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"" Table of Contents
The Report in Brief
"" Benefits and Beneficiaries
"" Financial Reports
"" Service
"" Economic Recovery Activities
"" Office of Inspector General
"" Selected Data on Benefit Operations
"" A Review of Operations
"" Administrative Developments
"" Legal Rulings
"" Statistical Tables
"" Contact Public Affairs
2009 Annual Report for Fiscal Year Ended
September 30, 2008
The Report in Brief View this document in PDF

 
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Railroad retirement and unemployment insurance benefits totaling over $10.1 billion were paid by the Railroad Retirement Board to about 623,000 beneficiaries in fiscal year 2008.  Financial reports issued in 2009 on the solvency of the railroad retirement and railroad unemployment insurance systems were both favorable.  Total railroad retirement system assets equaled $26.7 billion as of September 30, 2008.

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment Insurance Acts totaled over $10.1 billion in the fiscal year ending September 30, 2008. Retirement and survivor benefits were paid by the Railroad Retirement Board to about 598,000 beneficiaries during the fiscal year, of whom 559,000 were on the Board’s annuity rolls at the end of the year. Over 28,000 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 $10.0 billion during the 2008 fiscal year were $237.8 million more than payments in the prior year. Employee and spouse annuitants were paid nearly $7.9 billion, accounting for 78 percent of the total payments. Employees received about $4.5 billion in age annuities, $2.1 billion in disability annuities and $61.0 million in supplemental annuities, while spouses and divorced spouses received over $1.2 billion. Survivors were paid $2.2 billion in annuities and some $4.0 million in lump-sum benefits. The total number of beneficiaries who received retirement and survivor benefits declined by nearly 18,000 from fiscal year 2007.

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 paragraph below, the Federal Income Tax Transfers section and the accompanying 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 2008 totaled $110.7 million. Net benefits totaled about $80.1 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 $3.7 million and $6.1 million, respectively, from the preceding year. Gross unemployment benefits totaling $38.9 million ($35.1 million net) were paid to 10,600 claimants, while gross sickness benefits of $71.8 million ($44.9 million net) were paid to 18,700 claimants.

Financial Reports

The Board's 24th triennial actuarial valuation, submitted to Congress in June 2009, 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 22 years.  Cash-flow problems arise only under the Board's most pessimistic employment assumption, and even then not until 2031.  The long-term stability of the system, however, is still 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 Board's 2009 railroad unemployment insurance financial report was also generally favorable.  Even as projected maximum benefit rates increase 43 percent from $61 to $87 from 2008 to 2019, experience-based contribution rates maintain solvency.  While small, short-term cash-flow problems may occur in 2010 and 2011, projections show quick repayment of loans resulting from any shortfall, even under the most pessimistic employment assumption.  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 2009 in order to maintain a minimum account balance, will likely remain in effect in 2010 and rise to 2.5 percent in 2011.

The National Railroad Retirement Investment Trust’s annual management report for fiscal year 2008 stated that, as of September 30, 2008, the market value of the Trust-managed assets had decreased to $25.3 billion, reflecting a -19.07 percent rate of return (net of fees). Total railroad retirement system assets, including those maintained at the Treasury, equaled $26.7 billion.

The 2009 railroad retirement and railroad unemployment insurance financial reports and the National Railroad Retirement Investment Trust’s 2008 annual management report are available at www.rrb.gov.

Service

Customer Service Plan

During fiscal year 2008, customers received benefit services within the timeframes promised in the Board’s Customer Service Plan 98.6 percent of the time.

Service Enhancements

In 2008 the Board completed implementation of a new nationwide toll-free telephone service. A single toll-free number (1-877-772-5772) provides Board customers with easy access to the agency’s field offices, and offers options for self-service through automated menus and automatic routing of calls to representatives in nearby offices.

Also in fiscal year 2008, the agency expanded its document imaging system to 29 field offices. The remaining 24 offices will be brought into the system in fiscal year 2009. Imaging helps Board offices reduce paperwork, improve efficiency and protect customer information within a secure electronic environment.

Economic Recovery Activities

The American Recovery and Reinvestment Act of 2009 contained a number of provisions affecting railroad retirement annuitants and railroad employees. Among those implemented by the Board were a one-time $250 payment to most individuals eligible for railroad retirement benefits at any time during the period November 2008 through January 2009, and an additional 13 weeks of unemployment benefits for certain railroad workers who exhausted their rights to the benefits normally provided under the Railroad Unemployment Insurance Act.

Office of Inspector General

During fiscal year 2008, the Office of Inspector General continued its independent oversight of agency operations and its efforts to combat fraud, waste, and abuse. Five audit reports issued during the year identified operational weaknesses and provided recommendations for corrective action to program managers.

Investigative activities resulted in 47 criminal convictions, 52 indictments and informations, 29 civil judgments and $4.1 million in recoveries, restitutions, fines, civil damages and penalties.

Selected Data on Benefit Operations

Retirement-Survivor Fiscal Year
2008
Fiscal Year
2007

Employee age annuities

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


9,800
191,200
$1,982


9,600
193,300
$1,890
 

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
2,300
20,200
63,800
$1,392
$2,285


1,100
2,500
20,300
64,000
$1,346
$2,213
 

Supplemental employee annuities

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


7,100
120,800
1$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



10,100
3,600
136,300
$458
$742



10,100
3,500
137,400
$443
$709


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
8,200
124,100
154,200


6,500
8,100
129,400
160,300

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


$1,222
$1,025
$1,529
$816
$804
$879


$1,173
$989
$1,471
$781
$773
$853

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/
$2,447


4,200
$905
2/
$2,674

Employees and Earnings3 Fiscal Year
2008
Fiscal Year
2007

Average employment

234,000

238,000

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


$15.99
$14.78


$15.39
$14.21
Creditable earnings, Railroad Unemployment Insurance Act (billions)
$3.65

$3.57

Unemployment-Sickness Benefit Year
2007-2008
Benefit Year
2006-2007

Qualified employees

255,200

250,200

Unemployment benefits

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


$32.2    4($35.1) 
      10,100  4(10,600) 64,600
2,200
$519



$29.6
9,500
56,600
1,800
$499


Sickness benefits

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


 $46.1    4($44.9)
18,400  4(18,700)
122,400
3,300
$520



$43.5
19,000
128,300
3,500
$503


1 Includes 200 supplemental annuities, averaging $65, awarded under the 1937 Act.
2 Fewer than 50.
3 Except for fiscal year 2007 employment, all figures in this section are preliminary.
4 Data in parentheses are for the fiscal year (October 1, 2007 - September 30, 2008).

 

 

 


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