Railroad retirement and unemployment insurance benefits totaling over $10.9 billion were paid by the Railroad Retirement Board (RRB) to about 617,000 beneficiaries in fiscal year 2010.  Financial reports issued in 2010 on the solvency of the railroad retirement and railroad unemployment insurance systems were both favorable.  Total railroad retirement system assets equaled $25.1 billion as of September 30, 2010.

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment Insurance Acts totaled over $10.9 billion in the fiscal year ending September 30, 2010. Retirement and survivor benefits were paid by the RRB to about 582,000 beneficiaries during the fiscal year, of whom 547,000 were on the RRB’s annuity rolls at the end of the year. Some 38,000 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 $10.8 billion during the 2010 fiscal year were $276.2 million more than payments in the prior year. Employee and spouse annuitants were paid approximately $8.6 billion, accounting for 80 percent of the total payments. Employees received some $4.9 billion in age annuities, $2.3 billion in disability annuities and $60.3 million in supplemental annuities, while spouses and divorced spouses received over $1.3 billion. Survivors were paid $2.2 billion in annuities and nearly $3.6 million in lump-sum benefits. The total number of beneficiaries who received retirement and survivor benefits declined by about 7,000 from fiscal year 2009.
 

Gross unemployment and sickness benefits paid in fiscal year 2010 totaled $191.0 million. Net benefits totaled almost $159.6 million after adjustment for recoveries of benefit payments, including injury settlements, some of which were made in prior years. Total gross benefit payments increased by approximately $1.0 million while net benefit payments decreased by $0.2 million from the preceding year,  Unemployment benefits continued to be at recessionary levels.  Gross unemployment benefits totaling $113.7 million ($109.6 million net), including $20.5 million ($20.2 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, were paid to 21,700 claimants, while gross sickness benefits of $77.3 million ($50.0 million net) were paid to 18,100 claimants.

Financial Reports

The RRB's 2011 railroad retirement financial report to Congress, which addressed the period 2011-2035, 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 even then not until 2034.  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 RRB's 2011 railroad unemployment insurance financial report was also generally favorable.  Even as projected maximum benefit rates increase 38 percent (from $66 to $91) from 2010 to 2021, experience-based contribution rates maintain solvency.  The funds borrowed from the Railroad Retirement Account during fiscal year 2010 are expected to be repaid in entirety by the end of fiscal year 2011.  The report also predicted average employer contribution rates well below the maximum throughout the projection period.  A 2.5 percent surcharge was imposed in calendar year 2011 in order to maintain a minimum account balance, with a surcharge of either 1.5 percent or 2.5 percent probable in 2012.  All three employment assumptions indicate no surcharge in 2013 or 2014, with a periodic surcharge of at least 1.5 percent in subsequent years.

The National Railroad Retirement Investment Trust’s annual management report for fiscal year 2010 stated that, as of September 30, 2010, the market value of the Trust-managed assets was $23.8 billion. This represented an increase of $500 million over the year, which included a transfer of $2.0 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 $25.1 billion.

The 2011 railroad retirement and railroad unemployment insurance financial reports and the National Railroad Retirement Investment Trust’s 2010 annual management report are available at www.rrb.gov.

Service Delivery

Customer Satisfaction

During fiscal year 2010, the RRB began a year-long survey of visitors to the agency's website.  Initial results of the survey indicated that the website compared very favorably with other Federal agencies, particularly those with similar programs and responsibilities.  Feedback to the survey also identified improvements the RRB can make in navigation from the home page and within the site to increase overall satisfaction.

Customer Service Plan

In fiscal year 2010, 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 implemented online filing of biweekly claims for sickness benefits in October 2010, to complement the ability for railroad employees to electronically file applications and claims for unemployment insurance benefits.  The agency also made improvements to its Employer Reporting System to facilitate future expansion of online forms and capabilities, and increased the number of online training presentations, which can be accessed by external customers and agency employees, as part of its RRBVision initiative.

Economic Recovery Activities

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 contained two provisions that affected railroad employees.  It provided up to 13 weeks of additional temporary extended unemployment benefits for certain workers who exhausted their rights to benefits normally provided under the Railroad Unemployment Insurance Act.  The legislation also included a temporary reduction of two percentage points in the social security payroll tax for employees, which includes the tier I tax on railroad employees.

75th Anniversary Observance

In August 2010, the RRB commemorated the 75th anniversary of the enactment of the Railroad Retirement Act of 1935, which served as the cornerstone of the present railroad retirement system.  Activities included a national managers meeting, a display of historical items in the headquarters building, an open house for agency retirees, and an anniversary luncheon.

Office of Inspector General

During fiscal year 2010, 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 13 audit reports that identified operational weaknesses and recommended improvements to agency management.

Investigative activities resulted in 50 convictions, 47indictments and/or informations, 19 civil judgments and almost $29.3 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 2010	Fiscal Year 2009
Employee age annuities Number awarded Number being paid at end of period Average being paid at end of period	10,700 190,200 $2,186	10,300 190,300 $2,126
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 2,000 20,400 63,100 $1,508 $2,452	1,100 2,100 20,300 63,500 $1,488 $2,423
Supplemental employee annuities1   Number awarded   Number being paid at end of period   Average being paid at end of period	7,300 121,200 $42	7,000 120,800 $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 3,900 137,100 $504 $817	10,900 3,700 136,500 $492 $795
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	6,200 7,700 114,900 143,900	6,300 7,900 119,500 148,900
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	$1,329 $1,108 $1,643 $896 $880 $937	$1,294 $1,084 $1,597 $879 $867 $935
Partition payments2   Number being paid at end of period   Average being paid at end of period	700 $287	300 $289
Lump-sum survivor benefits awarded   Number of lump-sum death benefits   Average lump-sum death benefit   Number of residual payments   Average residual payment	3,700 $915 3/ $2,133	3,700 $905 3/ $2,052