Railroad Retirement vs Social Security

[CMStPnP]

OK so what is the major argument against merging RRB into Social Security?

[tree68]

I'm guessing here, but I'd opine that it might have something to do with SS having been looted and a fear that RR retirement might be seen by some as another source of funds for said looting...

[BOB WITHORN]

TREE,

 

+1

 

Bob

[PNWRMNM]

Railroad employees, and their employers, both pay MUCH higher tax rates for MUCH higher payouts upon retirement. My wife and I can actually live as well on my railroad retirement as we did when I was working, which is not be possible with social security.

While both are Ponzi schemes in that they tax current employees to pay past employees, IIRC when congress introduced the 60/30 full retirement option, they also allowed temporary surplus funds to be invested in the real economy, which of course social security can not do as their surpluses have all been "loaned" to the US Govt. Now that there are far fewer workers relative to retirees in SS, the Govt will soon have to raise taxes or borrow more from the Chicoms to pay Social Security.

If RR is merged with SS, rail employees will get robbed comming and going. That is the arguement against it. 

Mac McCulloch

[oltmannd]

Social Security and Railroad Retirement already are merged....sort of.

Tier One of Railroad Retirement is exactly the same as Social Security in terms of tax and benefits (except for the 60 years old/30 years service early retirement provision of RR).  In fact, if you work a railroad job and then quit and work a "normal" job, you Tier One contributions count toward Social Security. Tier One is also taxed and ajusted for cost of living just like SS. 

The Tier One funds are mergered, I believe.

RR Tier Two is a different deal.  It's its own fund maintianed by fixed employee and variable employer contributions. It is treated like a defined pension benefit by the IRS. It's cost of living adjustment is only about 1/3 of Tier One.  Also, if you don't finish your career with a railroad, you lose all Tier Two benefits.

The Tier Two funds can't be mergered any more than any other pension plan could be mergered with SS.

[Euclid]

PNWRMNM

If RR is merged with SS, rail employees will get robbed comming and going. That is the arguement against it. 

Mac McCulloch

So who, if anybody, is advocating merging Railroad Retirement with Social Security?

[ACY Tom]

Euclid

 

 

PNWRMNM

If RR is merged with SS, rail employees will get robbed comming and going. That is the arguement against it. 

Mac McCulloch

 

 

So who, if anybody, is advocating merging Railroad Retirement with Social Security?

 

Lots of folks in the GOP.

Tom

[Euclid]

ACY

 

Euclid

 

 

PNWRMNM

If RR is merged with SS, rail employees will get robbed comming and going. That is the arguement against it. 

Mac McCulloch

 

 

So who, if anybody, is advocating merging Railroad Retirement with Social Security?

 

 

 

 

Lots of folks in the GOP.

Tom

 

Like who?  What reason do they give?

[jeffhergert]

Euclid

 

 

ACY

 

Euclid

 

 

PNWRMNM

If RR is merged with SS, rail employees will get robbed comming and going. That is the arguement against it. 

Mac McCulloch

 

 

So who, if anybody, is advocating merging Railroad Retirement with Social Security?

 

 

 

 

Lots of folks in the GOP.

Tom

 

 

 

 

Like who?  What reason do they give?

 

Paul Ryan, for one.

http://www.ble-t.org/ryanbudget/

Jeff

[wanswheel]

[Euclid]

I can certainly see why people with RR would oppose merging with SS.  SS is quickly going broke; probably much sooner than is commonly predicted. 

But what I would like to know is this:  What is the stated reasons why RR should be merged with SS? 

[Deggesty]

Euclid

I can certainly see why people with RR would oppose merging with SS.  SS is quickly going broke; probably much sooner than is commonly predicted. 

But what I would like to know is this:  What is the stated reasons why RR should be merged with SS? 

 

Yes, why would anyone want to merge the two?

[Norm48327]

jeffhergert

Paul Ryan, for one.

Paul Ryan = RINO.

[tree68]

Euclid

But what I would like to know is this:  What is the stated reasons why RR should be merged with SS? 

As with any political move, there are two reasons - those the politicians give to justify the action (which will supposedly benefit all involved), and the the real reasons (which, if revealed would deep six the action faster than you-know-what).  

The real reason has likely already been discussed here.  I doubt you'll hear any politicians bring it up.

[Euclid]

tree68

 

Euclid

But what I would like to know is this:  What is the stated reasons why RR should be merged with SS? 

As with any political move, there are two reasons - those the politicians give to justify the action (which will supposedly benefit all involved)...    

 

That is what I want to hear.  I am fully aware of why people oppose it. 

 

I am just asking if someone could give me the thumbnail synopsis of the case being made for merging RR with SS.  I could spend a couple days researching it, but surely someone here has the quick answer. 

 

I am not asking whether the case for merger is justified or honest.  I am only asking what it is. 

[jeffhergert]

Norm48327

 

 

jeffhergert

Paul Ryan, for one.

 

 

Paul Ryan = RINO.

 

Thank you for reminding me why I changed to being registered as an Independent. 

As the reasons for merging the two are mostly budget tricks and all political, maybe it's time to lock this thread.

Jeff 

[oltmannd]

jeffhergert

 

 

Norm48327

 

 

jeffhergert

Paul Ryan, for one.

 

 

Paul Ryan = RINO.

 

 

 

 

Thank you for reminding me why I changed to being registered as an Independent. 

As the reasons for merging the two are mostly budget tricks and all political, maybe it's time to lock this thread.

Jeff 

 

+1

[stebbycentral]

oltmannd

RR Tier Two is a different deal. It's its own fund maintianed by fixed employee and variable employer contributions. It is treated like a defined pension benefit by the IRS. It's cost of living adjustment is only about 1/3 of Tier One. Also, if you don't finish your career with a railroad, you lose all Tier Two benefits.

A slight correction; Tier 2 benefits are "lost" only if an employee leaves the railroad industry with less than 10 years (120 months) of railroad employment.  If you leave the railroad with less than 10 years of service, the railroad service is only counted as Social Security time when you retire.  But if you have more than 10 years of railroad service when you leave the railroad, you are still entitled to the RRB benefits at age 62.  The difference is that Tier 2 benefit does not increase in value for the years you work outside the railroad.  (As would any private pension where the benefit is calculated only based on the years you worked for the company.) 

You do loose some benefits by not being a current railroad employee when you retire or die.  Disability benefits and survivor benefits are all paid through Social Security instead of the RRB.  And you must meet the Social Security eligibility requirements to get these benefits, which can in some cases be more restrictive.  Of course the laws can change over time, so it is wise for any former railroad worker to check with your local RRB office as well as SSA when you are thinking about retirement.  For instance, if you didn't have 10 actual years of railroad work you still might be eligible for RRB benefits if you spent in time in the military while working for the railroad.  Military service under the right circumstances can be used to make up the difference if the total of RR time plus military time equals 10 years.

[ACY Tom]

I don't understand the reasons for wanting to merge them, but the idea gets some credence from the mistaken idea that the two programs serve the same purpose. Railroad Retirement is the primary retirement program for railroad employees. They and their employers have paid into it in order to guarantee some measure of guatanteed security in retirement. Social Security is a supplement, and was never intended to be the primary means of support for retirees. Compromising Social Security would be a calamity. Compromising Railroad Retirement would be a catastrophe.  

In my case, I retired from the railroad before putting in the full 30 years. This was far less than ideal, but my advancing age made it unreasonable for me to continue longer. Before working for the railroad, I worked over 25 years in jobs under SSI. As a result, my monthly retirement check reflects both Railroad Retirement and SSI. I consider the SSI portion vulnerable, and would be very concerned if the RRB portion became vulnerable as well. I would be far better off financially if I had stayed with the railroad for the full 30 years, but that wasn't in the cards for me.   

Tom

[Euclid]

.

 

[schlimm]

jeffhergert

 

 

Euclid

 

 

ACY

 

Euclid

 

 

PNWRMNM

If RR is merged with SS, rail employees will get robbed comming and going. That is the arguement against it. 

Mac McCulloch

 

 

So who, if anybody, is advocating merging Railroad Retirement with Social Security?

 

 

 

 

Lots of folks in the GOP.

Tom

 

 

 

 

Like who?  What reason do they give?

 

 

 

 

Paul Ryan, for one.

http://www.ble-t.org/ryanbudget/

Jeff

 

I guess those answers must have come as a surprise to Euclid, as it doesn't fit his anti-government, rightist memes.  But then, much of his thinking is reality-challenged.  Now he's trying to show it's all a Dem fiction to scare folks about the GOP's plans (see Jeff's link) to modify the RRB and SS beyond recognition.  Both those central features of our retirement systems were passed by Democrats.  The GOP has openly or covertly tried to repeal/destroy both them for over half a century.

 

[Euclid]

Apparently the reason why nobody can explain the basis for proposal that RR be merged with SS is that there is no such proposal.   It is only a tactic to scare members into voting for Democrats. 

http://aboutmittromney.com/railroad-retirement.htm

Here is a portion of the link:

******************************************************

Question:

The union folks are claiming that Gov. Romney plans to move the railroad retirement system into social security (which would reduce the benefits of those who have worked on the railroad for many years), and that is a basis to vote for Obama. To me this is not very smart since Obama has an all-out war on coal, nevertheless it is the argument they are using...

Could you please confirm or deny this plan?

Long Answer:

(short answer found below at the bottom)

This is an untrue rumor by the democrat-aligned unions in the important coal and railroad regions in Virginia and West Virginia, and told to railroad workers and retirees nationwide.

Innuendo and Untrue Argument #1:

Different unions are making different arguments and the stories are changing.
A common claim: Republicans tried to take away benefits but democrats stopped them.

Fact: The House Budget did not mention the railroad retirement.
(It set general spending levels for the federal budget, but the Senate rejected it.)

Official government site for the budget voted on in 2012: H.Con.Res.112 "Establishing the budget for the United States Government for fiscal year 2013 and setting forth appropriate budgetary levels for fiscal years 2014 through 2022."

The above page has a link "Text of Legislation" which takes the reader to three versions:
  1) H.CON.RES.112.RH Version that came out of committee on March 23, 2012.
  2) H.CON.RES.112.EH Version passed by House on March 29th.
  3) H.CON.RES.112.PCS Version voted down by Senate on May 16th.

None of the versions mentioned or took away any railroad retirement benefits.
(Verify by reading the text in the above links if there is any doubt.)

The above official site also has a link "Major Congressional Actions" to the voting record. At the bottom of that link, the House votes are recorded here and the Senate vote here.

Democrat unions falsely claim that vote was on a different resolution that mentioned railroad benefits. (Verify title: Vote was on H.Con.Res.112 with its name as noted above.)

The different resolution, called "an original measure, H.Rept.112-421", was introduced March 23rd and never voted on. (This resolution was a report, not a bill, and all references to the report were removed from the Budget bill that congress voted on.)

Also, lied about by the unions, House Report 421 did not specify to take away benefits.

Under a section titled "Illustrative Policy Options," House report 421 stated committees have jurisdiction to determine what specific spending measures can be presented for a vote, but said that committees could consider proposing to "Conform Railroad Retirement Tier 1 Benefits to Social Security Benefits."

Committees never did that, and unions have already talked to committee members on why that cannot and should not be done.

In fact, the Railroad Retirement Board specifically stated in a memo they posted on their site that "No such legislation has been introduced."

More details and facts are given on this, in addressing recent claims by BLET:

ROMNEY, OBAMA, RAILROAD RETIREMENT AND BLET »

Innuendo and Untrue Argument #2:

Unions claim Romney, multiple times, praised the House Report 421, and therefore he plans to do away with railroad retirement benefits.

Actual Facts: Romney
  1) Praised the Budget Roadmap (it did not mention railroad retirement)
  2) Praised the Budget Blueprint (it did not mention the railroad retirement)
  3) Praised the Passed Budget H.Con.Res.112 (it did not mention railroad retirement)
  4) Never praised Report 421 (it suggested committees could review tier 1 benefits)

The roadmap came out first, then the blueprint and Romney praised those. The report came out March 23rd and Romney did not praise it. After the Budget, H.Con.Res.112, was passed on March 29th, Romney praised the budget, which although it had deficit spending, had spending limits that were not out of control.

Other Facts:

Mitt Romney has no plan to take away railroad benefits, and it would go against his stated philosophies to introduce such a plan.

This is merely an attempt to swing the vote to Obama by using untrue scare tactics.

Mitt Romney has laid out his plan to reform social security and it does not mention and does not touch the railroad retirement. (See summary by NY Times below.)

Mitt Romney has never introduced or stated any plans to modify the railroad retirement.

Reason:

The railroad retirement is healthy and currently does not need reforming:

“Barring a sudden, unanticipated, large decrease in railroad employment or substantial investment losses, the railroad retirement system will experience no cash-flow problems during the next 23 years. The long-term stability of the system, however, is still questionable. Under the current financing structure, actual levels of railroad employment and investment return over the coming years will largely determine whether corrective action is necessary.”

rrb.gov - RRB Financial Reports - July, 2011

But Social Security needs reforming:

“Social Security began running deficits in 2010, paying out $48.9 billion more in benefits than it received through payroll taxes. Nor will these deficits ever end, meaning that without reforms, Social Security will continue to add billions to the deficit and debt each year.”

[Norm48327]

jeffhergert

Thank you for reminding me why I changed to being registered as an Independent.

I owe allegiance to no party. I prefer, even if I may be errant, to think for myself.

[Norm48327]

Euclid

.

 

 

Mind suddenly go blank?

[zugmann]

Euclid

Apparently the reason why nobody can explain the basis for proposal that RR be merged with SS is that there is no such proposal. It is only a tactic to scare members into voting for Democrats.

I wish that were the case, Bucky.  Ok, so not so much as merged as "conformed", although I would use another verb that starts with the letter F.

https://www.congress.gov/congressional-report/112th-congress/house-report/421/1

 

Sepcifically:

 "Conform Railroad Retirement Tier 1 Benefits to Social 
Security Benefits. Tier 1 benefits for railroad retirees are 
supposed to mimic Social Security benefits, but they are more 
generous than Social Security in many ways. This option would 
conform Tier 1 so that its benefits would equal those of Social 
Security, with an estimated savings to taxpayers of $2 billion 
over 10 years."

[stebbycentral]

ACY

I don't understand the reasons for wanting to merge them, but the idea gets some credence from the mistaken idea that the two programs serve the same purpose. Railroad Retirement is the primary retirement program for railroad employees. They and their employers have paid into it in order to guarantee some measure of guatanteed security in retirement.

To add to that, the idea of merging the two systems was advocated during the years of the Nixon administration.  The stated motive was to reduce the size of the federal bureaucracy, having by Social Security take over administration of the program.  This would enable the closing the 300 plus RRB offices through out the country, as well as the Chicago headquarters. 

Of course the other unstated consequence of such a move is that it would have vastly reduced the influence of the railroad unions on proposed future benefit changes.  As the Railroad Reirement Act was originally written in 1937, there is an actual "Railroad Retirement Board".  It consists of three people appointed by the President; one from the Unions, one from the Industry, and a third person who is supposed to be impartial.  If the system had been merged into Social Security, the "Board" itself would have been abolished, so the unions fought it.  The compromise was the "Tier" system that tied part of the benefits to the Social Secuity laws, while preserving the Railroad Retirement Board as an independent agency.  The RRB collects the taxes from railroad workers, administers the funds, and pays the benefits for all retirees who meet the 10 year rule.

However in the 1980's the Regan Administration was able to convince Congress to rewrite the Civil Service laws to make all new federal workers pay into Social Security.  The new laws replaced the old Civil Service Annuity with a supplemental government pension called the Federal Employee's Retirment System (FERS) which is administered by the Office of Personnel Management (OPM).  Like railroad workers government workers also pay additional contributions for their FERS benefits.  So a current federal worker who retires files at Social Security for a Social Security benefit that include all their earnings, but also gets a seprate OPM check for their federal employment only.  Workers who retired before the change still get a Civil Service check under the old pension system, but as they die off the system will die with them.  

This has become the model for most of the proposals floated today for railroad workers; where Social Security would take over complete administration of all Tier 1 funds and benefits, and the RRB would administer only the Tier 2 benefits paid for by railroad worker contributions.  Under most of these proposals there is no guarantee that the RRB would continue to be a government agency, rather it could become like any private industrial pension and it would be up to the unions and the railroads to decide who administers it.   The other thing is that if the Tier 1 benefits are turned over to Social Security, the more generous early retirement provisions of the RRB Act either go out the window or have to be paid for out of the Tier 2 fund. 

[zugmann]

ACY

I don't understand the reasons for wanting to merge them, but the idea gets some credence from the mistaken idea that the two programs serve the same purpose. Railroad Retirement is the primary retirement program for railroad employees. They and their employers have paid into it in order to guarantee some measure of guatanteed security in retirement. Social Security is a supplement, and was never intended to be the primary means of support for retirees. Compromising Social Security would be a calamity. Compromising Railroad Retirement would be a catastrophe.

A (mostly)blue-collared (mainly) unionized working class with their own retirement program?  That's blasphemy to many in this country anymore. 

I don't get how so many have this attitude of "if you want something better you should work for it".  Well, we as railroaders do work for it.  This job and lifestyle aren't easy.  I think a lot of the hate on the railroad retirement is jealousy.  Hey, it sucks most industries don't have pensions any more.  I don't want it to be that way.  But this perpetual race to the bottom we as a society are participating in is going to be the end of us all.  

Maybe some day people will get off of their instagram and wake the hell up.

[Ulrich]

A pension is great if you work for an employer who offers one, and you're loyal to that employer and stay there for years. Pensions don't work for the average person who changes jobs every couple or three years. Most people (including myself) have nothing beyond whatever thay can save..not complaining.. that's just the way it is. At least we don't have to worry about having our pensions monkeyed with..  

[tree68]

Ulrich

At least we don't have to worry about having our pensions monkeyed with..

Oh, you can count on someone trying to mess with whatever you do have saved up...  Those who are job mobile are lucky if they are working places that support 401K's and similar arrangements.  At least those are relatively portable.

[Ulrich]

True enough... there's no absolute security. My investments could go to pot, my health could fail, and I could find myself with a tin cup in hand begging for change when I'm 80. Nobody plans for it.. but it does happen to alot of decent people. BAD LUCK can strike anyone and often does.