VESTING REQUIREMENT.

SEC. 103. VESTING REQUIREMENT. (a) Certain Annuities for Individuals.—Section 2(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231a(a)) is amended— (1) by inserting in subdivision (1) “(or, for purposes of paragraphs (i), (iii), and (v), five years of service, all of which accrues after December 31, 1995)” after “ten years of service”; and (2) by adding at the end the following new subdivision: “(4) An individual who is entitled to an annuity under paragraph (v) of subdivision (1), but who does not have at least ten years of service, shall, prior to the month in which the individual attains age 62, be entitled only to an annuity amount computed under section 3(a) of this Act (without regard to section 3(a)(2) of this Act) or section 3(f)(3) of this Act. Upon attainment of age 62, such an individual may also be entitled to an annuity amount computed under section 3(b), but such annuity amount shall be reduced for early retirement in the same manner as if the individual were entitled to an annuity under section 2(a)(1)(iii).”. (b) Computation Rule for Individuals’ Annuities.—Section 3(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)), as amended by section 102 of this Act, is further amended by adding at the end the following new subdivision: “(3) If an individual entitled to an annuity under section 2(a)(1)(i) or (iii) of this Act on the basis of less than ten years of service is entitled to a benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act which began to accrue before the annuity under section 2(a)(1)(i) or (iii) of this Act, the annuity amount provided such individual under this subsection, shall be computed as though the annuity under this Act began to accrue on the later of (A) the date on which the benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act began, or (B) the date on which the individual first met the conditions for entitlement to an age reduced annuity under this Act other than the conditions set forth in sections 2(e)(1)and 2(e)(2) of this Act and the requirement that an application be filed.”. (c) Survivors’ Annuities.—Section 2(d)(1) of the Railroad Retirement Act of 1974 (45 U.S.C. 231a(d)(1)) is amended by inserting “(or five years of service, all of which accrues after December 31, 1995)” after “ten years of service”. (d) Limitation on Annuity Amounts.—Section 2 of the Railroad Retirement Act of 1974 (45 U.S.C. 231a) is amended by adding at the end the following new subsection: “(i) An individual entitled to an annuity under this section who has completed five years of service, all of which accrues after 115 STAT. 8811995, but who has not completed ten years of service, and the spouse, divorced spouse, and survivors of such individual, shall not be entitled to an annuity amount provided under section 3(a), section 4(a), or section 4(f) of this Act unless the individual, or the individual’s spouse, divorced spouse, or survivors, would be entitled to a benefit under title II of the Social Security Act on the basis of the individual’s employment record under both this Act and title II of the Social Security Act.”. (e) Computation Rule for Spouses’ Annuities.—Section 4(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(a)), as amended by section 102 of this Act, is further amended by adding at the end the following new subdivision: “(3) If a spouse entitled to an annuity under section 2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), or section 2(c)(2) of this Act or a divorced spouse entitled to an annuity under section 2(c)(4) of this Act on the basis of the employment record of an employee who will have completed less than 10 years of service is entitled to a benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act which began to accrue before the annuity under section 2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), section 2(c)(2), or section 2(c)(4) of this Act, the annuity amount provided under this subsection shall be computed as though the annuity under this Act began to accrue on the later of (A) the date on which the benefit under section 202(a), section 202(b), or section 202(c) of the Social Security Act began or (B) the first date on which the annuitant met the conditions for entitlement to an age reduced annuity under this Act other than the conditions set forth in sections 2(e)(1) and 2(e)(2) of this Act and the requirement that an application be filed.”. (f) Application Deeming Provision.—Section 5(b) of the Railroad Retirement Act of 1974 (45 U.S.C, 231d(b)) is amended by striking the second sentence and inserting the following new sentence: “An application filed with the Board for an employee annuity, spouse annuity, or divorced spouse annuity on the basis of the employment record of an employee who will have completed less than ten years of service shall be deemed to be an application for any benefit to which such applicant may be entitled under this Act or section 202(a), section 202(b), or section 202(c) of the Social Security Act. An application filed with the Board for an annuity on the basis of the employment record of an employee who will have completed ten years of service shall, unless the applicant specified otherwise, be deemed to be an application for any benefit to which such applicant may be entitled under this Act or title II of the Social Security Act”. (g) Crediting Service Under the Social Security Act.—Section 18(2) of the Railroad Retirement Act of 1974 (45 U.S.C. 231q(2)) is amended— (1) by inserting “(or less than five years of service, all of which accrues after December 31, 1995)” after “ten years of service” every place it appears; and (2) by inserting “(or five or more years of service, all of which accrues after December 31, 1995)” after “ten or more years of service”. (h) Automatic Benefit Eligibility Adjustments.—Section 19 of the Railroad Retirement Act of 1974 (45 U.S.C. 23 1r) is amended—115 STAT. 882 (1) by inserting “(or five or more years of service, all of which accrues after December 31, 1995)” after “ten years of service” in subsection (c); and (2) by inserting “(or five or more years of service, all of which accrues after December 31, 1995)” after “ten years of service” in subsection (d)(2). (i) Conforming Amendments.— (1) Section 6(e)(1) of the Railroad Retirement Act of 1974 (45 U.S.C. 231e(1)) is amended by inserting “(or five or more years of service, all of which accrues after December 31, 1995)” after “ten years of service”. (2) Section 7(b)(2)(A) of the Railroad Retirement Act of 1974 (45 U.S.C. 23 lf(b)(2)(A)) is amended by inserting “(or five or more years of service, all of which accrues after December 31, 1995)” after “ten years of service”, (3) Section 205(i) of the Social Security Act (42 U.S.C. 405(i)) is amended by inserting “(or five or more years of service, all of which accrues after December 31, 1995)” after “ten years of service”. (4) Section 6(b)(2) of the Railroad Retirement Act of 1974 (45 U.S.C. 231e(b)(2)) is amended by inserting “(or five or more years of service, all of which accrues after December 31, 1995)” after “ten years of service” the second place it appears. (j) Effective Date.—The amendments made by this section shall take effect on January 1, 2002.