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 1987, 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
Annual Report, which includes a recent actuarial valuation, indicates an
improved financial outlook for the rail pension fund, due in part to a 2
percentage point increase in the rail sector contribution rate. The Congress
enacted this increase based on an Administration proposal and a recommendation
by the Railroad Retirement Board's Chief Actuary. I hope we can continue to
work together in the future to protect rail pensioners' benefits.
The
Congress also enacted a $370 million taxpayer subsidy for the rail pension fund
at the urging of rail sector representatives. Since 1983, over $3.5 billion of
Federal funds have been given to the rail pension fund. It is time to put an
end to this tap on the taxpayer. Under current law, the subsidy will expire in
1989. I urge the Congress to hold the rail industry to its pledge to fund rail
pensions fully without Federal taxpayer support by allowing this subsidy to
expire at that time.
The
Congress has also asked for a study by a panel of rail sector representatives
and independent experts regarding rail pension reform proposals. I urge the
panelists, including the rail sector representatives, to adhere to the
Congress's wish, as expressed in the charter and in the report language, that the Commission focus on putting rail pensions
on a sound long-term track financed solely from rail sector resources and not
on palliatives involving new taxpayer subsidies.
The
best approach to rail pension reform is to restore the rail pension system to
the private sector, where all other private pension plans reside. The
Administration recently transmitted to the Congress the Rail Industry Pension
Restoration Act of 1988, which would restore control over rail pensions to rail
labor and management. The bill would allow labor and management to collectively
bargain their pension plan free from inappropriate Federal intrusion. Current
retirees' pensions and the earned benefits of current workers would be
protected. Over time, rail pensions would be fully funded in advance of
retirement like other industry pension plans.
I
urge the Congress and the reform commission to consider our privatization
proposal, which is a strong first step toward long-term stability for rail
pensions.
Ronald
Reagan
The
White House,