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.
 

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