GAO-10-351R 

United States Government Accountability Office

Washington, DC 20548 

February 4, 2010 

The Honorable John L. Mica 

Ranking Republican Member 

Committee on Transportation and Infrastructure 

House of Representatives 

The Honorable Bill Shuster 

Ranking Republican Member 

Subcommittee on Railroads, Pipelines, and Hazardous Materials 

Committee on Transportation and Infrastructure 

House of Representatives 

Subject: Use of the Railroad Retirement Board Occupational Disability Program across the 

Rail Industry 

We recently reported that Long Island Rail Road (LIRR) workers applied for U.S. Railroad 

Retirement Board (RRB) occupational disability benefits at a rate 12 times higher than 

workers from the other commuter railroads covered under the Railroad Retirement Act.1

RRB provides an occupational disability benefit to eligible workers whose physical or mental 

impairments prevent them from performing their specific railroad jobs. For example, a 

railroad engineer who cannot frequently climb, bend, or reach, as required by the job, may be 

found occupationally disabled. 

On March 18, 2009, you asked us to conduct a systematic review of RRB’s occupational 

disability program. Per our discussions following the release of our September 2009 report 

on LIRR and commuter rail workers’ experience with the program, you refined your request. 

You told us that your primary interest was quickly determining whether unusual patterns in 

claims like those exhibited at LIRR exist elsewhere across the rail industry, including class I, 

II, and III railroads.2 This letter formally conveys the information we provided during a 

briefing with you and your staff on December 2, 2009. In summary, we found that no other 

 

1

GAO, Railroad Retirement Board: Review of Commuter Railroad Occupational Disability Claims 

Reveals Potential Program Vulnerabilities, GAO-09-821R (Washington, D.C.: Sept. 9, 2009). 

2

We classified railroads in accordance with RRB’s 2007 Actuary Consolidations, which RRB officials 

report is generally based on Surface Transportation Board (STB) classifications. The STB classifies 

railroads as class I, II, and III based on operating revenues. Most of the eligible rail workers were 

employed by class I railroads in the years we reviewed. LIRR and the other seven commuter railroads 

are included in class III. We also analyzed other employers—such as car loan companies and rail labor 

unions—covered under the Railroad Retirement Act. 
rail employers in our analysis had the consistently high rates of occupational disability 

awards that existed at LIRR from calendar years 2004 to 2007, the most current data 

available at the time of our review. 

To perform this work we calculated occupational disability rates using RRB occupational 

disability award and rail employment data. Specifically, for each rail employer we analyzed 

RRB awards to rail workers relative to the total number of eligible workers—those who 

satisfied RRB occupational disability age and service requirements—for calendar years 2004 

to 2007.3

 We also reviewed occupational disability award data for calendar year 2008, but 

employment data for this year were not available from RRB at the time we performed our 

work. We assessed the reliability of RRB’s data by interviewing knowledgeable agency 

officials and electronically testing the data to identify obvious problems with completeness or 

accuracy. While we determined that the data were sufficiently reliable for the purposes of 

this briefing, our data analysis had one key limitation. RRB does not have data readily 

available on the number of applications it denied by railroad, so our analysis assumed that 

approval rates were consistent across railroads. We believe this is a reasonable assumption 

given the consistently high approval rates—on average about 98 percent—reported by the 

RRB.4

 In addition, our prior analyses of claims from the commuter rail industry showed that 

while LIRR workers in fiscal year 2007 applied for occupational disability benefits at a rate 

12 times higher than the other commuter rail workers, all commuter rail workers were 

approved at the same rate of nearly 100 percent. 

We conducted this performance audit from August 2009 to February 2010 in accordance 

with generally accepted government auditing standards. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our audit 

objectives. 

In our analysis, we found that no other rail employers had the consistently high rates of 

occupational disability awards, relative to the number of eligible workers, that existed at 

LIRR. A small number of employers exhibited high rates in one or more years, but LIRR was 

the only consistent outlier across the rail industry for each year from 2004 to 2007 in terms of 

workers’ use of RRB’s occupational disability program.5

 For example, in 2006, LIRR had 

 

3

Railroad workers are eligible to apply for occupational disability at age 60 if they have 10 years of 

service, or at any age if they have at least 20 years of service. We analyzed data for calendar years 2004 

through 2007, because 2004 was the earliest year that RRB had complete data on rail employees’ ages 

and years of service. Further, our analysis only included employers with at least one occupational 

disability annuitant and 50 or more eligible workers during the time period we analyzed. 

4

RRB produces a monthly report showing the percentage of all claims decided that month that were 

approved and denied, but this report does not disaggregate claims by railroad. For calendar years 2007 

and 2008, we found that the average approval rate was 98.4 percent. 

5

We defined a high occupational disability rate as two standard deviations or more above the average. 

We considered employers with occupational disability rates three or more standard deviations above 

average as outliers. From calendar years 2004 to 2007, only one employer other than LIRR qualified as 

a statistical outlier in one year only (2006). LIRR was the only employer that qualified as a statistical 

outlier each year of our analysis. Beyond identifying these patterns in occupational disability awards, 

we did not conduct additional audit work to determine why certain employers’ occupational disability 

rates exceeded the industry-wide average during our period of analysis. 

Page 2 GAO-10-351R
Page 3 GAO-10-351R

an occupational disability rate of 17.1 percent compared to the industry-wide average of 3.7 

percent. While LIRR workers did receive fewer occupational disability awards in calendar 

year 2008 than 2007, they still received twice as many awards as workers from the other 

seven commuter railroads combined. 

As we previously reported, RRB did not detect the unusual patterns in LIRR workers’ 

occupational disability claims. The data we used for our analyses are readily available to 

RRB. The agency could have used these data to identify such patterns as part of its routine 

monitoring and oversight of the occupational disability program. Recently, RRB initiated 

efforts to create a new position responsible for collecting, developing, and analyzing relevant 

data to assist in the management and oversight of the occupational disability program. As a 

result of these actions, we are making no recommendations at this time. 

We provided a copy of this report to the Chairman, Labor Member, and Management 

Member of the Railroad Retirement Board for review and comment. The agency had no 

comments on our report. 

- - - - - - - - - - - 

We understand that the briefing on December 2, 2009, and this letter complete our review in 

response to your request. As agreed with your offices, unless you publicly announce the 

contents of this report earlier, we plan no further distribution until 30 days from the report 

date. At that time, we will send copies to the Chairman, Labor Member, and Management 

Member of the Railroad Retirement Board; relevant congressional committees; and other 

interested parties. In addition, the report will be available at no charge on the GAO Web site 

at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me at (202) 512-7215 

or bertonid@gao.gov. Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this report. Key contributors to this report include 

Jeremy Cox, Arthur Merriam, Rachael Valliere, Jacob Beier, Carl Barden, James Bennett, 

Nora Boretti, Jessica Botsford, Joanna Chan, Virginia Chanley, Gloria Hernandezsaunders, 

Jessica Orr, Linda Siegel, and Gregory Wilmoth. 

Daniel Bertoni 

Director, Education, Workforce, 

 and Income Security Issues 

(130950) 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately. 
The Government Accountability Office, the audit, evaluation, and GAO’s Mission investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost Obtaining Copies of is through GAO’s Web site (www.gao.gov). Each weekday afternoon, GAO 

GAO Reports and posts on its Web site newly released reports, testimony, and 

correspondence. To have GAO e-mail you a list of newly posted products, Testimony go to www.gao.gov and select “E-mail Updates.” 

Order by Phone 	 The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s Web site, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Contact: To Report Fraud, 

Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Federal Programs Automated answering system: (800) 424-5454 or (202) 512-7470 

Ralph Dawn, Managing Director, dawnr@gao.gov, (202) 512-4400 Congressional U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Relations Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 Public Affairs U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548