WASHINGTON — The U.S. House of Representatives on Tuesday gave final congressional approval to a bill that would permit $15.3 billion in railroad pension funds to be invested on Wall Street, reports a wire service.
On a vote of 369-33, the House passed the previously Senate-approved measure and sent it to President George W. Bush for his anticipated signature.
The measure would let the federally administered railroad pension system take the assets out of U.S. Treasury bonds and invest the money in private securities instead.
The bill would cut railroad’s payroll taxes while aiming to boost the benefits of retirees and their widows or widowers.
Passed by the Senate last week, the measure was backed by rail companies and their unions.
The bill’s proponents said it was important to help tens of thousands of rail retirees, who are not covered by Social Security, as well as the rail companies.
The main provision in the bill allows $15.3 billion in railroad retirement assets to be transferred to a new National Railroad Retirement Investment Trust.
The trust could invest the assets in a diversified portfolio, similar to private sector retirement plans. It would have a seven-member Board of Trustees, with three appointed by rail management, three by rail labor, and the seventh appointed by the other six.
Under the legislation, rail companies that now pay payroll taxes at the rate of 16.1 percent would see this reduced to 15.6 percent next year and 14.2 percent in 2003. After that the rate would be adjusted annually, depending on the level of reserves.
Widows’ and widowers’ benefits would be guaranteed to be equal to the annuity the retiree had received, just as for Social Security. Previously they could receive no more than half once the retiree died.
The measure would also permit employees to retire at age 60 with 30 years of service. The current retirement age is 62.