▶ 0:16:33Chair Cassidy: The senate committee on health, education, labor, and pensions will come to order. I start highlighting this is a bipartisan hearing. The witnesses are selected both by city cassidy and sanders, and I think senator sanders were his engagement and willingness to just address in such a process such an important issue, retirement. Like almost every american who wants to retire, for as many reasons as there are americans.
▶ 0:17:05Chair Cassidy: We want to retire with security. So therefore, we agreed to have money taken out of our paycheck and put aside one day so that we can retire. Begs the question, if we are paying for it, why can some not afford it? As chair of this committee, I'm committed to making sure that retirement is not some far off dream but a reality for everyone in my state of louisiana and united states of america. Senator tim kaine and I have several bills in the works but there is more to do.
▶ 0:17:37Chair Cassidy: As we look to strengthen the american retirement system, let's look at what has worked. If we don't have to reinvent the wheel, don't reinvent it. Look to the success. The railroad retirement board works. It is solvent, it has successfully provided a wide range of benefits to rail workers and their families including retirement, survivor, disability, unemployment, sickness, and vested dual benefits.
▶ 0:18:07Chair Cassidy: But important to note, this was not always the case. In 2001, the railroad retirement board rrb, had over 34 billion dollars in unfunded liabilities by private-sector standards. There were too few workers supporting a lot of retirees. That is a problem we are seeing in social security and other systems now. What can we learn to benefit?
▶ 0:18:40Chair Cassidy: In 2000 and one, congress formed a trust for the rrb which resembled a private sector pension plan, and the subject of this trust robust fiduciary standards similar to what is expected in the private sector. Congress made sure the money was invested with the best interest of beneficiaries in mind, and it took the power of the american economy and brought it to the service of hard-working americans who wouldn't invest in the stock market on their own,
▶ 0:19:11Chair Cassidy: But through this process, can enjoy the fruits of what our economy spins off. This reform had bipartisan support. We look back upon that in envy. Every democrat in the senate voted for it and many of my colleagues who voted for it in 2000 one are still in congress today. They were either in the house or senate then, and still are. Let me give some examples.
▶ 0:19:41Chair Cassidy: Susan collins, mike crapo, dick durbin, lisa murkowski, patty murray on the committee, jack reed, mark warner, ron wyden. By the way, the few who opposed were republicans. Democrats unanimously, republicans substantially.
▶ 0:20:04Chair Cassidy: But since, this is an agency that has been supported by congress, employers, workers, and unions. That is what we should be striving for in this committee's work. Bipartisan, multi-stakeholder agreement around solutions delivering results for workers and families.
▶ 0:20:24Chair Cassidy: As of september 2024, the rrb trust held $28.46 billion in assets compared with 27.6 billion dollars in liabilities. These returns enabled congress to lower the payroll tax on employers and provide a lower retirement age to workers than social security without harming the overall solvency of the program.
▶ 0:20:51Chair Cassidy: By the way, the rrb trust charges fees lower than most private-sector funds which means more of those dollars fund the benefits. Some modeled after a pension investment fund, which is how meet every major corporation successfully plans for their employee's retirements, the the rrb trust fund is predicted to continue running smoothly and solidly for another 75 years,
▶ 0:21:22Chair Cassidy: Which is the limit of our projections. It is the gold standard for sustainability. Investing in the power of the U.S. economy, producing returns for the families relying on that income. We spend a lot of time in washington talking about what doesn't work. It becomes about problems and barriers. My gosh, can't we work it out?
▶ 0:21:47Chair Cassidy: It turns out, when we focus on things that do work, we can find solutions to these problems. Perhaps collaboration where previously we thought not possible. So let's learn from the rrb, let's come up with other solutions based upon this that work for the employer, the union, the unionized, and the worker. Thank you to our witnesses for being here.
▶ 0:22:13Chair Cassidy: We look forward to hearing first-hand accounts of the rrb's positive impact. With that I recognize senator sanders.
▶ 0:22:20Sen. Sanders: Thank. Thank you for holding support hearing. I think you and I will agree that being a railroader is a tough job. I want to thank the many, many thousands of people who get up in the morning, 365 days a year, maintain our trains, make sure the goods and the products that
▶ 0:22:50Sen. Sanders: They deliver get to the places where they are supposed to be on time. It's a tough job, and we very much appreciate how they keep our economy going. Mr. chairman, last year, I was pleased when I was the chairman of the committee, to work in a bipartisan way with former senator mike braun, to help lead the effort to ensure our nations real workers receive paid sick leave, and that was quite a struggle. We had some success.
▶ 0:23:20Sen. Sanders: I will soon be introducing legislation to make certain that every worker in america has at least seven paid sick days, not a radical idea. For far too long, rail workers have been overworked and underappreciated. But Mr. chairman, there is one good thing that has been accomplished.
▶ 0:23:41Sen. Sanders: In the 1930's, way back when, president franklin delano made a commitment to our nation's railroad workers, that after a lifetime of work, they would receive a secure income in retirement. Fdr also made sure that real-world workers would receive a decent disability and unemployment benefits. Those promises have been kept for over 90 years.
▶ 0:24:05Sen. Sanders: Last year, 475,000 railroad retirees and their families received retirement benefits. 8600 received unemployment benefits. Nearly 19,000 railroad workers receive disability benefits. The average pension for a retired railroad worker is $375 a month. Real workers on the job for 30 years and retire at the age of 60 receive more than $4500 a month. That is the good news.
▶ 0:24:36Sen. Sanders: That is the type of defined benefit retirement system that I believe should be expanded to every worker in america. There was once a time when, if you work for a large company, you receive strong -- you had a strong defined benefit retirement plan. In many cases, that is no longer the situation. I would like to prevent that. So many people in our country, Mr.
▶ 0:25:05Sen. Sanders: Chairman, retire with virtually nothing in the bank. The richest country on earth, we should be doing better than that. The good news is we have accomplished something. The bad news is, Mr. chairman, the railroad retirement board's budget has been flat for several years. As a result of this insufficient funding, it takes an average of 470 days for the railroad retirement board to determine if a worker is eligible to receive disability benefits.
▶ 0:25:36Sen. Sanders: That's a bit absurd. Real workers are forced to wait up to two and a half hours on the phone to receive the assistance they need from the rrb. Many field offices in real communities have been forced to shut down or substantially reduce services. Even when it is determined that a worker is eligible to receive disability benefits, it can take 18 months or longer for them to receive those benefits. In my view, that is unacceptable.
▶ 0:26:04Sen. Sanders: That is why I strongly support the request of the rail unions and management to provide $170 million in funding for the railroad retirement board. This is not an unreasonable request. It would roughly match inflation since 2019. It is urgently needed to improve customer service, rail workers, and their families, and to make sure they receive the benefits they have earned and deserved. Mr.
▶ 0:26:28Sen. Sanders: Chairman, since the agency's administrative costs are funded entirely through payroll taxes, paid by the rail industry, this budget increase would not cost taxpayers one cent. It would not increase the deficit and would not need to be offset. I look forward to working with you and the members of the committee to make this a reality. Thank you very much.
▶ 0:26:48Chair Cassidy: Thank you, senator sanders. We are joined today by erhard chorle, chairman of the railroad retirement board. Mr. chorle has served in his current role since 2019, overseeing the operations of the rrb and the administration of benefits to real workers. Before his appointment, he served in numerous roles in the illinois state government including as a chair of investments.
▶ 0:27:15Chair Cassidy: He is a graduate of depaul university and received his jd from the john marshall law school. Thank you, sir, for being here. Please proceed, Mr. chorle.
▶ 0:27:24Mr. Chorle: Good morning, chairman cassidy, ricky member sanders, members of the committee. Thank you for the opportunity to speak with you today about the U.S. railroad retirement board, the rrb, and the national railroad retirement board's interest. The trust funding mechanism has been essential to securing retirement benefits of our nation's railroad workers. I am erhard chorle, public member and chair of the rrb.
▶ 0:27:52Mr. Chorle: With me today our labor member john bragg and management member thomas jane. We three were appointed by president trump with the advice and consent of the senate in the early 2019. Also with me is my chief of staff kimberly cameron. Board members and our staffs will make ourselves available at the conclusion of the hearing for any additional questions or comments.
▶ 0:28:12Mr. Chorle: The rrb was formed in early 1930's to provide stable and reliable retirement benefits to rail employees and a stable, reliable skilled workforce to one of the nation's most critical and strategic industries. The rrb has been successful in helping to achieve these goals. Since its inception, the rrb's response ability's have expanded to include on a polemic, sickness, disability benefits plus medicare administration for eligible railroad beneficiaries.
▶ 0:28:40Mr. Chorle: Last year, the rrb paid more than $14.6 billion in benefits to approximately 500,000 beneficiaries and help serve an additional 200,000 active real employees. Benefits and costs are not funded by general tax dollars although our administrative costs are subject to congressional appropriation.
▶ 0:29:00Mr. Chorle: Instead, rrb administrative costs and the railroad benefits are funded through payroll taxes and investment income from -- book payroll taxes and the corresponding benefits are structured into double tiers. Tier one, taxes and benefits are almost identical social security. Tier two employees pay an additional 4.9% in payroll tax and employers an additional 13.1%.
▶ 0:29:25Mr. Chorle: The employee taxes are capped at the current rate but the employer rate can rise up to 22.1% should our actuators determined it was necessary. It's worth noting that even the post-covid declines in the market did not require raising the employer tax rate nor would even a significant increase in administrative costs.
▶ 0:29:46Mr. Chorle: Formed in 2001 as a private trust in the district of columbia and is governed by three trustees appointed by labor, three by rail management, and an independent trustee appointed by the other six trustees. It was initially funded with roughly $21 billion of accumulative payroll tax dollars, and these funds have been held in a treasury account and invested in U.S. government instruments.
▶ 0:30:15Mr. Chorle: Subsequently invested in a portfolio of diversified assets classes similarly to other large pension investments. A portion of the statutory language governing this sets forth that we invest with the care, skill, prudence, and diligence that a prudent person acting in a light capacity would use in the conduct of an enterprise of like character and with like aims.
▶ 0:30:39Mr. Chorle: Achieved an average return on investment of more than 7% per year since inception and this last year and achieved a rate of more than 10%. Investment income the supplements employer and employee taxes and contributed about 35 billion to the rrb funding, representing 10% of the benefits paid each year. The current assets under management amount to approximately $29 billion.
▶ 0:31:03Mr. Chorle: As a measure of rrb efficiency, operating costs are about 1% of the amount of benefits that we pay. Expenses for the last 10 years have ranged from .31% to last years .23% of assets under management. In recent years, the rrb has made significant improvements in program integrity, customer service, and technology modernization, all with declining staffing levels, increasing costs, and outdated technology.
▶ 0:31:32Mr. Chorle: We will continue to work to better serve our constituents and yours, but please be assured that the retirement system stands as a financially sound and sustainable retirement system making it rare if not unique among public pension funds. Thank you again. It's been an honor and privilege. I will do my best not to answer any questions you may have. Thank you.
▶ 0:31:52Chair Cassidy: I defer to senator sanders to introduce the tennessee volunteer fan, Mr. joines.
▶ 0:32:00Sen. Sanders: In addition. Mr. jeff joines is a railroader. Thank you for your service, Mr. joines. As the director of the government affairs for the brotherhood of maintenance of way employes, international brotherhood of teamsters. Jeff served in the U.S. army national guard for 21 years where he was deployed to iraq twice. Mr.
▶ 0:32:30Sen. Sanders: Joines, thank you so much for your service and being here today.
▶ 0:32:36Mr. Joines: Chairman cassidy, ranking member sanders, members of the committee, thank you for the opportunity to testify here today on the railroad retirement board. My name is jeff joines, legislative director for the brotherhood of maintenance of way employes, division of the teamsters. We make up half of all real labor in this country. Our members are the members that swing the hammer. We drive the spikes.
▶ 0:33:05Mr. Joines: We lay the rails, inspect the track. Every day our members are out there keeping the american rail system safe. As you can tell by the way I talk, I'm not from around the beltway. I'm a proud son of wilson county tennessee. I lived there on my farm with my wife debbie. As the senator said, I've worn many hats in my career, farmer, railroad worker, unionist, 21-year military veteran. But all I will ever be is a railroader to my core.
▶ 0:33:37Mr. Joines: Most don't show up in suit and ties. But that is who I am and I'm proud of it. I started swinging a hammer for csx many years ago and now my railroad career is about over. In a few months, I will join a long line of rail workers that have benefited from the railroad retirement. Railroad jobs are some of the hardest best jobs out there for the working class. It has lifted many families out of poverty, and today they still stay with the railroads 30, 40, 50 years.
▶ 0:34:09Mr. Joines: A lot of that is because the railroad retirement and the benefits they get through the rrb. Railroad workers do not get social security retirement or disability benefits or state unemployment, instead, we receive these benefits through the railroad retirement board. In fact, the railroad workers were the first private sector workers in the history of this great country to receive a defined benefit, retirement under the rrb.
▶ 0:34:36Mr. Joines: The railroad retirement even updates social security, and the reason the railroad retirement board established was for older railroaders and their families could retire with dignity and have a secure future. While all real labor and others don't agree on a lot these days, one thing we agree on is a strong and functioning rrb. That's because of the importance to the workers and management alike. The railroad retirement is the best retirement out there. Full stop.
▶ 0:35:06Mr. Joines: While the railroad retirement board is best at what they do, they're always ways congress can help them serve railroaders even better. It's the payroll taxes off the railroad in the railroad workers that fund the railroad retirement board. Including the administrative costs through the rrb. Not one penny of taxpayer dollars goes toward any of the benefits or the administrative costs. Yet, the rrb cannot spend as much money as they need administering our benefits to do so.
▶ 0:35:34Mr. Joines: Rrb are at their lowest staffing levels in 90 years, which is causing issues with 16-month backlog for railroaders to get disability applications process. Long wait times and only one employee in some field offices. Together, we can make small tweaks and make a stronger rrb even stronger. We've had some great successes in recent years.
▶ 0:36:01Mr. Joines: I want to thank all the senators that supported the reflect which ended a ended the sequestration of on appointment benefits and sick benefit. Before that, we would only workers in the country subject to the sequestration. Thank you for that. Recently he would help a chairman cassidy, ranking member sanders, senator hawley, congress approved an extra million dollars to help for the loa to administer those benefits. We appreciate that.
▶ 0:36:32Mr. Joines: The railroad retirement has been around for 92 years, supported generations are railroaders over the years. Let's keep the railroad retirement going for the next 90 years and support railroad retirement system and the railroad retirement board. Mr. chairman, if I could, I would like to say a special thank you to michael. I've been working with him for a long time. I know that you will lose a valued team member.
▶ 0:37:00Mr. Joines: Michael, I will tell you from this railroader, every railroader in this room, every railroader across the country, we owe you a great deal of gratitude. . [applause] I've always wanted to say this. I yield back.
▶ 0:37:19Chair Cassidy: You are on a roll, I was going to give you extra time. I thought you were going to say something nice about me and sanders. I will start with questions. Jim and charlie, again, you are a real witness, you talk about how well your agency is doing. 25 years ago, congress did a double job.
▶ 0:37:41Chair Cassidy: They allow government funds -- no, funds, kind of the response ability of the government, to be invested in the broader economy, not just in treasuries with a poor rate of return but in the broader economy. You hear criticism of that concept. It is privatizing a fund, president obama used to talk about taking money, there is a risk associated with it.
▶ 0:38:09Chair Cassidy: You all started your fund not long before the great financial crisis, but it's done extremely well. So for those critics, back then -- if you could go back and address them and tell them why they were wrong, give it to me in 45 seconds, please.
▶ 0:38:29Mr. Chorle: It is hard to argue with success. Had the trust that sent us $37 billion since its inception. Had it sent that same 37 billion dollars, had it retained its investment in the 3.5% yielding government instruments they were in, it would have run out of money in 2021.
▶ 0:38:57Mr. Chorle: The funds at that point invested in fixed income, 3.5%, currently, the average rate of return, annualized rate of return is 7.9%.
▶ 0:39:07Chair Cassidy: In your current account.
▶ 0:39:09Mr. Chorle: Correct. 7.9% is what it was annualized. Last year was 10%. It's been higher, lower. But when you invest over time, it is actually -- again, you cannot argue with the results.
▶ 0:39:25Chair Cassidy: Going through the great financial crisis and post-covid, nonetheless, you have averaged 7.9% returns.
▶ 0:39:33Mr. Chorle: By the way, our predictions for the sustainability of the fund is based on an assumption of only 7%. It actually attained and annualized average of seven .9%.
▶ 0:39:44Chair Cassidy: I polled this regarding another proposal I had and the american people are concerned that congress will, or the executive branch, will use the money for its own purposes. Believe it or not, they don't trust congress. They trust cassidy and sanders but nobody else. But you have guardrails that make sure -- you spoke of the fiduciary responsibility. Please speak to that again.
▶ 0:40:10Mr. Chorle: One of the keys to the success of this is governance. The governance of the -- rests in the hands of the stakeholders. The two principal stakeholders, the people paying the money that supports it, they are governing the trust, not us, not the government.
▶ 0:40:39Mr. Chorle: And they leave the investment process to the investment professionals. Additionally, you have got the law of trusts, fiduciary response ability. They report to congress on an annual basis. They are audited --
▶ 0:40:56Chair Cassidy: Let me ask you another question. I'm guessing but please tell me, what was the ratio of worker to retiree when you started? What was it in 2001 when the system was put in place, and what is it now?
▶ 0:41:11Mr. Chorle: Those are numbers to be precise, that I would have to supply to you for the record.
▶ 0:41:17Chair Cassidy: Ballpark?
▶ 0:41:20Mr. Chorle: No.
▶ 0:41:22Chair Cassidy: That's ok. The fact you have more retirees relative to workers and you're about to add one more tells me that that is an issue that you have addressed. Mr. joines, again, you are a champion for this. Congratulations. You advocated for the passage of the reef act, restoring full unemployment benefits to rail workers.
▶ 0:41:49Chair Cassidy: In your experience, the fact that it is fully funded, it is able to take on additional responsibilities, and you still are funded for the life of our score which is 75 years. What difference had this made to those who depend on this program?
▶ 0:42:10Mr. Joines: Mr. chairman, most railroaders out there don't know how the sausage is made with the rrb. But what I can tell you is, they have the confidence, when they get sick and they need some assistance, there is somebody there on the other end of the line that can help. When a retiree dies, that we don't needs an assistant, they know somebody is there at the rrb.
▶ 0:42:39Mr. Joines: We have all the confidence in the world in our three board members to do the right thing when it comes to protecting the trust. There is just a gamut of ways railroad workers use the rrb. Whether it is through sickness, short-term sickness benefits, whether it is unemployment, getting ready to retire, annuity, all kinds of stuff that we use.
▶ 0:43:09Mr. Joines: But we have the confidence it will be there when we need it.
▶ 0:43:10Chair Cassidy: Thank you. Senator sanders.
▶ 0:43:13Sen. Sanders: Thank you. Mr. chairman, over 20% of seniors in this country, believe it or not, are trying to survive on $15,000 a year or less. Half of seniors in america are trying to survive on $30,000 a year or less. I'm not quite sure how they do that. Nearly half of older workers in america today have no retirement security. Mr. joines, what I want to ask is a very general question.
▶ 0:43:47Sen. Sanders: Real woodworkers have been successful in the U.S. fighting pensions. Many workers in america have not. We have had workers from the automobile industry who reminded us that their grandparents had one good benefit, retirement benefits, pensions that they don't have today. In many ways, we have gone backward in that area.
▶ 0:44:10Sen. Sanders: Talk for a moment about what it means for a railroad worker to know that when he or she retires , they will be a decent pension for that family.
▶ 0:44:21Mr. Joines: Senator, I will say, the railroad retirement board was set up for just those reasons that you mentioned. Old railroad workers were having to work until they couldn't work anymore and didn't have security, didn't have anything. The system was set up just for that, like you are talking about. As I said come in a few months, I will retire.
▶ 0:44:53Mr. Joines: I started drawing a paycheck when I was somebody when I was 12 years old. I don't know exactly how it will feel, sitting at the house with a check coming in the mail. But I have that security, and I know that my defined-benefit will come, will support me in my family into the golden years. Just knowing that you are able to say, ok, it is time for me to go. I have worked hard, I have a good pension.
▶ 0:45:22Mr. Joines: I don't need to worry about what tomorrow looks like. I don't know how anybody leaves the job without that.
▶ 0:45:27Sen. Sanders: I think you are right. Do you think that defined-benefit pension concept is something we should expand to other workers in our economy?
▶ 0:45:37Mr. Joines: I think all railroaders could support everyone having a defined benefit.
▶ 0:45:43Sen. Sanders: I agree with you. Mr. chorle, thank you for being here. Tell us some of the financial problems. I understand there are backlogs now that could be addressed with increased funding. Could you talk about that?
▶ 0:46:01Mr. Chorle: Sure. We operate with a cobalt-based technology system that was initiated in the 1960's. Start with technology which is our biggest need.
▶ 0:46:21Mr. Chorle: Our overall employment numbers, when the three of us were all appointed -- by the way, the first time since its inception at all three board members were appointed the same time. We had a staff of 840 persons when we took office. Last week we were down to 660. Our I.t. Staff alone was 130 people when we took office, we are down to 65.
▶ 0:46:49Mr. Chorle: We have eight cobalt developers on board right now, six of whom could retire with full retirement benefits tomorrow. That is probably our most critical initial need. We have a backlog right now. We believe we do a pretty good job of issuing benefits, initial benefits, in an accurate and timely manner.
▶ 0:47:16Mr. Chorle: Yet, we have a backlog of 100,000 cases where someone is receiving benefits, but through some change in life event, employment status, whatever, we may be paying them too much, may be paying them too little. Yet, we don't have the follow-up. Part of that is technology but part of that is just personnel. We think it is probably over all pretty much a wash, overpayments and underpayments, which to the system is neutral possibly.
▶ 0:47:47Mr. Chorle: But if you are the person being overpaid $30,000, and now we come to five years later, it is pretty unpleasant. We don't want to be over or under paying anyone. The field offices, since we have taken office, we have not had to out right permanently close any of the offices, but we do have to close them for times of day.
▶ 0:48:16Mr. Chorle: We have a single person office, obviously. They are entitled to vacation, they get sick. A single person office is not providing the service we would like to provide. We had to look at, imminently, what do we do with these offices? Those are some of the low lights of where we are at today. The irony is the money is there. The railroaders and their employees have paid it in.
▶ 0:48:46Mr. Chorle: The beauty of the system is it is self-sustaining. We are not asking the taxpayers to increase the federal deficit.
▶ 0:48:52Sen. Sanders: Thank you very much.
▶ 0:48:55Chair Cassidy: Senator marshall.
▶ 0:49:00Sen. Marshall: Thank you, Mr. chairman. One of the great advantages that kansas agriculture still has is our ability to get our goods to market more efficiently. Less expensive than other countries and hopefully that leads to a lower price for consumers. One of the reasons that the kansas city rail depot is the second-largest in the country is because it is full of some of those kids.
▶ 0:49:24Sen. Marshall: On a recent trip to mexico, I learned once again why rail is so important, another reason why our trade with mexico has grown to a trillion dollar a year business. But I'm concerned, do we have the infrastructure for the continued expansion of those markets? Our interaction with mexico's rail systems as well. I feel like we have maxed out that system. And we are feeling that back home.
▶ 0:49:52Sen. Marshall: We are feeling at back home at our small co-ops and small elevators. We don't feel like we are being treated like customers, we feel like we are being treated like the last person picked on a team at recess back in grade school. The stress, customer service is probably my biggest concern with the rail system. I realize that is a short line we are dealing with, but the short liners blame it on the big boys.
▶ 0:50:22Sen. Marshall: They show up with a train car and say on a sunday at 3:00 a.m. And tell us we have eight hours to fill it. So we are feeling that stress right now. I will bring my first question to Mr. joines. Again, I emphasize that rail service for liabilities are going to on your year in the small towns, leading to kansas dealings with uncertainty.
▶ 0:50:47Sen. Marshall: From a worker's perspective, are you hearing anything from your members about rail operations on the ground, why service in the industry is deteriorating?
▶ 0:50:56Mr. Joines: It is called psr, senator. That is why we are in the shape that we are in right now. Over the last few years --
▶ 0:51:09Sen. Marshall: What is psr?
▶ 0:51:12Mr. Joines: Greases and schedule railroading. What it means to the workers is, over the past six years, they have reduced the numbers by 30%, so you have track workers like myself doing more. You have engineers, longer trains, all of the real world workers are having to do more. You have 70% of the workforce now trying to do 100% of the work that was done then.
▶ 0:51:47Mr. Joines: Until we can have a robust -- I used to have six guys on my getting when I was out there. Now there are two.
▶ 0:52:02Sen. Marshall: When you say your gang, what do they do? I am curious.
▶ 0:52:08Mr. Joines: I worked on a section gang, so we would go out and change ties, lay rail somewhere, do repairs on the track. When you extend your territory by a third or half, you don't get that schedule of maintenance like you are supposed to.
▶ 0:52:35Mr. Joines: In the end, whether it is coming from a grain elevator or coming from the factory, wherever it is coming from, it all suffers from psr.
▶ 0:52:46Sen. Marshall: Similar question. My farmers and ranchers back home are very concerned about the union pacific and norfolk southern's plans to merge. We know it's been rejected by the stb for now. How do you think this will impact your membership? These big murders don't turn out well for the american worker.
▶ 0:53:07Mr. Joines: We can go back to the past three or four mergers. Ups merged, we lost 2500 members. Csx, norfolk southern, conrail, we lost 3000. The last big one that happened was the kc, cpkcs. They said they were going to hire 600 and the opposite has happened.
▶ 0:53:37Mr. Joines: Those are small potatoes compared to what this merger is. Never been a merger like this before. In the context of the rrb, all those members that we lose, like you were saying, Mr. chairman, will be paying into the system.
▶ 0:53:50Sen. Marshall: How do you think it will impact customer service, especially at that little elevator in goodland, kansas?
▶ 0:53:59Mr. Joines: When you're the only game in town, you make the rules.
▶ 0:54:03Sen. Marshall: Thank you, Mr. chairman. I yield back.
▶ 0:54:07Chair Cassidy: Senator kaine.
▶ 0:54:12Sen. Kaine: I really appreciate this hearing. This is the help committee, health, education, labor, pension. If you look at the hearings we have in a two-year period, you would think it is health, education, labor, pension. We don't have many fears about retirement issues here. I applaud the chair who has tried to change that, so we are having more hearings about retirement security issues compared to the first many years I've been on the committee. I appreciate it.
▶ 0:54:42Sen. Kaine: I also want to associate myself with comments that senator cassidy made about the structure of the rrb, and the fact that you have been prudent investors, like other pension plans have been in the market, and have generated a return through those investments that have really helped meet the obligations that you have two railroad retirees.
▶ 0:55:08Sen. Kaine: I give the chair more credit than me in advocating that one of the potential solutions to social security solvency issues that we are seeing is to take the existing system, leave it as is with the employer and employee contribution, but to additionally create a fund that could invest, as the rrb does, and the earnings of that fund would come in to buttress the solvency of social security.
▶ 0:55:34Sen. Kaine: This is an idea that senator cassidy and I, senator hickenlooper and others have talked about. I hope that we will explore that in the rrb's history. We would be wise to explore that. I wanted to ask this question and really underline it, about ways that you can be even more effective. Your testimony is very positive about what you've done.
▶ 0:55:58Sen. Kaine: But the fact that you are limited in using assets for administration create some customer service problems. We were speaking, chairman, the other day in my office, about the delay, for example, in resolving disability claims filed by railroad workers. Talk about the average length that it takes to resolve a disability claim.
▶ 0:56:25Mr. Chorle: Currently it takes 470 days for summit to get a determination on their disability. It is inexcusable.
▶ 0:56:33Sen. Kaine: That 470-day time period, which is outrageous for somebody experiencing a disability, that is driven by an inadequate workforce, insufficient workforce, antiquated technology systems. Isn't that correct?
▶ 0:56:50Mr. Chorle: Currently the files that our folks have to work with come in as images, they are not even searchable documents. A disability file, by the time it contains all the medical reports that our system requires to make a good, quality decision, can be a stack of papers like this.
▶ 0:57:15Mr. Chorle: Our folks literally have to go through them, right hand written notes, take those handwritten notes, run them through whatever form.
▶ 0:57:23Sen. Kaine: And the number of folks doing it has shrunk. Tell us about that?
▶ 0:57:29Mr. Chorle: The workforce has diminished by I believe 30%. To be a qualified examiner in the disability world requires somewhere between six months and two years of training, in order to really be qualified to do this. These are complicated decisions.
▶ 0:57:52Sen. Kaine: If you could fix some of the technological issues, if you could hire the workforce, you could trip that 475 days down to something much more reasonable, correct?
▶ 0:58:03Mr. Chorle: Absolutely. Still, there are safeguards, we have to make sure we get all the medical exams we need to, but it is one of those things where the employers and labor are in complete agreement.
▶ 0:58:16Sen. Kaine: And you could do that if congress allowed you to use your own money to hire more people and put better technology, correct?
▶ 0:58:27Mr. Chorle: Yes. The beauty of the system is we could do all of that without even having to raise the tax rate to the employers.
▶ 0:58:38Sen. Kaine: And because your administrative expenses are so very, very low, if we allowed you to do that, you could do it in a way that would serve people a lot better and a lot faster without jeopardizing the solvency of the fund, without jeopardizing the ability of the rrb to pay retirement or disability benefits, is that not also correct?
▶ 0:59:01Mr. Chorle: If I could put it better, I would. Yes. [laughter]
▶ 0:59:06Sen. Kaine: To my colleagues that are here, I hope this is something that we might explore. This is not about trying to find money in the general fund or find other tax dollars to help these guys serve railroaders better. This is an artificial cap that congress has imposed with this self-funded program, that limits them from hiring, limits them from technological upgrades that they could make without jeopardizing the solvency of the program.
▶ 0:59:35Sen. Kaine: If they did, they would end up serving railroaders a lot better. Senator sanders alluded to this in his opening comments, but I wanted to dig into this one issue, the disability determinations. We could help you fix that without jeopardizing the program, without increasing anyone's taxes. We could help you fix that and we should help you fix that. I hope that is something we might be able to find some common ground on the committee.
▶ 1:00:01Sen. Kaine: These guys are doing a good job, they could do a lot better if we could take some artificial restraints off the way they serve there in valley retirees.
▶ 1:00:09Chair Cassidy: For the information of senator kaine and the dais, we are working on that. It would give them the same status of the pvgc, fbi status of the pvgc, fbdic, and that is one of the objectives we are tending to achieve. Senator banks.
▶ 1:00:28Sen. Banks: Senator kaine as the most important question. He's exactly right. We are not asking taxpayers to foot the bill for more money. It is letting you do what you need to do to take care of your people.
▶ 1:00:40Sen. Banks: We have 20,567 hoosiers who rely on the railroad retirement today , and that includes retired and railway workers who count on the rrb for their pensions and health care, especially in northwest indiana, what we call the region outside chicago. The rrb is critical, and we needed to function effectively. I appreciate your testimony.
▶ 1:01:07Sen. Banks: Senator kaine, the more I learn about this, the crazier it seems to me that we tie your hands to stop you from doing what you need to do. Senator kaine talked about the 473-day waiting period. I wonder, Mr. chorle, because I'm new around here, what was congress' explanation to tie your hands to begin with, as foolish as it was?
▶ 1:01:36Mr. Chorle: When we speak to members and staff -- and by the way, the three of us together or separately have made over 100 visits to members and staff since we took office to talk about this. I cannot explain exactly what the thinking is on the part of -- parts of the congress.
▶ 1:02:08Mr. Chorle: I cannot explain it frankly.
▶ 1:02:09Sen. Banks: You cannot explain it because it doesn't make sense. Is there anybody out there that this makes sense to?
▶ 1:02:19Mr. Chorle: Not that I understand, no. In fairness, I think the concern is, when we talk to certain members about spending "our own money," what they hear is that we are not in favor of congressional oversight in some matter. That is not the case at all. We make every effort to be as transparent as we possibly can.
▶ 1:02:51Mr. Chorle: If our detractors, house republicans, senate majority, majority, whoever it is, whatever they are concerned about, if they were to express their concerns to us clearly, we would be more than happy to address them.
▶ 1:03:08Sen. Banks: The chairman already said we are going to fix this. What are your very specific recommendations to us on how they do that?
▶ 1:03:16Mr. Chorle: Beginning with the way our budget is scored, there is a hurdle right there to overcome. In a perfect world, yes, we would be appropriated, would have access to these funds through the similar mechanisms that these are the trust fund agencies are funded.
▶ 1:03:34Sen. Banks: As simple as that?
▶ 1:03:37Mr. Chorle: Yes.
▶ 1:03:39Sen. Banks: Easy enough, Mr. chairman. Sounds like the chairman is serious about helping us do that. That is good for over 20,000 hoosiers relying on it. Mr. joines, some railroad workers are waiting 18 months to get there disability claims. Taken care of. How is that affecting their health and well-being and their families? What is the real world effect on them and their families?
▶ 1:04:05Mr. Joines: Senator, as you explained, it can take up to 18 months to get a disability adjudicated, until you start receiving your money. The bad thing for us is, our short-term sickness benefits run out at nine months.
▶ 1:04:24Mr. Joines: When that happens, you are sitting at home with a family counting on you to bring in income and stability, and you cannot, because you cannot work, you are waiting on your disability to be approved. But all the safety nets that are built in there have run out.
▶ 1:04:47Mr. Joines: The target at the rrb is 100 days, from the time that you put in an application for disability, to the time it's adjudicated and you start getting money. 100 days is the target.
▶ 1:05:01Sen. Banks: Can you talk about staffing shortages, field offices, how that affects your people?
▶ 1:05:10Mr. Joines: Just like the chairman said, we don't have the people to do that. At the rrb, rail labor has been to congress year after year asking to let us spend our own money on I.t. Upgrades. I don't know what the hell cobalt is, but it must be bad, because that is what they are using. It is things like that that will help the process. More people.
▶ 1:05:43Mr. Joines: They are just bare bones. They are doing the best they can, but it is our members that are suffering. Because when we need the rrb, most of the time, we are in dire need.
▶ 1:05:55Sen. Banks: Thank you. My time has expired. I yield back.
▶ 1:06:00Chair Cassidy: Senator alsobrooks.
▶ 1:06:03Sen. Alsobrooks: Thank you chair cassidy, ranking member sanders for hosting this today. Thank you also to our witnesses were being present today. And for the work that you do every day to ensure the people and businesses across our country can count on the railroad service for their transportation needs. I also want to commend the rrb for the work you've done to improve responsiveness and service delivery to your members.
▶ 1:06:30Sen. Alsobrooks: In maryland, we have 4300 active railroad workers, 7400 rail retirement beneficiaries. I know that these issues matter so much to each of them. I have a first question for chair chorle. I can relate in so many ways to the need to get the service delivery and to make sure that your members are well staffed.
▶ 1:06:54Sen. Alsobrooks: In fact, when I served as county executive, one of my new agency directors approached me early in my term and said, I enjoy working in your administration, but as I've had an opportunity to look around the agency, it is like walking into 1985. This is what he told me in 2018, in terms of technology, paper filing. These technology and staffing challenges definitely hamper our ability to serve our constituents in a timely come in meaningful way.
▶ 1:07:24Sen. Alsobrooks: I want to commend the rrb for reducing average call wait times , technology upgrades have improve services for the men and women who have dedicated their lives to our rail system, and you've made this progress as the rrb's budget has remained flat. And you continued to face the challenges of a 21% reduction in field office staff, and a 50% increase in the number of benefit applications received.
▶ 1:07:50Sen. Alsobrooks: I understand you are $170 million budget request will increase staff and improve technology in the short term, but what will you need in the long term to ensure the high quality level of service that your members deserve and that I know you are committed to providing?
▶ 1:08:07Mr. Chorle: Short-term and long-term. Short term, we don't even have the money to pay overtime. During our peak season, let's say, we have made significant progress in the phone service, which you mentioned. Thank you for acknowledging that. Still, as Mr.
▶ 1:08:33Mr. Chorle: Joines pointed out, you can still wait for as long as two hours to get the phone answered during our peak season, which is tax season. People have lots of questions around that time obviously. We don't have the money to pay overtime. Our call system -- maybe this is too much detail. Our call system is a national system where we have people on the east coast and west coast.
▶ 1:09:01Mr. Chorle: We could pay overtime to the people on the east coast to answer questions for people on the west coast, but we don't have the money to pay overtime. We have been on a self-imposed hiring freeze since at least 2023. It is not a recent thing that we have done. Long-term, I think, the single biggest investment that we pay long-term benefits is the technology development.
▶ 1:09:32Mr. Chorle: I think that is the answer to your question. Long-term, we could hire 20 people in disability tomorrow, if we had the money for it. It would still take six months to two years for them to get really up to speed on what they need to know to do the job. There is some immediate needs, and then again, longer-term.
▶ 1:09:59Mr. Chorle: The technology investment is probably the single best long-term investment we could make.
▶ 1:10:03Sen. Alsobrooks: Mr. joines, I want to thank you as well for your service to our country, all the ways that you continue to serve throughout your life. In your testimony, you mention how congress has not raised in the rrb's ability to spend their resources in 15 years and the impact it has had on rrb's attempt to serve rail workers, specifically in terms of face-to-face service.
▶ 1:10:28Sen. Alsobrooks: I know you entered some part of this question a moment ago, but I would love for you to share your thoughts on how rrb's $117 million budget request will help reduce the field office staff and what that would mean for railroaders, from the service perspective and the morale? To know that they can walk into a field office and have face-to-face interactions as they make critical decisions about their long-term financial future, could you just comment on that?
▶ 1:10:55Mr. Joines: Thank you, senator. We try to talk about these things, how they impact our members, and not just our members but all railroaders. One of the results of the shortfall, like you are talking about, they used to have retirement seminars around the country. And they cannot do that now.
▶ 1:11:27Mr. Joines: They don't have the money to put on the seminars. It is like that field office in nashville. It is so vital for me and other folks like me. The field office in new orleans, field offices in kansas city, richmond. Those are the lifeline for the workers.
▶ 1:11:47Mr. Joines: Because I have to go in, and as the chairman was talking about, the stack of papers that they actually have to go through when we get ready to retire, it is a stack of papers, as well. They will walk us through. As I said earlier, it's a scary process getting ready to retire, seek disability because you cannot work anymore.
▶ 1:12:14Mr. Joines: That one on one interaction with people in the field offices is very important to our members, to be able to get the right information. Whenever we turn in from them will affect us for the rest of our lives. You can understand how important it is to have the opportunities to get that one on one connection with the field offices.
▶ 1:12:37Sen. Alsobrooks: Thank you so much.
▶ 1:12:39Chair Cassidy: Senator hawley.
▶ 1:12:44Sen. Hawley: Thank you so much, Mr. chairman, thanks to the witnesses for being here. How do I pronounce her last name? Mr. chorle, thank you for being here. Let me start with you. On the subject of the railroad retirement board, I actually get quite a few inquiries from constituents about the railroad retirement board. I have to say very few of them are positive. I want to walk through a few of them with you and maybe you can tell me what the issues are, if you need additional resources. I want to get this disentangled.
▶ 1:13:15Sen. Hawley: Let's start with a 77-year-old woman from independence, missouri. This is pretty typical, going to put her comments behind me. This is pretty typical of the concerns I hear. She says "I've been waiting patiently for my increase on my ex-husband's railroad retirement pay. The website said it would be processed by july. When I call this morning on the lady told me it could be as late as december. I am 77 years old, I was diagnosed with cancer last year. I need that money.
▶ 1:13:43Sen. Hawley: She was on to say, when I voiced my concern to an rrb employee, she was told, if you don't live to see it, your kids will get it. That is not good. If you don't live to see it, your kids will get it. That is very bad. Why is this happening?
▶ 1:14:05Sen. Hawley: The brotherhood of locomotive engineers and trainman found the average wait time for adjudication of rrb occupational disability claims is currently 450 days. Average telephone time on hold, four hours. Why is that?
▶ 1:14:24Mr. Chorle: I think there are three questions in that. I'm sorry, I was not speaking into it. Three parts to your question. The comment that our employee made is inexcusable. Whoever said that. And we would follow up on it.
▶ 1:14:52Mr. Chorle: As to the other two, it is a question of resources. We just -- we do not have -- we don't have the people, with our current technology in place, that can make determinations any faster than we are.
▶ 1:15:10Sen. Hawley: On that point, in missouri, you have two field offices, one in kansas city, one in st. Louis. Both open mondays through fridays from 9:00 a.m. To 3:00 p.m. Only. In the st. Louis office, their website still advertises, and I quote, due to pie covid-19 community levels, all visitors are required to wear masks. Why is that?
▶ 1:15:35Mr. Joines: -- Mr. chorle: I can't give you an answer to that. It should not be.
▶ 1:15:44Sen. -- Sen. Hawley: You have people waiting for hundred some days to get an initial response. They are on the phone for hours. They are told -- if they go to an office, they are closed, and the got to wear a mask. It is not good. Here is another missouri railway worker. He says, I became disabled in 2022. I filed for disability 16 months ago.
▶ 1:16:12Sen. -- Sen. Hawley: When I call rrb for updates, the same answers. We are understaffed and it is a minimum of 480 days to process any application. He goes on, I'm not looking for a handoff. I worked my tail off to be able to utilize this program that I paid into for situations like this one. Another disabled railway worker in missouri told me that she waited 475 days before she got any response. 470 five days, a year and a half.
▶ 1:16:40Sen. -- Sen. Hawley: Another missouri and pulled me they wanted to change their withholding. They called rrb three times to ask about the proper form to fill out, and four months later, they still have not heard an answer. What are we going to do about this?
▶ 1:16:56Mr. Chorle: I can't quarrel with the delays. As I said earlier, they are inexcusable. There is no reason that people should wait -- 470 days is the average.
▶ 1:17:13Chair Cassidy: If I may interrupt, in your earlier testimony, you spoke about how congress needs to give you the resources, and the resources should be there. Can you elaborate on that for senator hawley?
▶ 1:17:24Mr. Chorle: Absolutely. The delays in technology and the office hours in certain offices are limited, again, because of the staffing levels that we have. A single person office or even a two person office is going to be closed part of the time. I don't know what to say about the fact that there is a sign up in one of our offices that says --
▶ 1:17:54Sen. Hawley: It is on the website.
▶ 1:17:56Mr. Chorle: That we are still under covered profile -- protocol.
▶ 1:18:02Sen. Hawley: If you need more resources to staff your offices, I'm all for doing that. If you need more offices in my state -- you only got two. We are a geographically large state and cover a lot of territory. I'm all for doing that. What is inexcusable for me has nothing to do with funding levels. It is people being told on the phone that if you die, good luck to you. Your kids will get it. Offices that are not open. Offices that are still under so-called covid protocols.
▶ 1:18:32Sen. Hawley: You can understand the frustration, and I hear it regularly from people in person and on the phone, who come to see me. They are beside themselves. This has got to change.
▶ 1:18:41Mr. Chorle: Senator, I think the vast majority of the people do a pretty good job, day in and day out. If that person who spoke to your constituents that way did that, for that, I apologize. It is inexcusable. When things like that are brought to our attention, we will follow up and we will act accordingly.
▶ 1:19:08Mr. Chorle: Other than apologizing at this point, I don't know what I can do other than that.
▶ 1:19:13Sen. Hawley: I am finishing with this, Mr. chairman. Listen, I hope that what you will do is come back to us, and I would ask you to come back to me to submit for the record, a plan to make sure that you are actually addressing the concerns of these folks. I want to know how it is -- I would like to see the protocols for how it is you address people on the phone. Surely, you have written protocols for your employees. I want to see your protocols for your offices.
▶ 1:19:41Sen. Hawley: I want to see your training materials. I need to see all of it. At this point, my constituents are not getting the services they have paid for, what they have worked their lives for and paid for. They are angry about it and I am angry about it, and I want to see some results. If you need more funding, I'm happy to give you more funding, but I want some answers. I will have more questions for the record. But I want to see stuff in writing.
▶ 1:20:06Sen. Hawley: As soon as I see it in writing, I'm going to make it public, because there have to be changes. I want to say this for the record. This cannot go on like this for the people of my state. It just cannot go on. Thank you, Mr. chairman.
▶ 1:20:19Chair Cassidy: Thank you.
▶ 1:20:22Sen. Lee: I did not realize we had less the other side of the day us. I -- the dais. I appreciate our witnesses for being here today. Sometimes, when we have these hearings and we are talking about oversight of agencies and government programs, and congress -- we are focusing on what we can do better for americans, american taxpayers.
▶ 1:20:51Sen. Lee: I think we also want to talk about how we can improve and maybe examine ways we have gotten things right, and maybe that can be a model that we can replicate in other programs. I appreciate having that discussion with senator hawley, and in florida, we have 27,000 railroad retirement beneficiaries. We have the opportunity to discuss sometimes how in that specific program we have gotten it right.
▶ 1:21:20Sen. Lee: I think when we talk about solvency of that program, funding of that program, I like to examine -- it is a unique program, certainly. So I like to go back and go, ok, what have we done right here? How might we use some of those things for other programs that we have? I think there is a bipartisan success story in their of the railroad retirement board as an answer to h-old problems.
▶ 1:21:48Sen. Lee: Given the uncertainty of current times, millions of floridians planning for retirement are concerned what the golden years will look like for them. Many have private pensions, retirement accounts, and have made preparations, but many don't. And in congress, our number one job is minding the nation's purse.
▶ 1:22:10Sen. Lee: And mismanagement previously has put some of our trust funds that protect our most vulnerable in danger of insolvency. And I want to make sure we take where programs have not become insolvent and maybe apply these lessons to some of these funds when we are facing real challenges in the future. The president is fully committed.
▶ 1:22:39Sen. Lee: Leadership in the senate is fully committed to making sure that we are examining how we are spending money, what this future in terms of stability of this country's success looks like, and making sure that we are being meaningful stewards of taxpayer money.
▶ 1:22:58Sen. Lee: So business as usual may not cut it as we move forward, because we are -- many would say we are facing extraordinary financial challenges as a nation. It is up to us to fix it. So I always appreciate opportunity like this to discuss programs and where we might have some things to learn.
▶ 1:23:23Sen. Lee: So I appreciate you being here to talk about the railroad retirement board, what it has gotten right and how we might translate that to success elsewhere. So Mr. chorle, in your testimony, one of the ways the retirement board has remained solvent is through investment. In 2001, congress committed the rrb to invest in private sector securities.
▶ 1:23:47Sen. Lee: And I believe you would say this has led to the major factor of maintaining solvency. In the working families tax cut act, we created tax-advantaged accounts. These funds are invested in the market and become available at 18, and they create opportunity for young adults.
▶ 1:24:10Sen. Lee: And some folks out there, some analysts have done that, an estimate if you invested $7,000 at the birth of a child, by the time they reach retirement, they could have over a million dollars. I think that is exemplary of what prudent investing can do in the private market. So harnessing the power of the american worker, which is always trending up over a multi-decade interval, seems to be a great way of ensuring physical health. Certainly, we have seen that. Mr.
▶ 1:24:39Sen. Lee: Chorle, do you think it is worth exploring similar investment strategies in some of our other trust funds?
▶ 1:24:48Mr. Chorle: I hesitate to advise congress on how they should expand this program, but I can talk about the success of the program that we have in place here, and I can speak to my personal experience when I was the chairman of a state public pension fund years ago, we are expanding the asset classes of
▶ 1:25:18Mr. Chorle: Investment, in the long term, is a sound investment theory. I leave it to congress to determine whether to expand our success and its principles to other trusts.
▶ 1:25:31Mr. Chorle: But I can tell you, as I have earlier, that it has worked for us, and it works best when we are investing for the long term, which is the whole principle of pension funds and pension fund investing.
▶ 1:25:51Sen. Moody: And you believe that change by congress at that time -- one of the big factors of solvency now.
▶ 1:25:58Mr. Chorle: Absolutely. Absolutely. Had -- the numbers are thus. $21 million in 2001. They sent us $35 billion since their inception. And yet they have gone from a balance of 21 billion of assets under management to 29 billion.
▶ 1:26:24Mr. Chorle: Had they sent us the 35 billion that they did and still invested during that whole period in fixed income securities and government securities at 3.5%, we would have gone broke in 2021. So the principal of market investing, I think, is a sound one and has worked for us, and I would hope that if the senate and if the congress expands it to other fields, that it works for them as well.
▶ 1:26:54Chair Cassidy: Thank you, senator moody. Thank you both for being here. Any senator wishing to ask additional questions, questions for the record are due at 5:00 p.m. Friday, february 20. Thank you for being here. Although it senator moody would like to say go gators, I will say go tigers anyway. The committee stands adjourned.