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"" Table of Contents
The Report in Brief
"" Benefits and Beneficiaries
"" Financial Reports
"" Service Delivery
"" Office of Inspector General
"" Selected Data on Benefit Operations
"" A Review of Operations
"" Administrative Developments
"" Legal Rulings
"" Statistical Tables
"" Contact Public Affairs
2015 Annual Report for Fiscal Year Ended
September 30, 2014
The Report in Brief View this document in PDF

 
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Railroad retirement and unemployment insurance benefits totaling almost $12.0 billion were paid by the Railroad Retirement Board (RRB) to about 585,000 beneficiaries in fiscal year 2014.  Financial reports issued in 2015 on the solvency of the railroad retirement and railroad unemployment insurance systems were both favorable.  Total railroad retirement system assets equaled $27.8 billion as of September 30, 2014.
 

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment Insurance Acts totaled almost $12.0 billion in the fiscal year ending September 30, 2014. Retirement and survivor benefits were paid by the RRB to about 562,000 beneficiaries during the fiscal year, of whom 530,000 were on the RRB's annuity rolls at the end of the year. More than 25,000 railroad employees were paid unemployment and/or sickness insurance benefits. Almost 2,000 beneficiaries received payments under both the Railroad Retirement Act and the Railroad Unemployment Insurance Act.

Retirement and survivor benefit payments of $11.9 billion during fiscal year 2014 were $260.7 million more than payments in the prior year. Employee and spouse annuitants were paid about $9.7 billion, accounting for 82 percent of the total payments. Employees received over $5.7 billion in age annuities, $2.4 billion in disability annuities and $60.8 million in supplemental annuities, while spouses and divorced spouses received almost $1.6 billion. Survivors were paid $2.2 billion in annuities and nearly $3.0 million in lump-sum benefits. The total number of beneficiaries who received retirement and survivor benefits declined by about 6,000 from fiscal year 2013.
 

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 2014 totaled about $106.2 million. Net benefits totaled about $84.4 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 some $6.2 million from the preceding year. In accordance with the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the Budget Control Act of 2011, amounts reflect a reduction of 9.2 percent under sequestration for days of unemployment and sickness after February 28, 2013, and 7.2 percent for days after September 30, 2013.

Gross unemployment benefits increased by nearly 21 percent compared to the previous year. Unemployment benefits were at nearly pre-recessionary levels due to the phase-out of temporary extended benefits. Gross unemployment benefits totaling $40.85 million ($37.7 million net), including $1.1 million ($0.6 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, the Middle Class Tax Relief and Job Creation Act of 2012, and the American Taxpayer Relief Act of 2012, were paid to 9,800 claimants, while gross sickness benefits of $65.4 million ($46.7 million net) were paid to 15,900 claimants.

Financial Reports

The RRB's 26th triennial actuarial valuation, submitted to the Congress in 2015, 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 32 years. Cash-flow problems arise only under the most pessimistic employment assumption, and then not until 2047. 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 determine whether corrective action is necessary. 

The RRB's 2015 railroad unemployment insurance financial report was also generally favorable. Even as projected maximum benefit rates increase 39 percent (from $70 to $97) from 2014 to 2025, 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 2015 in order to maintain a minimum account balance. Under all three employment assumptions, the report projects a 1.5 percent surcharge in 2016 and 2017, with a surcharge of 1.5 percent likely to occur thereafter. 

The National Railroad Retirement Investment Trust's annual management report for fiscal year 2014 stated that, as of September 30, 2014, the net asset value of the Trust-managed assets was $26.1 billion. This represented an increase from $25.0 billion in the previous year, primarily due to a net investment return of 10.2 percent. The ending balance also reflects a transfer of $1.4 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 $27.8 billion.

The 2015 railroad retirement and railroad unemployment insurance financial reports and the National Railroad Retirement Investment Trust's 2014 annual management report are available at www.rrb.gov.

Service Delivery

Customer Service Plan

In fiscal year 2014, customers received benefit services within the timeframes promised in the RRB's Customer Service Plan 98.9 percent of the time.

Service Enhancements

The RRB completed additional enhancements to its Employer Reporting System, allowing employers to complete several new forms in an electronic format, and undertook improvements to its Medicare processing capabilities. The agency also completed a cost-of-living adjustment, with tier I benefits increasing by 1.7 percent due to inflation.

Office of Inspector General

During fiscal year 2014, 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 that recommended improvements in agency operations.

Investigative activities resulted in 18 arrests, 35 indictments and/or informations, 89 convictions, 22 civil judgments, 64 referrals to the Department of Justice, and more than $343 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
2014
Fiscal Year
2013

Employee age annuities

  Number awarded 10,200 10,200
  Number being paid at end of period 190,200 189,600
  Average being paid at end of period $2,536 $2,451

Employee disability annuities
  Number of total disability annuities awarded 800 900
  Number of occupational disability annuities awarded 1,000 1,400
  Number of total disability annuities being paid at end of period 20,500 20,700
  Number of occupational disability annuities being paid at end of period 58,900 60,500
  Average total disability annuity being paid at end of period $1,671 $1,635
  Average occupational disability annuity being paid at end of period $2,686 $2,638

Supplemental employee annuities1
  Number awarded 6,700 6,500
  Number being paid at end of period 122,100 121,500
  Average being paid at end of period $42 $42


Spouse and divorced spouse annuities

 

  Number awarded, total 11,500 11,400
  Number being paid to divorced spouses at end of period 4,500 4,400
  Number being paid at end of period, total 142,600 140,900
  Average being paid to divorced spouses at end of period $590 $567
  Average being paid at end of period, total $946 $915

Survivor annuities
  Number awarded to aged widow(er)s 5,600 6,000
  Number awarded, total 7,100 7,600
  Number being paid to aged widow(er)s at end of period 98,400 102,200
  Number being paid at end of period, total 125,400 129,700

Average being paid at end of period to
  Aged widow(er)s $1,525 $1,476
  Disabled widow(er)s $1,250 $1,217
  Widowed mothers (fathers) $1,798 $1,757
  Remarried widow(er)s $1,005 $986
  Divorced widow(er)s $1,005 $974
  Children $1,027 $1,006

Partition payments
2
  Number being paid at end of period 1,300 1,100
  Average being paid at end of period $302 $300

Lump-sum survivor benefits awarded
 
  Number of lump-sum death benefits 3,100 3,300
  Average lump-sum death benefit $925 $922
  Number of residual payments 3 3
   Average residual payment $2,304 $3,087

Employees and Earnings4 Fiscal
Year
2014
Fiscal
Year
2013

Average employment

239,000

237,000

Creditable earnings, Railroad Retirement Act (billions)

  Tier I
  Tier II




$18.48
$17.16



   $17.56
$16.27
Creditable earnings, Railroad Unemployment Insurance Act (billions)
$4.10

$3.97

Unemployment-Sickness5 Benefit Year
2013-2014
Benefit Year
2012-2013

Qualified employees

247,600

243,800
     
Unemployment benefits    
  Net amount paid (millions) 6$39.9 7($37.7) 8$47.2
  Beneficiaries 10,000  7(9,800) 10,700
  Number of payments 69,700 83,500
  Normal benefit accounts exhausted 2,300 2,500
  Average payment per 2-week registration period $550

$557

     
Sickness benefits    
  Net amount paid (millions) $45.3 7($46.7) $43.4
  Beneficiaries 15,600  7(15,900) 15,800
  Number of payments 101,100 102,500
  Normal benefit accounts exhausted 2,600 2,600
   Average payment per 2-week registration period $555

$571


1 Excludes partition payments to spouses and divorced spouses where the employee is deceased. Averages are after court-ordered partitions. Fiscal year 2014 average includes fewer than 50 supplemental annuities, averaging $70, 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 2013 employment, all figures in this section are preliminary.
5 In accordance with the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the Budget Control Act of 2011, amounts reflect a reduction of 9.2% under sequestration for days of unemployment and sickness after February 28, 2013, and 7.2% for days after September 30, 2013.
6 Benefit years 2012-2013 and 2013-2014 include $6.9 million and $2.4 million, respectively, 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, the Middle Class Tax Relief and Job Creation Act of 2012, and the American Taxpayer Relief Act of 2012.
7 Data in parentheses are for fiscal year (October 1, 2013 - September 30, 2014). Unemployment benefits include $0.6 million in temporary extended unemployment benefits.
 

 

 

 


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