Question 42: How soon will the proposed changes in the "60/30 provision" become law?
Answer: Recently an agreement was reached on changes to the Railroad Retirement System. The agreement was worked out between the major railroads and most(but not all) of the railway labor organizations. A bill has been drafted to incorporate the changes into the Railroad Retirement Act.
On July 14, it was introduced in the House of Repersentatives as HR 4844, and favorably report out by the Ways & Means Committee on July 25, 2000. On September 8, 2000 it was passed by the House.
Among the changes proposed is the elimination of the reduction when a rail worker with 30 or more years of service retires between ages 60 and 62. Vesting would be reduced from 10 years to 5 years for those employees with atleast five years of Rail service after 1995.
Other proposals include changes in the calculation of widow(er)s benefits, consolidation of the seperate Supplemental Railroad Retirement Trust Fund into the Regular Trust Fund, and reduction of payroll tax rates and the intoduction of an automatic rate adjustment mechanism.
The legislation would also expand the type of investments the Trust Fund could make for Tier 2 funds beyond U.S. government securities. An independent Board of Trustees would be set up to direct the investments. There would be seven trustees appointed by a unamious vote of the Railroad Retirement Board.
The fate and timing of the changes is uncertain at this point. The bill faces the many hurdles that Congressional legislation must overcome to become law. 2000 is an election year, so Congress probably will adjourn early.
Be sure to follow the progress of the proposed legislation through this column. Q&A-42 and Q&A--52 will be updated periodically as as important milestones occur.