New York Probes Long Island Rail Road Disability Benefits

September 23, 2008

New York state Attorney General Andrew Cuomo said he has issued subpoenas as part of “an aggressive and expeditious” probe into reports of unusually high levels of disability benefits paid to Long Island Rail Road retirees.

Cuomo said he had issued subpoenas seeking “all books and records” about disability benefits paid to the rail road’s employees.

“This begins what will be an aggressive and expeditious investigation into troubling allegations of wrongdoing regarding such payments,” Cuomo said in a statement.

New York Gov. David Paterson had called on Cuomo to probe the disability awards after a New York Times report on Sunday on high rates of disability benefits paid to retirees of the Long Island Rail Road.

According to The New York Times, “virtually every career employee — as many as 97 percent in one recent year — applies for and gets disability payments soon after retirement.”

The Long Island Rail Road, one of the country’s busiest commuter railroads, said that last month it had referred the high rate of retiree disability payments to the inspector generals of its parent, the Metropolitan Transportation Authority, and the U.S. Railroad Retirement Board, which approves the benefits.

Both the U.S. Railroad Retirement Board and the Long Island Rail Road pledged to cooperate with the investigations.

The Long Island Rail Road said that less than 1 percent of its workers got disability pensions from the Metropolitan Transportation Authority in the past three years.

“The high rate of disability pensions awarded to former LIRR employees by this (U.S.) governmental body is alarming and out of sync with our workplace safety record at the Long Island Rail Road and is inconsistent with Social Security disability rates,” the LIRR said in a statement.

The Railroad Retirement Board said the LIRR retirees collect benefits from both state and federal agencies.

The U.S. Railroad Retirement Board said decisions on workers benefits are on whether the medical evidence meet its standards.

The agency, which was created in the 1930s to provide retirement benefits to railroad employees, since 1946 has provided annuities to workers who can no longer perform their regular job.

The Retirement Board said its occupational disability annuity payments are funded by taxes paid by railroad employees and the railroad industry. The average annuity paid in 2007 was $26,400 a year, the agency said.

The LIRR, in a statement, said: “In fact, the MTA has asserted that its commuter rails should no longer be part of the Railroad Retirement Board pension system, and instead be part of the Social Security system, a move that would save the MTA millions each year if approved.”

According to the New York Times report, many rail road retirees receive “tens of thousands of dollars in annual disability payments — a sum roughly equal to the base salary of their old jobs.”

(Reporting by Joan Gralla in New York; editing by Leslie Adler)

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