Pub. L. 88-133, tit. I, sec. 7

Sec. 7. (a) Section 15 of the Railroad Retirement Act of 1937 is amended by striking out the third sentence of subsection (a); and by striking out subsection (b) and inserting in lieu thereof the following: “(b) At the request and direction of the Board, it shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as, in the judgment of the Board, is not immediately required for the payment of annuities, pensions, and death benefits. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at the issue price; or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may 77 Stat. 221be issued under the Second Liberty Bond Act, us amended, are hereby extended to authorize the issuance at par of special obligations exclusively to the Account. Such obligations issued for purchase by the Account shall have maturities fixed with due regard for the needs of the Account, and shall bear interest at a rate equal to the average market yield, computed as of the end of the calendar month next preceding the date of such issue, borne by all marketable interest-bearing obligations of the United States then forming a part of the public debt that are not due or callable until after the expiration of three years from the end of such calendar month, except that where such rate is not a multiple of one-eighth of 1 per centum, the rate of interest on such obligations shall be the multiple of one-eighth of 1 per centum nearest such rate: Provided, That the rate of interest on such obligations shall in no case be less than 3 per centum per annum. The Secretary of the Treasury may purchase other interest-bearing obligations of the United States, or obligations guaranteed as to both principal and interest by the United States, on original issue or at the market price only if he determines that such purchases are in the public interest, provided that the investment yield of such obligations shall not. be less than the interest rate determined in accordance with the preceding sentence. If it is in the interest of the Account so to do, the Secretary of the Treasury may sell mid dispose of obligations in the Account and he may sell obligations acquired by the Account (other than special obligations issued exclusively to the Account) at the market price. Special obligations issued exclusively to the Account shall, at the request of the Board, be redeemed at par plus accrued interest. All amounts credited to the Account shall be available, for all purposes of the Account.” (b) The Secretary of the Treasury is authorized to retire the special obligations held by the Account on the date of enactment of this Act and to issue in lieu thereof special obligations with an interest rate determined as provided for in section 15(b) of the Railroad Retirement Act of 1937 as amended by this Act.