By UTU International President Mike Futhey – 

Railroaders should not lose sleep over a rumor that Congress will cut Railroad Retirement benefits.

The rumor began after language was inserted in a budget report by conservative Rep. Paul Ryan (R-Wis.) suggesting the federal deficit could be cut by eliminating certain Railroad Retirement benefits. He did not understand how Railroad Retirement is funded.

The UTU, SMWIA and other rail union legislative departments, along with carriers and the Railroad Retirement Board, immediately contacted congressional offices to remind lawmakers there are no federal funds used to pay Railroad Retirement Tier I benefits. Every penny of Railroad Retirement Tier I benefits is funded by payroll taxes on railroads and their workers.

Thus, there can be no savings to the federal government by tinkering with Railroad Retirement. As National Legislative Director James Stem said, “We are all confident that Rep. Ryan’s unfortunate draft language will disappear from consideration in Congress.”

This reminds us all to be ever vigilant in protecting Railroad Retirement, and the importance of participating in the UTU PAC.

Railroad Retirement, along with Social Security – which covers virtually all other private sector workers – originated with President Franklin Roosevelt’s New Deal during the Great Depression.

Railroad unions gained from Congress a guarantee that Railroad Retirement would never provide less in monthly benefits than Social Security. In fact, Railroad Retirement today pays considerably more than Social Security — the additional cost borne entirely by railroads and their workers.

For Railroad Retirement Tier I, the payroll taxes on employers and workers are the same as for Social Security, but Tier I allows railroaders with at least 30 years of service to retire at age 60 with full benefits for themselves and spouse. The cost of early retirement is funded by Tier II payroll taxes, which also fund additional Railroad Retirement benefits similar to private-sector pension plans where they still exist.

The average Railroad Retirement benefit paid current retirees is some $1,700 more monthly than paid to Social Security recipients, while the Railroad Retirement spouse benefit is some $500 more than paid spouses under Social Security.

Carriers pay the bulk of the additional Railroad Retirement taxes – 12.1 percent on payroll up to $81,900 per employee, while employees pay 3.9 percent on the same earnings. This significant pension benefit is what the railroads rely on to keep our professional workforce on the job until retirement.

For more information on Railroad Retirement, visit the Railroad Retirement Board website by clicking on the following link:

Railroad retirees and current rail workers should not be losing sleep over the much-hyped rumor that Congress is going to abolish Railroad Retirement, cut Railroad Retirement benefits or otherwise do harm to a system supported financially entirely by carriers and labor since its inception during the 1930s.

Recent language in a House Budget Committee report — “Conform Railroad Retirement Tier 1 benefits to Social Security benefits” — suggested an imminent congressional assault on Railroad Retirement by House Republicans.

But as the UTU and SMWIA legislative departments canvassed Capitol Hill, it became clear that the authors, who were drafting a roadmap for future federal spending cuts, did not understand how Railroad Retirement is funded.

UTU National Legislative Director James Stem, SMWIA Director of Government Affairs Jay Potesta, others in rail labor, carriers and the Railroad Retirement Board, began delivering the factual message to congressional offices:

“There are no public funds or general tax revenue used to pay the additional benefits provided by Tier 1 that exceed Social Security benefits. These additional benefits are fully funded by payroll taxes paid by rail labor and the carriers and are held in the Railroad Retirement account. Social Security does not reimburse Railroad Retirement for benefits that are not available under Social Security.”

Thus, there would be no savings to the federal government by tinkering with the Railroad Retirement system.

“Rail labor, carriers and the Railroad Retirement Board will continue delivering that message on Capitol Hill,” Stem said. “We are all confident that when the dust settles, this unfortunate draft language will disappear from consideration in Congress.”

U.S. Capitol Building; Capitol Building; Washington D.C. Public transportation funding, transportation jobs, workplace safety, Railroad Retirement and Medicare are under a mean-spirited and sustained attack by congressional conservatives who are trying to muscle their agenda through Congress prior to the November elections.

The UTU and Sheet Metal Workers International Association – now combined into the Sheet Metal, Air, Rail and Transportation Workers (SMART) – along with other labor organizations, public interest groups, congressional Democrats and moderate Republicans are working on Capitol Hill to block these attempts, which could be devastating to working families.

UTU National Legislative Director James Stem and SMWIA Director of Governmental Affairs Jay Potesta outlined the conservatives’ agenda that has surfaced in proposed congressional transportation reauthorization and budget legislation:

* Cut $31.5 billion in federal transportation spending, which would threaten some 500,000 American jobs.

* Eliminate federal spending for Amtrak and expansion of intercity rail-passenger service and high-speed rail, with a direct impact on jobs associated with that service.

* Gut federal spending for the Alaska Railroad, which would force elimination of scores of train and engine workers represented by the UTU.

* Delay implementation of positive train control, which is a modern technology to reduce train accidents and save lives and limbs.

* Eliminate federal spending for expansion of local and regional transit service as Americans scramble to find alternatives to driving in the face of soaring gasoline prices. The federal spending cut would prevent the return to work of furloughed workers from budget-starved local transit systems and likely cause layoffs of still more transit workers.

* Encourage privatization of local transit systems, which would open the door for non-union operators eager to pay substandard wages and eliminate employee health care insurance and other benefits.

* Remove any requirement for shuttle-van operators, whose vehicles cross state lines, from paying even minimum wage or overtime – a proposal, which if enacted, could lead to applying that legislation to interstate transit operations.

* Eliminate Railroad Retirement Tier I benefits that exceed Social Security benefits even though railroads and rail employees pay 100 percent of those benefits through payroll taxes, with no federal funds contributing to Tier I benefits that exceed what is paid by Social Security.

* Replace direct federal spending on Medicare in favor of handing out vouchers to be used to purchase private insurance, which will undercut the viability of Medicare.

* Provide large tax breaks to millionaires and preserve tax breaks for Wall Street hedge funds that cater to the wealthy, while cutting by two-thirds federal assistance to veterans and public schools.

The UTU member-supported political action committee (PAC) is helping to fund election campaigns by labor-friendly candidates, and a labor-wide “get out the vote” drive will go door-to-door across America in support of labor-friendly candidates in advance of November elections.

In the meantime, UTU and SMWIA legislative offices will continue their education campaign on Capitol Hill, visiting congressional offices to explain the economic devastation the current conservative agenda would impose on working families.

U.S. Capitol Building; Capitol Building; Washington D.C. Never underestimate the impact of your communications to Congress.

Combined with the tens of thousands of messages from others, the House Republican leadership has pulled back a planned vote Feb. 17 on a draconian transportation bill that would cost jobs, menace transportation safety and threaten the future of Railroad Retirement.

As phone call, email and fax communications flooded House offices in Washington – many from UTU members asked to voice their concern — House Speaker John Boehner (R-Ohio) delayed at least for another week a vote on H.R. 7, the misnamed American Energy and Infrastructure Jobs Act.

Boehner’s fellow Republicans were refusing to get in line with the speaker,  taking note of voter displeasure with the bill. Separately, President Obama said he would veto the measure if it reached his desk.

The fight is not over.

“Your contacts with Congress helped make this postponement of a vote necessary,” said UTU National Legislative Director James Stem. “With Congress in recess next week, and House members back in their districts taking the voters’ pulse, it is important you continue to call and email your House representative and renew your plea that they vote “no” on H.R. 7, the misnamed American Energy and Infrastructure Jobs Act.”

Here are the facts on how damaging that bill, if passed into law, could be for UTU members.

* It would facilitate privatization of public transit system by directing more federal funds to systems that contract out at least 20 percent of the jobs.

* It denies transit systems the flexibility to use federal funds to maintain service and retain workers during times of economic crisis, as we now are enduring.

* It eliminates federal minimum wage and overtime requirements for van drivers that transport rail crews between terminals, meaning these already low-paid and fatigued drivers would become more of a safety hazard when transporting crews.

* It delays mandatory implementation of positive train control on passenger rail lines from late 2015 to late 2020.

* It allows freight railroads to implement alternatives to installing of positive train control, which would provide crews and the public far less protection.

* It eliminates grants for hazmat train-the-trainer program, which would dramatically reduce or end training programs at the National Labor College.

* It eliminates capital grants for states seeking to expand and improve Amtrak service.

* It reduces long-term capital funding for Amtrak, limiting Amtrak’s ability to upgrade tracks and bridges on the Northeast Corridor.

* It prohibits Amtrak from using specialized outside counsel to recover from those at fault in Amtrak collisions, likely causing Amtrak to bear full responsibility for deaths and injuries cause by a non-Amtrak entity – even where it is clear the other operator was solely responsible for the entire accident.

* It requires Amtrak to contract-out its food and beverage service to the lowest bidder, threatening 2,000 Amtrak jobs and contributions to Railroad Retirement by shifting those jobs to non-union low-wage, low-benefits operators.

* It makes permanent a pilot program that allows any passenger rail provider to bid for any of Amtrak’s routes.

* It prohibits California from using any highway, transit, or passenger rail funds for development of high-speed rail.

To contact your House member and urge a “no” vote on H.R. 7, the American Energy and Infrastructure Jobs Act, click on the following link:

Then select your state, click on the name of your representative, and you have the information needed to send an email or fax, or make a phone call.

Freight rail, Amtrak and transit jobs, safety and Railroad Retirement are at risk if this bill is passed by the House of Representatives.

Retirees receiving Railroad Retirement Tier I or Social Security benefits will see their payments rise by 3.6 percent beginning Jan. 1 – the first increase in those benefit payments in two years.

Increases in Railroad Retirement and Social Security benefits are tied to the Department of Labor’s Consumer Price Index.

For railroad retirees, Tier II payments will rise by 1.2 percent, as the Tier II increases are calculated at 32.5 percent of the Consumer Price Index. Those receiving vested dual benefits payments, phased out in the early 1980s, and supplemental annuities will not see an increase in those payments.

Increases in Medicare Part B premiums will be announced by mid-November.

For railroad retirees who have not attained the full retirement age and are employed while receiving Railroad Retirement benefits, the maximum earnings not subject to a reduction will rise to $14,640 Jan. 1 from the current $14,160. The earnings deduction is $1 in benefits for every $2 in earnings over the exempt amount.

Railroad retirees, regardless of age, who work for their last pre-retirement non-railroad employer, are subject to an additional earnings deduction in their Tier II and supplemental benefits — $1 for every $2 in earnings up to a maximum reduction of 50 percent. This earnings restriction does not change from year to year and does not allow for an exempt amount.

For more information, contact your nearest Railroad Retirement or Social Security office.

A new year under the Railroad Unemployment Insurance Act for unemployment and sickness benefits begins July 1.

The maximum daily benefit rate payable remains at $66 in the new benefit year.

Benefits are normally paid for the number of days of unemployment or sickness over four in 14-day registration periods. Thus, the maximum benefits for biweekly claims will continue to total $660.

During the first 14-day claim period in a benefit year, benefits are payable for each day of unemployment or sickness in excess of seven, rather than four, which, in effect, provides a one-week waiting period.

Initial sickness claims must also begin with four consecutive days of sickness. However, only one waiting period is required during any period of continuing unemployment or sickness, even if that period continues into a subsequent benefit year. Claimants already on the rolls will normally not be required to serve another waiting period because of the onset of the new benefit year.

To qualify for railroad unemployment or sickness benefits in the benefit year beginning July 1, an employee must have had railroad earnings of at least $3,325 in calendar year 2010, not counting more than $1,330 for any month. Those who were first employed in the rail industry in 2010 must also have at least five months of creditable railroad service in that year.

Under certain conditions, employees who do not qualify in the new benefit year on the basis of their 2010 earnings may still be able to receive benefits beginning July 1.

Employees who received normal benefits in the benefit year ending June 30, might still be eligible for extended benefits.

Ten-year employees may be eligible for accelerated benefits, if they have rail earnings of at least $3,325 in 2011, not counting earnings of more than $1,330 a month.

Application forms for unemployment and sickness benefits may be obtained from railroad employers, UTU local or general committee offices, any Railroad Retirement Board (RRB) office, or the Railroad Retirement Board’s website at

Applications for unemployment benefits may be filed on-line.

Since November 2010, claimants have been able to file biweekly claims for sickness benefits over the Internet as well. However, rail employees who miss work due to illness or injury still must file a paper form that serves as their initial application for sickness benefits.

To access Railroad Retirement Board online services, employees must first establish an RRB Internet Services account. For security purposes, first-time users must apply for a Password Request Code, which they will receive by regular mail in about 10 business days.

To do this, employees should click on “requesting a Password Request Code (PRC)” in the “Benefit Online Services Login” section of the home page.

Once employees establish their online accounts, they will be able to file their applications and biweekly claims for unemployment benefits as well as conduct other business with the RRB over the Internet.

Employees are encouraged to initiate an online account while still employed so the account is established if they ever need to use these or other select RRB Internet services. Employees who have already established online accounts do not need to do so again.

Claimants with questions about unemployment or sickness benefits should contact an RRB office by calling toll free at (877) 772-5772. Field office locations can also be found online at

An opinion article recently published by the Financial Times and Fox News, written by conservative financial columnist Liz Peek, takes a nasty and incorrect swipe at Railroad Retirement, saying Railroad Retirement should be eliminated and folded into Social Security.

The argument begins with a major falsehood — that Railroad Retirement is costing the American taxpayer.

In fact, Railroad Retirement costs the American taxpayer not a single penny.

Not only are all Railroad Retirement benefits paid from payroll taxes of railroads and their workers, but so is the overhead operation of the Railroad Retirement Board.

Scrapping Railroad Retirement and folding it into Social Security wouldn’t save the federal government or the American taxpayer a single penny. But shutting it down would ravage the retirement security of some 600,000 current railroad retirees and their families, as well as future railroad retirees and their families.

The truth is:

  • The Railroad Retirement Tier I benefit is roughly equivalent to Social Security benefits.

Railroads and their employees each pay the same 6.2 percent payroll tax as employers and employees covered by Social Security. In what is strictly an accounting transfer, Railroad Retirement payroll taxes are transferred by the Railroad Retirement Board to the Social Security Administration, and then Social Security returns the equivalent Social Security benefits due railroad retirees to the Railroad Retirement Board. It is strictly an accounting transfer.

Although Tier I does provide benefits beyond what is paid by Social Security — such as early retirement and occupational disability — those additional Tier I benefits are paid entirely out of the Railroad Retirement Trust Fund — maintained entirely by railroads and their employees through payroll taxes.

  • The Railroad Retirement Tier II benefit, which is equivalent to a defined benefit private pension, is fully funded by additional payroll taxes paid solely by railroads and their employees — 3.9 percent by employees and 12.1 percent by railroads.
  • If the Railroad Retirement Trust Fund faces a shortfall, railroads are on the hook for higher payroll taxes — not the American taxpayer. That’s the law.

Railroad Retirement was created before there was Social Security, and has remained separate from Social Security, but is funded fully by railroads and their employees.

Although Congress sets the payroll tax rates and benefit levels, it does so in collaboration with railroads and rail labor — and not a penny of general tax revenue has been or is used for Railroad Retirement.

The unwarranted, unsubstantiated and unjust attack on Railroad Retirement by right-wing extremists is as phony as claiming that elimination of public-employee collective bargaining rights will solve state financial problems.

The mean-spirited attack on Railroad Retirement is part of a more broad effort to weaken and destroy organized labor.

WASHINGTON — Since its creation four decades ago, Amtrak has perennially teetered on the edge of financial extinction, annually fighting down to the wire for minimal funds to keep it operating.This year is no exception. And while UTU member and retiree phone calls — along with tens of thousands of others from Amtrak supporters nationwide — helped defeat an Amtrak-killing effort in the House of Representatives Feb. 17, the assault on Amtrak continues.

And as one should always expect a train at a highway-rail grade-crossing, we should always expect a congressional assault on Amtrak.

Indeed, there are those who do NOT love a train; but there are far more who do.

Limiting the ability of those in lawmaking authority to kill Amtrak — or so severely hobble Amtrak that death would follow — is a perennial effort requiring vigilance and education.

For rail employees — freight and passenger — this is a matter of job survival and family financial security.

This is because Amtrak’s survival means more than jobs for 20,000 Amtrak workers.

It means survival of Railroad Retirement.

Without Amtrak — and its workforce that numbers 9 percent of all active rail workers — Tier II of Railroad Retirement would suffer the same fate as Amtrak. Railroad Retirement Tier II cannot remain solvent should 20,000 Amtrak workers disappear from the employment roles and participation in Railroad Retirement.

Thus, Amtrak’s survival is as important to all active and retired rail employees as it is Amtrak’s current workforce.

Here are points of light for rail employees to communicate to lawmakers:

  • The high cost of fuel, along with traffic and airport congestion, is drawing travelers back to trains for commuting and travel between cities as much as 500 miles apart.
  • A Pew Research poll found that the number of Americans who enjoy driving fell by 10 percentage points over a recent 15 year period — and highway traffic congestion, rather than higher fuel prices — was the reason.
  • The American Association of State Highway and Transportation Officials predicts that by 2020, some 90 percent of urban Interstate highways will be at or exceeding capacity.
  • Philadelphia officials estimate 50 additional flights daily would be needed to handle Amtrak passengers arriving and departing from that city.
  • Federal transportation officials estimate that without Amtrak service into Manhattan, 20 additional highway lanes, 10 new tunnels under the Hudson River and hundreds of acres of new more parking would be required.
  • Civil engineers estimate that two railroad tracks have the capacity to carry as many people each hour as 16 lanes of highway; and 300 miles of railroad use less land than a single commercial airport.
  • Railroads require less land than new highways and airports, they are less expensive to construct, they are more fuel efficient than highway or air transport, they are environmentally preferable to all competing forms of motorized transportation, and they are notably safer than highway travel.

To communicate these points to your elected lawmakers, click on the following link, and then type in your address and zip code to receive the name and direct office phone number of your elected lawmakers in the House and Senate:  

Railroad Retirement, Social Security, Medicare and Railroad Unemployment Insurance payroll taxes have changed for 2011.

Following are the tax rates:

 Railroad Retirement Tier I:

  • Paid by employer: 6.20% on wages up to $106,800.
  • Paid by employee: 4.2% on wages up to $106,800.

Social Security (non-railroad employment):

  • Paid by employer: 6.2% on wages up to $106,800.
  • Paid by employee: 4.2% on wages up to $106,800. 

Medicare (railroad and non-railroad employment):

  • Paid by employer: 1.45% on all wages (no cap).
  • Paid by employee: 1.45% on all wages (no cap).

 Railroad Retirement Tier II

  • Paid by employer: 12.1% on wages up to a $79,200.
  • Paid by employee: 3.9% on wages up to $79,200.

 Railroad Unemployment Insurance:

  • Paid by employer: 3.15% on wages up to $15,960.
  • No tax on employee.


Come May 1, Social Security and Railroad Retirement checks for new recipients no longer will be mailed.

The Social Security Administration and the Railroad Retirement Board are going paperless — sending payment electronically (direct deposit) to those receiving retirement, disability and survivor benefits.

Those already receiving Social Security and Railroad Retirement benefits will have until March 1, 2013 to establish direct deposit at a financial institution, or arrange for the benefits to be credited to a debit card. An exception will be made for those at least 90 years old and those living in remote areas.

The agencies say that eight of 10 benefits recipients already receive them electronically.

Electronic payment eliminates the problem of lost or stolen checks, and makes it easier and more prompt for those away from home to ensure payments are available for use.

Beneficiaries who do not have bank or credit union accounts may obtain a Direct Express debit MasterCard.

For more information and assistance, go to, or call, toll free, (800) 333-1795.