Western Railroad Discussion > Railroad Retirement

I just received an email from my brother -in-law stating that the House of Representatives has passed a bill to eliminate RRT. I wonder what the reasoning is ? The Federal Government does not fund RRT. It is funded by RR Employees and the Carriers. Has anyone have any input or an update in regards to this matter ? I l@@ked at the email again this plan is buried in the Budget Plan authored by Paul Ryan...


ess Vanderpool; Wallace Jim; Wayne Kibbey; Ronda Wellman; Terry Wells; Russell Willaimson; Edward Yates; Dale Young
Subject: FYI Rail Road Retirement - House recently voted to destroy the railroad retirement pension system
Importance: High

Subject: FYI Rail Road Retirement -- The National Association of Railroad Vets has released detail of Congressman Paul Ryan's House Budget Plan and it includes reducing pension benefits to rail workers to be on par with those who receive Social Security. Completely ignoring the fact that rail workers contribute double and sometimes triple into their own pension system, compared to that which is contributed by those covered by Social Security.
The railroad carriers, via the American Association of Railroads, have all ready voiced opposition to this plan of Congressman Ryan and the House Republicans. The AAR has stated that such action by Congress "would interfere with the railroad retirement structure and would not result in any savings to the US Government". There would be no saving to the US government as the US government has never contributed one penny to this retirement system. The pension for rail workers is funded 100% by the workers and the rail carriers. Regardless, 228 Republicans in the House voted last week to strip the rail workers of pensions to which they contributed all of their lives. It is very troubling the attitude of the GOP toward the middle classes and toward those of us contribute to our own pensions at no cost to the government. This is government abuse of power at its worst.
Currently Congress is not in session and it’s a plus that the American Association of Railroads is opposed to the Republican plan to destroy their worker’s pensions. Not one penny of federal money has ever been involved in the pensions of rail workers and the rail pensions have no bearing on the debts of the US Government. Revealing that Congressman Ryan and 228 Republican Congressmen understand absolutely nothing about the railroad pension system. Nor did they care to find out the facts before they voted to destroy the railroad pension system.
Rail workers contribute from their pay checks for their railroad pensions in the same manner as those who contribute to Social Security.
I do not know the exact rate as it changes from year to year, but rail workers contribute a little less than $1,000 a month to their pensions.
Or over $10,000 a year but less than $12,000 per year-- currently. In like manner, the rail carriers contribute over $1,300 a month or about $16,000 per year on behalf of each rail employee. The bottom line being that currently, between the workers and the rail carriers, around $27,000 per year goes into the pension account of each rail employee annually. At todays rate and using today's dollars, over a 40 year working career, well over $1 million dollars goes into the pension account of a railroad worker in his lifetime. Basically this is a private pension system that is controlled by the federal government. All costs associated with the railroad pension system are paid for by the rail workers and the railroad companies. On top of this, the rail pension system (RRB) is very solvent and is projected to be very financially sound for decades to come. Unlike Social Security which faces a questionable future. The Railroad
Retirement Board (RRB) has invested rail workers pension funds more wisely, and has very little administrative costs. In a word, the pensions for rail workers has been better managed, and receives larger worker and corporate contributions, and due to its small size, it is more manageable. The entire railroad industry only employs 150,000 persons, so we are talking a very small, yet highly efficient pension system for a very small group of workers. As compared to 10 million truck drivers in the USA who are not part of the rail pension system, but who are also transportation workers.
The Railroad Retirement system receives not one penny from the US Government and it remains very financially sound. The major railroads also have additional investment plans such as Union Pacific where employees can buy into various investment options offered by Vanguard. But this involves employee contributions only and is optional.
I also read that the railroad companies were extremely concerned that the US House of Representatives had recently voted to destroy the Railroad Retirement pension system. It is encouraging that the railroad companies (American Association of Railroads) see no purpose in this destructive legislation. Other than to create more hardships on the working classes. This is rail worker and rail company money, and has no bearing on the current debt crisis in the USA, It is a mystery as to why 228 Republicans in the US House recently voted to destroy the railroad pension system. And this bill did pass the US House and went to the US Senate where so far no action has been taken. Congressman
Ribble of my Congressional district, is one of the 228 Republicans who recently voted to destroy the railroad retirement pension system. The question is why?



Edited 2 time(s). Last edit at 04/11/12 17:04 by SanJoaquinEngr.

Are you sure? I just did a search on the House web site and found nothing recent about the RRB.

I just did a search and can't find anything about this in the news, union sites or labor forums. I think it may have been an April fools that got out of hand.

Posted from iPhone

Without providing any specific legislative information, this should just be considered a rumor. And a bad one at that.

That would be a rather quick way to get the railroads to grind to a stop.

Joe

SanJoaquinEngr Wrote:
-------------------------------------------------------
> I just received an email from my brother -in-law
> stating that the House of Representatives has
> passed a bill to eliminate RRT. I wonder what the
> reasoning is ? The Federal Government does not
> fund RRT. It is funded by RR Employees and the
> Carriers. Has anyone have any input or an update
> in regards to this matter ?


Actually, the Railroad Retirement Board is run by the Federal Government. RRB employees are government employees.
I hadn't heard about any vote by the House, but it doesn't surprise me. The reasoning would be to give the impression of saving money. That's the reasoning for everything. That's also the reasoning for those wanting to eliminate Amtrak.
Any such bill will never get past the Senate, so I wouldn't be too concerned at this point, but it is a foot in the door.
If Republicans win the Senate and White House in November, things could change dramatically.

I haven't been able to find the bill. Can someone post a link to it?
It's more fun to read a bill than to rely on either side's talking points.

Ryan Wilkerson
Fair Oaks, CA

Eliminating the RRB would hardly save any money, this sounds like most
misunderstandings. It's like Social Security though, the money really
doesn't grow very well. It's more like the efforts of the government
to save us from ourselves.

If it passed, you would see a really big necktie party......

The House has been in recess since March 30th, however something could have passed the Ways and Means Committee.

This sounds like a way to get a large group of people fired up and mad at a particular group. More alarm than substance until proven otherwise...this IS an election year after all!

Ryan Wilkerson
Fair Oaks, CA

RyanWilkerson Wrote:
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> This sounds like a way to get a large group of
> people fired up and mad at a particular group.
> More alarm than substance until proven
> otherwise...this IS an election year after all!

Yup.

I don't believe the Ryan proposals have even made it to the hearing in committee stage yet. CNBC mentioned this morning that about 75% of the Ryan budget proposal overlaps identically with the Obama 2011 proposal. It's in the remaining 25%, which addresses pensions, medical care costs, taxes, military, how to pay for stuff, etc where the two proposals differ.

At the moment it's in the interest of both major parties to fire up their bases and maybe get them to believe this year's crop of lies. There's a lot of ballyhoo on both sides, and not a lot of honesty.

RyanWilkerson Wrote:
-------------------------------------------------------
> I haven't been able to find the bill. Can someone
> post a link to it?
> It's more fun to read a bill than to rely on
> either side's talking points.


The closest thing I could find was on Facebook, from a fellow BNSF engineer/union officer at KC. "I am surprised no one here has even posted about the recently passed US House Budget Plan, authored by Wisconsin Republican Representative Paul Ryan, that would effectively cut our railroad retirement tier 1 benefits to make the payout like social security. No democrats voted for the House Budget that contained these changes. But since the US House is controlled by republicans, the House Republicans were able to push it through and pass it."

"

It is all political posturing on both sides, nothing will happen, remember they have not passed a budget in three years; you have to be very gullible to pay it any mind.



Edited 1 time(s). Last edit at 04/11/12 17:44 by alamedafrank.

The most important fact to be disclosed here is that railroad employees, when they retire, draw both from Social Security fund and from Railroad Retirement. The social security portion is referred to as Tier I, and is the same as what any worker would draw from Social Security. The Railroad Retirement Portion is referred to as Tier II, and is in addition to the Tier I payment, and is about the same as the SS payment.

The RRB portion of the pension plan is soundly funded and is paid entirely from contributions by employers and employees. Unfortunately, the same cannot be said for Social Security. Projections that the SS fund will run out of money by 2020 or even earlier are frequently heard.

Most government pension plans/funds are not well funded, and their ability to pay out large benefits is in question. Most corporate pension systems are closely regulated and soundly funded, and furnish annual reports to beneficiaries on request. They are well worth reading. Without major restructuring of our government pension systems a day of reckoning will arrive.

Norm

alamedafrank Wrote:
-------------------------------------------------------
> It is all political posturing on both sides,
> nothing will happen, remember they have not passed
> a budget in three years; you have to be very
> gullible to pay it any mind.


Yeah baseless rumor why dont you read here before you speak

Committee Reports
112th Congress (2011-2012)
House Report 112-421

FUNCTION 600: INCOME SECURITY

Conform Railroad Retirement Tier 1 Benefits to Social Security Benefits. Tier 1 benefits for railroad retirees are supposed to mimic Social Security benefits, but they are more generous than Social Security in many ways. This option would conform Tier 1 so that its benefits would equal those of Social Security, with an estimated savings to taxpayers of $2 billion over 10 years.

http://www.gpo.gov/fdsys/pkg/CRPT-112hrpt421/pdf/CRPT-112hrpt421.pdf



Edited 2 time(s). Last edit at 04/11/12 17:54 by Afbombers.

The government likes to consider Railroad Retirement as part of its social insurance network, although the law walls it off for the most part. But the fully funded status makes it an attractive target for merger into social security.

One sword of Damocles hanging over the process is the end of the "Bush tax cuts" at the end of 2012, if they're not continued. Unlike most laws, this one requires Congress to do something or taxes on most people making over $25,000 will go up. Either party or house can block change and cause taxes to rise on a vast number of Americans.

Many of the research houses believe that retirement income, capital gains on investment sales, dividend income, some portion of especially generous employer paid health insurance, etc will be subjected to some tax increases in order to keep the Bush tax cuts for earners under some magic number, probably $150,000. Hedge fund or private equity gains will continue to have some favored treatment given how much money is flowing to both parties to keep this benefit.

Merge a solvent RR fund with a broke Social Security, and get more people to pay into SS. Sounds like a dream come to for a broke nation. You think about how many unions have had to fight for raises or have gone on strike recently. The attack on the middle class is on. GOP is in full force destroying the middle class. Sad thing is, what will actually bring about change in our nation.

about 1/2 the retirees don't collect 5 years worth of pension ... if it were enacted it would have to start with new employees ... vested money is already established with present employees ... the money already in accounts is accounted for and belongs to the retirees ..

let me also say this ... if people think the million man march ... occupy wall street and everywhere else ... trayvon hoodie party or the European truckers strike was a was a show stopper ... let Congress mess with the railroad retirement and you'll see the likes of the "The Day The Earth Stood Still" type of rail stoppage



Edited 1 time(s). Last edit at 04/11/12 23:15 by Out_Of_Service.

>The most important fact to be disclosed here is that railroa employees, when they retire, draw both from Social Security fund and from Railroad Retirement.

To put it politely, you're woefully uninformed, and your so-called "fact" is entirely false. Railroaders pay $0 into SSI, and their pensions are 100% from the RRB, $0 from SSI. The RRB, unlike SSI, is completely funded and solvent, in the black, and will be so for at least 50 years to come.