UNITED STATES OF AMERICA
RAILROAD RETIREMENT BOARD
844 NORTH RUSH STREET
CHICAGO, ILLINOIS 60611-2092
BOARD MEMBERS:
CHERRYL T. THOMAS, CHAIR
V.M. SPEAKMAN, JR., LABOR MEMBER
JEROME KEVER, MANAGEMENT MEMBER
As Chair of the Railroad Retirement Board, I appreciate the
opportunity to participate in the White House Conference on Social
Security.
The $8 billion a year retirement, survivor, and disability benefit
programs administered by the Board under the federal Railroad
Retirement Act, and their financing, are closely coordinated with
the old-age, survivor and disability insurance programs provided
by the Social Security Act. Railroad retirement beneficiaries are
also covered under Medicare on the same basis as social security
beneficiaries.
Under the two-tier railroad retirement system, which includes both
social security equivalent and staff retirement benefits, tier I
railroad retirement payments are based on social security as well
as railroad retirement credits, computed under social security
formulas, and issued to dual beneficiaries in combined benefit
payments adjusted to omit duplications. At the same time, while
railroad work is covered under the Railroad Retirement Tax Act
rather than the Federal Insurance Contributions Act, rail employees
and employers pay tier I railroad retirement payroll taxes at the
same rate as social security taxes, and a financial interchange
between the two systems equitably apportions benefit payments and
taxes between the railroad retirement and social security trust
funds.
Legislative changes to the Social Security Act consequently become
applicable to the Railroad Retirement Act, and significant changes
in the social security system are of great importance to the
retirement system serving the nation's rail workers and their
families.
Therefore, while I have not as yet come to conclusions regarding
the future direction of social security, I look forward, as the
Board's public member, to being part of the discussion on this
topic, which is of such vital concern to the future financial
security of railroad retirement beneficiaries as well as to all
Americans.
Sincerely,
Cherryl T. Thomas
Chair
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