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8/4/2006



Rail News: Rail Industry Trends

New Senate bill proposes treasury department as provider of railroad retirement annuities



Last week, Sen. Rick Santorum (R-Pa.) introduced the Railroad Retirement Technical Improvement Act of 2006 (S. 3726), which would amend the Railroad Retirement Act of 1974 to install the U.S. Department of the Treasury as the provider of railroad retirement annuities instead of a private company.

Referred to the Senate Committee on Health, Education, Labor and Pensions, S. 3726 is a companion bill to the Railroad Retirement Technical Improvement Act of 2006 (H.R. 5074) introduced in April by Rep. Don Young (R-Alaska).

H.R. 5074 proposes to change provisions in Railroad Retirement and Survivors Act of 2001 amendments that require the Railroad Retirement Board to contract an outside party to issue payments to beneficiaries.

“This provision was added to the 2001 bill at the last minute in order to make the railroad retirement system appear more like a private plan, even though the BLET and rail labor lobbied against it,” said officials of the Brotherhood of Locomotive Engineers and Trainmen — which supports the bills — in a prepared statement. “The amendment forces the Railroad Retirement Trust Fund to take money from the fund to pay the outside entity, which reduces the amount of money available for beneficiaries.”


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