Last Friday, Eloise Menefee of Arlington opened her mail only to learn that as of Thursday she will be $16.70 poorer each month because of a cut in her federal retirement benefits.
Menefee is one of an estimated 400,000 retired railroad workers whose so-called "windfall" benefits will be reduced 21 percent Oct. 1 in order to keep the federal Railroad Retirement Fund afloat during the coming decade.
Railway unions, management and Congress were braced for the cutbacks, part of a legislative package passed in August. But Menefee, a sprightly 76-year-old living in the Virginia suburbs, was caught off guard. And she's mad.
"I'm not kidding, I almost had a heart attack. There was no warning, no advertising, nothing on the radio, and I listen every day. There was nothing ever mentioned. It was just right out of the blue. Like that."
"It doesn't sound like much, I know, but then when you don't have much, everything counts. But it's the principle . . . that's the part that really burned me up. I don't think they have a right to give people five days notice," said Menefee who, since her first job in 1924, spent 10 years, 2 months and 19 days working for the Norfolk & Southern, the Virginian and other railroad companies.
Since the notices of the cuts went out last week, telephones have been ringing at the Railroad Retirement Board in Chicago as officials try to explain the tangled tale of railroad retirement benefits.
But what they can't explain away is the cut in real dollars to former railroad employes who, according to their union, earned these benefits during their working years. "They paid for it and they're entitled to it," said Jim Kennedy, national legislative counsel for the Brotherhood of Railway and Airline Clerks, which has 151,000 members working for the railroads.
The cuts are being made in "dual benefit windfall payments," a fund that provides special benefits to certain railroad workers who had paid into both the Railroad Retirement Fund and Social Security. The two funds were combined in 1974, and Congress then agreed to pay those eligible for the "windfall" benefits until the dual program phased itself out.
But the cost of these special benefits soon outstripped projections and, to supplement the funds Congress provided, the Railroad Retirement Fund has been forced to borrow from its regular pension fund. This only aggravated a pending crisis for the fund itself which, according to the federal Railroad Board, was heading for insolvency by 1982.
This year, Congress, following a recommendation made first by the Carter administration and then by the Reagan administration, put a $350 million ceiling on its appropriations for windfall benefits while at the same time increasing contributions to the Retirement Fund by 2 percent for railroad employes and 2.25 percent by employers. These increases, which also go into effect Thursday, will cost the average railroad worker an extra $20 a month.
The appropriation fell short of the $440 million needed this year, according to Bill Poulos, spokesman for the Railroad Retirement Board, and so the 21 percent shortfall was passed on to the retirees.
Of the one million retired railroad workers, less than half will be affected by the cuts, and for many of those, the actual decrease in total benefits will be far less than 21 percent, Poulos said.
The average reduction is $23 for retirees, $19 for spouses and $10 for widowers, Poulos said. He also noted that the average worker gets a total of $475 in monthly benefits from the Railroad Retirement Fund, of which $112 is a "windfall."