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"" Table of Contents
The Report in Brief
"" Benefits and Beneficiaries
"" Financial Reports
"" Service Delivery
"" Economic Recovery Activities
  "" New Board Member
"" Office of Inspector General
"" Selected Data on Benefit Operations
"" A Review of Operations
"" Administrative Developments
"" Legal Rulings
"" Statistical Tables
"" Contact Public Affairs
2012 Annual Report for Fiscal Year Ended
September 30, 2011
The Report in Brief View this document in PDF

 
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Railroad retirement and unemployment insurance benefits totaling over $11.0 billion were paid by the Railroad Retirement Board (RRB) to approximately  603,000 beneficiaries in fiscal year 2011.  Financial reports issued in 2012 on the solvency of the railroad retirement and railroad unemployment insurance systems were both favorable.  Total railroad retirement system assets equaled $23.6 billion as of September 30, 2011.
 

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment Insurance Acts totaled over $11.0 billion in the fiscal year ending September 30, 2011. Retirement and survivor benefits were paid by the RRB to about 578,000 beneficiaries during the fiscal year, of whom 543,000 were on the RRB's annuity rolls at the end of the year. Approximately 28,000 railroad employees were paid unemployment and/or sickness insurance benefits. Nearly 3,000 beneficiaries received payments under both the Railroad Retirement Act and the Railroad Unemployment Insurance Act.

Retirement and survivor benefit payments of $10.9 billion during the 2011 fiscal year were $166.3 million more than payments in the prior year. Employee and spouse annuitants were paid approximately $8.8 billion, accounting for 80 percent of the total payments. Employees received almost $5.1 billion in age annuities, $2.3 billion in disability annuities and $60.8 million in supplemental annuities, while spouses and divorced spouses received nearly $1.4 billion. Survivors were paid $2.2 billion in annuities and more than $3.6 million in lump-sum benefits. The total number of beneficiaries who received retirement and survivor benefits declined by about 4,000 from fiscal year 2010.
 

Statistics are presented on the cash basis of accounting instead of the accrual basis of accounting for much of the Report. However, with the exception of the first paragraph below, the Federal Income Tax Transfers section/table in "A Review of Operations," which are also presented as cash, the information under "Financial Reports" in "The Report in Brief, " and in both the Railroad Retirement and Survivor Program and the Railroad Unemployment and Sickness Insurance Program financial operations sections of "A Review of Operations" is presented on the accrual basis of accounting. The primary difference between the two bases of accounting is that the cash basis recognizes revenue and expenditures only when cash is received and paid. The accrual basis, on the other hand, recognizes revenue when it is earned and expenses when they are incurred.

Gross unemployment and sickness benefits paid in fiscal year 2011 totaled about $129.0 million. Net benefits totaled almost $100.7 million after adjustment for recoveries of benefit payments, including injury settlements, some of which were made in prior years. Total gross benefit payments decreased by approximately $62.0 million while net benefit payments decreased by about $58.9 million from the preceding year.  Gross unemployment benefits decreased by over 54 percent as compared to the previous year, reflecting recovery from the prior year's recessionary levels.  However, unemployment benefits were still above pre-recessionary levels.  Gross unemployment benefits totaling $52.1 million ($48.3 million net), including $9.1 million ($8.7 million net) in temporary extended benefits under the American Recovery and Reinvestment Act of 2009 and the Worker, Homeownership, and Business Assistance Act of 2009, as amended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, were paid to 10,800 claimants, while gross sickness benefits of $76.9 million ($52.3 million net) were paid to 17,700 claimants.

Financial Reports

The RRB's 25th triennial actuarial valuation, submitted to the Congress in June 2012, was generally favorable, concluding that, barring a sudden, unanticipated, large decrease in railroad employment, or substantial investment losses, the railroad retirement system will experience no cash-flow problems during the next 23 years.  Cash-flow problems arise only under the RRB's most pessimistic employment assumption, and then not until 2035.  The long-term stability of the system, however, is not assured.  Under the current financing structure, actual levels of railroad employment and investment return over the coming years will largely determine whether corrective action is necessary.

The RRB's 2012 railroad unemployment insurance financial report was also generally favorable.  Even as projected maximum benefit rates increase 44 percent (from $66 to $95) from 2011 to 2022, experience-based contribution rates maintain solvency.  The report also predicted average employer contribution rates well below the maximum throughout the projection period.  A 1.5 percent surcharge was imposed in calendar year 2012 in order to maintain a minimum account balance.   Under all three employment assumptions, the report projects no surcharge in 2013 or 2014, with a periodic surcharge of at least 1.5 percent likely in subsequent years.

The National Railroad Retirement Investment Trust's annual management report for fiscal year 2011 stated that, as of September 30, 2011, the net asset value of the Trust-managed assets was $22.1 billion. This represented a decline from $23.8 billion in the previous year, almost all of which is attributable to a transfer of $1.7 billion to the U.S. Treasury for the payment of railroad retirement benefits.  Total railroad retirement system assets, including those maintained at the Treasury, equaled $23.6 billion.

The 2012 railroad retirement and railroad unemployment insurance financial reports and the National Railroad Retirement Investment Trust's 2011 annual management report are available at www.rrb.gov.

Service Delivery

Customer Satisfaction

During fiscal year 2011, the RRB completed a year-long survey of visitors to the agency website.  The survey provided specific suggestions for improvements, particularly with regard to the design of the site and navigation from the home page.  Many of these, including a login for online services from the home page, were implemented in May 2011.

Customer Service Plan

In fiscal year 2011, customers received benefit services within the timeframes promised in the RRB's Customer Service Plan 99.2 percent of the time.

Service Enhancements

The RRB completed enhancements to its Employer Reporting System which allows employers to complete several new forms in an online, web-based format.  The agency also completed a cost-of-living adjustment, with beneficiaries seeing a 3.6 percent benefit increase due to inflation, for the first time in 2 years.  In addition, the RRB expanded its range of Internet services to include online filing of claims for sickness benefits.

Economic Recovery Activities

The Temporary Payroll Tax Cut Continuation Act of 2011 and the Middle Class Tax Relief and Job Creation Act of 2012 extended two provisions relating to railroad employees.  Both laws provided for continued access to temporary extended unemployment benefits and a reduction in payroll taxes paid by employees.  The 2011 law extended these provisions for the first 2 months of calendar year 2012, while the subsequent law covered the balance of the year.

New Board Member

Walter A. Barrows was sworn in as the Labor Member of the Board on October 7, 2011.  At the time of his appointment, he was the Secretary-Treasurer of the Brotherhood of Railroad Signalmen, and had also served as a Trustee of the National Railroad Retirement Investment Trust.  Mr. Barrows replaced V. M. Speakman, Jr., who retired.

Office of Inspector General

During fiscal year 2011, the Office of Inspector General continued its independent oversight of agency operations and its efforts to combat fraud, waste, and abuse. This included the issuance of 12 audit reports and 2 special reports that identified operational weaknesses and recommended improvements to agency management.

Investigative activities resulted in 62 convictions, 67indictments and/or informations, 21 civil judgments and more than $106 million in recoveries, restitutions, fines, civil damages and penalties.   This reflects fraud amounts related to programs administered exclusively by the RRB and fraud amounts from other Federal programs, such as Medicare or social security, which were included in the disposition resulting from the investigation.

Selected Data on Benefit Operations

Retirement-Survivor Fiscal Year
2011
Fiscal Year
2010

Employee age annuities

Number awarded
Number being paid at end of period
Average being paid at end of period


10,500
190,100
$2,244


10,700
190,200
$2,186
 

Employee disability annuities

  Number of total disability annuities awarded
  Number of occupational disability annuities awarded
  Number of total disability annuities being paid at end of period
  Number of occupational disability annuities being paid at end of period
  Average total disability annuity being paid at end of period
  Average occupational disability annuity being paid at end of period


1,200
1,900
20,600
62,500
$1,525
$2,482


1,100
2,000
20,400
63,100
$1,508
$2,452
 

Supplemental employee annuities1

  Number awarded
  Number being paid at end of period
  Average being paid at end of period


7,100
121,400
$42


7,300
121,200
$42


Spouse and divorced spouse annuities
  Number awarded, total
  Number being paid to divorced spouses at end of period
  Number being paid at end of period, total
  Average being paid to divorced spouses at end of period
  Average being paid at end of period, total



11,300
4,000
138,300
$518
$839



11,300
3,900
137,100
$504
$817


Survivor annuities

  Number awarded to aged widow(er)s
  Number awarded, total
  Number being paid to aged widow(er)s at end of period
  Number being paid at end of period, total


6,100
7,600
110,400
138,800


6,200
7,700
114,900
143,900

Average being paid at end of period to

  Aged widow(er)s
  Disabled widow(er)s
  Widowed mothers (fathers)
  Remarried widow(er)s
  Divorced widow(er)s
  Children


$1,366
$1,133
$1,663
$907
$892
$941


$1,329
$1,108
$1,643
$896
$880
$937
Partition payments2
  Number being paid at end of period
  Average being paid at end of period

800
$292

700
$287

Lump-sum survivor benefits awarded

  Number of lump-sum death benefits
  Average lump-sum death benefit
  Number of residual payments
  Average residual payment


3,600
$916
3/
$2,519


3,700
$915
3/
$2,133

Employees and Earnings4 Fiscal
Year
2011
Fiscal
Year
2010

Average employment

228,000

220,000

Creditable earnings, Railroad Retirement Act (billions)
  Tier I
  Tier II


$16.27
$15.18


$15.21
$14.20
Creditable earnings, Railroad Unemployment Insurance Act (billions)
$3.66

$3.53

Unemployment-Sickness Benefit Year
2010-2011
Benefit Year
2009-2010

Qualified employees

239,100

252,300

Unemployment benefits

  Net amount paid (millions)
  Beneficiaries
  Number of payments
  Normal benefit accounts exhausted
  Average payment per 2-week registration period

 
5$51.4  6($48.3)
11,600  6(10,800)
89,300
2,800
$566

 

7$138.2

24,800
241,200
7,500
$553


Sickness benefits

  Net amount paid (millions)
  Beneficiaries
  Number of payments
  Normal benefit accounts exhausted
  Average payment per 2-week registration period


 $51.2  6($52.3)
17,400  6(17,700)
117,100
3,100
$585



$52.4
17,800
120,000
3,200
$565


1 Excludes partition payments to spouses and divorced spouses where the employee is deceased.  Averages are after court-ordered partitions.  Fiscal year 2011 average includes 50 supplemental annuities, averaging $65, awarded under the 1937 Act. 
2 Limited to partition payments to spouses and divorced spouses where the employee is deceased or not otherwise entitled to an annuity.  Partition payments from employees on the rolls are included with the employees' annuities.
3 Fewer than 50.
4 Except for fiscal year 2010 employment, all figures in this section are preliminary.
5 Includes $9.4 million in temporary extended unemployment benefits authorized by the American Recovery and Reinvestment Act of 2009 and the Worker, Homeownership, and Business Assistance Act of 2009, as amended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
6 Data in parentheses are for fiscal year (October 1, 2010 - September 30, 2011).  Unemployment benefits include $8.7 million in temporary extended unemployment benefits authorized by the American Recovery and Reinvestment Act of 2009 and the Worker, Homeownership, and Business Assistance Act of 2009, as amended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
7 Includes $26.8 million in temporary extended unemployment benefits authorized by the American Recovery and Reinvestment Act of 2009 and the Worker, Homeownership, and Business Assistance Act of 2009.

 

 

 


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