I am today signing H.R. 8195, a bill which provides a cost-of-living increase in the industry pension benefits of retired rail workers next year and directs rail labor and management to report jointly their recommendations for sound longterm financing of their pension system by March 1, 1981.
The report requirement and deadline imposed by this bill are especially important since the rail industry pension system is seriously underfunded and could run out of money within 2 years. To help address this problem, my administration has proposed the rail pension assurance amendments to protect railroad workers, retirees, and their families by restoring the railroad pension fund to solvency. We have also invited rail labor and management to submit long-term financing proposals.
The seriousness of the railroad retirement financing crisis cannot be overemphasized. I urge that the report required by H.R. 8195 be submitted within the statutory deadline, so that the affected parties and the Congress will have sufficient time to develop and agree on an industry-financed solution to this financial crisis without added Federal subsidies.
Any reluctance I have in signing H.R. 8195 arises from the fact that the bill does not provide revenues to finance the cost-of-living payment increases that it mandates. The effect of this omission is to increase the cash deficit of the rail industry pension by approximately $40 million a year. This shortcoming in the bill makes it all the more essential that railroad labor, management, and the Congress act quickly to provide additional financing before the railroad retirement trust fund is further depleted.