BMWE President Mac A. Fleming, left, with BLE President Edward Dubroski at January 25 IA meeting.

January 25 BMWE International Association meeting.

Left to right, Mac A. Fleming, Edward Dubroski, and Joel Myron, BMWE Director of Strategic Coordination and Research at January 25 IA meeting.

Some of the BMWE legislative directors and system officers who lobbied Congress on Railroad Retirement at the end of January.

Railroads and Rail Unions Except for BMWE and BLE Sign Retirement Agreement

On January 14 the railroads and rail unions representing approximately 60% of rail workers initialed an agreement (see summary on page 4) proposing changes in the Railroad Retirement Act that would give the railroads at least $347 million per year by 2004 of railroad workers' money in return for an alleged $308 million of railroad workers' money. As explained in last month's JOURNAL, this is all railroad workers' money because taxes paid to the Railroad Retirement Fund by the railroads have been paid in lieu of wages and benefits to railroad workers. These taxes constitute the equivalent of employer payments to workers' pensions in non-railroad retirement industries.

The BMWE and Brotherhood of Locomotive Engineers, representing approximately 40% of rail workers, have refused to accept this agreement for several reasons. For one, the BMWE cannot support in principle a "50/50 split" of surplus funding because as noted above, all the funding belongs to railroad workers.

Another reason is the agreement provides too great of a windfall to the railroads and not enough in improved benefits for those in the Railroad Retirement System. Put another way, the railroads get too much while members get too little for too great a cost; it's like paying the price for a Porsche and getting a Chevy Cavalier. Although a 1999 Chevy Cavalier is a better car than what members currently drive, it's definitely not worth the price of a 2000 Porsche.

Another is, while the groups supporting the agreement have included a mechanism to provide improved benefits in the future as the Fund balance permits, they don't mention that that future is more than a generation away. According to the Railroad Retirement Board actuary's projections, any "extra" money in the Fund is gone until 2037 and there will only be a small improvement at that time.

Still another is, in the past all changes to the Railroad Retirement Act were based upon consensus. To make changes to the Act without consensus would effectively disenfranchise thousands of workers in the Railroad Retirement System.

For all of these reasons and more, the BMWE filed suit against the railroads in the United States District Court, Northern District of Illinois, on January 21, 2000, seeking to refrain the railroads from acting in accordance with the agreement initialed on January 14 because it would have the effect of making "unilateral changes to maintenance of way employees' pension benefits, ... railroad retirement taxes, retiree health insurance ..., and total compensation without the participation and agreement of their duly designated representative, plaintiff Brotherhood of Maintenance of Way Employes ('BMWE')."

On January 25, 2000, a special International Association meeting was held in Washington, DC to discuss and determine the extent of action necessary to protect and enhance BMWE members railroad retirement benefits. (The International Association is comprised of Grand Lodge and system officers.)

The meeting concluded with the unanimous support of the officers for continued action to secure fair railroad retirement benefits. It was also determined that the legislative and protective departments of the BMWE would work collectively toward the accomplishment of that goal.

Following the meeting and in spite of the snowstorm that week that closed federal government offices for two days, BMWE legislative directors and system officers lobbied Congress with the BMWE message. That message was and is -- take no action on changing the Railroad Retirement Act until there is a consensus between rail labor and the railroads on what those changes should be.

BMWE believes Congress should not be involved in the substance of this agreement until the parties involved resolve their differences.

The railroads and rail unions party to the agreement are trying to mischaracterize the BMWE's position as one which demands that the retirement age be immediately lowered to age 55 once an employee has 30 years service and say that the BMWE will accept nothing less. They sent a letter to all members of Congress on February 1, stating that "Only two unions oppose the agreement, arguing that it does not sufficiently improve employee benefits. Specifically, these unions want the retirement age for employees with 30 years of service immediately lowered to 55."

While the BMWE obviously supports full retirement benefits at age 55 when an employee has 30 years service, it also has been and will remain committed to the solvency of the Railroad Retirement Trust Fund. Beyond this, BMWE constantly strives for the best deal possible for its members and at minimum, the fairest deal possible. The fairest deal possible right now may not be retirement at 55 with 30 years of service. But a fair deal does not provide $347 million a year -- of members' money--to the railroads while giving members benefits worth substantially less and which also come from their own money.

And because the BMWE and BLE strongly agree that the survivor benefit should be improved as soon as possible, they accepted the "fix" in the proposed agreement and offered to work collectively with the railroads and the other unions to pass independent legislation incorporating that "fix." On January 14, Presidents Mac A. Fleming and Edward Dubroski (BMWE and BLE, respectively) wrote all the Rail Labor Chiefs and officially proposed that the issue of improving survivor benefits be segregated from the rest of the proposed agreement and agreed "to support immediate enactment of legislation that would implement the changes to survivor benefits currently on the table." The railroads and the other rail unions refused, in effect holding survivors hostage to a deal that BMWE and BLE cannot accept.

On January 26, the United Transportation Union issued a news release on its website that said the BMWE and BLE "stand alone outside the house of rail labor opposing what has been called the best railroad retirement deal in 25 years. Rail industry observers are saying the BMWE and BLE are doing so for purely selfish internal political purposes that could hurt current and future railroad retirees."

To carry the BMWE analogy just a little further, BMWE cannot accept that paying for a 2000 Porsche and getting a 1999 Chevy Cavalier that you have to drive for 20, 30 or 40 years or more, is the best deal in 25 years. While BMWE knows that a 1999 Chevy Cavalier, even without an automatic transmission and air conditioning, is a functional car -- it's not what anyone would want when they pay for a 2000 Porsche. If you have to pay for a 2000 Porsche, at least you want a 2000 Lincoln Town Car. Does anyone really believe that's selfish?