Message to the Congress
Transmitting the Annual Report of the Railroad Retirement Board
To
the Congress of the
I
hereby submit to the Congress the Annual Report of the Railroad Retirement
Board for Fiscal Year 1986, pursuant to the provisions of Section 7(b)(6) of
the Railroad Retirement Act, enacted October 16, 1974, and Section 12(1) of the
Railroad Unemployment Insurance Act, enacted June 25, 1938.
The
rail industry pension fund has nearly gone broke three times since 1974.
Significant declines in rail employment have eroded the pension fund's
contribution base. Refinancing legislation enacted in 1974, 1981, and 1983 has
failed to provide long-term solutions for the rail pension system. The Railroad
Retirement Board's chief actuary is again predicting cash-flow problems and
recommends an upward adjustment in the rail sector's contributions.
Rail
industry pensions should be fully financed from rail sector resources. As long
as the Federal Government has a fiduciary responsibility for rail pensions, I
will work to ensure that rail sector contributions are adequate to finance rail
retirees' benefits. I therefore concur with the chief actuary, Board Chairman Gielow, and Board Member Chamberlain that the rail sector's
contributions should increase to prevent the pending financial crisis and to
ensure adequate financing for rail industry pensions. I renew my August
recommendation for a 3-percent rail sector contribution rate increase on
I
strongly oppose suggestions by some to restart American taxpayer subsidies to
the rail sector by transferring Federal income taxes collected on rail pensions
to the rail industry pension fund. As the Congress recognized in 1983 and 1986,
rail pensions -- the amounts above social security equivalent levels -- are private
pensions and should be treated like all other private industry pensions. Income
taxes collected on these private pensions should go to the general fund, not be converted to subsidies to the rail sector.
The
long-term solution for the rail pension system lies in the private sector,
where all other industry pension systems reside. Rail labor and management
should be allowed to determine pension financing and payment provisions free
from Federal intrusion and participation. I therefore reaffirm my position that
the rail pension system should be restored to the private sector and terminated
as a Federally administered program.
Ronald
Reagan
The
White House,
Note: The 134-page
report was entitled ``Railroad Retirement Board, 1986 Annual Report for the
Fiscal Year Ending September 30.''