A bill to amend the Railroad Retirement Act of 1974 with respect to the computation of annuity amounts in certain cases.

(Reported to Senate from the Committee on Labor and Public Welfare with amendment, S. Rept. 94-1246)

Amends the Railroad Retirement Act of 1974 respecting the computation of annuity benefits for railroad employees and spouses of deceased employees.

Directs the Secretary of the Treasury, upon request by the Railroad Retirement Board, to transfer funds from the Railroad Retirement Account in the U.S. Treasury to the Railroad Retirement Supplemental Account if the amounts in the supplemental account are insufficient to pay the annuities due from it. Requires the transfer of any excess amounts in the supplemental account to the retirement account.

Amends the Internal Revenue Code of 1954 to exclude from the definition of compensation paid to railroad employees, for purposes of the Railroad Retirement Tax, amounts paid to, or on behalf of, an employee or any of his dependents, under a plan or system established by an employer which provides for his employees generally or for a class or classes of his employees on account of sickness or accident disability or medical or hospitalization expenses in connection with such sickness or disability.