Pension System A Runaway Train?

Walter Kueffner was an auditing manager at Long Island Rail Road in New York until he took early retirement at age 50. Now he's almost 64 and still physically fit.

Yet Kueffner has little doubt what would've happened if he'd applied for disability from the federal agency created to look after workers like him: The U.S. Railroad Retirement Board, CBS News investigative correspondent Sharyl Attkisson reports.

"Do you think that you would be able to get disability?" Attkisson asked.

"I think I probably could," he said.

What makes Kueffer think someone like him could get disability? Because the system's handing out benefits in suspiciously large numbers.

What does that tell him?

"It tells me something's wrong," he said.

In fact, the percentage of Long Island Rail Road union employees who end up getting disability benefits is so huge, it boggles the mind: up to 97 percent. That's almost all of them.

For instance, the New York Times investigation found: "The 12 highest-paid Long Island Rail Road engineers in 2006" were healthy enough to earn generous salaries, most "over $200,000." But just two years later, they've all retired and gone on disability. The same is true of "the top-earning conductors."

The U.S. Railroad Retirement Board was started in the 1930's as a sort of social security and disability program for rail workers. But unlike regular Social Security, it approves nearly all occupational disability requests, and doesn't require rehab or medical re-evaluations.

Pair the Railroad Retirement Board with the Long Island Rail Road's equally generous pensions, and workers have figured out in large numbers that they can retire in their 50's, file for disability, and pull in their base salary without lifting a finger.

The scandal has brought a wide range of responses. Long Island Rail Road officials call it "alarming" and say they play no part in granting disability.

The U.S. Railroad Retirement Board, which does grant disability, says it's investigating, and that the payments come from taxes on rail workers and companies, not Social Security.

The FBI and New York attorney general have launched their own probes.

Just last week, police made the first arrest in the case: a Rail Road employee who allegedly profited by helping others gain disability. He's pleaded not guilty.

Kueffner is just happy to be one Long Island Rail Road retiree who's not caught up in the whole mess. He's glad he's not disabled, and he's not about to claim it.