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.

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