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Two individuals, each having 30 years' service, and having contributed the same amount into the pension fund, a proportional unit will give them the same pension, whereas the nonproportional unit will give them a pension with a variation of from $10 to $40.

The 1924 to 1931-37 period

It does not require a genius to see the inevitable discrimination and unfairness resulting from the application of the 1924 to 1931-37 period, in any proportion, or by a unit established on this unrelated base, in determining the amount of annuity or pension.

This base is an unrelated base, with no proportional relation to the pension fund. This unit is not a measure of service; neither is it a proportional unit of measure, due to the differences, substandard and standard wages, as existed in this period. One individual working 2 hours for the same amount of earnings as another may be required to work only 1 hour, and such base having no proportional relation to the pension fund.

This base is a fixed base.

It is one that never changes with the up and down costs of living and wages. It is one that was obsolete in less than 3 years after its adoption. To tie this base on to a flexible base spoils the flexible base in proportion to their respective time each represents.

The 1937 to date of retirement basis

This base is a flexible base. It is one that swings up and down with the cost of living and wages. It is one on which a pension, or annuity, can be determined in proportion to the amount contributed into the pension fund or by a proportional unit. It is one in which the amount contributed to the pension fund is proportional to the amount earned, up to the limit of $300 per month. The amount earned is proportional to the living cost of the respective period. A unit established on this base will be a proportional unit, thus measuring out a pension or annuity with justice to all.

A and B each have 30 years service, and have each contributed $2,000 into the pension fund. A proportional unit would give A and B equal pension. But a unit based on the related earnings of 1924 to 1931-37, such earnings having no proportional relations to the pension fund, would give A and B a pension of unequal amount, varying from $10 to $40 due to the nonproportional unit.

The only fair way to distribute any fund is on a proportional basis, in proportion to the contributions to the fund.

Surely there can be no mathematical nor moral reason under such a condition of equal contribution, for one individual to receive a pension of $75 per month and another $95 when the length of service are the same. It is possible, and no doubt it has often occurred, where two individuals have a service of 30 years each, and the one contributing the most into the pension fund, receives the less pension. In the period of 1924 to 1931, the employees of many railroads, including the Pacific Electric Railway Co., and certain other properties, were far underpaid, due mostly to lack of labor organization. To penalize these men by using such a period as 1924 to 1931 in conjunction with the period 1937 to date the retirement, in determining the amount of pension they are to draw, and at the same time permit others, who were more fortunate, drawing or receiving standard wages for this period, to receive a pension of from $20 or more per month, even though all were contributing equally into the pension, is discrimination.

To select a period in which living standard was $100 per month as a basis to determine the amount of a pension for a period when living cost is $200 or more, is unfair to all.

Eliminate the 1924 to 1931-37 period. Use the 1937 to date of retirement as a basis to determine a unit of measure with which to multiply the years of service. Change the present method of determining the dollar-service unit (H. R. 6397, sec. 2, lines 9, 10, and 11) as follows: 3 percent of first $50, 2 percent of next $100, and 1 percent of balance. Thus creating a maximum proportional unit of 5; $300 being the amount on which the unit is based.

With the above solution as a basis, I hereby petition the Congress of the United States to enact the following provisions, which I sincerely believe are well within the bounds of sound reasoning as well as practical and timely.

(1) Change the present maximum of $120 to $150 based on 30 years' service, an increase of 25 percent.

(2) Change the present retirement age from 65 to 60.

(3) Establish 1937 to date of retirement (highest paid five years of earnings, not exceeding $300 per month) as a base for all.

Although I have included several extracts from H. R. 6397 in parts of this testimony, the major portion deals specifically with a proposal to establish 1937 to date of retirement, as a fair base for all, rather than the present outmoded, obsolete, nonproportional unit (based on the period of 1924 to 1931-37) that has no proportional relation to the pension fund.

Gentlemen, in closing, may I ask your kind consideration to enact legislation at this session, in keeping with progressive thinking. While we have been busy helping foreign countries, we have seriously delayed much needed financial aid to help our own people of the Iron Horse, without whom, we might have lost the recent War.

The nation's rail workers, especially the old-timers who must depend on charity to exist, patiently pray for your legislative help.

"Times change and wise men change with them."

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Gentlemen, it is time for

WALT SANDS,

Editor, Rail Pension News, National Railroad Pension Forum, Inc.

P. S. As we understand, the only favorable legislation we can expect at this session of Congress is the enactment of H. R. 6766 introduced by the chairman. I support H. R. 6766.

To the Honorable Committee on Interstate and Foreign Commerce:

WALT SANDS.

My name is Floyd A. Ross. I reside at 407 East Forty-eighth Street, in the city of Minneapolis, Minn. I am regional vice president of the National Railroad Pension Forum, Inc., a nonprofit organization chartered under the laws of the State of Illinois, which organization I became interested in of my own volition and not at the request of railroad management.

I have been employed by the Minneapolis & St. Louis Railway Co. for over 36 years in the revenue accounting and the comptrollers office.

I am appearing before this honorable committee in the interest of the rank and file railroad employees and urge the prompt enactment of bill H. R. 6397, introduced by the Honorable Joseph P. O'Hara, of the State of Minnesota.

At the present time monthly compensation of $250 is very prevalent, and I will use that monthly average as a basis for any figures I may use. On January 1, 1947, our retirement taxes were increased by 60 percent: They will be further increased under the present law and during the 30-year period the total increase in tax will be 65.85 percent greater than the tax in effect December 31, 1946. This will result in the payment of $2,212.50 more during this period for which we will receive no increase in our retirement annuity.

H. R. 6397 will increase annuities 25 percent for all railroad employees (maximum $150 per month). This increase in annuities is entirely justified and compensates us to some extent for the large increase in our retirement taxes under the present law.

Aside from the exorbitant increase in our retirement taxes, I wish to call attention to the fact that under the present law, and for the 30-year period after January 1, 1947, the lump-sum death benefit will be decreased by $3,106, or to the amount of $494, which is not enough to provide a decent burial. To make a further comparison, after paying retirement taxes amounting to $5,572.50 over the 30-year period, some one of our dependents may receive $494 if they file claim for it within 2 years. The present law denies us the right to name our beneficiary and has confiscated our equity in the amount we have contributed to the retirement account in the form of taxes. During the period January 1, 1937, to December 31, 1946, on average monthly compensation of $250, this would amount to $915.

The retirement taxes we are paying reduces our take-home pay and is either coming out of our living expenses or is decreasing the meager savings we are accumulating for a rainy day. The railroad employees in general were fully aware that the lump-sum death benefit would be paid their beneficiary, which amount would be somewhat more than had been paid in, and would augment any life insurance.

H. R. 6397 provides for a lump-sum death benefit based on 4 percent of earnings (up to $300 per month) for the period January 1, 1937, to December 31, 1946, inclusive, and 7 percent of earnings (up to $300 per month) thereafter. On this

basis the lump-sum death benefit for 30 years' service at average monthly compensation of $250 would amount to $5,400. This is to be compared with $494 which would be payable under the present law.

Under the present law annuities are payable to female employees at 60 years of age after 30 years of service. This discriminates against the male employee who must wait until age 65 or suffer a reduction in his annuity.

This is also taken care of by H. R. 6397, which provides for retirement at 60 years of age for both male and female employees. It also provides annuity for widows at 60 years of age instead of at 65. Respectfully submitted,

FLOYD A. Ross,
Regional Vice President,
National Railroad Pension Forum, Inc.

P. S.-As we understand, the only favorable legislation we can expect at this session of Congress is the enactment of H. R. 6766, introduced by the chairman. I support H. R. 6766.

To the Honorable Committee on Interstate and Foreign Commerce:

FLOYD A. Ross.

My name is George K. Wenig, Jr., I reside at 4822 West Walton, Chicago, Ill., and am an advisory member of the National Railroad Pension Forum, a nonprofit organization chartered under the laws of the State of Illinois. This organization represents the rank and file of the railroad industry who are opposed to certain features of the Railroad Retirement Act, as covered by the Crosser amendment, enacted in the Seventy-ninth Congress under Public Law 572. I have worked over 19 years for the Western Pacific Railroad in their off-line Chicago office. At present I am chief clerk of that office. I want it known that my activities with the National Railroad Pension Forum are not influenced in any manner by management.

We are in favor of H. R. 6397, submitted by your fellow Congressman, Representative O'Hara, of Minnesota., at our request.

This bill, if approved, would permit retirement at age of 60 of all railroad employees with 30 years of service at a higher pension than now provided.

Ổn February 1, 1948, the report of the Railroad Retirement Board outlined the reserve fund as being over $1,300,000,000. This tremendous reserve would supply sufficient cushion to absorb the extra cost of additional employees immediately retiring under this bill and the increased benefit payments, still leaving a tremendous reserve for future pensions and death benefits.

H. R. 6397 insures payment upon death of lump-sum payment at least equivalent to amount paid into the fund with interest.

H. R. 6397 would permit a widow to take a pension in place of the lump-sum death benefit is she so chose.

This bill also would permit 25 percent increase in the amount of allowances presently received by those now on pension.

We understand before a bill is considered, having to do with the Railroad Retirement Act, the Railroad Retirement Board makes a report.

It should be understood that, while the railroad retirement employees receive their pay checks from the United States Government, their pay is actually charged to our retirement fund. Therefore, as our indirect employees, we do not feel they should have the right to recommend or not recommend any bill-their duties should be strictly confined to honestly, thoroughly, and promptly administering the operation of the plan in effect under the Railroad Retirement Act as amended. Certain union officials have taken the attitude that what they decide to recommend to Congress in connection with any amendments to the Railroad Retirement Act, as they did when the Crosser amendments were considered in 1946, is final.

It should be understood that the Crosser amendments to the Railroad Retirement Act were made without the general knowledge or consent of the railroad emplovees.

While the railroad union officials generally have the right to represent the employees on matters concerning rates of pay, hours of work, working rules, etc., the railroad employees have not given up their rights as American citizens to the union leaders.

Therefore, we the rank and file railroad employees appeal to you to hear our plea for increased benefits and/or reduced cost.

Submitted,

GEORGE K. WENIG, Jr.,
Member, Advisory Committee,
National Railroad Pension Forum, Inc.

P. S. As we understand, the only favorable legislation we can expect at this session of Congress is the enactment of H. R. 6766, introduced by the chairman. I support H. R. 6766.

X

GEORGE K. WENIG, Jr.

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