Unions try to save rail retirement program from Reagan's budget ax
Railroad unions are facing another battle in Congress to preserve their separate retirement and unemployment benefits system.Skip to next paragraph
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A year ago, unions won changes in the system's basic tax structure - increases in payments by employers and workers in the dwindling railroad labor force - that averted threatened insolvency of the system by 1985.
The Congressional Budget Office now considers the system secure until 1990. Under it, 500,000 workers and their companies support benefits for 1 million beneficiaries.
The Railway Labor Executives Association, the central body representing railroad unions, is back again on Capitol Hill fighting a new threat to its retirement system.
As part of his 1983 budget, President Reagan recommends abolishing the Railroad Retirement Board, which oversees pensions and unemployment compensation; merging Tier I retirement benefits with social security; turning over Tier II benefits to a new private corporation; and shifting federal jobless benefits for railroad workers to state unemployment systems.
Tier I benefits are comparable to social security benefits in other industries and are financed equally by employers and workers.
Tier II benefits are financed entirely by employers but are administered, along with Tier I benefits, by the Railroad Retirement Board. They are comparable to pensions.
The Reagan administration considers the railroad retirement program an unnecessary, expensive duplication of social security.
The unions contend the already weak social security system would be worse if it is burdened with a million more beneficiaries.
They object to the shift of Tier II benefits to a private corporation and to the proposal to make future Tier II benefits subject to income taxes. The unions also object to ''fragmentation'' of their jobless benefits program by shifting it to states.