Benefits & ERISA Law

Railroad Retirement and the Pension Protection Act

By Suzanne Wynn

Tucked away toward the end of the Pension Protection Act are two sections which made changes to Railroad Retirement. Section 1002 and Section 1003 both became effective on August 17, 2007, one year after the date PPA was enacted. Section 1002 is Entitlement of Divorced Spouses to Railroad Retirement Annuities Independent of Actual Entitlement of Employee, and it states:

(a) IN GENERAL.?Section 2 of the Railroad Retirement Act of 1974 (45 U.S.C. 231a) is amended?

(1) in subsection (c)(4)(i), by striking ??(A) is entitled to an annuity under subsection(a)(1) and (B)??; and

(2) in subsection (e)(5), by striking ??or divorced wife?? the second place it appears.

Section 1003 is Extension of Tier II Railroad Retirement Benefits to Surviving Former Spouses Pursuant to Divorce Agreements, and it states:

(a) IN GENERAL.?Section 5 of the Railroad Retirement Act of 1974 (45 U.S.C. 231d) is amended by adding at the end the following:

??(d) Notwithstanding any other provision of law, the payment of any portion of an annuity computed under section 3(b) to a surviving former spouse in accordance with a court decree of divorce, annulment, or legal separation or the terms of any court-approved property settlement incident to any such court decree shall not be terminated upon the death of the individual who performed the service with respect to which such annuity is so computed unless such termination is otherwise required by the terms of such court decree.??

Just as quickly as Congress added subsection (d) to Section 5 of the Railroad Retirement Act, Congress has decided to delete subsection (d) of Section 5. In Section 11 of the Pension Protection Technical Corrections Act, which is currently pending before Congress, it states:

SEC. 11. AMENDMENTS RELATED TO TITLE X.
(a) AMENDMENTS TO RAILROAD RETIREMENT ACT.?

(1) Section 14(b) of the Railroad Retirement Act of 1974 (45 U.S.C. 231m(b)) is amended by adding at the end the following:

??(3)(i) Payments made pursuant to paragraph (2) of this subsection shall not require that the employee be entitled to an annuity under section 2(a)(1) of this Act: Provided, however, That where an employee is not entitled to such an annuity, payments made pursuant to paragraph (2) may not begin before the month in which the following three conditions are satisfied:
??(A) The employee has completed ten years of service in the railroad industry or, five years of service all of which accrues after December 31, 1995.

??(B) The spouse or former spouse attains age 62.

??(C) The employee attains age 62 (or if deceased, would have attained age 62).

??(ii) Payments made pursuant to paragraph (2) of this subsection shall terminate upon the death of the spouse or former spouse, unless the court document provides for termination at an earlier date. Notwithstanding the language in a court order, that portion of payments made pursuant to paragraph (2) which represents payments computed pursuant to section 3(f)(2) of this Act shall not be paid after the death of the employee.

??(iii) If the employee is not entitled to an annuity under section 2(a)(1) of this Act, payments made pursuant to paragraph (2) of this subsection shall be computed as though the employee were entitled to an annuity.??.

With the Pension Protection Technical Corrections Act still pending, it is possible that more changes will be made before PPTCA heads to the President for signature.

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Full post as published by Pension Protection Act Blog on May 07, 2008 (boomark / email).