RAILROAD RETIREMENT ANNUITY INCREASE-1972

THURSDAY, AUGUST 10, 1972

U.S. SENATE,

SUBCOMMITTEE ON RAILROAD RETIREMENT,

COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D.C.

The subcommittee met, pursuant to notice, at 2 p.m. in room 4232, New Senate Office Building, Senator Alan Cranston, chairman of the subcommittee, presiding.

Present: Senators Cranston, Schweiker and Taft.

Committee staff present: Jonathan R. Steinberg, counsel to the subcommittee; Gene Mittelman, minority general counsel.

Senator CRANSTON. The hearing will please come to order.

This afternoon we meet to hear public testimony on three bills regarding the railroad retirement system: S. 3852 and H.R. 15927, bills to increase railroad retirement benefits temporarily by 20 percent effective September 1, 1973, through June 30, 1973, and H.R. 15922 making certain technical amendments to the Railroad Retirement Act of 1937. I think all present are aware that the House overwhelmingly passed H.R. 15927 yesterday; H.R. 15922 is scheduled for House action in the next few days.

S. 3852 is a bill which I introduced along with the distinguished ranking minority member of this subcommittee, the Senator from Pennsylvania, Mr. Schweiker; the distinguished chairman of the full Committee on Labor and Public Welfare, Mr. Williams; as well as two other distinguished members of this committee, the ranking majority member, Senator Randolph, and Senator Mondale.

Because we have many witnesses this afternoon and because of the time pressures involved in this question, I will not extend this statement any further except to say that we all fully recognize the vital importance of the issue of the 20-percent increase, the great concern which is felt by railroad workers and retirement beneficiaries for prompt action on the part of the Congress, as well as the serious questions and objections raised regarding such an increase by the Commission on Railroad Retirement and the management member of the Railroad Retirement Board.

We will set forth in the record at this point the text of the three bills and the administration's transmittal letter and section-by-section analysis of the technical amendments (H.R. 15922).

(The information referred to follows:)

92D CONGRESS 2D SESSION

S. 3852

IN THE SENATE OF THE UNITED STATES

JULY 27, 1972

Mr. CRANSTON (for himself, Mr. MONDALE, Mr. RANDOLPH, Mr. SCHWEIKER, and Mr. WILLIAMS) introduced the following bill; which was read twice and referred to the Committee on Labor and Public Welfare

A BILL

To amend the Railroad Retirement Act of 1937 to provide a temporary 20 per centum increase in annuities, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That (a) Section 3 (a) of the Railroad Retirement Act of 4 1937 is amended by inserting at the end thereof the follow5 ing new paragraph:

6 "(5) The individual's annuity computed under the pre7 ceding provisions of this subsection and that part of subsec8 tion (e) of this section which precedes the first proviso 9 shall be increased by 20 per centum.".

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(b) Section 2 (e) of such Act is amended—

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(1) by striking out "section 3 (a) (3) or (4) of this Act" and inserting in lieu thereof "section 3 (a)

(3), (4), or (5) of this Act";

(2) by striking out the second sentence of the last

paragraph; and

(3) by adding at the end thereof the following new paragraph:

"The spouse's annuity computed under the other pro9 visions of this section shall (before any reduction on account 10 of age) be increased by 20 per centum. The preceding sen11 tence and the other provisions of this subsection shall not 12 operate to increase the spouse's annuity (before any reduc13 tion on account of age) to an amount in excess of the maximum amount of a spouse's annuity as provided in the first sentence of this subsection. This paragraph shall be disregarded in the application of the preceding two paragraphs." (c) Section 2 (i) of such Act is amended by striking out "the last two paragraphs" and inserting in lieu thereof "the 19 last paragraph plus the two preceding paragraphs".

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(d) Section 5 of such Act is amended by inserting at the

end thereof the following new subsection:

"(p) A survivor's annuity computed under the preceding provisions of this section (except an annuity in

the amount determined under the proviso in subsection

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(a) or (b) shall (before any reduction on account of age) be increased by 20 per centum."

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SEC. 2. All pensions under section 6 of the Railroad Re

4 tirement Act of 1937, all annuities under the Railroad Retire5 ment Act of 1935, and all survivor annuities deriving from 6 joint and survivor annuities under the Railroad Retirement 7 Act of 1937 shall be increased by 20 per centum.

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All widows' and widowers' insurance annuities which are 9 payable in the amount of the spouse's annuity to which the 10 widow or widower was entitled, shall, in cases where the 11 employee died prior to October 1, 1972, be increased by 20 12 per centum.

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Joint and survivor annuities shall be computed under 14 section 3 (a) of the Railroad Retirement Act of 1937 and 15 shall be reduced by the percentage determined in accord16 ance with the election of such annuity.

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SEC. 3. All recertifications required by reason of the 18 amendments made by this Act shall be made by the Rail19 road Retirement Board without application therefor.

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SEC. 4. For the purposes of approximating the offsets 21 in railroad retirement benefits for increases in social security 22 benefits by reason of amendments prior to the Social Security 23 Amendments of 1971, the Railroad Retirement Board is 24 authorized to prescribe adjustments in the percentages in

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the Railroad Retirement Act of 1937 and laws pertaining

thereto in order that these percentages, when applied against

current social security benefits not in excess of the primary

insurance amount applicable for an average monthly wage

of $650, will produce approximately the same amounts as those computed under the law in effect, except for changes in the wage base, before the Social Security Amendments of 1971 were enacted.

SEC. 5. (a) The amendments made by this Act shall be effective with respect to annuities accruing for months after 11 August 1972 and with respect to pensions due in calendar months after September 1972.

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(b) The first three sections of this Act, and the amend14 ments made by such sections, shall cease to apply as of the 15 close of June 30, 1973. Annuities accruing for months after 16 June 30, 1973, and pensions due in calendar months after 17 June 30, 1973, shall be computed as if the first three sections 18 of this Act, and the amendments made by such sections, had 19 not been enacted.