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"" Table of Contents
The Report in Brief
"" Benefits and Beneficiaries
"" Financial Reports
"" Service Delivery
"" 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
2013 Annual Report for Fiscal Year Ended
September 30, 2012
The Report in Brief View this document in PDF

 
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Railroad retirement and unemployment insurance benefits totaling over $11.4 billion were paid by the Railroad Retirement Board (RRB) to about 595,000 beneficiaries in fiscal year 2012.  Financial reports issued in 2013 on the solvency of the railroad retirement and railroad unemployment insurance systems were both favorable.  Total railroad retirement system assets equaled $25.3 billion as of September 30, 2012.
 

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment Insurance Acts totaled over $11.4 billion in the fiscal year ending September 30, 2012. Retirement and survivor benefits were paid by the RRB to about 573,000 beneficiaries during the fiscal year, of whom 539,000 were on the RRB's annuity rolls at the end of the year. Approximately 26,000 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 $11.3 billion during the 2012 fiscal year were $383.8 million more than payments in the prior year. Employee and spouse annuitants were paid approximately $9.2 billion, accounting for 81 percent of the total payments. Employees received almost $5.3 billion in age annuities, $2.3 billion in disability annuities and $60.8 million in supplemental annuities, while spouses and divorced spouses received nearly $1.5 billion. Survivors were paid $2.2 billion in annuities and more than $3.4 million in lump-sum benefits. The total number of beneficiaries who received retirement and survivor benefits declined by about 5,000 from fiscal year 2011.
 

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 2012 totaled about $119.2 million. Net benefits totaled about $88.5 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 $9.8 million while net benefit payments decreased by over $12.1 million from the preceding year. Gross unemployment benefits decreased by some 11 percent as compared to the previous year, reflecting continued recovery from recessionary levels. However, unemployment benefits were still above pre-recessionary levels due to the continuation of temporary extended benefits. Gross unemployment benefits totaling $46.2 million ($41.1 million net), including $7.3 million ($6.7 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, the Temporary Payroll Tax Cut Continuation Act of 2011, and the Middle Class Tax Relief and Job Creation Act of 2012 were paid to 9,600 claimants, while gross sickness benefits of $73.0 million ($47.5 million net) were paid to 17,000 claimants.

Financial Reports

The RRB's 2013 railroad retirement financial report to Congress, which addressed the period 2013-2037, 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.  However, the long-term stability of the system is still uncertain.  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 2013 railroad unemployment insurance financial report was also generally favorable. Even as projected maximum benefit rates increase 42 percent (from $66 to $94) from 2012 to 2023, experience-based contribution rates maintain solvency. The report also predicted average employer contribution rates well below the maximum throughout the projection period. A surcharge was not necessary in calendar year 2013 to maintain a minimum account balance, and the report predicts one will not be required in 2014.  Under all three employment assumptions, the report projects a surcharge of 1.5 percent in 2015, and at least that amount in 2016 and periodically thereafter. 

The National Railroad Retirement Investment Trust's annual management report for fiscal year 2012 stated that, as of September 30, 2012, the net asset value of the Trust-managed assets was $23.7 billion. This represented an increase from $22.1 billion in the previous year, primarily due to a net investment return of 16.4 percent. The ending balance also reflects a transfer of $2.0 billion to the U.S. Treasury for the payment of railroad retirement (tier II) benefits. Total railroad retirement system assets, including those maintained at the Treasury, equaled $25.3 billion.

The 2013 railroad retirement and railroad unemployment insurance financial reports and the National Railroad Retirement Investment Trust's 2012 annual management report are available at www.rrb.gov.

Service Delivery

Customer Satisfaction

In fiscal year 2012, the RRB conducted two surveys designed to measure customer satisfaction and identify potential service improvements. One survey focused on claimants receiving unemployment and sickness insurance benefits while the other was geared to initial survivor annuitants. The overall satisfaction score from the surveys were 81 and 90, respectively, well above the latest aggregate satisfaction index of 67 for the entire Federal government.

Customer Service Plan

In fiscal year 2012, customers received benefit services within the timeframes promised in the RRB's Customer Service Plan 99.3 percent of the time.

Service Enhancements

The RRB completed additional enhancements to its Employer Reporting System which allows employers to complete several new forms in an electronic format, significantly reducing the number of paper documents generated and mailed. The agency also completed a cost-of-living adjustment, with tier I benefits increasing by 1.7 percent due to inflation. In the area of information technology, the RRB added to its online library of on-demand training videos and made upgrades to its server network in the field that allows electronic data to be transmitted up to 90 percent faster.

Economic Recovery Activities

The Middle Class Tax Relief and Job Creation Act of 2012 provided for continued access to temporary extended unemployment benefits for railroad workers. The RRB also reached out to rail workers impacted by Hurricane Sandy in October 2012 to assist them in filing unemployment claims and ensure such claims were processed expeditiously.

Office of Inspector General

During fiscal year 2012, 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 11 audit reports and one special report that identified operational weaknesses and recommended improvements to agency management.

Investigative activities resulted in 34 arrests, 106 indictments and/or informations, 85 convictions, 26 civil judgments, 95 referrals to the Department of Justice, and more than $77.3 million in financial accomplishments. This reflects potential fraud amounts related to programs administered exclusively by the RRB and potential fraud amounts from other Federal programs, such as Medicare or social security, which were identified during Office of Inspector General joint investigative work.

Selected Data on Benefit Operations

Retirement-Survivor Fiscal Year
2012
Fiscal Year
2011

Employee age annuities

  Number awarded 10,100 10,500
  Number being paid at end of period 189,900 190,100
  Average being paid at end of period $2,363 $2,244

Employee disability annuities
  Number of total disability annuities awarded 1,100 1,200
  Number of occupational disability annuities awarded 1,700 1,900
  Number of total disability annuities being paid at end of period 20,800 20,600
  Number of occupational disability annuities being paid at end of period 61,700 62,500
  Average total disability annuity being paid at end of period $1,596 $1,525
  Average occupational disability annuity being paid at end of period $2,580 $2,482

Supplemental employee annuities1
  Number awarded 6,800 7,100
  Number being paid at end of period 121,600 121,400
  Average being paid at end of period $42 $42


Spouse and divorced spouse annuities

 

  Number awarded, total 11,500 11,300
  Number being paid to divorced spouses at end of period 4,200 4,000
  Number being paid at end of period, total 139,700 138,300
  Average being paid to divorced spouses at end of period $542 $518
  Average being paid at end of period, total $882 $839

Survivor annuities
   Number awarded to aged widow(er)s 5,800 6,100
  Number awarded, total 7,500 7,600
  Number being paid to aged widow(er)s at end of period 106,300 110,400
  Number being paid at end of period, total 134,300 138,800

Average being paid at end of period to
  Aged widow(er)s $1,426 $1,366
  Disabled widow(er)s $1,181 $1,133
  Widowed mothers (fathers) $1,700 $1,663
  Remarried widow(er)s $956 $907
  Divorced widow(er)s $938 $892
  Children $980 $941

Partition payments
2
  Number being paid at end of period 1,000 800
  Average being paid at end of period $294 $292

Lump-sum survivor benefits awarded
 
  Number of lump-sum death benefits 3,500 3,600
  Average lump-sum death benefit $928 $916
  Number of residual payments 3/ 3/
   Average residual payment $919 $2,519

Employees and Earnings4 Fiscal
Year
2012
Fiscal
Year
2011

Average employment

233,000

227,000

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


$17.11
$15.79


$16.49
$15.32
Creditable earnings, Railroad Unemployment Insurance Act (billions)
$3.84

$3.66

Unemployment-Sickness Benefit Year
2011-2012
Benefit Year
2010-2011

Qualified employees

235,100

239,100
     
Unemployment benefits    
  Net amount paid (millions) 5$40.7  6($41.1) 7$51.4
  Beneficiaries 9,200  6(9,600) 11,600
  Number of payments 71,800 89,300
  Normal benefit accounts exhausted 2,200 2,800
  Average payment per 2-week registration period $573

$566

     
Sickness benefits    
  Net amount paid (millions) $49.1  6($47.5) $51.2
  Beneficiaries 16,700  6(17,000) 17,400
   Number of payments 112,200 117,100
  Normal benefit accounts exhausted 3,000 3,100
   Average payment per 2-week registration period $585

$585


1 Excludes partition payments to spouses and divorced spouses where the employee is deceased. Averages are after court-ordered partitions. Fiscal year 2012 average includes fewer than 50 supplemental annuities, averaging $69, 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 2011 employment, all figures in this section are preliminary.
5 Includes $7.0 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, the Temporary Payroll Tax Cut Continuation Act of 2011, and the Middle Class Tax Relief and Job Creation Act of 2012.
6 Data in parentheses are for fiscal year (October 1, 2011 - September 30, 2012). Unemployment benefits include $6.7 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, the Temporary Payroll Tax Cut Continuation Act of 2011, and the Middle Class Tax Relief and Job Creation Act of 2012.
7 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.

 

 

 


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