U n i t e d S t a t e s G o v e r n m e n t FORM G-llSf (1-92)

R a i l r o a d R e t i r e m e n t B o a r d MEMORANDUM

April 12, 2001

L-2001-06

TO: Kenneth P. Boehne 

Chief Financial Officer

FROM: Steven A. Bar

General Cour /

SUBJECT: Dual Benefits Payments Account

This is in response to your memorandum of April 2, 2001, regarding the Dual Benefits 

Payments Account (DBPA).

You advise that the RRB “accrues benefits due and payable at September 30” for all 

benefit components other than dual benefits. Dual benefits are accounted for on a cash 

basis. The OIG has recommended that the agency determine the proper accounting 

method for dual benefits. This issue was previously examined in Legal Opinion L-87- 

163 where it was stated that the DBPA is a cash account. For the reasons set forth 

below, it continues to be our opinion that the DBPA is a cash account.

As you know, dual benefits are separately funded by annual appropriations from general 

revenues. Authority for these appropriations is found in section 15(d) of the Railroad 

Retirement Act (45 U.S.C. 231 n(d)(1)). The amount to be appropriated is based on the 

Board's estimate of the amount of dual benefits to be paid during a fiscal year. Section 

7(c)(1) of the Act (45 U.S.C. 231f(c)(1)) provides that the amount of dual benefits paid in 

any fiscal year shall not exceed the amount appropriated to the DBPA under section 

15(d) of the Act. Finally, as you note in your memorandum, section 15(d) of the Act 

authorizes the DBPA to borrow funds from the Railroad Retirement Account if an 

appropriation has not been enacted to cover the costs of dual benefits for a particular 

month. As noted above, section 7(c)(1) of the RRA provides that dual benefits for a 

fiscal year shall not exceed the amount appropriated for the fiscal year under section 

15(d) of the Act. The plain meaning of this language is that if no appropriation is in 

effect for a particular fiscal year, no dual benefits may be paid for that fiscal year. The 

payment on October 1, in such case, would include a dual benefit component if funds 

had been borrowed from the Railroad Retirement Account for that purpose; in the 

absence of borrowed funds, no dual benefit would be payable.
Section 15(d)(1) of the Railroad Retirement Act provides in pertinent part that

* * * Not more than 30 days prior to each fiscal year * * * the Board may request 

the Secretary of the Treasury to transfer from the Railroad Retirement Account to 

the credit of the Dual Benefits Payments Account any amount not exceeding the 

amount that the Board estimates will be necessary to pay on the first day of the 

next succeeding month the [vested dual benefit amounts], * * * Not more than 

10 days after the funds appropriated to the Dual Benefits Payments Account * * * 

are received into such account, the Board shall request the Secretary of the 

Treasury to retransfer [the amounts previously transferred from the Railroad 

Retirement Account],

The amounts transferred under this provision are for the purpose of the payment of 

benefits for the next fiscal year. Accordingly, the authority is for the new fiscal year. 

Moreover, the statute states that any amounts borrowed must be repaid to the Railroad 

Retirement Account from the amount of the appropriation for the new fiscal year when 

received. The statute clearly contemplates that the payments due on October 1 of a 

given fiscal year be made from funds appropriated for the fiscal year commencing on 

such October 1. Thus the DBPA must be accounted for on a cash basis.

Finally, you ask whether dual benefit payments made on the basis of borrowed funds 

would be considered erroneous if no appropriation is enacted for the fiscal year. Since 

the amount of dual benefits paid in a fiscal year cannot exceed the amount of the 

appropriation for that fiscal year, any payments made in a fiscal year for which no 

appropriation is enacted would be erroneous payments.

MCLitt:mcl:scm:cmw 

misc/dualbenefits1063.mcl