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8/1/2001



Rail News: Rail Industry Trends

House approves rail retirement act


The House July 31 overwhelmingly passed the Railroad Retirement and Survivors' Improvement Act of 2001, or H.R. 1140, by a 384-33 vote.
The bill now moves to the Senate, which since April 5 has been considering the act under S. 697. The Senate legislation currently has 72 co-sponsors.
"The overwhelming support in the House indicates the importance of modernizing the 75-year-old railroad retirement system," said Edward Hamberger, Association of American Railroads president and chief executive officer, in a prepared statement. "The legislation allows the fund to be invested — for the first time — in a diversified portfolio, bringing the railroad retirement system into the 21st century."
If enacted, the legislation would provide full retirement annuity at age 60 (instead of age 62) after 30 years of service, eliminate artificial caps on benefits, establish new-employee vesting in the Railroad Retirement System after five years (instead of 10 years), and raise a widow’s Tier II annuities to equal those annuities paid by Social Security (current law sets a widow’s Tier II annuity at 50 percent of a retiree’s Tier II annuity).
The bill also would allow the railroad pension to be invested in a mix of public and private securities.
Brotherhood of Locomotive Engineers International President Edward Dubroski believes efforts by BLE and Grand International Auxiliary officials helped overcome the Office of Management and Budget's and certain House republicans' objections to the bill.
"Without the action of these brothers and sisters, this bill never would have seen the light of day," he said.
Bill supporters believe the Senate might act on the bill shortly after Congress' summer recess, which is scheduled to end Sept. 3.
"Our employees are anxious to have this legislation signed into law by President Bush, so it can take effect on Jan. 1, 2002," said Union Pacific Railroad Chairman and CEO Dick Davidson.


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