and the UTU Big Lie!

IMAGE 2 - Over 400 "55&30" flyers were distributed at the Huntington Locomotive Shops in Huntington, West Virginia during three shifts. Members working at this location from Lodge 112, Allied Eastern Federation, were Eddie Ellison, Dave Farnsworth, Glenn Hayes, Charlie Del papa and Len Buckley. (Photo from Len Buckley.)

IMAGE 3 - Left to right, Bud Joseph, Doug Losey, Howard Wilkinson, and Tom Foster, members of the Consolidated Rail System Federation and the Pennsylvania Federation handed out flyers at CSX Trail Van Yards in Columbus, Ohio.

IMAGE 4 - Left to right, Brian Neely, Bill Garrard, Blair Campbell and Bill Snider, members of one of the same two federations, distributed flyers at Norfolk Southern's Buckeye Yards in Columbus, Ohio. (Photos in Columbus from Perry Rapier.)

IMAGE 5 - Distributing flyers at Duluth, Missabe and Iron Range Railway in Minnesota were Mike Nagle, DM&IR System Division Second Vice Chairman at left and Mark Schneider, member of Lodge 1710. Warren Sjoquist, also a member of Lodge 1710, is the driver of the truck in the photo. (Photo from Mark Thudin.)

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IMAGE 8 - Retirees Marion R. Kalinowski, Melvin Henry, Freddie Lewis and his wife Dottie distributed flyers at Union Pacific's Englewood Yard in Houston, Texas. (Photos from Danny Baisey.)

On November 19, 1999, BMWE members distributed information to rail labor members across the country which explained the BMWE's fight to reduce the retirement age to 55 with 30 years of service.

Almost immediately afterward the United Transportation Union began distributing flyers attacking the BMWE's position. Under the name of "The Coalition for a Better Railroad Retirement," but often accompanied by an affirming letter from UTU President Charlie Little, the flyers contain outright lies about the BMWE's position. This misinformation has been widely distributed, including on the UTU website and is aptly characterized as the "BIG LIE."

People who make up propaganda long ago developed the technique called the "BIG LIE." The Big Lie is a statement that is so outlandish, so ridiculous, that no one believes that anyone would make it up. Then the Big Liar and his allies repeat the Big Lie over and over again so that it doesn't appear to be outlandish because people keep hearing it.

Part of the trick to getting people to believe the Big Lie is to make sure that there is a half-truth buried in it. The half-truth is used to give only the part of the story that is favorable to the Big Liar. The UTU has refined the Big Lie to include only quarter truths or less.

On December 27 the BMWE sent fact sheets to all Local Lodge Presidents, Secretary-Treasurers and 55/30 Committee Chairpersons with the urgent request that these be distributed to all rail members as soon as possible. Hopefully everyone reading this has long since received a copy of this fact sheet, which lists the eight components of the UTU Big Lie and the real facts. If anyone hasn't received a copy, details are provided in this article.

Along with the fact sheets, President Mac A. Fleming's cover letter explained the reason why the UTU is trying to cause such a great deal of confusion among the entire rail labor membership. The UTU is trying to mask their leadership of an effort to make a deal that would give the railroads a tax cut of between 3.25% ($325 Million) and 3.4% ($340 Million) in return for minimal improvements in railroad retirement. To make it even worse, these tax cuts would come from the membership's money.

A little background is necessary to understanding how this is so. As a result of changes to railroad retirement that occurred in the early 1980s, the Railroad Retirement Trust Fund is very well off and getting better. At that time, however, primarily as a result of massive downsizing in the railroad industry, the Fund was in poor financial condition.

In order to put the fund on a financially stable basis, rail labor and rail management reached an agreement in 1983 in which, among other things, the railroads began contributing 16.1% of payroll to the tier II (pension) component of railroad retirement over what they contributed to the tier I (Social Security) component. Rail workers contribution to tier II was reduced to 4.9% of payroll.

In order to maintain the solvency of the Railroad Retirement Trust Fund, rail workers had to suffer a benefit reduction. The primary loss was an increase in the age in which a rail worker could retire with full benefits -- from 59-1/2 plus one day with 360 months credit -- to age 62 with 360 months credit.

The most important point to keep in mind is that the 16.1% of payroll the railroads contribute to railroad retirement is in lieu of wage and benefit increases rail workers would otherwise have received -- in effect meaning all of the money in the Railroad Retirement Trust Fund is rail workers money.

The process for changing benefits and taxes requires labor and management to reach agreement and then work to have Congress pass legislation embodying that agreement as an amendment to the Railroad Retirement Act.

Because the changes that were made in 1983 were successful and today the Railroad Retirement Trust Fund is thriving, the railroads contacted rail labor in 1997 to discuss making changes to railroad retirement -- basically they want to lower the amount of taxes they pay.

Rail labor was willing to talk because we want improved benefits -- the two most important being 1) reducing the age at which railroad workers can retire and 2) improving the benefits provided to survivors of deceased railroad workers.

After over two years of negotiations the rail unions except for the BMWE and the Brotherhood of Locomotive Engineers (which collectively represent about 40 percent of active members paying into Railroad Retirement) reached the framework of an agreement with the railroads. The BMWE and BLE are strongly opposed to this framework because it is much too generous to the railroads and much too skimpy for railroad workers.

First, the UTU deal would provide full benefits at age 60 with 360 months (30 years) of railroad retirement credit. The fact is railroad workers already have 60 and 30 but at a reduced level. The UTU proposal is not a new benefit but only a 10 to 15 percent improvement of only one of our benefits.

If you retire now at age 60 and 360 months, you get approximately 15% less (30% reduction in tier I) than you would if you got a full benefit at age 62 with 360 months. Retirement at age 61 with 360 months would give you a reduction of approximately 10% less (20% reduction in tier I) than a full benefit.

Second, the UTU proposal calls for lifting the cap on the amount of benefits a retiree is entitled to. This would fix a problem in which many who contributed a substantial amount into railroad retirement for at least 120 months (10 years) but did not work in the industry within 10 years prior to their retirement are capped at a $1200 month pension. As this change primarily resolves a problem that harms lower and middle level contributors and not the highest paid contributors, BMWE supports this change.

Third, the proposal calls for an improved survivor benefit. The BMWE is in full support of this change but think it could be made better by including cost of living provisions.

Fourth, the proposal calls for vesting in the Railroad Retirement System after five years instead of the current 10.

The proposal also is demanding that health policy GA-46000 with a lifetime cap of $75,000 be provided rail workers who retire at age 60 but the railroads have yet to agree to this.

During the discussions on making changes to railroad retirement, the UTU has refused to retain independent actuaries or investment bankers for expert advice even though the union side has no experts on this subject on staff and the railroad representatives have had experts by their side at every meeting. The BMWE and the BLE have retained independent actuaries and bankers and are waiting for reports before jumping into any deal.

Meanwhile the UTU continues the Big Lie. They say the BMWE "wants 55/30 in the next contract at any cost" and "they will give up all pay raises to get it!" At the same time the UTU Big Lie states the "Railroad Retirement Board says that without a tax increase, 55/30 will bankrupt your retirement system" and "BMWE says that's OKAY as long as they get 55/30 in the next contract." In addition to the fact that these statements contradict each other and therefore don't make sense, they are untrue.

The fact is that the Railroad Retirement Board originally estimated that 55/30 and the improved survivor benefit would cost 7.8% (later reduced to 6.8%) over existing tax levels. This information was furnished to the BMWE membership in a number of ways including the BMWE Journal. The Board also estimated that to get full benefits at 60/30 and an improved survivor benefit would cost about 2.5% (later reduced to 1.8%) over existing tax levels.

Based on the Board's estimate of 7.8% for 55/30 and knowing that it is almost certainly necessary to provide the railroads with some inducement in order to improve benefits, the BMWE survey taken in the spring of 1999 specifically asked members to tell leadership what they were willing to give to get 55/30 retirement. Forty-six percent said they were willing to get less in a wage increase and 25% said they were willing to pay higher railroad retirement taxes.

Now, however, the Railroad Retirement Board says the Fund can afford between a 3.25% and 3.4% tax reduction for the railroads and still provide 60/30 with full benefits and the improved survivor benefit. Please note that the combined amount of a 3.4% tax reduction for the railroads and a supposed 3.4% increase in benefits (the UTU proposal) for railroad workers is equal to the revised estimate of 6.8% that the Railroad Retirement Board said would be needed to provide full benefits at 55 and 30 and improve the survivor benefit.

Although this deal is being referred to as a "50/50 split" of the Fund "surplus," again it is important to remember that the money in the Railroad Retirement Trust Fund belongs to railroad workers. The BMWE simply cannot agree to give the railroads 50% of its members money (between $325 and $340 million per year) in return for the improvements proposed.

Changes in benefits and contribution levels rarely occur. Once this deal is made, railroad retirement will more than likely not be revisited for decades absent a calamity. This deal effectively trades the surplus which rail workers created for benefit increases that do not provide us with enough value. That is why the BMWE strongly opposes the framework of this deal.