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April 4, 2001
ROCKEFELLER INTRODUCES BILL TO EXPAND BENEFITS FOR RAILROAD RETIREES AND THEIR FAMILIES
WASHINGTON, D.C. – Senator Jay Rockefeller (D-WV) today joined several of his colleagues in introducing bipartisan legislation that will expand benefits for railroad workers, retirees and their dependants. Recognizing the need to greatly improve retirement security for railroad retirees and their families, Senator Rockefeller worked with several of his colleagues to create The Railroad Retirement and Survivors’ Improvement Act of 2001.
"In West Virginia we have over 11,000 retirees and their families, and another 3,500 active rail workers, who depend on railroad retirement benefits. Many of these workers have dedicated their lives and careers to the railroad and they deserve a better retirement program," Rockefeller said.
"The need to dramatically improve benefits for widows and widowers is obvious and has gone unaddressed for too long. It is wrong to slash the benefits of the widow of a railroad retiree at the death of her spouse, as the current policy does. Congress must act now to fix these inadequacies," Rockefeller said, adding, "Improving retirement benefits for railroad workers, retirees, and their families is an important priority and I intend to actively work with my colleagues, labor and rail management to get this legislation passed."
One of the most important features of the legislation is the improvement of benefits for railroad widows and widowers who currently only receive about half of their spouse’s benefits. Other changes include, changing the vesting in pensions. Currently, it takes 10 years of service before a railroad worker becomes vested in the retirement plan, while private companies covered by the Employee Retirement Income Security Act (ERISA) vest their employees in just 5 to 7 years.
Experts predict that the Railroad Trust Fund will be solvent for the next 25 years, and existing policy offers guaranteed benefits to railroad retirees and their families. Under the new plan, the railroads would pay less taxes into the Railroad Retirement Trust Fund, but the fund would create an investment board to invest its reserves in private equities and use the increased rate of returns to cover the expanded benefits. Under the plan, there is a provision to allow an increase railroad taxes, when necessary, to fully fund the railroad retirement benefits. Under the legislation, the retirement benefits are secure.
Nationwide, there are about 673,000 railroad retirees and families, and about 245,000 active rail workers who depend on railroad retirement benefits.
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