Funds not needed immediately for benefit payments or administrative expenses are invested through the NRRIT. The Trust was established pursuant to section 105 of the Railroad Retirement and Survivors' Improvement Act of 2001 for the sole purpose of investing railroad retirement assets. The Act authorizes the Trust to invest the assets of the RR Account in a diversified investment portfolio in the same manner as those of private sector retirement plans. Prior to the Act, investment of RR Account assets was limited to U.S. Government securities. Although the Trust was created by Congress to hold and invest Federal assets, it is not an agency or instrumentality of the Federal government. It is a tax-exempt entity governed by a seven-member Board, three selected by rail management, three selected by rail labor and one independent trustee selected by the six rail trustees.
During fiscal year 2015, the net asset value of Trust-managed assets decreased from $26.1 billion on October 1, 2014, to $24.5 billion on September 30, 2015. This includes $1.2 billion that the Trust transferred to the U.S. Treasury for the payment of railroad retirement benefits during the year. The rate of return on Trust-managed assets for the year (net of fees) was -1.5 percent.
Total railroad retirement system assets (Trust-managed assets and reserves held in Treasury accounts) grew from $20.7 billion in 2002 to $26.3 billion as of the end of fiscal year 2015, after net transfers for benefit payments of approximately $17.8 billion over the same time frame.
Trust operations are described in detail in the NRRIT Annual Management Report for fiscal year 2015, which is available here.