BLE objects to proposed Railroad Retirement changes

The Railroad Retirement reform proposal publicized last week by a number of unions and the National Carriers' Conference Committee is a complex package. The BLE cannot support the proposal, for several reasons.

One provision -- a "ratchet" that will automatically adjust tax rates to compensate for the investment performance of the Tier II fund -- will affect railroad workers for generations to come. The Railroad Retirement Board actuary has yet to release his findings as to what level of tax adjustment will be necessary in order for the "ratchet" to work.

Moreover, the BLE has yet to receive the results of an actuarial study commissioned late last year. This report will compare different reform proposals. The report, which is overdue, now is expected in February.

Finally, Railroad Retirement reform has historically been enacted only when full consensus among labor and management has been reached. That full consensus is lacking at this time, in part, because - according to Rail Intellingence, a weekly industry publication - the proposal would provide the industry with a windfall worth over $300 million annually.

One area where there is consensus is the issue of improving benefits for surviving spouses.

The BLE continues to support immediate enactment of legislation to reform surviving spousal annuities, while efforts to reach full consensus on the remainder of the package continue.

© 2000 Brotherhood of Locomotive Engineers