LOUISVILLE — After her husband died in April, Katherine Jane Ernst saw the monthly benefit from his railroad retirement pension drop about $250 a month.

        “I try to watch things a little closer,” Ms. Ernst, 78, a retired teacher, told The Courier-Journale. “You have to tighten your belt some.”

        Ms. Ernst is among 600,000 beneficiaries of the federal pension system who are watching legislation in Congress to overhaul the nation's railroad retirement program. The bill passed the House 384-33 on July 31, with support from the entire Kentucky delegation and Rep. Baron Hill of Indiana's 9th District.

        But since Sept. 11, Congress has been busy with a new set of priorities, and the bill is sitting in the Senate Finance Committee, which is considering an economic stimulus package to accompany the war on terrorism.

        The bill includes an increase in benefits to spouses of railroad workers; a reduction in the retirement age from 63 to 60 for workers with 30 years on the job; a shorter time of five years, instead of 10, for vesting in the pension; and a provision allowing part of the fund to be invested in the stock market.

        The pool of potential pensioners is huge. Nationwide, railroads employ about 250,000 people, including 5,000 in Kentucky and 7,300 in Indiana.

        The railroad retirement system, established in the mid-1930s, recognized the importance of the industry to the economy — and the strength of its unions.

        Many railroads had pensions, but they were threatened by the Depression. With Social Security still being developed, rail workers demanded a separate retirement program.

        The railroad pension system is the only industry retirement program controlled by the government.

        At the end of June, 662,500 people were receiving benefits, according to Railroad Retirement Board spokesman Jim Metlicka. Railroad unions estimate that Kentucky has 7,500 railroad retirees, 3,800 spouses and 5,100 survivors collecting benefits. In Indiana, 8,500 retirees, 4,400 spouses and 5,800 survivors collect benefits.

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