RETIREMENT SYSTEM HEARINGS BEFORE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE HOUSE OF REPRESENTATIVES NINETY-THIRD CONGRESS SECOND SESSION ON H.R. 15301 A BILL TO AMEND THE RAILROAD RETIREMENT ACT OF COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE HARLEY O. STAGGERS, West Virginia, Chairman TORBERT H, MACDONALD, Massachusetts JOHN JARMAN, Oklahoma JOHN E. MOSS, California JOHN D. DINGELL, Michigan LIONEL VAN DEERLIN, California FRED B. ROONEY, Pennsylvania W. S. (BILL) STUCKEY, JR., Georgia BOB ECKHARDT, Texas RICHARDSON PREYER, North Carolina RALPH H. METCALFE, Illinois JOHN BRECKENRIDGE, Kentucky SAMUEL L. DEVINE, Ohio ANCHER NELSEN, Minnesota JAMES T. BROYHILL, North Carolina DAN KUYKENDALL, Tennessee JAMES F. HASTINGS, New York JOHN WARE, Pennsylvania JOHN Y. MCCOLLISTER, Nebraska BARRY M. GOLDWATER, JR., California H. JOHN HEINZ III, Pennsylvania EDWARD R. MADIGAN, Illinois Statement of— Ailes, Stephen, president and chief executive officer, Association of 164 354, 361 Bayo, Francisco, Deputy Chief Actuary, Social Security Administra- tion, Department of Health, Education, and Welfare--- Benjamin, Abraham, Director of Research, Railroad Retirement Board Cardwell, James B., Commissioner, Social Security Administration, Department of Health, Education, and Welfare_- Carlucci, Hon. Frank C., Under Secretary, Department of Health, Chamberlain, Charles J., president, Brotherhood of Railroad Signal- Cowen, James L., Chairman, Railroad Retirement Board_ Davis, Edward B., counsel, Brotherhood of Railway & Airline Clerks Marquis, James E., Assistant Commissioner for Planning and Evalu- 354, 361 Morton, Alexander L., associate professor of business administration, Quarles, Wythe D., Jr., management member, Railroad Retirement Speirs, Neil L., labor member, Railroad Retirement Board....... Zimmerman, Dale, Assistant General Counsel, Railroad Retirement Chart-Operation of financial interchange, dual benefit cases.. Chart-Effects of the financial interchange between social security Additional material submitted for the record by-Continued Interstate and Foreign Commerce Committee, correspondence between Chairman Staggers and Congressman Devine, and Chairman Mills and Congressman Schneebeli re H.R. 15301_. Masten, John K., Elmhurst, N.Y., statement__. Morton, Alexander L., associate professor of business administration, National Association of Retired & Veteran Railway Employees, Inc., Page 2 401 395 397 National Railroad Pension Forum, Inc., Robert B. Byrnes, president, statement 391 National Railway Labor Conference: Attachments to Mr. Dempsey's prepared statement: Chart 1-Illustration of windfall dual benefits- 176 177 Chart 3-Cost impact of dual benefits___ 178 Chart 4-Illustration of benefit components under proposed Rail- 179 180 Chart 5 The effect of the proposed act upon the financial status Niessen, Abraham M., former Chief Actuary, Railroad Retirement Patten, Hon. Edward J., a Representative in Congress from the Railroad Retirement Board, attachments to Mr. Cowen's prepared Exhibit 1-Procedures used in making the financial inter- Exhibit 2-Legislative history of the provisions of the RRA, Exhibit 3--Discussions of questions pertaining to the recom- 353 398 397 265 270 294 310 Exhibit 5 Compounding effect in benefits of percentage in- 321 324 Wallis, W. Allen, chancellor, University of Rochester, letter dated August 26, 1974, to Chairman Staggers_ 397 RESTRUCTURING OF THE RAILROAD RETIREMENT SYSTEM THURSDAY, JULY 25, 1974 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The committee met at 10 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. Harley O. Staggers [chairman] presiding. The CHAIRMAN. The committee will come to order. The hearings today are on H.R. 15301, a bill to revise the Railroad Retirement Act of 1937. Public Law 93-69 adopted last year provided for the establishment of a Joint Labor-Management Committee to recommend to the Congress a restructuring of the Railroad Retirement Act to place the system on a sound financial basis. H.R. 15301 is a draft bill submitted by the parties in response to the mandate of Public Law 93-69. The bill represents the product of many hours of work on the part of the members of this committee and is a major accomplishment. I understand that the bill is endorsed by management and by all railway labor organizations. Several features of the bill involve matters of concern to the Ways and Means Committee. The most important of these are three in number and involve the question of which agency will administer social security benefits payable to beneficiaries of the railroad retirement system, the method by which the financial interchange program between railroad retirement and social security will operate, and the manner in which will be paid the costs associated with payment of social security benefits to persons also entitled to railroad retirement benefits. Mr. Devine and I joined in sending a letter to Chairman Mills calling these matters to the attention of the Ways and Means Committee and requesting such recommendations as that committee might choose to make. On July 11, Chairman Mills responded by letter signed by himself and Mr. Schneebeli, ranking Republican member of the committee. I will include the text of the letter from Mr. Devine and me at the conclusion of my remarks along with the reply signed by Chairman Mills and Mr. Schneebeli [see p. 2]. Among other things, the letter from Chairman Mills and Mr. Schneebeli states: Although the Committee on Ways and Means has not had an opportunity to review these changes in depth, we believe we can say with confidence that the committee would not be willing to agree with them because of the adverse effects they would have on the social security system. (1) |