LINCOLN, Neb. — Right down to the wire, Scott Rezek and his sheet metal workers union members were making the phones ring in the offices of Nebraska’s U.S. senators, the Lincoln Journal Star reports.
Rezec, his union colleagues and about a million other railroaders around the country got the job done Wednesday.
The Senate passed 90-9 a bill to improve retirement benefits for railroad employees, retirees and dependents, to cut federal payroll taxes on railroads and to allow the federally administered railroad retirement fund to be invested in stocks and bonds to make up for the lower taxes.
“We’re certainly happy and excited, especially for the widows and future retirees who can retire at 60 years old,” said Rezec, directing general chairman of the Sheet Metal Workers International Association. Rezec runs a district council that represents all the sheet metal workers in the U.S. railroad industry.
Both senators from Nebraska co-sponsored the bill, which was supported for the past couple of years by the Association of American Railroads and rail unions.
The railroad retirement system is financed by payroll taxes on both the railroads and their employees and is administered by the federal government. The bill will allow one tier of the two-tier system to invest in stocks, bonds and other instruments as part of a more diversified investment portfolio. The other tier will remain invested only in federal government securities, and will retain its federal guarantees.
The improved returns presumed by riskier investments is what allows other benefits in the bill, including lower payroll taxes paid by the railroads; lowering the minimum retirement age for those who have worked 30 years to 60 from 62; reducing the vesting period in the system from 10 years to five; improving the benefits paid to widows and widowers of railroad retirees to 100 percent of the deceased retiree’s benefit, up from 47 percent.
Union officials focused on the benefits and the significance of a political victory for united labor and management.
“This is a first and a significant first,” said Ray Lineweber, Nebraska legislative director for the United Transportation Union. “It tells people it can be done, that progress can be made in the form of partnership.”
“It’s one of the most dangerous industries there is,” Rezek said. “After 30 years it’s time for them to retire. Sixty (the new retirement age of eligibility) to me is not as important as the widows’ benefit.”
Sen. Chuck Hagel called the bill “the right thing to do” and pointed out the importance of railroad operations in the state: “Nebraska is home to over 23,000 railroad employees, retirees, spouses and survivors, as well as two railroads, Union Pacific and Burlington Northern Santa Fe.”
His Democratic Party colleague, Sen. Ben Nelson, broke down the constituency further: 11,161 retirees and survivors, and 12,091 current workers.
“These reforms also do not threaten the solvency of the program, which has been projected out to 75 years by the Railroad Retirement Board’s actuary,” a statement from Nelson’s office said.
The legislation returns to the House, where a nearly identical bill passed overwhelmingly in July.
President Bush has not taken a position, but Senate Majority Leader Tom Daschle, D-S.D., said he expected the president to sign it into law and said there are easily enough votes to override a veto.