Railroad retirement and unemployment insurance benefits totaling almost $9.9 billion were paid by the Railroad Retirement Board to about 641,000 beneficiaries in fiscal year 2007.  Financial reports issued in 2008 on the solvency of the railroad retirement and railroad unemployment insurance systems were both favorable.  Total railroad retirement system assets equaled $34.0 billion as of September 30, 2007.

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment Insurance Acts totaled almost $9.9 billion in the fiscal year ending September 30, 2007. Retirement and survivor benefits were paid by the Railroad Retirement Board to about 616,000 beneficiaries during the fiscal year, of whom 568,000 were on the Board’s annuity rolls at the end of the year. Nearly 29,000 railroad employees were paid unemployment and/or sickness insurance benefits. More than 3,000 beneficiaries received payments under both the Railroad Retirement Act and the Railroad Unemployment Insurance Act.

Retirement and survivor benefit payments of $9.8 billion during the 2007 fiscal year were $357.0 million more than payments in the prior year. Employee and spouse annuitants were paid over $7.6 billion, accounting for 78 percent of the total payments. Employees received some $4.3 billion in age annuities, $2.1 billion in disability annuities and $61.0 million in supplemental annuities, while spouses and divorced spouses received about $1.2 billion. Survivors were paid $2.2 billion in annuities and almost $4.0 million in lump-sum benefits. The total number of beneficiaries who received retirement and survivor benefits declined by more than 3,000 from fiscal year 2006.

Gross unemployment and sickness benefits paid in fiscal year 2007 totaled $107.0 million. Net benefits totaled about $74.0 million after adjustment for recoveries of benefit payments, including injury settlements, some of which were made in prior years. Total gross and net benefit payments increased by about $1.4 million and $1.2 million, respectively, from the preceding year.  Gross unemployment benefits totaling $33.9 million ($27.8 million net)  were paid to 10,100 claimants, while gross sickness benefits of $73.1 million ($46.2 million net) were paid to 19,500 claimants.

Financial Reports

The Board's 2008 railroad retirement financial report to Congress, which addressed the period 2008-2032, 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 25 years.  The long-term stability of the system, however, is still questionable.  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 Board’s 2008 railroad unemployment insurance financial report was also generally favorable. Even as projected maximum benefit rates increase 47 percent from $59 to $87 from 2007 to 2018, 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, in effect in calendar year 2008 in order to maintain a minimum account balance, will likely remain in effect through 2011, according to the report.

No financing changes were recommended by the Board for the railroad retirement or unemployment insurance systems.

The National Railroad Retirement Investment Trust’s annual management report for fiscal year 2007 stated that, as of September 30, 2007, the market value of the Trust-managed assets had increased to $32.7 billion, reflecting a 16.38% rate of return. Total railroad retirement system assets, including those maintained at the Treasury, equaled approximately $34.0 billion.

The 2008 railroad retirement and railroad unemployment insurance financial reports and the National Railroad Retirement Investment Trust's 2007 annual management report are available at www.rrb.gov.

Officials

President Bush reappointed Michael S. Schwartz as Chairman, Jerome F. Kever as Management Member, and V. M. Speakman, Jr., as Labor Member of the Board.  Their nominations were confirmed by the U.S. Senate on June 22, 2007.  Mr. Kever and Mr. Speakman are now the longest-serving Board Members in the agency's history.

Service

Customer Service Plan

During fiscal year 2007, customers received benefit services within the timeframes promised in the Board’s Customer Service Plan 98.6 percent of the time.  Beginning in fiscal year 2008, the agency implemented a revised plan which provides customers with additional information.

Service Enhancements

The Board implemented a restructuring plan for its field offices in fiscal year 2007, which will enable the agency to improve customer service by utilizing new technologies more effectively.  The new hub-and-satellite configuration will continue to provide telephone and face-to-face service to Board customers, and will allow agency management to more effectively balance and share workloads among the offices in each network. 

To further improve service, the Board also implemented a new online contact log which allows agency field representatives to electronically record contacts or transactions with customers in order to maintain a chronological service history for each customer, and also began to expand the use of document imaging to its field offices to help reduce paperwork, improve efficiency, and protect customer information within a secure electronic environment.

In addition, in 2007 the Board began work on a new nationwide toll-free telephone service.  A single toll-free number will provide Board customers with easy access to the agency's field offices, and will offer options for self-service through automated menus and automatic routing of calls to representatives in nearby offices.

Database Conversion Project

The Board completed work on a two-year information technology initiative to convert its existing IDMS database management system to a more flexible and efficient DB2 database system.  The conversion places the Board in a better position to provide service more efficiently in the coming years.

Office of Inspector General

During fiscal year 2007, the Office of Inspector General continued its independent oversight of agency operations and its efforts to combat fraud, waste, and abuse. Nine audit reports issued during the year identified operational weaknesses and provided recommendations for corrective action to program managers.

Investigative activities resulted in 46 criminal convictions, 32 indictments and informations, 25 civil judgments and  $4.6 million in recoveries, restitutions, fines, civil damages and penalties.

Selected Data on Benefit Operations

Retirement-Survivor	Fiscal Year 2007	Fiscal Year 2006
Employee age annuities Number awarded Number being paid at end of period Average being paid at end of period	9,600 193,300 $1,890	7,900 195,400 $1,789
Employee disability annuities   Number of total disability annuities awarded   Number of total 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	1,100 2,500 20,300 64,000 $1,346 $2,213	1,200 2,900 20,300 64,000 $1,286 $2,121
Supplemental employee annuities   Number awarded   Number being paid at end of period   Average being paid at end of period	7,300 121,200 1$42	5,700 121,400 $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	10,100 3,500 137,400 $443 $709	8,800 3,500 138,500 $416 $671
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	6,500 8,100 129,400 160,300	6,800 8,500 134,800 166,600
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	$1,173 $989 $1,471 $781 $773 $853	$1,122 $946 $1,423 $747 $740 $823
Lump-sum survivor benefits awarded   Number of lump-sum death benefits   Average lump-sum death benefit   Number of residual payments   Average residual payment	4,200 $905 2/ $2,674	4,500 $905 2/ $2,981