death benefit shall be paid to the legal representative of the deceased.

In computing the aggregate compensation for the purpose of this section, no part of any month's earnings in excess of $300 shall be recognized.

PENSIONS TO PERSONS ON PENSION OR GRATUITY ROLLS OF EMPLOYERS

SEC. 6. Beginning July 1, 1937, each person then on the pension or gratuity roll of an employer by reason of his employment, who was on such roll on March 1, 1937, and was not, prior to July 1, 1937, eligible for an annuity under this Act based in whole or in part on service rendered prior to January 1, 1937, shall be paid on July 1, 1937, and on the first day of each calendar month thereafter during his life in substitution for the pension or gratuity from his employer, a pension equal in amount to the pension or gratuity granted to him by the employer without diminution by reason of a general reduction or readjustment made subsequent to December 31, 1930, and applicable to pensioners of the employer: Provided, however, That no pension payable under this section shall exceed $120 monthly: And provided further, That no person on the pension or gratuity roll of an employer not conducting the principal part of its business in the United States shall be paid a pension under this section unless, in the judgment of the Board, he was, on March 1, 1937, carried on the pension or gratuity roll as a United States pensioner. No person shall be entitled to receive both a pension under this section and an annuity under section 2 of this Act.

SEC. 7. Nothing in this Act shall be taken as restricting or discouraging payment by employers to retired employees of pensions or gratuities in addition to the annuities or pensions paid to such employees under this Act, nor shall the Act be taken as terminating any trust heretofore created for the payment of such pensions or gratuities.

part of its business in the United States or rendered in the United States to any other employer as defined in section 1 (a) of this Act bears to his total compensation (including compensation in any month in excess of $300) for service rendered anywhere to an employer after January 1, 1937. (2) In all other cases, the years of service shall include only the service subsequent to December 31, 1936.

(3) Where the years of service include only part of the service prior to January 1, 1937, the part included shall be taken in reverse order beginning with the last calendar month of such service.

(4) In no case shall the years of service include any service rendered after June 30, 1937, by a person who is sixty-five years of age or over, except for the purpose of computing his monthly compensation as provided in subsection (c) of this section.

(c) The "monthly compensation" shall be the average compensation earned by an employee in calendar months included in his "years of service", except (1) that with respect to service prior to January 1, 1937, the monthly compensation shall be the average compensation earned by an employee in calendar months included in his years of service in the years 1924-1931, and (2) that where service in the period 1924-1931 is insufficient to constitute a fair and equitable basis for determining the monthly compensation for service prior to January 1, 1937, the Board may determine the monthly compensation for such service in such manner as in its judgment shall be just and equitable. If the employee earned compensation after June 30, 1937, and after the last day of the month in which he attained age sixty-five, such compensation shall be disregarded if the result of taking such compensation into account would be to diminish his annuity. In computing the monthly compensation, no part of any month's compensation in excess of $300 shall be recognized.

(d) The annuity of a person who shall have been an employee representative shall be determined in the same manner and with the same effect as if the employee organization by which he shall have been employed were an employer as defined in section 1 (a) of this Act.

(e) If the person was an employee when he attained age sixty-five and has completed twenty years of service, the minimum annuity payable to him shall be $40 per month: Provided, however, That if the monthly compensation on which his annuity is based is less than $50, his annuity shall be 80 per centum of such monthly compensation, except that if such 80 per centum is less than $20, the annuity shall be $20 or the same amount as the monthly compensation, whichever is less. In no case shall the value of the annuity be less than the value of the additional old-age benefit he would receive under title II of the Social Security Act if his service as an employee after December 31, 1936, were included in the term "employment" as defined therein.

(f) Annuity payments due a person but not yet paid at death shall be paid to a surviving spouse if such spouse is entitled to an annuity under an election made pursuant to the provisions of section 4 of this Act; otherwise they shall be paid to the same person or persons who may be entitled to receive any death benefit that may be payable under the provisions of section 5 of this Act.

(g) No annuity shall accrue with respect to the calendar month in which an annuitant dies.

(h) After an annuity has begun to accrue, it shall not be subject to recomputation on account of service rendered thereafter to an employer, except as provided in subdivision 3 of section 2 (a).

(i) If an annuity is less than $2.50, it may, in the discretion of the Board, be paid quarterly or in a lump sum equal to its commuted value as determined by the Board.

JOINT AND SURVIVOR ANNUITY

SEC. 4. A person whose annuity shall not have begun to accrue may elect prior to January 1, 1938, or at least five years before the date on which his annuity begins to accrue, or upon furnishing proof of health satisfactory to the Board, to have the value of his annuity apply to the payment of a reduced annuity to him during life and an annuity after his death to his spouse during life equal to, or 75 per centum of, or 50 per centum of such reduced annuity. The amounts of the two annuities shall be such that their combined actuarial value as determined by the Board shall be the same as the actuarial value of the single-life annuity to which the person would otherwise be entitled. Such election shall be irrevocable, except that it shall become inoperative if the person or the spouse dies before the annuity begins to accrue or if the

person's marriage is dissolved or if the person shall be granted an annuity under subdivision (3) of section 2 (a): Provided, however, That the person may, if his marriage is dissolved before the date his annuity begins to accrue, or if his annuity under subdivision (3) of section 2 (a) ceases because of failure to make the required proof of disability, make a new election under the conditions stated in the first sentence of this subsection. The annuity of a spouse under this subsection shall begin to accrue on the first day of the calendar month in which the death of the person occurs.

DEATH BENEFITS

SEC. 5. The following benefits shall be paid with respect to the death of persons who were employees after December 31, 1936:

(a) If the deceased should not be survived by a widow or widower who is entitled to an annuity under an election made pursuant to the provisions of section 4 of this Act, there shall be paid to such person or persons as the deceased may have designated by a writing filed with the Board prior to his death, or if there be no designation, to the legal representative of the deceased, the amount, if any, by which 4 per centum of the aggregate compensation earned by the deceased after December 31, 1936, exceeds the sum of the total of the annuity payments actually made to the deceased plus the total of the annuity payments due the deceased but not yet paid at death. If the person or persons designated to receive the death benefit do not survive the deceased, the death benefit shall be paid to the legal representative of the deceased.

(b) If the deceased should be survived by a widow or widower entitled to an annuity under an election made pursuant to the provisions of section 4, there shall, on the death of the widow or widower, be paid to such person or persons as the deceased may have designated by a writing filed with the Board prior to his death, or if there be no designation, to the legal representative of the deceased, the amount, if any, by which 4 per centum of the aggregate compensation earned by the deceased after December 31, 1936, exceeds the sum of the total of the annuity payments actually made to the deceased plus the total of the annuity payments actually made to the widow or widower under an election made pursuant to the provisions of section 4 of this Act and under the provisions of section 3 (g) of this Act plus the total of the annuity payments due the widow or widower but not yet paid at death. If the person or persons designated to receive the death benefit do not survive the widow or widower, the death benefit shall be paid to the legal representative of the deceased. In computing the aggregate compensation for the purpose of this section, no part of any month's earnings in excess of $300 shall be recognized.

PENSIONS TO PERSONS ON PENSION OR GRATUITY ROLLS OF EMPLOYERS

SEC. 6. Beginning July 1, 1937, each person then on the pension or gratuity roll of an employer by reason of his employment, who was on such roll on March 1, 1937, and was not, prior to July 1, 1937, eligible for an annuity under this Act based in whole or in part on service rendered prior to January 1, 1937, shall be paid on July 1, 1937, and on the first day of each calendar month thereafter during his life in substitution for the pension or gratuity from his employer, a pension equal in amount to the pension or gratuity granted to him by the employer without diminution by reason of a general reduction or readjustment made subsequent to December 31, 1930, and applicable to pensioners of the employer: Provided, however, That no pension payable under this section shall exceed $120 monthly: And provided further, That no person on the pension or gratuity roll of an employer not conducting the principal part of its business in the United States shall be paid a pension under this section unless, in the judgment of the Board, he was, on March 1, 1937, carried on the pension or gratuity roll as a United States pensioner. No person shall be entitled to receive both a pension under this section and an annuity under section 2 of this Act.

SEC. 7. Nothing in this Act shall be taken as restricting or discouraging payment by employers to retired employees of pensions or gratuities in addition to the annuities or pensions paid to such employees under this Act, nor shall the Act be taken as terminating any trust heretofore created for the payment of such pensions or gratuities.

CONCLUSIVENESS OF RETURNS OF COMPENSATION AND OF FAILURE TO MAKE RETURNS

OF COMPENSATION

SEC. 8. (a) Returns of compensation required by the Board to be filed with it shall be under oath and shall be conclusive as to the amount of compensation earned by a person during a particular calendar month and the fact that no return was made of the compensation claimed to be earned by a person during a particular calendar month shall be taken as conclusive that no compensation was earned by that person during that month, unless the error in the amount of compensation returned in the one case, or in the failure to make return of the compensation in the other case, is called to the attention of the Board within four years after the last date on which return of the compensation was required to be made.

(b) The Board shall adopt such rules and regulations in connection with its requirement of returns of compensation as, in its judgment, may be necessary and proper to prevent the application of subsection (a) of this section from defeating the purpose of this Act.

RECOVERY OF ERRONEOUS PAYMENTS

SEC. 9. There shall be no recovery of payments of annuities, death benefits, or pensions from any person who, in the judgment of the Board, is without fault and where, in the judgment of the Board, such recovery would defeat the purpose of the benefits otherwise authorized or would be against equity and good conscience. No disbursing officer shall be held liable for any amount paid by him to any person where the recovery of such amount is waived under this section.

RETIREMENT BOARD

Personnel

SEC. 10. (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 vancancy 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 carriers by railroad subject to this Act, 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 employer or organization of employees. Vacancies in the Board shall not impair the powers nor affect the duties of the Board or 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.

Duties

(b) 1. 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 awards and certify payments. Decisions by the Board upon issues of law and fact relating to applications for annuities or death benefits shall not be subject to review by any other administrative or accounting officer, agent, or employee of the United States.