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"" Table of Contents
The Report in Brief
"" Benefits and Beneficiaries
"" Financial Reports
  "" Officials
"" Service
"" Office of Inspector General
"" Selected Data on Benefit Operations
"" A Review of Operations
"" Administrative Developments
"" Legal Rulings
"" Statistical Tables
"" Contact Public Affairs
2008 Annual Report for Fiscal Year Ended
September 30, 2007
The Report in Brief View this document in PDF

 
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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.

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, and the Federal Income Tax Transfers section and accompanying table in "A Review of Operations", which are also presented as cash, 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 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

Employees and Earnings3 Fiscal Year
2007
Fiscal Year
2006

Average employment

237,000

235,000
 

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


$15.55
$14.35


$15.05
$13.84
Creditable earnings, Railroad Unemployment Insurance Act (billions)
 

$3.57

$3.43

Unemployment-Sickness Benefit Year
2006-2007
Benefit Year
2005-2006

Qualified employees
 

250,200

244,600

Unemployment benefits

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


$29.6  4($27.8)
9,500  4(10,100) 
56,600
1,800
$499



$30.6
8,900
54,000
1,900
$490


Sickness benefits

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


 $43.5    4($46.2)
19,000  4(19,500)
128,300
3,500
$503



$43.8
19,700
135,500
3,700
$496


1 Includes 300 supplemental annuities, averaging $66, awarded under the 1937 Act.
2 Fewer than 50.
3 Except for fiscal year 2006 employment, all figures in this section are preliminary.
4 Data in parentheses are for the fiscal year (October 1, 2006 - September 30, 2007).

 

 

 


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