U.S. Railroad Retirement Board

Mission Statement

The Railroad Retirement Board’s mission is to administer retirement/survivor and unemployment/sickness insurance benefit programs for railroad workers and their families under the Railroad Retirement Act

and the Railroad Unemployment Insurance Act. These programs provide income

protection during old age and in the event of disability, death or temporary 

unemployment and sickness. The Railroad Retirement Board also administers

aspects of the Medicare program and has administrative responsibilities under

the Social Security Act and the Internal Revenue Code.

I

n carrying out its mission, the Railroad Retirement Board will pay benefits to the right people, in the right amounts, in a timely manner, and

will take appropriate action to safeguard our customers’ trust funds. The

Railroad Retirement Board will treat every person who comes into contact with

the agency with courtesy and concern, and respond to all inquiries promptly,

accurately and clearly.

If you have any comments or suggestions regarding the 

presentation of information in this publication, please let us know. 

You can fax us at 312-751-7154, e-mail us at opa@rrb.gov 

or write us at the following address: 

Public Affairs, U.S. Railroad Retirement Board

844 North Rush Street, Chicago, IL 60611-2092

The cover photo was taken by Stephen Noyes, an amateur photographer from the Kansas City area who 

specializes in railroad photos. He is a former Amtrak conductor and currently works as an auditor for the 

United Transportation Union. The individual pictured is Crystal Blasius, at the time a conductor for the 

Canadian Pacific working on the Dakota, Minnesota and Eastern Line. She currently works as an engineer 

out of Pierre, South Dakota.
UNITED STATES

RAILROAD RETIREMENT BOARD

2013 Annual Report

For Fiscal Year Ended September 30, 2012

THE REPORT IN BRIEF 1

A REVIEW OF OPERATIONS 7

ADMINISTRATIVE DEVELOPMENTS 37

LEGAL RULINGS 47

STATISTICAL TABLES 53

www.rrb.gov
THE REPORT IN BRIEF
 

Railroad retirement and unemployment insurance benefits totaling over
 

$11.4 billion were paid by the Railroad Retirement Board (RRB) to about 595,000
 

beneficiaries in fiscal year 2012. Financial reports issued in 2013 on the
 

solvency of the railroad retirement and railroad unemployment insurance systems
 

were both favorable. Total railroad retirement system assets
 

equaled $25.3 billion as of September 30, 2012.
 

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment

Insurance Acts totaled over $11.4 billion in the fiscal year ending

September 30, 2012. Retirement and survivor benefits were paid by the RRB to about

573,000 beneficiaries during the fiscal year, of whom 539,000 were on the RRB’s annuity rolls at the end of the year. Approximately 26,000 railroad employees were paid

unemployment and/or sickness insurance benefits. Nearly 3,000 beneficiaries received

payments under both the Railroad Retirement Act and the Railroad Unemployment

Insurance Act.

Retirement and survivor benefit payments of $11.3 billion during the 2012 fiscal

year were $383.8 million more than payments in the prior year. Employee and spouse

annuitants were paid approximately $9.2 billion, accounting for 81 percent of the total

payments. Employees received almost $5.3 billion in age annuities, $2.3 billion in

disability annuities and $60.8 million in supplemental annuities, while spouses and

divorced spouses received nearly $1.5 billion. Survivors were paid $2.2 billion in

annuities and more than $3.4 million in lump­sum benefits. The total number of

beneficiaries who received retirement and survivor benefits declined by about 5,000

from fiscal year 2011.

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 on page 2, the Federal Income Tax Transfers section on page 10

and the accompanying table on page 11, which are also presented as cash, the

information on pages 2, 7­15 and 28­30 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.

1
 
2 2013 Annual Report, U.S. Railroad Retirement Board
 

Gross unemployment and sickness benefits paid in fiscal year 2012 totaled about

$119.2 million. Net benefits totaled about $88.5 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 over $12.1 million from the preceding year. Gross unemployment benefits decreased by some 11 percent as compared to the previous year,

reflecting continued recovery from recessionary levels. However, unemployment benefits were still above pre­recessionary levels due to the continuation of temporary extended benefits. Gross unemployment benefits totaling $46.2 million ($41.1 million net),

including $7.3 million ($6.7 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, and the Middle Class Tax Relief and Job Creation Act of

2012 were paid to 9,600 claimants, while gross sickness benefits of $73.0 million

($47.5 million net) were paid to 17,000 claimants.

Financial Reports

The RRB’s 2013 railroad retirement financial report to Congress, which addressed

the period 2013­2037, 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 cash­flow problems during the next 25

years. However, the long­term stability of the system is still uncertain. 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 RRB’s 2013 railroad unemployment insurance financial report was also generally favorable. Even as projected maximum benefit rates increase 42 percent (from $66 to

$94) from 2012 to 2023, experience­based contribution rates maintain solvency. The

report also predicted average employer contribution rates well below the maximum

throughout the projection period. A surcharge was not necessary in calendar year 2013

to maintain a minimum account balance, and the report predicts one will not be required

in 2014. Under all three employment assumptions, the report projects a surcharge of 1.5

percent in 2015, and at least that amount in 2016 and periodically thereafter.

The National Railroad Retirement Investment Trust’s annual management report

for fiscal year 2012 stated that, as of September 30, 2012, the net asset value of the

Trust­managed assets was $23.7 billion. This represented an increase from $22.1 billion

in the previous year, primarily due to a net investment return of 16.4 percent. The ending balance also reflects a transfer of $2.0 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 $25.3 billion.
THE REPORT IN BRIEF 3

The 2013 railroad retirement and railroad unemployment insurance financial reports

and the National Railroad Retirement Investment Trust’s 2012 annual management

report are available at www.rrb.gov.

Service Delivery

Customer Satisfaction

In fiscal year 2012, the RRB conducted two surveys designed to measure customer satisfaction and identify potential service improvements. One survey focused on claimants

receiving unemployment and sickness insurance benefits while the other was geared to

initial survivor annuitants. The overall satisfaction score from the surveys were 81 and

90, respectively, well above the latest aggregate satisfaction index of 67 for the entire

Federal government.

Customer Service Plan

In fiscal year 2012, customers received benefit services within the timeframes

promised in the RRB’s Customer Service Plan 99.3 percent of the time.

Service Enhancements

The RRB completed additional enhancements to its Employer Reporting System which

allows employers to complete several new forms in an electronic format, significantly

reducing the number of paper documents generated and mailed. The agency also completed a cost­of­living adjustment, with tier I benefits increasing by 1.7 percent due to inflation. In the area of information technology, the RRB added to its online library of ondemand training videos and made upgrades to its server network in the field that allows

electronic data to be transmitted up to 90 percent faster.

Economic Recovery Activities

The Middle Class Tax Relief and Job Creation Act of 2012 provided for continued

access to temporary extended unemployment benefits for railroad workers. The RRB also

reached out to rail workers impacted by Hurricane Sandy in October 2012 to assist them

in filing unemployment claims and ensure such claims were processed expeditiously.
4 2013 Annual Report, U.S. Railroad Retirement Board
 

Office of Inspector General

During fiscal year 2012, 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 11 audit reports and one special report that identified operational weaknesses and recommended improvements to agency management.

Investigative activities resulted in 34 arrests, 106 indictments and/or

informations, 85 convictions, 26 civil judgments, 95 referrals to the Department of

Justice, and more than $77.3 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.
THE REPORT IN BRIEF 5

Selected Data on Benefit Operations
 

Fiscal Year Fiscal Year

Retirement­Survivor 2012 2011

Employee age annuities

Number awarded 10,100 10,500

Number being paid at end of period 189,900 190,100

Average being paid at end of period $2,363 $2,244

Employee disability annuities

Number of total disability annuities awarded 1,100 1,200

Number of occupational disability

annuities awarded 1,700 1,900

Number of total disability annuities being paid

at end of period 20,800 20,600

Number of occupational disability annuities

being paid at end of period 61,700 62,500

Average total disability annuity

being paid at end of period $1,596 $1,525

Average occupational disability annuity

being paid at end of period $2,580 $2,482

Supplemental employee annuities1

Number awarded 6,800 7,100

Number being paid at end of period 121,600 121,400

Average being paid at end of period $42 $42

Spouse and divorced spouse annuities

Number awarded, total 11,500 11,300

Number being paid to divorced

spouses at end of period 4,200 4,000

Number being paid at end of period, total 139,700 138,300

Average being paid to divorced spouses

at end of period $542 $518

Average being paid at end

of period, total $882 $839

Survivor annuities

Number awarded to aged widow(er)s 5,800 6,100

Number awarded, total 7,500 7,600

Number being paid to aged widow(er)s

at end of period 106,300 110,400

Number being paid at end of period, total 134,300 138,800

Average being paid at end of period to

Aged widow(er)s $1,426 $1,366

Disabled widow(er)s $1,181 $1,133

Widowed mothers (fathers) $1,700 $1,663

Remarried widow(er)s $956 $907

Divorced widow(er)s $938 $892

Children $980 $941

Partition payments2

Number being paid at end of period 1,000 800

Average being paid at end of period $294 $292

Lump­sum survivor benefits awarded

Number of lump­sum death benefits 3,500 3,600

Average lump­sum death benefit $928 $916

Number of residual payments 3/ 3/

Average residual payment $919 $2,519
6 2013 Annual Report, U.S. Railroad Retirement Board
 

Selected Data on Benefit Operations (Continued)
 

Fiscal Year Fiscal Year

Employees and Earnings4 2012 2011

Average employment 233,000 227,000

Creditable earnings, Railroad Retirement

Act (billions):

Tier I $17.11 $16.49

Tier II $15.79 $15.32

Creditable earnings, Railroad

Unemployment Insurance Act (billions) $3.84 $3.66

Benefit Year Benefit Year

Unemployment­Sickness 2011­2012 2010­2011

Qualified employees 235,100 239,100

Unemployment benefits

Net amount paid (millions) 5

$40.7 6($41.1) 7$51.4

Beneficiaries 9,200 6

(9,600) 11,600

Number of payments 71,800 89,300

Normal benefit accounts exhausted 2,200 2,800

Average payment per 2­week registration period $573 $566

Sickness benefits

Net amount paid (millions) $49.1 6

($47.5) $51.2

Beneficiaries 16,700 6

(17,000) 17,400

Number of payments 112,200 117,100

Normal benefit accounts exhausted 3,000 3,100

Average payment per 2­week registration period $585 $585

1 Excludes partition payments to spouses and divorced spouses where the employee is deceased. Averages are

after court­ordered partitions. Fiscal year 2012 average includes fewer than 50 supplemental annuities,

averaging $69, 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 2011 employment, all figures in this section are preliminary. 5 Includes $7.0 million 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, and the Middle Class Tax Relief and Job Creation Act of 2012. 6 Data in parentheses are for fiscal year (October 1, 2011 ­ September 30, 2012). Unemployment benefits include

$6.7 million 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, and the Middle Class Tax Relief and Job Creation Act of 2012. 7 Includes $9.4 million 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.
A REVIEW OF OPERATIONS
 At the end of fiscal year 2012, total railroad retirement system assets equaled
 

$25.3 billion. During fiscal year 2012, benefits totaling approximately $11.4 billion
 

were paid under the Railroad Retirement and Railroad Unemployment Insurance Acts.
 

Retirement and survivor benefits accounted for almost all of this amount.
 

Net unemployment and sickness benefits totaled $83.1 million.
 

RAILROAD RETIREMENT AND
 

SURVIVOR PROGRAM
 

As of September 30, 2012, total railroad retirement system assets, including

those maintained in U.S. Treasury accounts and those maintained by the

National Railroad Retirement Investment Trust (the “Trust” or “NRRIT”), equaled $25.3

billion, an increase of $1.7 billion during the fiscal year. Amounts in the Railroad

Retirement (RR) Account not needed to pay current administrative expenses and

amounts in the Social Security Equivalent Benefit (SSEB) Account not needed to pay

current benefits and administrative expenses are transferred to the NRRIT whose Board

of seven trustees is empowered to invest Trust assets in non­governmental assets, such

as equities and debt, as well as in governmental securities.

FINANCIAL OPERATIONS ­ U.S. TREASURY ACCOUNTS

During fiscal year 2012, railroad retirement and survivor benefit payments were

financed through four U.S. Treasury accounts.

The SSEB Account, established in fiscal year 1985, pays the portion of railroad

retirement benefits equivalent to a social security benefit from various income sources

related to these benefits. The RR Account funds retirement, survivor and disability benefits, in excess of social security equivalent benefits, from payroll taxes on employers

and employees and other income sources. Supplemental benefit payments are also paid

from the RR Account. The Dual Benefits Payments (DBP) Account and Federal

Payments (FP) Account, funded by congressional appropriations from general revenues,

finance the phase­out costs of certain vested dual benefits and interest on unnegotiated

checks, respectively. The four accounts together incurred $11.3 billion in benefit obligations (excluding $1.4 billion in social security benefits which were reimbursed by the

Social Security Administration) during fiscal year 2012.

7
 
8 2013 Annual Report, U.S. Railroad Retirement Board
 

Financing Sources
 

Payroll Taxes

The primary source of income to the railroad retirement and survivor program is

payroll taxes levied on covered employers and their employees. Payroll taxes amounted

to $4.8 billion, 40.0 percent of total financing sources (which excludes an increase of

$1,645.8 million, mostly due to a change in NRRIT net assets) and $77.4 million more

than in fiscal year 2011.

Railroad employees and employers pay tier I taxes which, by law, are the same as

social security taxes. The 2012 rate of 7.65 percent was split between 6.20 percent for

retirement and 1.45 percent for Medicare hospital insurance. The maximum amount of

earnings subject to the 6.20 percent rate in calendar year 2012 was $110,100, and all

earnings were subject to the 1.45 percent Medicare tax.

Legislation enacted in December 2010 temporarily lowered the social security payroll tax rate on employees, and the corresponding tier I payroll tax rate on railroad

employees, by 2 percentage points for calendar year 2011. This temporary rate reduction was subsequently extended for calendar year 2012 under legislation enacted in

February 2012. As a result, the tier I tax rate on employees in those years was divided

into 4.2 percent for railroad retirement and 1.45 percent for Medicare hospital insurance. This temporary reduction in the employee rate expired at the end of 2012, as

they are once again paying the same rate as employers.

Both employees and employers also pay a tier II tax to finance railroad retirement

benefit payments over and above social security levels. This tax, on earnings up to

$81,900 and $79,200 in 2012 and 2011, respectively, was 3.9 percent on employees and

12.1 percent on employers in both years.

Tier I and tier II taxes for fiscal year 2012 amounted to $2.2 billion and $2.3 billion,

respectively.

Financial Interchange Transfers

The second major source of income to the railroad retirement and survivor program

consists of transfers from the social security trust funds under a financial interchange

between the two systems. The financial interchange is intended to place the Social

Security Old­Age, Survivors and Disability Insurance and Hospital Insurance Trust

Funds in the same position in which they would have been had railroad employment

been covered by the Social Security and Federal Insurance Contributions Acts. This

involves computing the amount of social security taxes that would have been collected

on railroad employment, and computing the amount of additional benefits which

social security would have paid to railroad retirement beneficiaries during the

same fiscal year.

(text continued on page 10)
A REVIEW OF OPERATIONS 9

RETIREMENT AND SURVIVOR PROGRAM
 

F i n a n c i n g S o u r c e s ­ F i s c a l Y e a r 2 0 1 2 ( I n M i l l i o n s )

GROSS TOTAL: $11,900.61

1Excludes $1,645.8 million as shown under Other Financing Sources on page 12.
 

C o s t s ­ F i s c a l Y e a r 2 0 1 2 ( I n M i l l i o n s )

TOTAL: $11,566.0

Note.­­Percentages may not add to 100 due to rounding.
 
10 2013 Annual Report, U.S. Railroad Retirement Board
 

In the computation of the latter amount, credit is given for any social security benefits actually paid to railroad retirement beneficiaries. When benefit reimbursements

exceed payroll taxes, the difference, with an allowance for interest and administrative

expenses, is transferred from the Social Security Trust Funds to the SSEB Account. If

taxes exceed benefit reimbursements (this has not happened since 1951), a transfer

would be made in favor of the Social Security Trust Funds. The net financial interchange transfer to the SSEB Account during fiscal year 2012 amounted to $4.2 billion.

Interest on Investments and Other Revenue

Interest revenue decreased from $35.8 million in fiscal year 2011 to $33.3 million in

fiscal year 2012. Interest revenue was also earned from financial interchange

advances.

Federal Income Tax Transfers

Legislation enacted in 1983 subjecting social security and railroad retirement benefits to Federal income taxes also provided for a transfer of the tax revenues to the social

security and railroad retirement systems for the payment of benefits. Most of the revenue from income taxes on social security equivalent railroad retirement benefits is

transferred to the SSEB Account, although a portion attributable to higher­income

taxpayers is transferred to the Federal Hospital Insurance Trust Fund. Revenue

derived from taxing regular railroad retirement benefits in excess of social security

equivalent benefits is transferred to the RR Account. Revenue from taxing the vested

dual benefits funded by the general revenue appropriations previously described is

transferred to the DBP Account.

At the beginning of each quarter, income tax transfers are made from Treasury

general funds to the SSEB, RR and DBP Accounts. These transfers are estimates of

expected tax revenues for the quarter. Adjustments are made later to reconcile the

estimates for a taxable year with actual tax revenues for the year. On a cash basis,

original tax transfers for fiscal year 2012 amounted to $516 million during the year.

Original transfers for fiscal year 2011 totaled $452 million. Net income tax transfers

after adjustments were $438 million for fiscal year 2012, including a $10 million adjustment for calendar year 2005, and negative adjustments of $16 million, $28 million and

$44 million for calendar years 2006, 2007 and 2008, respectively. There was no reconciliation adjustment in fiscal year 2011.

The information in the preceding paragraph is on a fiscal year basis, while the table

on the next page shows income tax transfers to the Accounts for taxable (calendar)

years 2003 through 2012, including reconciliation adjustments through 2008.

General Appropriations

General revenue appropriations were provided by the Railroad Retirement Act of

1974 to fund the phase­out costs of certain dual railroad retirement/social security

benefits considered vested prior to 1975, and by the Railroad Retirement Solvency

(text continued on page 14)
A REVIEW OF OPERATIONS 11

Federal Income Tax Transfers by Recipient Account and
 

Benefit Component, Taxable Years 2003­2012 (Millions)
 

Revenue from taxes on
 

RRA benefits

treated as RRA benefits treated as

SSA benefits private or public pensions

Taxable year SSEB Tier II and

tier I non­SSEB Vested

benefits tier I benefits1 dual benefits

SSEB Account2 RR Account DBP Account3

Original transfers during the year

2003 $97 283 $9

2004 109 294 8

2005 117 301 7

2006 125 312 7

2007 135 334 6

2008 144 325 5

2009 144 304 3

2010 159 315 3

2011 160 300 3

2012 194 318 4

Reconciliation adjustments4

2003 (2008) ­12 ­70 ­3

2004 (2008) ­18 ­63 ­2

2005 (2009, 20115

) 8 ­56 ­1

2006 (2012) 24 ­39 ­1

2007 (2012) 35 ­64 1

2008 (2012) 24 ­69 1

1

Includes non­SSEB portion of tier I.
 2

Receives taxes on social security equivalent benefit (SSEB) portion of tier I.
 3

Receives taxes on vested dual benefit component beginning October 1, 1988.
 4

The year in parentheses is the year the adjustments were made.
 5

October 2011 adjustment to initial reconciliation made in March 2009.
 
12 2013 Annual Report, U.S. Railroad Retirement Board
 

Railroad Retirement and Survivor Program

Consolidated Financing Sources,

Costs and Net Position (Millions)1

For the Fiscal Year Ended September 30 2012 2011

Financing Sources:

Payroll Taxes $4,767.3 $4,689.9

Financial Interchange 4,252.5 3,890.2

Interest on Investments and Other Revenue2 33.3 35.8

Federal Income Taxes 427.6 453.4

General Appropriations2 393.9 326.7

Other 1,645.8 (1,664.3)

Transfers to the National

Railroad Retirement Investment Trust 0.0 0.0

Transfers from the National

Railroad Retirement Investment Trust 2,026.0 1,744.0

Total Financing Sources 13,546.4 9,475.7

Costs:

Benefit Payments 11,329.5 10,962.7

Interest Expense 121.4 132.2

Salaries and Expenses3 116.2 118.6

Other (1.1) 0.7

Total Costs 11,566.0 11,214.2

Financing Sources over Costs 1,980.4 (1,738.5)

Net Position ­ Beginning of Period 22,825.7 24,564.2

Net Position ­ End of Period $24,806.1 $22,825.7

1Prepared on an accrual basis of accounting.

2 Includes payroll tax holiday amount in fiscal years 2012 and 2011.

3 Includes unemployment and sickness insurance salaries and expenses of approximately

$16.1 million and $15.1 million for fiscal years 2012 and 2011, respectively.
A REVIEW OF OPERATIONS 13

National Railroad Retirement Investment Trust (NRRIT)

Fiscal Year 2012 Summary

Market value of assets managed

by NRRIT on September 30, 2012 $23.7 billion

Rate of return of investment portfolio

managed by NRRIT for full year

ended September 30, 2012 16.38%

Source: NRRIT

All NRRIT annual management reports and quarterly updates are available on the

Railroad Retirement Board’s website at www.rrb.gov.
14 2013 Annual Report, U.S. Railroad Retirement Board
 

Act of 1983 to fund interest on unnegotiated checks. The total amounts appropriated

by the Congress for vested dual benefits were $51.0 million for fiscal year 2012 and

$57.0 million for fiscal year 2011. These amounts include Federal income tax transfers

for 2012 and 2011. The amount appropriated for fiscal year 2012 was 10.5 percent less

than fiscal year 2011, reflecting the continuing decrease in eligibility for these benefits,

which are not increased for the cost of living. The total amount appropriated by the

Congress for interest on unnegotiated checks was $150,000 for fiscal years 2012/2011

and also $150,000 for fiscal years 2011/2010.

Other Financing Sources

Other financing sources consisted of $9.3 million to be provided by the Office of

Personnel Management to pay future retirement benefits to RRB employees and

$25.8 million from the railroad unemployment trust funds in transfers­in for current

budget fiscal year salaries and expenses. These financing sources were offset by an

increase in NRRIT net assets of $1,495.3 million, transfers­out of $7.1 million for

salaries and expenses of the RRB’s Office of Inspector General, a contingency liability

of $134.8 million, and a $1.7 million decrease in unexpended appropriations.

Costs

The RRB pays all salaries and expenses under a single administrative fund

(Limitation on Administration) for both the railroad retirement and survivor program

and the unemployment and sickness insurance program. Consequently, of the $116.2

million and $118.6 million shown on page 12 for salaries and expenses in fiscal years

2012 and 2011, respectively, about $16.1 million for fiscal year 2012 and $15.1 million

for fiscal year 2011 were for the unemployment and sickness insurance program.

About $1.3 million in other costs for fiscal year 2012 and $1.4 million for fiscal year

2011 were for the unemployment and sickness insurance program.

Excluding $17.4 million from total costs of $11.6 billion for fiscal year 2012 and

$16.5 million from total costs of $11.2 billion for fiscal year 2011, total costs for the railroad retirement and survivor program for fiscal year 2012 increased $350.8 million or

3.1 percent.

Benefit Payments

In fiscal year 2012, railroad retirement benefit payments increased $366.8 million

or almost 3.3 percent to about $11.3 billion on an accrual basis, including $48.6 million

in vested dual benefits and $60.9 million in supplemental annuities.

Interest Expense

Interest expense of $121.4 million represents interest on the financial interchange

advances made by the U.S. Treasury during the fiscal year.

Salaries and Expenses

Excluding unemployment and sickness insurance salaries and expenses of

$16.1 million for fiscal year 2012 and $15.1 million for fiscal year 2011, salaries and
A REVIEW OF OPERATIONS 15

expenses for the railroad retirement and survivor program were about $100.1 million for

fiscal year 2012 and about $103.5 million for fiscal year 2011, a $3.4 million or

3.3 percent decrease. Adjusted by the $16.1 million in salaries and expenses and

$1.3 million in other costs for the unemployment and sickness insurance program, fiscal

year 2012 administrative expenses for the railroad retirement and survivor program were

about 0.85 percent of total costs.

Other Costs

Other costs consisted primarily of post­retirement benefits (pensions, health and life

insurance) for RRB employees of $8.0 million for the railroad retirement and survivor program and $1.3 million for the unemployment and sickness insurance program. In addition, carrier refunds of $1.9 million were incurred. These costs were offset by approximately $11.8 million in reimbursements from the Centers for Medicare & Medicaid

Services for Part B Medicare costs, as well as a reimbursement of approximately

$0.4 million from the RRB’s Office of Inspector General for RRB­incurred expenses, and

various other revenues of approximately $28,000.

NATIONAL RAILROAD RETIREMENT

INVESTMENT TRUST OPERATIONS

Funds not needed immediately for benefit payments or administrative expenses are

invested through the National Railroad Retirement Investment Trust. 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 Railroad Retirement Account in a

diversified investment portfolio in the same manner as those of private sector retirement

plans. Prior to the Act, investment of Railroad Retirement 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 tax­exempt entity governed by a seven­member Board, three selected by rail management, three selected by rail labor and one independent trustee selected by the six rail

trustees.

During fiscal year 2012, the net asset value of Trust­managed assets increased from

$22.1 billion on October 1, 2011, to $23.7 billion on September 30, 2012. This includes

$2.0 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 Trust­managed assets for the

year (net of fees) was 16.4 percent.

Total railroad retirement system assets (Trust­managed assets and reserves held in

Treasury accounts) grew from $20.7 billion in 2002 to $25.3 billion as of the end of fiscal

year 2012, after net transfers for benefit payments of approximately $13.6 billion over

the same time frame.

Trust operations are described in detail in the National Railroad Retirement

Investment Trust Annual Management Report for fiscal year 2012, which is available on

the RRB’s website at www.rrb.gov.
16 2013 Annual Report, U.S. Railroad Retirement Board
 

BENEFIT OPERATIONS

Retirement and survivor benefits paid, including vested dual benefits and supplemental employee annuities, totaled $11.3 billion in fiscal year 2012, $384 million more

than in fiscal year 2011. Benefits were paid to about 572,600 beneficiaries in fiscal year

2012. Nearly 538,900 beneficiaries were being paid at the end of the year. The table

shown below presents retirement and survivor benefit payments for fiscal years 2012

and 2011, by type of benefit, and the percent changes in payments between the 2 years.

Under the two­tier railroad retirement formulas, the tier I annuity portion approxiRetirement benefits

mates a social security benefit and

increases by the cost­of­living per­ Amount

centage applied to social security (in millions)

benefits. The tier II portion, which Fiscal year Fiscal year Percent

is comparable to retirement bene­ Type of benefit 2012 2011 change

fits paid over and above social security benefits to workers in other

Employee annuities industries, increases by 32.5 per­ Age $5,298.4 $5,063.7 +4.6

cent of the social security percent­ Disability 2,338.2 2,274.9 +2.8

age. Supplemental1 60.8 60.8 +0.1

Effective December 2011, the Spouse and divorced

spouse annuities 1,457.9 1,379.2 +5.7 tier I portion increased by 3.6

percent Total 9,155.4 8,778.5 +4.3 and the tier II portion by

1.2 percent. Compared to pay­ Survivor benefits

ments in fiscal year 2011, this cost­ Annuities 2,168.3 2,161.6 +0.3

of­living increase provided addiLump­sum benefits 3.4 3.6 ­6.5 tional benefit payments of about

$208 million Total 2,171.7 2,165.3 +0.3 in fiscal year 2012.

In December 2012, the cost­ofPartition 3.2 2.8 +15.8 payments2

living increase for tier I and tier II

Grand total $11,330.3 $10,946.5 +3.5 were 1.7 and 0.6 percent, respectively. 1Excludes partitioned payments to spouse and divorced spouses where

the employee is deceased. Monthly retirement and sur­ 2Limited to partitioned payments to spouses and divorced spouses

vivor benefits being paid numbered where the employee is deceased or not otherwise entitled to an annuity.

Partitioned payments from employees on the rolls are included with the nearly 669,000 at the end of the employees’ annuities.

2012 fiscal year, some 3,500 less

Note.­­Detail may not add to total due to rounding.

than at the end of the prior year.
 

Monthly beneficiaries on the rolls declined by more than 3,900 over the year, from
 

542,800 to 538,900. The number of monthly benefits paid is always greater than the
 

number of beneficiaries on the rolls, since many annuitants receive more than one type
 

of benefit. Although the second benefit is usually a supplemental employee annuity,
 

some employees also receive a spouse or widow(er)’s annuity.
 

Regular employee annuities in payment status at the end of fiscal year 2012 numbered 272,300, about 900 less than at the end of the previous fiscal year. The number of
A REVIEW OF OPERATIONS 17

age annuities being paid dropped slightly from 190,100 to 189,900 over the year, while

disability annuities decreased almost 700 to 82,400. Supplemental annuities being paid

to employees rose nearly 200, numbering 121,600 at the end of the year. The number of

divorced spouse annuities being paid rose about 200 to 4,200. Spouse and divorced

spouse annuities together increased by almost 1,500, totaling 139,700 at year­end.

Nearly 134,300 monthly survivor benefits were being paid at the end of fiscal year 2012,

a decrease of 4,500 from the previous year. Approximately 1,000 partition payments to

spouses and divorced spouses where the employee is deceased or not otherwise entitled to

an annuity were being paid at the end of fiscal year 2012, an increase of over 100 from

the prior year.

Retirement

Regular employee annuities

Awards of regular employee annuities numbered 12,900 in fiscal year 2012, some 700

less than in fiscal year 2011. Data by type of annuity awarded during the year are given

in the table on this page.

Railroad employees with 10 to 29 years of creditable service, or 5 to 9 years of service

if at least 5 years

were after 1995,

are eligible for regular annuities

based on age and

service at age 62.

Early retirement

annuity reductions

are applied to

annuities awarded

before full retirement age­­the age

at which an

employee can

receive full benefits

with no reduction

for early retirement. This ranges

from age 65 for

those born before 1938 to age 67 for those born in 1960 or later, the same as under social

security. If an employee had any creditable railroad service before August 12, 1983, the

retirement age for tier II purposes will remain 65. The reduction for early retirement is

1/180 for each of the first 36 months the employee is under full retirement age when his

or her annuity begins and 1/240 for each additional month.

Employee annuities

awarded in

fiscal year 2012 Number Percent

Age

Beginning at full

retirement age or over 1,000 7

Unreduced, beginning

at age 60 to under full

retirement age 6,300 49

Reduced, beginning at

age 62 to under full

retirement age 2,800 21

Disability 2,900 22

Total 12,900 100

Monthly

amount

$2,327

3,550

1,568

2,585

$2,821

Average

Years of

service

21.6

36.5

16.3

24.2

28.4

Age at

retirement

67.4

60.8

63.0

55.6

60.6

Note.­­Detail may not add to total due to rounding.

Rail employees with 30 or more years of service are eligible for regular annuities

based on age and service at age 60. Certain early retirement reductions are applied if the
18 2013 Annual Report, U.S. Railroad Retirement Board
 

Number of monthly beneficiaries,

September 30, 2007, and 2012 (thousands)

employee first became eligible for a 60/30

annuity July 1, 1984, or later and retired

at ages 60 or 61 before 2002. Employees

who retire at 60 or older with at least 30

years of railroad service are referred to

as 60/30 retirees.

Disability awards are based either

on total disability or on occupational disability. A total disability annuity is

based on disability for all employment

and is payable at any age to employees

with at least 10 years of railroad service.

Employees with 5­9 years of service, if at

least 5 years were after 1995, may qualify for tier I only before retirement age on

the basis of total disability if they also

meet certain social security earnings

requirements. An employee is considered

totally disabled if medical evidence shows

that a permanent physical or mental condition exists which prevents the performance of any regular work. A condition

is considered to be permanent if it has

lasted or may be expected to last for at

least 12 months.

An occupational disability annuity is

based on disability for the employee’s regular railroad occupation and is payable to

employees with a current connection with

the rail industry at age 60 if the employee has 10 years of service, or at any age if

the employee has at least 20 years of service. An employee is considered occupationally disabled if the physical or mental

condition is such that the employee is

permanently disabled for work in his or

her regular railroad occupation, even

though the employee may be able to perform other kinds of work.

Of the year’s 2,900 disability awards,

1,200 averaging $1,755 per month were

for total disability and 1,700 averaging

Amount of benefits paid,
 

fiscal years 2007 and 2012 (millions)
 

1

Includes $60.8 million in fiscal year 2007 and $60.8 million in
 

fiscal year 2012 for supplemental annuities. 2Includes divorced spouses.
 

Average monthly amount,

September 30, 2007, and 2012

1

Without supplemental annuity. 2Includes divorced spouses.
A REVIEW OF OPERATIONS 19

$3,141 were for occupational disability. Many employees who are disabled for all

employment but are otherwise qualified for an occupational disability annuity are initially awarded occupational disability annuities in order to expedite payment.

An estimated four­fifths of all employees recently awarded disability annuities will

meet the medical criteria for a disability freeze determination. The standards for freeze

determinations follow social security law and are comparable to the criteria for granting

total disability. Also, an employee granted a disability freeze may qualify for early

Medicare coverage and lower Federal income taxes on his or her annuity.

Of the employees who were awarded regular annuities in fiscal year 2012,

approximately 8,900, or 69 percent, last worked for a railroad either in the calendar year

their annuity began or in the preceding year. Such retirements are termed “immediate,”

while those that occur 2 or more calendar years after the year of last railroad employment are called “deferred.” As a group, immediate retirees represent career railroad

employees who worked in the industry until retirement. Awards based on immediate

retirement averaged $3,318 per month, compared to $1,703 for the 4,000 awards based

on deferred retirement. Immediate retirees averaged 33 years of railroad service, almost

twice the average of 17 years for deferred retirees. Of the year’s awards, 52 percent of

normal age retirements were immediate. While 94 percent of all 60/30 retirements were

immediate, only 16 percent of the reduced age awards to employees with less than 30

years of service were immediate. Immediate retirements accounted for 71 percent of the

year’s disability awards.

The 272,300 retired employees on the rolls as of September 30, 2012, were being paid

regular monthly

annuities aver­ Employee annuities Average Percent

aging $2,354. in current­payment status monthly immediate

The table on on September 30, 2012 Number Percent amount retirements

this page pre­ Age

sents data by

type of annuity Beginning at full

retirement age or over 20,700 8 $1,763 45

for these benefits. Unreduced, beginning

at age 60 to under full

Of the retirement age 99,300 36 3,077 92

82,400 disability annuities

Reduced, beginning at

age 60 to under full

retirement age 69,900 26 1,527 33

being paid,

20,800 were for

Disability 82,400 30 2,332 81

total disability Total 272,300 100 $2,354 70

and 61,700 for Note.­­Detail may not add to total due to rounding.

occupational

disability. The two types of disability annuities averaged $1,596 and $2,580, respectively. In fiscal year 2012, nearly $398 million was paid in total disability annuities and

$1,940 million in occupational disability annuities.
20 2013 Annual Report, U.S. Railroad Retirement Board
 

Almost 190,100 employees on the rolls at the end of fiscal year 2012 were immediate retirees and their regular annuities averaged $2,736 per month. Annuities of the

82,300 deferred retirees averaged $1,470. Although their average railroad retirement

annuity was much lower, a greater proportion of the deferred annuitants also received

social security benefits­­27 percent compared to 4 percent for the immediate retirees.

Moreover, the average social security benefit paid to deferred retirees was higher than

that paid to immediate retirees. Combined railroad retirement and social security

benefits to deferred retirees who were dual beneficiaries averaged $1,654, while combined benefits to immediate retirees averaged $2,448. The table below presents numbers of beneficiaries and

average benefit amounts

for employees on the

rolls who were receiving

social security benefits,

and for those who were

not, by type of retirement.

Regular employee

annuities consist of as

many as three components: tier I, tier II, and

a vested dual benefit.

Reductions for early age

retirement are made in

all components in cases where the employee retired before full retirement age with less

than 30 years of railroad service. The tier I component is based on the employee’s combined railroad and social security covered earnings, and is reduced by the amount of

any social security benefit that the employee receives. The gross tier I amounts of

employees on the rolls at the end of fiscal year 2012 averaged $1,816 per month. Tier I

amounts of nearly 7,300 employees were completely offset by social security benefits.

Tier I amounts being paid averaged $1,669.

Dual benefit status Total

Receiving social security benefit

Number 30,100

Average monthly amount:

Railroad retirement (regular) $722

Social security 1,143

Combined benefit 1,865

Not receiving social security benefit

Number 242,300

Average monthly amount $2,556

Type of retirement

Immediate Deferred

8,000 22,100

$1,490 $444

958 1,211

2,448 1,654

182,100 60,200

$2,791 $1,847

Note.­­Detail may not add to total due to rounding.

The employee tier II component is based solely on railroad earnings. Tier II

amounts being paid at the end of fiscal year 2012 averaged $736. Employees are eligible for vested dual benefits if, based on their own earnings, they met certain vesting

requirements and qualified for both railroad retirement and social security benefits at

the end of 1974, or, in some cases, at the end of an earlier year of last railroad service.

About 22,800 retirees were receiving vested dual benefits averaging $162 at the end of

the fiscal year.

Supplemental employee annuities

A supplemental annuity is payable to employees with a current connection with the

rail industry at age 60 if the employee has at least 30 years of service, or at age 65 if
A REVIEW OF OPERATIONS 21

the employee has 25­29 years of service. The employee must also have had some rail

service before October 1981.

Nearly 6,800 supplemental annuities were awarded in fiscal year 2012, about

300 less than in fiscal year 2011. More than 4,900 of the awards (73 percent) began

concurrently with the employee’s regular annuity, while the remaining 1,900 were to

employees already receiving a regular annuity. Supplemental annuity awards averaged over $41 per month after court­ordered partitions; 83 percent were at the current

maximum rate of $43. Supplemental annuities are reduced for any part of a private

railroad pension attributable to employer contributions. During the fiscal year, 2,200

supplemental annuities were not awarded because they were entirely offset by private

pensions. In a few cases, the supplemental annuity was partially offset by the pension,

or the supplemental annuity was not offset because the pension was reduced.

Supplemental annuities were being paid to some 121,600, or 45 percent, of the

retired employees on the rolls at the end of the 2012 fiscal year. These annuities averaged $42 after court­ordered partitions; fewer than 30 of them were paid under 1937

Act amendments, which stipulated a maximum rate of $70.

Spouse and divorced spouse annuities

Annuity awards to spouses and divorced spouses of retired employees numbered

11,500 in fiscal

year 2012, 200 In current­payment

more than in the Awarded in status on

previous year. fiscal year 2012 September 30, 2012

The table on this Monthly spouse Average Average

benefits Number amount Number amount page presents

numbers and

Beginning at full average amounts retirement age or over 1,200 $540 16,400 $487 of spouse and diWith minor or disabled vorced spouse child in care 400 1,110 1,800 1,178

annuities awardUnreduced, beginning ed during the

at age 60 to under full

year and being retirement age 6,100 1,373 66,800 1,264

paid at the end of

the year, by type Reduced rate 3,100 463 50,500 523

of annuity and Total 10,800 1,007 135,600 892

whether subject Divorced spouse

to age reduction. annuities 700 545 4,200 542

If an employ­ Grand total 11,500 $981 139,700 $882

ee is at least age Note.­­Detail may not add to total due to rounding.
 

62 and retires
 

with 10­29 years of railroad service, or has 5­9 years of service and at least 5 years
 

were after 1995, the employee’s spouse is eligible for an annuity at age 62. Full retire­
22 2013 Annual Report, U.S. Railroad Retirement Board
 

ment age for a spouse is gradually rising from 65 to 67, depending on the year of birth.

Early retirement reductions are applied to the spouse annuity if the spouse retires

before full retirement age. The reduction for early retirement is 1/144 for each of the

first 36 months the spouse is under full retirement age when her or his annuity begins

and 1/240 for each month (if any) over 36.

If an employee retires with at least 30 years of service and is at least age 60, the

employee’s spouse is eligible for an annuity at age 60. Prior to 2002, certain early

retirement reductions were applied to the tier I component of such a spouse annuity if

the employee retired before age 62, unless the employee attained age 60 and completed

30 years of service prior to July 1, 1984. If a 30­year employee retired at age 62, no age

reduction applied to the spouse annuity. December 2001 legislation liberalized early

retirement benefits for 30­year employees retiring at ages 60 or 61 after 2001 and their

spouses. A spouse of an employee qualified for an age and service annuity is eligible for

a spouse annuity at any age if caring for the employee’s unmarried child, and the child

is under age 18 or the child became disabled before age 22.

Of the 3,100 reduced spouse annuities awarded in fiscal year 2012, fewer than 100

averaging $596 per month were to spouses of 30­year employees and some 3,000

averaging $460 were to spouses of employees with less than 30 years of service.

At the end of fiscal year 2012, almost 135,600 spouse annuities averaging $892 per

month were being paid. Nearly 4,200 divorced spouse annuities averaging $542 per

month were also being paid. These included some 60, averaging $630, where the

employee was not yet entitled to an annuity. Families with an employee and spouse on

the rolls were paid combined railroad retirement benefits averaging $3,408. This

included $2,515 in regular and supplemental employee annuities and $892 in spouse

annuities.

Approximately 53,000, or 38 percent, of the spouses and divorced spouses on the

rolls were also receiving social security benefits. Combined railroad retirement and

social security benefits to these annuitants averaged $1,334 per month, including $342

in railroad retirement benefits and $993 in social security benefits. Railroad retirement

annuities to the 84,300 spouses not receiving social security benefits averaged $1,226,

while railroad retirement annuities to the 2,400 divorced spouses not receiving social

security benefits averaged $729.

Like regular employee annuities, spouse annuities consist of up to three components. The tier I component equals one­half of the employee’s tier I amount before any

reduction for the employee’s social security benefit. The spouse tier I amount is

reduced for the spouse’s receipt of a social security benefit and may be reduced for a

spouse’s public service pension. The tier I portion may also be reduced if the spouse

receives a railroad retirement employee annuity, but this reduction is usually restored

through an addition to the spouse tier II amount. Divorced spouses receive only a tier I

benefit.

The spouse tier II component equals 45 percent of the employee’s tier II amount.

Railroad retirement amendments in 1981 precluded further awards of vested dual

benefits to spouses.
A REVIEW OF OPERATIONS 23

Of the 135,600 spouses on the rolls at the end of fiscal year 2012, 92,400 were being

paid tier I amounts averaging $785 per month. The tier I amounts of 43,200 spouses were

completely offset by other benefits also due. Spouse tier II amounts averaged $389.

Vested dual benefits averaging $144 were being paid to 100 spouses. The 4,200 divorced

spouses on the rolls at the end of fiscal year 2012 were being paid tier I amounts averaging $564 per month, not reflecting all annuity adjustments.

Lump­sum retirement benefits

A lump­sum benefit may be payable at retirement to employees who received separation or severance payments after 1984. This benefit approximates the tier II payroll taxes

deducted from separation or severance payments that did not yield additional service

credits for retirement. About $0.5 million was paid in separation/severance lump­sum

benefits during fiscal year 2012.

Employees who have at least 10 years of railroad service and are not entitled to a

vested dual benefit may be eligible for a dual retirement tax refund if they had concurrent

railroad retirement and social security earnings within the period 1951­74. The refund is

equal to the social security taxes that the employee paid on the combined railroad and

social security earnings in excess of the annual railroad retirement creditable earnings

maximum. During the 2012 fiscal year, the RRB paid over 600 dual retirement tax

refunds averaging $64. Most of the payments were to employees retiring during the year.

Fewer than 50 refunds were to survivors, mostly widows, of employees who died before

receiving the refund. Employees entitled to dual retirement tax refunds for years after

1974 may claim them on their Federal income tax returns.

Survivor

Monthly benefits

Annuity awards to survivors of deceased railroad employees numbered 7,500 during

fiscal year 2012, 200 less than the previous year. Almost 134,300 survivor annuities were

being paid at the end of the fiscal year, including 300 temporarily paid at spouse or

divorced spouse annuity rates pending recomputation to widow(er)s’ rates. About

106,300, or 79 percent, of the survivor annuities were to aged widows and widowers.

The table on the next page presents numbers and average monthly amounts of survivor annuities, by type, for those awarded in the year and those being paid at the end of

the year.

Survivor annuities, like regular employee and spouse annuities, consist of as many as

three components: tier I, tier II and, for widows and widowers only, a vested dual benefit.

As with spouses, legislation in 1981 precluded new awards of vested dual benefits to

widow(er)s. The tier I component is computed according to social security formulas and is

based on the deceased employee’s combined railroad and social security earnings. A

reduction is made for the survivor’s receipt of a social security benefit. There may also be

a tier I reduction if the survivor receives a railroad retirement employee annuity or public
24 2013 Annual Report, U.S. Railroad Retirement Board
 

pension. Remarried and divorced widow(er)s receive a tier I benefit only. A dependent

parent receives only a tier I amount if another family member is also receiving benefits

or if the parent has remarried.

Survivor tier II amounts are figured as a percentage of an employee tier II benefit.

Prior to 2002, the

percentages were

50 percent for a

widow(er), 15 percent for a child,

and 35 percent for

a parent. The total

tier II amount for a

survivor family

was subject to a

minimum of 35

percent and a maximum of 80 percent

of the employee

tier II benefit, and

all survivor tier II

amounts were proportionately

adjusted when

either limit

applied. December

2001 legislation

established an “initial minimum amount” for widow(er)s which provides a tier II benefit

equal to 100 percent of the tier II amount of the deceased employee. The maximum

tier II amount payable to a family rose to 130 percent of the employee’s tier II amount.

Widows and widowers are guaranteed a total tier I and tier II amount not less than

what they were paid as a spouse, any necessary increase being added to tier II.

Awarded in

fiscal year 2012

Monthly survivor Average

benefits Number amount

Aged widow(er)s’ 5,800 $1,859

Disabled widow(er)s’ 200 1,515

Widowed mothers’

(fathers’) 100 1,647

Remarried widow(er)s’ 200 1,130

Divorced widow(er)s’ 700 1,049

Children’s:

Under age 18 300 1,241

Student * 1,340

Disabled 100 1,160

Parents’ * $705

Total 7,500 ...

In current­payment

status on

September 30, 2012

Average

Number amount

106,300 $1,426

4,100 1,181

700 1,700

3,800 956

9,700 938

1,800 1,297

100 1,418

7,900 905

* $889

134,300 ...

*Fewer than 50.

Note.­­Detail may not add to total due to rounding.

Aged widow(er)s, who are eligible for benefits at age 60, have their tier I and tier II

amounts reduced if the annuity begins before full retirement age. The eligibility age for

unreduced annuities is gradually rising from age 65 to age 67. The maximum age

reductions range from 17.1 percent to 20.36 percent, depending on the widow(er)’s date

of birth. Excluding about 300 annuities temporarily paid at spouse or divorced spouse

rates, aged widow(er)s’ annuities being paid at the end of the 2012 fiscal year included

51,600 which were reduced for age. Aged widow(er)s’ tier I amounts being paid averaged $1,188 per month. In approximately 7,200 cases, the tier I amount was wholly offset by reductions for other benefits. Nearly 34,200 aged widow(er)s were also receiving

social security benefits, and these averaged $915. Tier II amounts averaged $320.

Almost 700 vested dual benefits, averaging $70, were being paid to aged widow(er)s.
A REVIEW OF OPERATIONS 25

The tier I and tier II amounts of disabled widow(er)s’ annuities, which begin at ages

50­59, are reduced 28.5 percent for age. Tier I amounts being paid to disabled

widow(er)s on the rolls at the end of fiscal year 2012 averaged $987 (in nearly 200

cases, the tier I amount was wholly offset by reductions). Social security benefits being

paid to about 1,500 disabled widow(er)s averaged $864. Tier II amounts averaged

$239, while the 100 vested dual benefits being paid averaged $92.

Tier I amounts paid to widowed mothers and fathers (widows and widowers caring

for children) generally equal 75 percent of the full amount payable to an aged widow(er)

before any reductions, similar to a social security mother’s or father’s benefit. Eligible

children and grandchildren are paid this same tier I amount. However, if the sum of

the tier I amounts of all members of a survivor family exceeds the social security family

maximum, then tier I amounts are proportionately reduced so that the total equals the

maximum. Reductions for the family maximum usually occur when the family includes

three or more beneficiaries. Tier I amounts being paid as of the end of fiscal year 2012

averaged $1,256 for widowed mothers and fathers and $906 for children. Fewer than

50 mothers (fathers) and nearly 2,300 children received social security benefits averaging $1,037 and $593, respectively. Tier II amounts paid mothers (fathers) and children

averaged, respectively, $487 and $102.

Lump­sum survivor benefits

A lump­sum death benefit can be payable at the time of an employee’s death only if

there are no survivors immediately eligible for monthly benefits. For survivors of

employees who had at least 10 years of railroad service before 1975, the lump­sum

death benefit is based on the employee’s earnings through 1974, with a maximum

amount of approximately $1,200. If the employee completed the 10th year of service

after 1974, the lump­sum death benefit is limited to $255, the maximum benefit

payable under social security law, and only the widow or widower living in the same

household is eligible for the benefit. Lump­sum benefits may also be payable to survivors of employees with less than 10 years of service, but at least 5 years after 1995, if

the employee met the social security insured status requirements. About 3,500

lump­sum death benefits averaging $928 were awarded during fiscal year 2012. More

than 400 benefits were to widow(er)s, while some 3,000 were to other individuals who

paid the funeral expenses.

Another lump­sum survivor benefit, the residual payment, can be made if no other

benefits based at least in part on an employee’s railroad service will be payable in the

future, and the total of prior benefit payments is less than what the employee paid in

pre­1975 railroad retirement taxes. Fewer than 50 residual payments were awarded in

the 2012 fiscal year; they averaged $919.

Partition Payments

The Pension Protection Act of 2006, as amended, continues the court­ordered

partitioned portion of the tier II, vested dual and supplemental benefit payments to for­
26 2013 Annual Report, U.S. Railroad Retirement Board
 

mer spouses after the death of the employee. It also allows for payment of courtordered partitioned payments where the employee is not entitled to an annuity if

(1) the employee has 120 months of railroad service or 60 months of service after 1995,

and (2) both the employee and spouse or divorced spouse are 62 for a full month, or, if

the employee is deceased, the employee would be 62 for a full month.

At the end of fiscal year 2012, there were nearly 1,000 spouses and divorced spouses

receiving payments averaging $294 where the employee was deceased or not otherwise

entitled to an annuity. While all but two received a partitioned tier II benefit, only

7 percent received a partitioned vested dual benefit and 34 percent received a

partitioned supplemental benefit.

Medicare Enrollments

The Medicare program provides health insurance to persons ages 65 and older, as

well as persons under age 65 who have been entitled to monthly benefits based on total

disability for at least 24 months. In the case of some disability diagnoses, the waiting

period is waived. Medicare has several parts to its program. Basic hospital insurance,

or Medicare Part A, is financed through payroll taxes. There is also an elective supplementary medical insurance, or Medicare Part B, plan for which monthly premiums are

charged. Medicare also offers Medicare Part C (Medicare Advantage) plans that

include both Parts A and B coverage and additional benefits, sometimes at an additional cost. Finally, Medicare Part D provides optional prescription drug coverage for an

additional premium. Both Medicare Parts C and D are offered through private insurance companies approved by Medicare.

Eligible railroad retirement annuitants and social security beneficiaries whose benefits are payable by the RRB are automatically enrolled under Part A and Part B; however, Part B may be declined by the annuitant or beneficiary. Eligible nonretired persons must apply in order to obtain Medicare coverage. The RRB automatically enrolled

more than 31,100 beneficiaries for Medicare during fiscal year 2012. As of the end of

the fiscal year, some 470,900 persons were enrolled in the Part A plan, and almost

452,200 (96 percent) of them were also enrolled in Part B.

Except for benefits for services in Canada, which are paid from the Railroad

Retirement Account, Part A benefits for railroad enrollees are paid from the Federal

Hospital Insurance Trust Fund, the same as for persons covered under the social

security system. Part B benefits are paid from the Federal Supplementary Medical

Insurance (SMI) Trust Funds. The carrier for Part B claims of railroad Medicare

enrollees made payments totaling $849 million in the 2012 fiscal year.

The regular monthly premium for Part B during fiscal year 2012 was $115.40 for

coverage through December 2011 and $99.90 thereafter. Beneficiaries with modified

adjusted gross incomes above certain thresholds pay higher Part B and Part D premiums under the Income Related Monthly Adjustment Amount (IRMAA) provisions of

law. At the end of fiscal year 2012, some 7,500 Part B premiums were increased by an

IRMAA amount.
A REVIEW OF OPERATIONS 27

The RRB generally withholds Part B premiums from the annuitant’s benefit payments, and at the end of fiscal year 2012 almost 430,000 annuitants were having their

premiums withheld. Of the remaining Part B enrollees, approximately 2,200 were paying premiums to the RRB, either directly or through an intermediary, and 20,000 had

their premiums paid by State agencies. The RRB periodically transfers premiums to the

SMI Trust Funds.

Recently, the RRB began offering to collect Part C and Part D premiums from

monthly benefits through an exchange process. While this option has grown in popularity, many annuitants pay their Part C and Part D premiums directly to their plan. At

the end of fiscal year 2012, some 2,500 Part C premiums and more than 9,800 Part D

premiums were deducted from benefits paid by the RRB. In addition, during calendar

year 2012 the RRB billed approximately 4,600 annuitants (both those who paid their

premiums directly to their plan and those with premiums deducted from their annuity)

for IRMAA amounts related to Part D.
28 2013 Annual Report, U.S. Railroad Retirement Board
 

RAILROAD UNEMPLOYMENT AND SICKNESS
 

INSURANCE PROGRAM
 

FINANCIAL OPERATIONS

Financing sources for the railroad unemployment and sickness insurance program

during fiscal year 2012 exceeded costs by $115.6 million and the net position increased

by $115.6 million from $209.4 million at the end of fiscal year 2011 to $325.0 million at

the end of fiscal year 2012. For fiscal year 2012 as compared to fiscal year 2011, total

financing sources for the railroad unemployment and sickness insurance program

increased by $37.6 million (23.3 percent) to $199.2 million.

(text continued on page 30)

Unemployment and Sickness Insurance Program

Consolidated Financing Sources,

Costs and Net Position (Millions)1

For the Fiscal Year Ended September 30 2012 2011

Financing Sources:

Employer Payroll Taxes $209.8 $172.8

Interest Income 3.7 1.7

General Appropriations 0.5 0

Other (14.8) (12.9)

Total Financing Sources 199.2 161.6

Costs:

Benefit Payments:

Unemployment 41.1 42.0

Sickness 42.0 54.4

Other2,3 0.5 3.3

Total Costs 83.6 99.7

Financing Sources over Costs 115.6 61.9

Net Position ­ Beginning of Period 209.4 147.5

Net Position ­ End of Period $325.0 $209.4

1

Prepared on an accrual basis of accounting. 2

Appropriated to the Railroad Retirement Board $500,000 for administrative expenses associated

with the payment of additional extended unemployment benefits. 3

Includes accrued interest expense for loan in fiscal year 2011 from the Railroad Retirement Account

and program costs for Railroad Unemployment Insurance ­ Extended Benefit Payments (Worker,

Homeownership, and Business Assistance Act of 2009). The loan was paid off in fiscal year 2011.
A REVIEW OF OPERATIONS 29

UNEMPLOYMENT AND SICKNESS
 

INSURANCE PROGRAM
 

F i n a n c i n g S o u r c e s ­ F i s c a l Y e a r 2 0 1 2 ( I n M i l l i o n s )

GROSS TOTAL $199.2

1Less Transfers­Out and carriers’ refunds of $14.8 million.

Employer 

Payroll Taxes1 97.9% 

$209.8 Interest Income 1.9% 

$3.7 

General Appropriations 0.3% 

$0.5 

C o s t s ­ F i s c a l Y e a r 2 0 1 2 ( I n M i l l i o n s )

TOTAL $83.6

Benefit Payments 99.4% 

$83.1 

Other Expenses 0.6% 

$0.5 
30 2013 Annual Report, U.S. Railroad Retirement Board
 

Financing Sources
 

The primary ongoing financing source of the railroad unemployment and sickness

insurance program is a payroll tax on railroad employers, based on the taxable earnings of their employees. The employees themselves are not taxed.

Each employer pays taxes at a rate which takes into consideration its employees’

actual incidence of benefit usage. Under experience rating, employers whose employees have low incidences of unemployment and sickness pay taxes at a lower rate than

those with higher levels of benefit usage. Each employer’s rate also has a component

for administrative expenses and a component to cover costs shared by all employers.

The rate applies to monthly earnings up to an indexed maximum. In calendar year

2012, the taxable earnings base was the first $1,365 of each employee’s monthly earnings. The earnings base is indexed each year by a rate which is equal to approximately

two­thirds of the annual rate of increase in the maximum base for railroad retirement

tier I taxes.

In 2012, the basic tax rates on railroad employers, including covered commuter

railroads, ranged from a minimum of 2.15 percent (which included a surcharge of

1.5 percent) to a maximum of 12.0 percent. Most employers were assessed the minimum rate in 2012. New employers in 2012 paid an initial rate of 2.65 percent.

Employer Payroll Taxes

Payroll taxes by employers totaled $209.8 million during fiscal year 2012. This was

an increase of 21.4 percent or $37.0 million more than the previous year.

Interest

Cash not needed immediately for unemployment and sickness insurance benefits

or operating expenses is held in the Federal Unemployment Insurance Trust Fund and

invested by the Secretary of the Treasury. The fund earned an average rate of return

of 2.8 percent in fiscal year 2012, of which the RRB earned $3.7 million as its pro rata

share.

Costs

Total costs for the railroad unemployment and sickness insurance program

decreased by $16.1 million (16.1 percent) to $83.6 million.

Benefit Payments

During fiscal year 2012, unemployment insurance benefit payments decreased by

$0.9 million (2.1 percent) to $41.1 million. Sickness insurance benefit payments

decreased $12.4 million (22.8 percent) to $42.0 million.
A REVIEW OF OPERATIONS 31

BENEFIT OPERATIONS

Net unemployment and sickness benefits totaling some $89.7 million were paid in

the 2011­2012 benefit year, $12.8 million less than in the prior year. Beneficiaries

numbered 25,100, in comparison to the previous year’s total of 28,100. Fewer than 900

employees received both unemployment and sickness benefits during the 2011­2012

benefit year. The number of unemployment benefit claimants decreased by more than

21 percent, while sickness benefit claimants decreased approximately 4 percent. Total

net unemployment benefit payments decreased by almost 21 percent, while net sickness benefits decreased by some 4 percent. The continued decrease in unemployment

benefits and beneficiaries can be attributed to an ending of a national economic recession. The number of employees qualified for benefits under the Railroad Unemployment Insurance Act fell about 2 percent to 235,100.

Benefits are payable for each day of unemployment or sickness in excess of 7 during

the first 14­day registration period in a benefit year. During benefit year 2011­2012,

there were 7,000 and 13,500 unemployment and sickness benefit waiting period claims,

respectively.

Unemployment

Improvement in the national economy was evidenced by decreases in unemployment

benefits and beneficiaries in the railroad industry. Almost 9,200 railroad workers were

paid $40.7 million in unemployment benefits during the 2011­2012 benefit year, including $7.0 million 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 Reauthorization, and Job

Creation Act of 2010, the Temporary Payroll Tax Cut Continuation Act of 2011, and the

Middle Class Tax Relief and Job Creation Act of 2012. The number of benefit claimants

decreased by 2,500 from the prior year total of 11,600, while the benefit amount fell

$10.7 million from the year­earlier total of $51.4 million. The claimant count decreased

for the second straight year. The average number of compensable days per unemployment benefit claimant was 75 in benefit year 2011­2012 as compared to 73 in the previous benefit year.

The mid­month unemployment count in the 2011­2012 benefit year began with a

July count of 2,500 claimants. The count generally rose in the following months until it

peaked at 4,000 in January 2012 due to extended benefit claims. After January 2012,

the count sporadically dropped and rose during the following months until reaching a

benefit year low of 2,300 in May 2012. For the 2011­2012 benefit year as a whole, the

weekly number of claimants averaged 2,800 in comparison to an average of 3,500 in the

NOTE.­­Railroad unemployment and sickness benefits are paid on the basis of benefit years beginning

July 1 and ending June 30 of the following year. Consequently, operational data in this “Benefit

Operations” section are generally presented for this time span, rather than fiscal years beginning October 1

and ending September 30.
32 2013 Annual Report, U.S. Railroad Retirement Board
 

Major unemployment and sickness benefit operations,
 

benefit years 2011­2012 and 2010­2011
 

Item

Benefit year 2011­2012 Benefit year 2010­2011

Total

Unemployment1

Sickness Total

Unemployment1

Sickness

Applications 32,800 12,300 20,600 35,700 14,500 21,200

Claims 213,100 81,400 131,700 238,400 101,100 137,300

Claimants 2

25,100 9,200 16,700 228,100 11,600 17,400

Net amount of benefits $89,746,500 $40,690,700 $49,055,800 $102,584,900 $51,423,800 $51,161,100

Number of payments

Normal 154,300 53,000 101,300 170,500 64,800 105,700

Extended 29,700 18,800 11,000 35,900 24,500 11,400

Total 184,000 71,800 112,200 206,400 89,300 117,100

Average amount per

2­week registration period

Normal $584 $576 $589 $581 $569 $589

Extended 556 562 545 554 557 549

Total 580 573 585 577 566 585

1

2

Starting in June 2009, includes temporary extended unemployment benefits authorized by the American Recovery and

Reinvestment Act of 2009. Beginning in November 2009, temporary extended unemployment benefits are also being paid under

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, and the Middle Class

Tax Relief and Job Creation Act of 2012. The benefit year 2010­2011 amount totaled $9.4 million and the benefit year

2011­2012 amount totaled $7.0 million.

Benefits for both unemployment and sickness were paid to approximately 900 employees in benefit years 2010­2011 and

2011­2012. Those claimants who had only a non­compensable waiting period are not included in the beneficiary counts since

no benefits were paid.

previous benefit year. The overall unemployment benefit claimant rate, measured in

relation to numbers of employees qualified to receive benefits under the Railroad

Unemployment Insurance Act during a particular time period, decreased to 4 per 100

qualified from the previous year’s level of 5 per 100 qualified, reflecting the return to

normal unemployment levels. The median age for all unemployment benefit claimants

was 43 years, as compared to 42 in the previous benefit year.

Sickness

The number of sickness benefit claimants during the 2011­2012 benefit year was

16,700, over 600 lower than in the previous year. The benefit year claimant count was

(text continued on page 34)
A REVIEW OF OPERATIONS 33

Claimants under the Railroad Unemployment Insurance Act,
 

Benefit Years 2007­2008 through 2011­2012
 

Unemployment and Sickness Benefit Claimants by Age,
 

Benefit Year 2011­2012
 
34 2013 Annual Report, U.S. Railroad Retirement Board
 

the lowest since sickness benefits began in benefit year 1947­1948. Gross sickness benefits of $74.5 million were paid, $3.1 million less than in the prior benefit year. Net sickness benefits totaled $49.1 million, reflecting repayment of a large amount of benefits

following settlements of suits for injuries. Benefits payable for an injury are recoverable

if the claimant is awarded damages or receives a settlement for the injury. Net benefits

decreased by $2.1 million in comparison with the previous year.

The utilization rate for sickness benefits was 7.1 percent as compared to 7.3 percent

in the previous benefit year. The average duration of sickness was 67 days in benefit

year 2011­2012 as compared to 68 in the previous benefit year.

Among the most common causes of sickness were injuries that included fractures or

wounds (affecting 25 percent of beneficiaries), arthritis and disk disorders (22 percent),

mental disorders, including drug and alcohol addictions (11 percent) and symptoms,

signs and all ill­defined conditions (8 percent). The median age of all sickness benefit

claimants was 52 years; the same as in the previous benefit year.
RAILROAD EMPLOYMENT

Average monthly railroad employment in fiscal year 2012 rose about 3 percent to

233,000 from the 227,000 average of the previous year. After experiencing an all-time

low of 215,000 in January 2010, railroad employment began to rebound in 2010 and has

continued that recovery in 2012. Fiscal year 2012 average railroad employment began

at 232,000 and stayed the same or increased in all but three months during the year.

By June 2012 railroad employment had risen to 236,000, the highest level since

October 2008. However, railroad employment declined slightly in the July-September

2012 quarter, averaging 234,000.

A REVIEW OF OPERATIONS 35

Note.--Numbers for 2012 are preliminary.

Average Railroad Employment

Fiscal Years 2008 through 2012
















ADMINISTRATIVE DEVELOPMENTS
 

The following describes some major issues addressed in 2012 and 2013 as the RRB

continued efforts to improve agency operations and better serve its customers.

Performance Management

Customer Satisfaction Surveys

In fiscal year 2012, the RRB conducted two surveys designed to measure customer

satisfaction and identify potential service improvements. The first survey focused on

claimants receiving unemployment and sickness insurance benefits, while the second

was geared to initial survivor annuitants. Like similar surveys in the past, these followed the American Customer Satisfaction Index model initially developed at the

University of Michigan. The unemployment and sickness insurance claimants were last

surveyed in fiscal year 2003, with a number of automated, online options introduced

during the intervening years. The results of the recent survey showed satisfaction

improving significantly with a score of 81, six points higher than in 2003. The survey

was conducted in December 2011, with the final report received in January 2012. The

previous survey of initial survivor annuitants was in 2005, and the results of the most

recent one showed satisfaction remaining consistent at 90, or 23 points above the latest

aggregate satisfaction index of 67 for the entire Federal government.

Customer Service Plan

The RRB’s Customer Service Plan promotes the principles and objectives of

customer­driven quality service agency­wide.

An important part of the plan is to keep customers informed of how well the RRB is

meeting timeliness standards. The RRB publicizes the Customer Service Plan and performance results on the agency website and posts them in all of its field offices. The

plan is reviewed and updated periodically based on agency experience, customer feedback and comparison with similar best­in­business models.

The agency has developed an index to measure the overall timeliness of customer

service in four benefit areas: retirement applications; survivor applications; disability

applications and payments; and railroad unemployment and sickness benefit applications and claims. This index, based on a weighted average, allows for a more concise

and meaningful presentation of its customer service efforts in these areas. During fiscal year 2012, the overall benefit timeliness index was 99.3 percent. This means that

37
 
38 2013 Annual Report, U.S. Railroad Retirement Board
 

the RRB provided benefit services within the timeframes promised in the Customer

Service Plan 99.3 percent of the time, up slightly from 99.2 percent in 2011. The RRB

also met or exceeded all of its customer service goals for the year in its Annual

Performance Plan.

Reducing Improper Payments

The RRB reviewed benefit payments made under the Railroad Retirement Act and

the Railroad Unemployment Insurance Act for fiscal year 2011 as required by the

Improper Payments Information Act of 2002 and the Improper Payments Elimination

and Reduction Act of 2010. The RRB’s Performance and Accountability Report for fiscal

year 2012 includes the results of that analysis along with a description of the actions

taken to address and prevent improper payments and projections of future improper

payment levels. The agency also entered the information on the Office of Management

and Budget’s (OMB) website, including breakdowns by cause and the amounts/percentages of over­ and underpayments. The analysis shows that the RRB does not have significant improper payments, as defined by OMB guidelines. The RRB continues to

review its benefit payments to ensure that improper payments remain below threshold

levels, and to look for operational improvements to minimize such payments.

Economic Recovery Activities

On February 22, 2012, President Obama signed the Middle Class Tax Relief and

Job Creation Act of 2012, which provided up to 13 additional weeks of temporary

extended unemployment benefits for certain railroad workers. In order to be eligible

for these temporary benefits, the workers must have exhausted their regular unemployment benefits and had a jobless claim between July 1, 2008, and June 30, 2012. These

temporary extended benefits were first authorized in 2009. The American Taxpayer

Relief Act of 2012, which the President signed on January 2, 2013, subsequently

extended temporary extended benefits to rail workers with jobless claims through June

30, 2013. Under the most recent legislation, the latest date that an extended benefit

period may begin is December 31, 2013. In addition, $175 million was provided for payment of these extended benefits. Accordingly, the temporary extended benefits payable

authorized under these laws were not charged to covered employers under the experience rating system that calculates their contribution amounts.

Up to the American Taxpayer Relief Act of 2012, the laws authorizing the temporary extended unemployment benefits also provided a reduction of 2 percentage points

in the employee portion of the social security payroll tax, and the tier I tax on railroad

employees. Originally enacted in 2010, the reduction was scheduled to expire at the

end of 2011, but was subsequently extended to the end of 2012. Previously, the overall

tax rate was 7.65 percent, which included 6.2 percent for tier I and 1.45 percent for

Medicare. However, during this two­year period, the reduced rate was 5.65 percent,

with 4.2 percent for tier I­­a reduction of 2 percentage points­­while the Medicare rate
ADMINISTRATIVE DEVELOPMENTS 39

remained 1.45 percent. Payroll tax rates for employers remained at 7.65 percent.

Since the most recent legislation did not extend this reduction, it expired as scheduled

in December 2012.

When Hurricane Sandy made landfall in the northeastern United States in October

2012, railroads and railroad employees were among those impacted. Fortunately, most

railroads were able to resume normal operations relatively soon, including commuter

railroads serving the New York City metro area. The RRB also reached out to railroad

workers who were temporarily out of work due to the impact of the storm, encouraging

them to apply for unemployment or sickness benefits online or through the agency’s

toll­free telephone number, and made arrangements to process any such claims as

expeditiously as possible.

Service Enhancements

Employer Reporting System

In fiscal year 2012, the RRB added two series of forms to this automated system

that enables railroad employers to conduct agency business in an electronic, online

format. The ID­40 series will allow employers to view their yearly unemployment

insurance contribution rates, while the ID­6 series lets them view notices of tax liability

based on payment of sickness benefits to their employees. Adding these two additional

services to the system will greatly reduce the number of paper documents generated

and mailed to railroad employers.

Cost­of­Living Adjustment

The RRB applied a cost­of­living increase to December 2012 benefits payable in

January 2013. The increase was 1.7 percent for tier I benefits and 0.6 percent for

tier II, and applied to 547,453 annuitants. In addition, 113,136 beneficiaries whose

social security benefits are paid by the RRB received an increase. The total amount of

the cost­of­living adjustment was almost $11.7 million in railroad retirement annuities

and $2.0 million in social security benefits. In light of the cost­of­living increase to

retirement benefits, monthly Medicare Part B premiums increased $5.00, to a total of

$104.90, although some beneficiaries pay a higher amount based on their income.

Officials

Michael S. Schwartz continues to serve as Chairman of the Railroad Retirement

Board, along with Jerome F. Kever as Management Member and Walter A. Barrows as

the Labor Member. Mr. Schwartz was first appointed to the Board in 2003, while

Mr. Kever was appointed in 1992 and Mr. Barrows in 2011. The agency’s Senior

Executive Officer and Director of Programs, Dorothy A. Isherwood, retired in January

2013 after 39 years of service to the RRB. The Board named Chief Financial Officer

George V. Govan as the new Senior Executive Officer at that time. In addition to his

continuing responsibility for financial management, in this new capacity Mr. Govan
40 2013 Annual Report, U.S. Railroad Retirement Board
 

chairs the RRB’s Executive Committee, coordinating development and implementation

of agency policy. Replacing Ms. Isherwood as Director of Programs was Martha M.

Barringer, who had previously served as the agency’s Director of Field Service since

July 2000. Daniel J. Fadden was then selected to succeed Ms. Barringer as Director of

Field Service, having served as Deputy Director since April 2012.

Workforce Management

Staffing/Training

Like other organizations in the Federal community, the RRB has an aging workforce, with over 65 percent of its employees having 20 or more years of service.

Additionally, about half of the agency’s current workforce will be eligible for retirement

in the next five years. To help cope with the loss of experience, the RRB is placing

increased emphasis on strategic management of human capital, particularly in the

areas of training and succession planning. While attrition remains an ongoing concern,

it has also presented an opportunity for the RRB to increase hiring of entry­level positions, particularly those engaged in direct customer service. In 2012, the agency conducted two training classes for claims examiners involved in initial adjudication processing under the Railroad Retirement Act, with one in the area of retirement benefits

and the other in survivor benefits, and another class for claims examiners under the

Railroad Unemployment Insurance Act. Lastly, the agency completed a training program for new claims representatives assigned to the various RRB field offices around

the country and an additional training class is planned in 2013.

Employee Survey

The Office of Personnel Management (OPM) conducts the Federal Employee

Viewpoint Survey to identify the extent to which employees identify the characteristics

of successful organizations within their own agencies. Of 897 RRB employees invited to

participate in the 2012 survey, 590 completed it, for a response rate of 66 percent.

Based on OPM guidelines for determining notable results, the RRB scored especially

high (greater than 65 percent favorable) on the majority of questions about personal

work experiences. Nearly 94 percent of RRB respondents think the work they do is

important, and 88 percent know how their work relates to agency goals and priorities.

Over 80 percent like the kind of work they do, 76 percent feel their work gives them a

feeling of personal accomplishment, more than 83 percent believe that they are held

accountable for achieving results, and more than 80 percent feel supported by their

supervisors in terms of balancing work and life issues. At the same time, while the lowest scores represent a minority of the respondents, the survey results showed room for

improvement in the areas of performance management and dealing with poor performers, which the agency will focus on improving in the coming years.
ADMINISTRATIVE DEVELOPMENTS 41

Employee Recognition

The RRB administers an Awards for Excellence program to recognize outstanding

agency employees. Both headquarters and field service employees, supervisors, and

work teams have the opportunity to be recognized for their contributions to the RRB.

The nominees, finalists and winners are all honored at an annual ceremony. The 25th

annual awards ceremony was held July 24, 2012, at Loyola University’s Kasbeer Hall.

Altogether, 23 individual nominations and eight team nominations were honored at the

event. The RRB also participates in the Chicago Federal Executive Board’s Federal

Employee of the Year awards program, which recognizes outstanding Federal employees from throughout the metropolitan area. The RRB had one team and one employee

selected as finalists for the 2012 Federal Employee of the Year awards. Letitia

Carthans, Daniel Delwiche, Stephanie Fraction, Frank Hutchinson, Joy Kalligeros,

Walter Kuhlmey, Luis Maldonado, Irene Miller, Emma Morales, Doris Porter and

Charlotte Williams of the Retirement Benefits Division Realignment Team were finalists in the Outstanding Headquarters Team category. Christine Schofield, an administrative aide in the Bureau of Fiscal Operations, was a finalist in the Outstanding

Administrative/Clerical Employee category.

Information Technology

Financial Management System Contract

In fiscal year 2012, the RRB awarded a contract valued at just over $21 million to

replace and update its financial management integrated system (FMIS). The recipient

of the multi­year contract was CGI Federal, a wholly owned subsidiary of CGI, an

international firm specializing in information technology and business process services

with more than 35 years’ experience supporting Federal agencies. The cloud­based

FMIS will be the agency’s core system for budget formulation and execution, procurement, payment and receivable management, general ledger management, and external

reporting. The new system will replace one that the agency has been using for the last

25 years. Under the contract, CGI will perform integration, operations and hosting services for a period not to exceed 11 years, with the new FMIS scheduled to become operational in fiscal year 2014. Implementation costs in fiscal year 2013 will total about

$3.9 million, with operations and maintenance costs averaging more than $1.7 million

for the first year of the contract as well as the nine subsequent option years.

RRBVision

The RRB uses a system called RRBVision that allows users to view video presentations with accompanying training materials, such as PowerPoint presentations or

online screens. Presentations can be viewed in real­time or saved for later viewing. In

2012, the agency developed 39 presentations for viewing by employees on the RRB

intranet. Topics included technical training for claims examiners/representatives,

non­technical training sessions, and presentations from the RRB’s Office of Equal
42 2013 Annual Report, U.S. Railroad Retirement Board
 

Opportunity. The benefits of RRBVision include consistency in training, a greater

number of training programs available to offsite staff, availability of training

on­demand, and savings in travel costs. The system also offers programs for rail

employers, rail workers, beneficiaries and claimants 24 hours a day through the RRB’s

website.

Information Security

The RRB is committed to protecting its annuitants’ information from unauthorized

use or disclosure, and continues to work on improving security capabilities in this

regard. The agency conducts annual training for its employees on security requirements and risks, with the content of the training determined by an employee’s level of

access to RRB systems and degree of responsibility for security management. Another

initiative designed to protect agency systems is Homeland Security Presidential

Directive 12, which required enhanced photo identification cards, incorporating biometric data, for all Federal employees. While the RRB started issuing the enhanced identification cards to its employees in 2008, which were needed to access RRB offices at

headquarters and in other Federal buildings, during 2012 it implemented the related

requirement to have employees use the identification card to logon to the agency computer network.

Increased Efficiency

In 2012, the agency completed deployment of wide­area networking optimization

controllers to 26 field offices. This enabled business­critical data to be transmitted up

to 90 percent faster, and also alleviated security vulnerabilities associated with unsupported server operating systems. Also, RRB staff, working with counterparts at other

agencies, continued to evaluate the utility of software used by the agency. This resulted

in software products being replaced by leveraging other software products, or being

eliminated as unnecessary, resulting in annual savings of more than $66,000.

Office of Equal Opportunity

Diversity Program

Throughout the year, the agency’s Office of Equal Opportunity sponsored many programs designed to foster an inclusive work environment and enhance the understanding of disability issues. These included several cultural enrichment events sponsored

by the RRB’s Workplace Diversity Committee to commemorate African American

History Month, Women’s History Month, Asian Pacific American Heritage Month,

Hispanic Heritage Month, and Native American Heritage Month. The agency’s

Employees with Disabilities Advisory Council also presented informational sessions and

released a newsletter devoted to topics that affect individuals with disabilities.
ADMINISTRATIVE DEVELOPMENTS 43

Equal Opportunity Policies and Procedures

The agency’s Equal Employment Opportunity (EEO) complaint program meets all

of the elements necessary to achieve a discrimination­free work environment. All

employees received training on their rights and remedies under the No FEAR Act, Title

VII and other anti­discrimination laws. The agency has policies and procedures to

address all forms of EEO complaints, including harassment, as well as procedures to

respond to requests for reasonable accommodation. The agency has an EEO

Handbook, and maintains several pages on its intranet and public website with information on EEO programs, procedures and forms. The RRB has also implemented

Executive Order 13583, Establishing a Coordinated Government­Wide Initiative to

Promote Diversity and Inclusion in the Federal Workplace, by developing a Diversity

and Inclusion Strategic Plan for the agency. The plan provides direction, encourages

commitment and creates alignment so the RRB can approach workplace diversity and

inclusion in a coordinated, collaborative and integrated manner. The plan reflects the

agency’s continued effort to create and sustain a diverse and inclusive workforce that

best serves its railroad customers.

Recruitment

As part of the RRB’s commitment to a diverse workforce, the Office of Equal

Opportunity worked with the Bureau of Human Resources to create a diverse pool of

external job applicants by identifying sources for the recruitment of individuals with

disabilities, various underrepresented groups, and disabled veterans. In its 2012

report to the President on hiring individuals with disabilities, the Office of Personnel

Management noted that the RRB was among the top five agencies in terms of hiring

the highest percentage of disabled individuals.

Public Information Activities

The RRB maintains direct contact with railroad retirement beneficiaries through

its field offices located across the country. Field personnel explain benefit rights and

responsibilities on an individual basis, assist railroad employees in applying for benefits and answer any questions related to the benefit programs. The RRB also relies on

railroad labor groups and employers for assistance in keeping railroad personnel

informed about its benefit programs.

At informational conferences sponsored by the Labor Member of the Board for railroad labor union officials, RRB representatives describe and discuss the benefits available under the railroad retirement­survivor, unemployment­sickness and Medicare

programs, and the attendees are provided with comprehensive informational materials.

Now in its 56th year, in 2012 a total of 1,578 railroad labor union officials attended 34

informational conferences held in cities throughout the United States. In addition,

railroad labor unions frequently request that RRB representatives speak before their

meetings, seminars and conventions. In 2012, the Labor Member’s Office was repre­
44 2013 Annual Report, U.S. Railroad Retirement Board
 

sented at 13 union gatherings attended by 2,391 railroad labor officials. Field personnel addressed 81 local union meetings with 3,525 members in attendance.

More than 150 rail industry reporting personnel from across the country attended

the National Rail Employer Training Seminar in Chicago during August 2012, hosted

by the Management Member’s Office. This was the eighth such seminar, which takes

place every three years. The attendees heard presentations by agency staff on topics

that included audits, basic and complex reporting, employer coverage, the experience

rating system for determining unemployment insurance contributions, electronic

reporting and Internet services, payment processing and fraud prevention. Presenters

also included representatives of the Internal Revenue Service, the Social Security

Administration and the RRB’s Office of Inspector General. At other seminars for railroad executives and managers, RRB representatives review programs, financing and

administration, with special emphasis on those areas which require cooperation

between railroads and RRB offices.

Office of Inspector General

The Office of Inspector General (OIG) for the RRB focuses its audit and investigative efforts on protecting the integrity of the agency’s trust funds by providing comprehensive program and operational oversight. Reports issued by the OIG, and other documents referenced in this section, can be accessed at www.rrb.gov/oig.

Office of Audit

During fiscal year 2012, auditors published 11 reports and issued findings and recommendations to agency management, including their opinion and related reports on

the RRB’s financial statements for fiscal years 2010 and 2011. Other reports completed

the annual evaluation of the RRB’s information security program, including progress in

implementing the Federal Information Security Management Act of 2002 requirements; published the results of the OIG’s inspections of the agency’s representative

payee monitoring and continuous monitoring of the RRB’s financial interchange system; evaluated the RRB’s oversight of railroad employer compliance; projected the

financial impact that RRB unilateral disability freeze cases have on the financial interchange between the RRB and the Social Security Administration; and audited the

agency’s compliance with the Improper Payments Elimination and Recovery Act, the

Application Express system’s date of death reliability, and the RRB’s Railroad

Medicare Part B eligibility and premium collection process. Pursuant to the Reports

Consolidation Act of 2000 and the requirements of Office of Management and Budget

Circular A­136, the Inspector General issued a document that identified the most serious management challenges facing the RRB and progress in addressing them. The

Inspector General identified the following as the most serious challenges facing the

RRB: oversight and transparency of invested program assets; disability program

integrity; financial impact of unilateral disability freeze cases; information technology

security; budgetary reporting; and preventing and detecting improper payments.
ADMINISTRATIVE DEVELOPMENTS 45

Office of Investigations

The Office of Investigations focuses on identifying, investigating, and presenting

RRB fraud cases for prosecution or monetary recovery action. It also seeks to prevent

and deter program fraud by reporting systemic weaknesses in agency operations and

processes identified through investigative work. In order to maximize the impact of its

resources, the office pursues cooperative investigative activities in coordination with

other inspectors general, such as the Office of Inspector General for the Department of

Health and Human Services, and law enforcement agencies, such as the Federal

Bureau of Investigation and the U.S. Secret Service.

As of September 30, 2012, the Office of Investigations’ caseload totaled 455 matters,

which represent approximately $124.2 million1 in potential fraud losses. During fiscal

year 2012, the office secured 34 arrests, 106 indictments and/or informations, 85 convictions, 26 civil judgments, 95 referrals to the Department of Justice, and more than

$77.3 million2 in financial accomplishments.

Of particular significance, the office’s joint investigation with the Federal Bureau of

Investigation unraveled a complex occupational disability fraud scheme allegedly perpetrated by a number of Long Island Rail Road (LIRR) retirees, doctors and disability

facilitators. During fiscal year 2012, 27 LIRR retirees, two doctors, and two disability

facilitators were charged and arrested for their alleged involvement in the scheme, with

three of the LIRR retirees pleading guilty. This investigation remains ongoing.

1

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 have been identified by Office of Investigations’ joint investigative work.

2 The total amount of financial accomplishments reflects fraud amounts related to programs administered

exclusively by the RRB and fraud amounts from other Federal programs such as Medicare or social

security which were included in the disposition resulting from the investigation.
LEGAL RULINGS
 

One ruling on a case involving the RRB was issued by a court of appeals
 

during fiscal year 2012, and eight noteworthy legal opinions
 

were issued by the RRB’s Office of General Counsel.
 

Court Cases

I

n Stephens v. Railroad Retirement Board, 704 F.3d 587 (2012), the U.S. Court of

Appeals for the Ninth Circuit reversed the Board’s decision denying an annuity

to the disabled child of a deceased railroad employee. The Board’s decision found

that the evidence failed to prove that the claimant had been continuously disabled

before attaining the age of 22, as the record showed substantial gainful activity in the

years 1987­1989. The Court considered the claimant’s work experience and found that

the RRB’s regulations on substantial gainful activity should be considered a guide and

not dispositive. The Court also found that the Board did not consider the context in

which the claimant’s earnings were received. Relying on Estes v. Railroad Retirement

Board, 776 F.2d 1436 (9th Cir. 1985), the Court found that “short periods of temporary

employment, inadequately performed, thus do not constitute substantial gainful

employment that would disqualify a claimant for benefits.” In a strongly worded dissent, Judge Milan D. Smith, Jr., found that the evidence simply did not conclusively

demonstrate that the claimant, before age 22, was disabled such that he could not work.

Therefore, he would hold that there is substantial evidence in the record to find that the

claimant did not meet his burden of proving, through medical evidence, that he was

disabled before age 22.

Legal Opinions

The RRB’s Office of General Counsel issued several formal legal opinions in fiscal

year 2012, with summaries for eight presented here as they are of special interest.

Legal Opinion L­2012­04 addressed the factors considered in determining if an

employee annuitant is self­employed or returning to railroad service with respect to

continuance of his annuity payment. A previous decision issued in December 2008

found that the employee’s work was a return to railroad service. Based on the significant changes to duties and responsibilities, the annuitant requested a new opinion.

Section 216.23(c) of the RRB’s regulations (20 CFR 216.23) defines self­employment as

“work performed in an individual’s own business, trade or profession as an independent

47
 
48 2013 Annual Report, U.S. Railroad Retirement Board
 

contractor, rather than as an employee.” It also sets out factors that will be considered

in determining whether an individual performs services as an employee or as an independent contractor. The General Counsel ruled, based on the facts provided, that the

annuitant was self­employed and thus his annuity is payable while he performs this

service.

Legal Opinion L­2012­05 responded to a request to amend a memorandum dated

July 16, 2009. The 2009 memorandum expressed the opinion that the Thoroughbred

Retirement Investment Plan was a defined contribution plan which was a private pension within the meaning of section 2(h)(2) of the Railroad Retirement Act (RRA)

(45 USC 231a), triggering a reduction to supplemental annuities payable under

section 2(b) of the RRA to the employees and their participating affiliates to the extent

the plan benefits are based upon employer contributions.

The Thoroughbred Work Incentive Stock Transfer (TWIST) was a special availability bonus program for all agreement employees. It awarded employees a bonus (from

$600 to $3,000) for each paired two­week period in which they remained marked­up

and available, during the period between July 3 and September 10, 1999. It was based

upon employee performance; employees had no input or discretion concerning the contribution; and it could be withdrawn two years after deposit. For many employees,

their sole participation in the Plan was the TWIST contribution made to them in 1999.

The General Counsel ruled that the TWIST contributions (and any earnings on a participant’s TWIST contributions) should be excluded from any reduction applicable to an

employee’s supplemental annuity, and the opinion in the 2009 memorandum was

amended accordingly.

Legal Opinion L­2012­10 addressed whether an annuitant can start a business,

incorporate the business and have it not affect his retirement payment. The annuitant’s proposed business would involve training various railroads in locomotive and

conductor certification. Section 2(e)(3) of the RRA (45 USC 231a) provides that no

annuity shall be paid with respect to any month in which an individual renders compensated service to a railroad employer. In addition, section 2(f)(1) of the RRA limits

the amount an individual under full retirement age can earn without the individual’s

annuity being subject to a deduction for earnings. When an individual under full

retirement age has earnings which exceed the annual limit, $1 in benefits is withheld

for every $2 in excess earnings. The General Counsel’s ruling was that the work would

not constitute service as an employee.

Legal Opinion L­2012­11 addressed the question whether a new cost accounting

code must be implemented to track the RRB’s expenditure of the administrative funding granted by the Middle Class Tax Relief and Job Creation Act of 2012. The Act provided an appropriation of $500,000 to pay for the agency’s additional administrative

expenses incurred in administering the new extension of railroad unemployment benefits. Although the Department of Treasury had not provided any direct guidance to the

RRB as to the cost accounting procedures to be used in administering the Act, the
LEGAL RULINGS 49

agency did receive guidance with respect to administration of funds provided by the

Worker, Homeownership, and Business Assistance Act of 2009. Since the language in

the 2012 law is very similar to the 2009 one, the legal opinion recommended that the

agency handle the funds consistently and separately track the new $500,000

appropriation.

Legal Opinion L­2012­19 addressed whether an employee should be allowed to

retain money received for services as petit juror in Alabama Circuit Court. The

Alabama petit juror fees are classified as an expense allowance that amounts to $10 per

day plus an additional 5 cents for each mile traveled to and from the court (Alabama

Legal Code Section 12­19­210). Per Legal Opinion L­92­64, the payment of expenses, as

opposed to the payment of compensation, are allowed to be kept by the employee as a

reimbursement. The previous opinion held that payments not classified solely as being

for expenses must be credited against an employee’s pay for that time period, per 5 USC

5515 and Comptroller General Decision File No. B­240962 (1991). Therefore, L­2012­19

concluded that the payments to the employee should be classified as reimbursement for

expenses that could be retained by the employee without an offset against any salary

received.

Legal Opinion L­2012­23 ruled on how benefits paid by the RRB should be treated

for purposes of section 43­8­70 of the Alabama Probate Code. This was an attempt to

determine the value of the “separate estate” of an annuitant’s widow. The legal opinion

advised that the RRA replaces the Social Security Act with respect to employment in

the railroad industry and that benefits under both Acts may be altered or eliminated by

Congress at any time. The benefits are not contractual in nature. Therefore, the annuitant’s widow did not acquire a property interest upon the death of the annuitant in the

annuity paid to her by the RRB.

Legal Opinion 2012­29 regarded clarification of the beginning date for an age and

service or spouse annuity based on an application filed on the earnings of an employee

who participates in the Voluntary Disclosure and Disposition Program. The program,

developed by the U.S. Department of Justice, allowed a select group of Long Island Rail

Road retirees who made false statements on their disability applications the option to

participate by submitting one of two applications, each with a cut­off date. The “early”

participants, who filed before September 14, 2012, did not have to repay any disability

annuities received; the “standard” participants, who filed after that date, had to repay

50 percent of the disability annuities received. Also, all participants could cancel their

disability application and reapply for an age and service annuity.

It was possible for the annuitant to file an application for an age and service annuity which would establish a beginning date retroactive to the period of time the program

participant received a payment based on the disability application that had not been

fully repaid. Thus, the annuitant could receive two annuity payments for the same

month­­the first representing the unrecovered disability annuity based upon the cancelled application, and the second representing the new age and service annuity based
50 2013 Annual Report, U.S. Railroad Retirement Board
 

upon the new application. In addition, some spouses of the participants were also

receiving annuities. Since section 2(c) of the RRA (45 USC 231a) requires that an

employee be entitled to an annuity in order for a spouse to receive an annuity, the cancellation of the employee’s application for an annuity causes, in effect, the cancellation

of the spouse’s application.

The General Counsel ruled that the annuity beginning date should be established

consistent with the provisions of the RRA. Therefore, the program participants and

spouses must file new applications if they want to receive an annuity under the RRA.

The spouse’s annuity date should be established in accordance with applicable law. If

the employee’s annuity is not payable for a month because the disability annuity was

also paid to the program participant and not fully recovered, the spouse’s annuity is

also not payable for that month for the same reason.

Legal Opinion 2012­35 reviewed the degree of oversight which the RRB exercises

over the staff compensation and administrative expenses of the National Railroad

Retirement Investment Trust. As set forth in section 15(j)(4) of the RRA

(45 USC 231n), the primary duties of the Trust are to invest assets of the Trust in a

manner consistent with such investment guidelines, either directly or through the

retention of independent investment managers; and to transfer money from the assets

of the Trust to the disbursing agent to pay benefits under the RRA. The Act allows the

Trust to employ professional staff and contract with outside advisers “for the proper

administration of the Trust.” Compensation for these services must be on a fixed contract fee basis, or on such other terms as are customary for such services. That section

further grants the Trust general authority to conduct business, to carry on operations,

to exercise its powers within or without the District of Columbia and “to possess and

exercise any other powers appropriate to carry out the purposes of the Trust.”

Administrative expenses incurred in these activities must be paid from the assets of

the Trust.

The May 2001 House Report on H.R. 1140, which established the Trust, explained

that Trustees would be subject to reporting and fiduciary standards parallel to the

requirements imposed on fiduciaries of private employer pension benefit plans under

the Employer Retirement Income Security Act (ERISA). The various paragraphs of

RRA section 15(j), which remove the RRB from Trustee selection, detail at length the

fiduciary and reporting duties of the Trust, and specify a single means of enforcement

by the RRB of these standards and duties, clearly demonstrate that Congress expected

the reporting and enforcement provisions to operate together, along the model of private plans subject to the fiduciary provisions of ERISA.
LEGAL RULINGS 51

Appeals

Any claimant for benefits under the Railroad Retirement or Railroad Unemployment Insurance Acts may appeal a determination he or she feels is not justified. This

appeal must be filed within certain time frames. Appeals are heard and decided by the

RRB’s Bureau of Hearings and Appeals. An appellant who is dissatisfied with the decision on his or her appeal may further appeal the case to the three­member Board within a prescribed period of time.

Railroad Retirement Act

During fiscal year 2012, 421 appeals were filed with the Bureau of Hearings and

Appeals under the Railroad Retirement Act, and the Bureau rendered decisions in 451

appeals. The initial or reconsideration decision was sustained in 178 cases. In 273

appeals the decision was favorable to the claimant in whole or in part.

Seventy­three appeals were filed with the RRB in fiscal year 2012, which, added to

the 34 appeals carried over from the previous year, brought the total to be considered to

107. Of 70 decisions, 60 sustained previous rulings of the hearings officer, one was

granted, two were dismissed, two were remanded to the Bureau of Hearings and

Appeals, two were affirmed in part and denied in part, one was remanded to the

Reconsideration Section, one was remanded to the Office of Programs, and two were

reversed. At the end of the year, 37 appeals were pending before the Board.

Railroad Unemployment Insurance Act

During fiscal year 2012, 79 appeals were filed with the Bureau of Hearings and

Appeals under the Railroad Unemployment Insurance Act, and the Bureau rendered

decisions in 59 appeals. The initial or reconsideration decision was sustained in 43

cases. In 16 appeals the decision was favorable to the claimant in whole or in part.

Eleven appeals were filed with the Board in fiscal year 2012. The Board rendered

decisions in seven cases of appeals from the decision of the referee, that affirmed the

decision of the referee, and one that was granted. At the end of the year, three appeals

were pending before the Board.
STATISTICAL 

TABLES 
Table 1.--Beneficiaries and benefits paid under the Railroad Retirement Act and the Railroad Unemployment Insurance Act, 

by fiscal year, 2003-2012, cash basis 

Fiscal year Total1 Retirement2 Survivor2 Unemployment3 Sickness 

BENEFICIARIES (in thousands)2003....................................................... 699 465 211 15 23
 

2004....................................................... 677 456 203 12 22
 

2005....................................................... 659 448 194 10 21
 

2006....................................................... 643 441 187 9 20
 

2007....................................................... 641 444 180 10 19
 

2008....................................................... 623 433 174 11 19
 

2009....................................................... 626 430 167 24 18
 

2010....................................................... 617 428 161 22 18
 

2011....................................................... 603 429 156 11 18
 

2012....................................................... 595 429 150 10 17
 

BENEFIT PAYMENTS (in millions)2003....................................................... $8,957.3 $6,726.0 $2,136.9 $44.3 $50.1
 2004....................................................... 9,091.3 6,876.9 2,131.3 37.7 45.3
 

2005....................................................... 9,254.0 7,051.6 2,129.5 29.2 43.7
 

2006....................................................... 9,513.7 7,294.0 2,146.9 30.8 42.1
 

2007....................................................... 9,871.5 7,641.1 2,156.4 27.8 46.2
 

2008....................................................... 10,115.4 7,877.0 2,158.1 35.1 44.9
 

2009....................................................... 10,663.8 8,311.0 2,192.0 111.7 48.1
 2010....................................................... 10,939.8 8,588.6 2,187.1 109.6 50.0
 2011....................................................... 11,047.2 8,778.5 2,165.3 48.3 52.3
 

2012....................................................... 11,418.8 9,155.4 2,171.7 41.1 47.5
 

1 Beginning in fiscal year 2008, beneficiaries and benefit payments include partition payments to spouses and divorced spouses where the employee is deceased or not

 otherwise entitled to an annuity. Benefit payments also include a small amount of payments for hospital insurance benefits for services in Canada. 2 Retirement benefits include vested dual benefit and supplemental annuity payments. Survivor benefits include vested dual benefit payments. 3 Includes temporary extended unemployment 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, and the Middle Class Tax Relief and Job Creation Act of 2012.

NOTE.-- Number of beneficiaries represents all individuals paid benefits in year. In total number for each year, beneficiaries are counted only once, even though they may have received more than one type of benefit. In fiscal year 2012, 7,400 individuals received both retirement and survivor benefits, 900 employees received both unemployment and sickness benefits, and 2,800 employees received benefits under both the Railroad Retirement Act and the Railroad Unemployment Insurance Act. These figures are partlyestimated, and totals for earlier years are similarly adjusted. 

54 2013 Annual Report, U.S. Railroad Retirement Board
 
Table 2.--Status of the Railroad Retirement Act accounts and trust funds, 

by fiscal year 2003-2012 (In millions), cash basis 

Fiscal Year 

Item 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 

RAILROAD RETIREMENT ACCOUNTReceipts

Tax transfers 1.................................................................. $2,651.4 $2,611.0 $2,606.6 $2,674.8 $2,637.8 $2,636.5 $2,501.2 $2,599.0 $2,712.7 $2,659.8 

Interest and profit on investments 2....................................... 291.8 15.1 15.8 19.6 19.3 12.9 12.0 11.0 12.3 11.4 

Transfers from the National RR Investment Trust 3.................. 300.0 1,564.0 809.0 947.0 1,391.0 1,298.0 1,553.0 1,989.0 1,744.0 2,026.0 Transfers from the SSEB Account 3....................................... ........ 223.0 149.0 38.0 181.0 147.0 ........ 81.0 255.0 19.0 

Loan repayments from RUI Account 4.................................. 8.2 ........ ........ ........ ........ ........ ........ ........ 48.4 ........ 

Expenditures

Benefit payments 5............................................................ $3,504.1 $3,602.4 $3,679.0 $3,808.8 $4,073.0 $4,121.8 $4,326.9 $4,474.4 $4,600.3 $4,775.0 

Financial Interchange adjustment 6....................................... 72.1 36.6 (137.4) (85.9) (45.7) (100.0) (104.6) (13.1) (88.5) (141.9) 

Net transfers to administration............................................. 64.0 65.3 73.7 69.9 64.0 58.4 63.4 68.7 73.6 69.6 Transfers to the National RR Investment Trust 3..................... 17,750.0 586.0 ........ ........ ........ ........ ........ ........ ........ ........ 

Loans to RUI Account......................................................... ........ ........ ........ ........ ........ ........ ........ 46.5 ........ ........ 

Balance at end of period 7......................................................... $502.2 $625.6 $591.1 $479.4 $616.9 $632.0 $418.2 $519.0 $706.5 $720.2 

SOCIAL SECURITY EQUIVALENT BENEFIT ACCOUNT 8 

Receipts

Tax transfers 1.................................................................. $2,128.0 $2,240.8 $2,370.8 $2,462.5 $2,538.0 $2,649.3 $2,528.9 $2,514.9 $2,675.3 $2,878.5 

Interest and profit on investments 2....................................... 59.1 20.0 23.3 28.0 29.0 19.9 19.0 18.9 21.9 20.1 

Transfers under financial interchange 9................................. 3,747.3 3,843.5 3,917.3 3,846.3 4,019.8 4,049.9 4,137.3 4,391.6 4,574.3 4,651.0 

Advances against financial interchange 10.............................. 3,236.1 3,245.7 3,256.0 3,241.3 3,232.3 3,385.6 3,661.1 3,819.0 3,820.4 3,738.6 

Expenditures

Benefit payments............................................................... $5,229.5 $5,288.7 $5,395.8 $5,536.1 $5,637.9 $5,835.8 $6,107.6 $6,243.7 $6,291.1 $6,506.7 

Financial Interchange adjustment 6....................................... (72.1) (36.6) 137.4 85.9 45.7 100.0 104.6 13.1 88.5 141.9 

Net transfers to administration............................................. 22.8 22.9 24.1 24.3 25.6 38.5 32.5 33.6 29.6 31.4 

Transfers under financial interchange 9................................. 426.3 418.6 444.9 471.5 483.3 525.7 524.3 535.1 477.2 510.9 

Repayment of advances against financial interchange 4......... 3,342.4 3,409.9 3,399.6 3,419.7 3,418.7 3,410.8 3,564.8 3,837.6 3,946.6 3,946.3 

Transfers to the National RR Investment Trust/RR Account 3... 1,438.0 223.0 149.0 38.0 181.0 147.0 ........ 81.0 255.0 19.0 

Balance at end of period............................................................ $674.6 $698.2 $714.8 $717.4 $744.2 $791.2 $803.8 $804.0 $807.9 $939.8 

STATISTICAL TABLES 55
 

See footnotes at end of table. 
Table 2.--Status of the Railroad Retirement Act accounts and trust funds, 

by fiscal year, 2003-2012 (In millions), cash basis - Continued 

Fiscal Year 

Item 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 

NATIONAL RAILROAD RETIREMENT INVESTMENT TRUST 11 

Cash and investment balance at end of period 12........................... $23,016.5 $25,019.7 $27,636.6 $29,327.9 $32,631.4 $25,271.5 $23,330.8 $23,770.4 $22,119.0 $23,586.2 

DUAL BENEFITS PAYMENTS ACCOUNT 13 

Dual benefit transfers 14............................................................ $131.1 $118.3 $107.1 $97.0 $88.0 $79.0 $72.0 $64.0 $56.9 $50.9 

Benefit payments..................................................................... 129.4 117.3 106.3 96.0 86.5 77.7 69.5 62.1 55.2 48.6 

Balance at end of period 7......................................................... $1.8 $1.0 $0.8 $1.0 $1.5 $1.3 $2.5 $1.9 $1.7 $2.3 

1 NetofU.S.Treasuryadjustmentsforpayrolltaxrefundstocertaincarriersandtheiremployeesforpriorperiods.Includes Federalincometaxtransfersundersection72(r)oftheInternalRevenueCodeasamended.Incalendaryears20112012,SocialEcurityEquivalentBenefitAccountincludesgeneralrevenuetransfersundertheTaxRelief,Unemployment

InsuranceReauthorization,andJobCreationActof2010.Infiscalyear2012,SocialSecurityEquivalentBenefitAccountincludesonetimegeneralrevenuetransferundertheHiring

IncentivestoRestoreEmploymentActof2010.2NetofinterestonU.S.Treasuryadjustmentsforpayrolltaxrefunds(seenote1).3UndertheRailroadRetirementandSurvivors'ImprovementActof2001,asamended,theportionoftheRalroadRetirementAccountnotneededtopaycurrentadministrativeexpensesistobetransferredtotheNationalRailroadRetirementInvestmentTrust(Trust).TheTrustmaytransferfundsbacktotheRailroadRetirementAccountforpaymentofbenefits.ThebalanceoftheSocialSecurityEquivalentBenefit(SSEB)AcccountnotneededtopaycurrentbenefitsandadministrativeexpensesistobetransferredtotheTrustortotheRailroadRetirementAccount.TheSSEBAccounttransferredfundstotheTrustinfiscalyear2003andtotheRailroadRetirementAccountthereafter.

4Includesinterest.5EffectiveJanuary1,2002,supplementalbenefitsarepaidfromtheRailroadRetirementAccount.

6AdjustmentsinbenefitpaymentschargedtotheSocialSecurityEquivalentBenefitAccountascomparedtoactualfinancial interchangebenefits,withinterest.

7TheRailroadRetirementAccountbalancereflects(a)thecurrentnetdifferencebetweenRRBpaymentsofsocialsecuritybenefitsandthereceiptofreimbursementsforsuchpayments,(b)liabilitiesforuncashedcheckcreditsreceivedfromU.S.Treasury,and(c)creditsforundistributedpaymentreturnsandrecoveries.TheDualBenefitsPayments

Accountbalancedoesnotcarryovertothefollowingyear.8EstablishedOctober1,1984,tokeeptrackofthefinancingandpaymentofsocialsecuritylevelportionsofrailroadretirementbeneffits.9TransferstoorfromOASDHITrustFundsundersection77(c)(2)ofthe1974RailroadRetirementAct.10Advances,includinginterest,fromU.S.Treasurytooffsetlaginreceiptoffinancialinterchangefundsundersection7(c)(4)ofthe1974RailroadRetirementActasamended.

11EstablishedFebruary1,2002,forinvestmentofrailroadretirementassets.

12Source:NationalRailroadRetirementInvestmentTrust.13EstablishedOctober1,1981,tokeeptrackofthefinancingandpaymentofvesteddualbenefits.

14TransfersfromU.S.Treasuryundersection15(d)ofthe1974RailroadRetirementActandFederalincometaxtransfersundersection72(r)oftheInternalRevenueCodeasamended.

56 2013 Annual Report, U.S. Railroad Retirement Board
 
Table 3.--Status of the Railroad Unemployment Insurance Account, by fiscal year, 2008-2012 (In thousands), cash basis

Fiscal year

 Item 2008 2009 2010 2011 2012 

RECEIPTS

 Taxes............................................................... $67,074 $69,600 $75,298 $149,287 $184,452

 Interest............................................................ 6,838 4,688 1,354	 1,933 4,106

 Transfer from Administration fund under sec. 11(d) of the RUI Act........................ 8,711 9,808	 8,305 7,918 11,219 Undistributed recoveries of benefit payments1

...... (34) (169) 354	 (48) (21)

 Loans from the RR Account.............................. .... 	 .... 46,500 .... .... 

 Total............................................................ $82,589 $83,927 $131,812 $159,089 $199,755 

EXPENDITURES

 Benefit payments2............................................. $80,068 $149,555 $139,392 $91,929 $81,782

 Repayment of RRA Loans................................. .... .... .... 48,408 .... 

 Funding for Office of Inspector General............... 1,550 1,536 1,274 1,077 1,022

 Total............................................................ $81,618 $151,091 $140,666 $141,414 $82,804 

Cash balance end of period................................. $105,287 $38,123 $29,269 $46,944 $163,895 

LOANS DUE RAILROAD RETIREMENT ACCOUNT

Loans............................................................... .... .... $46,500 .... .... 

 Interest accrued................................................ .... .... 878 $1,030 .... 

 Repayment from RUI Account.............................. .... .... .... 48,408 .... 

Due RR Account end of period.............................. .... 	 .... $47,378 .... .... 

1 Net of distributed payments.2	 Excludes temporary extended unemployment benefits authorized by the American Recovery and Reinvestment Act of 2009, the Worker, Homeownership, and Business 

Assistance Act of 2009, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the Temporary Payroll Tax Cut Continuation Act of 2011,and the Middle Class Tax Relief and Job Creation Act of 2012 . FY 2009: $10,249,000, FY 2010: $20,171,000, FY 2011: $8,736,000, and FY 2012: $6,737,000.

STATISTICAL TABLES 57
 
Table 4.--Status of the RUIA Administration Fund, 

by fiscal year, 2003-2012 (In thousands), cash basis

Transfer to

Railroad

Unemployment

Insurance 

Taxes and Administrative Account under Balance at 

Fiscal year interest expenditures1 Sec. 11d2 end of period 

2003...................................... $21,313 $15,407 $5,645 $8,304 


2004...................................... 20,787 15,846 6,608 6,637 


2005...................................... 21,126 15,761 6,544 5,457 
2006...................................... 21,980 10,610 6,664 10,163 
2007...................................... 23,082 14,415 8,923 9,907 


2008...................................... 23,945 14,713 8,711 10,427 
2009...................................... 23,151 14,305 9,808 9,465 


2010...................................... 22,990 15,729 8,305 8,421 
2011...................................... 23,722 12,442 7,918 11,783 
2012...................................... 25,463 14,608 11,219 11,419
 

1 Expenditures for each year included encumbrances as of end of year. Fiscal years 2006-2009 and 2011-2012 reflect

reallocation of prior period administrative expenses between the Railroad Retirement Act and Railroad UnemploymentInsurance Act programs.

2 Transfers to the Railroad Unemployment Insurance Account are based on the amount the accrual balance on the prior

September 30 exceeded $6,000,000. 

58 2013 Annual Report, U.S. Railroad Retirement Board
 
STATISTICAL

TABLES 59 Retired employees Spouses and Widowed Supple- divorced Aged Disabled mothers Remarried Divorced Total1 Age Disability mental2 spouses widow(er)s3 widow(er)s (fathers)3 Children widow(er)s widow(er)s3 NUMBER AT END OF YEAR 2003 ......................... 756,176 210,363 82,572 129,201 146,740 153,673 5,105 1,035 12,472 5,421 9,541 2004 ......................... 736,787 204,650 83,302 125,992 142,881 146,943 4,936 1,050 12,176 5,256 9,550 2005 ......................... 721,659 199,767 84,000 123,550 141,330 140,595 4,835 999 11,795 5,078 9,657 2006 ......................... 706,158 195,380 84,321 121,407 138,492 134,811 4,733 927 11,448 4,907 9,682 2007 ......................... 696,472 193,282 84,319 121,188 137,371 129,350 4,596 877 11,078 4,751 9,615 2008 ......................... 686,636 191,146 84,049 120,824 136,332 124,089 4,450 832 10,692 4,552 9,552 2009 ......................... 680,534 190,302 83,804 120,778 136,467 119,459 4,323 814 10,417 4,361 9,520 2010 ......................... 676,653 190,236 83,517 121,166 137,112 114,929 4,251 776 10,168 4,161 9,595 2011 ......................... 672,484 190,100 83,109 121,422 138,253 110,372 4,136 745 9,881 4,003 9,598 2012 ......................... 668,957 189,909 82,436 121,614 139,741 106,268 4,081 739 9,687 3,824 9,660 AVERAGE AMOUNT Table 5.--Number and average amount of retirement and survivor annuities in current-payment status at end of year, by type of annuitant and fiscal year, 2003-2012 Fiscal year AVERAGE AMOUNT 2003 ......................... $1,554 $1,683 $42 $598 $985 $831 $1,279 $744 $647 $649 2004 ......................... 1,619 1,751 42 620 1,026 865 1,337 766 673 674 2005 ......................... 1,693 1,825 42 638 1,069 902 1,388 789 704 703 2006 ......................... 1,789 1,920 42 671 1,122 946 1,423 823 747 740 2007 ......................... 1,890 2,005 42 709 1,173 989 1,471 853 781 773 2008 ......................... 1,982 2,070 42 742 1,222 1,025 1,529 879 816 804 2009 ......................... 2,126 2,197 42 795 1,294 1,084 1,597 935 879 867 2010 ......................... 2,186 2,221 42 817 1,329 1,108 1,643 937 896 880 2011 ......................... 2,244 2,244 42 839 1,366 1,133 1,663 941 907 892 2012 ......................... 2,363 2,332 42 882 1,426 1,181 1,700 980 956 938 1 Includes annuities to parents and, beginning in fiscal year 2008, partition payments to spouses and divorced spouses where the employee is deceased or not otherwise entitled to an annuity. On September 30, 2012, there were 28 parents' annuities in current-payment status averaging $889 and 970 partition payments averaging $294. 2 Excludes partition payments to spouses and divorced spouses where the employee is deceased. Averages are after court-ordered partitions. 3 Numbers include annuities temporarily being paid at spouse annuity rates, pending final adjudication of survivor annuities. NOTE.--Data exclude survivor (option) annuities, last payable in December 2005. Retired employees Spouses and Widowed Supple- divorced Aged Disabled mothers Remarried Divorced Total1 Age Disability mental2 spouses widow(er)s3 widow(er)s (fathers)3 Children widow(er)s widow(er)s3 NUMBER AT END OF YEAR 2003 ............................ 756,176 210,363 82,572 129,201 146,740 153,673 5,105 1,035 12,472 5,421 9,541 2004 ............................ 736,787 204,650 83,302 125,992 142,881 146,943 4,936 1,050 12,176 5,256 9,550 2005 ............................ 721,659 199,767 84,000 123,550 141,330 140,595 4,835 999 11,795 5,078 9,657 2006 ............................ 706,158 195,380 84,321 121,407 138,492 134,811 4,733 927 11,448 4,907 9,682 2007 ............................ 696,472 193,282 84,319 121,188 137,371 129,350 4,596 877 11,078 4,751 9,615 2008 ............................ 686,636 191,146 84,049 120,824 136,332 124,089 4,450 832 10,692 4,552 9,552 2009 ............................ 680,534 190,302 83,804 120,778 136,467 119,459 4,323 814 10,417 4,361 9,520 2010 ............................ 676,653 190,236 83,517 121,166 137,112 114,929 4,251 776 10,168 4,161 9,595 2011 ............................ 672,484 190,100 83,109 121,422 138,253 110,372 4,136 745 9,881 4,003 9,598 2012 ............................ 668,957 189,909 82,436 121,614 139,741 106,268 4,081 739 9,687 3,824 9,660 AVERAGE AMOUNT

Table 5.--Number and average amount of retirement and survivor annuities in current-payment status at end of year,

by type of annuitant and fiscal year, 2003-2012

Fiscal year

2003 ............................ ......... $1,554 $1,683 $42 $598 $985 $831 $1,279 $744 $647 $649

2004 ............................ ......... 1,619 1,751 42 620 1,026 865 1,337 766 673 6742005 ............................ ......... 1,693 1,825 42 638 1,069 902 1,388 789 704 7032006 ............................ ......... 1,789 1,920 42 671 1,122 946 1,423 823 747 7402007 ............................ ......... 1,890 2,005 42 709 1,173 989 1,471 853 781 7732008 ............................ ......... 1,982 2,070 42 742 1,222 1,025 1,529 879 816 8042009 ............................ ......... 2,126 2,197 42 795 1,294 1,084 1,597 935 879 8672010 ............................ ......... 2,186 2,221 42 817 1,329 1,108 1,643 937 896 8802011 ............................ ......... 2,244 2,244 42 839 1,366 1,133 1,663 941 907 8922012 ............................ ......... 2,363 2,332 42 882 1,426 1,181 1,700 980 956 938

1 Includes annuities to parents and, beginning in fiscal year 2008, partition payments to spouses and divorced spouses where the employee is deceased or not

 otherwise entitled to an annuity. On September 30, 2012, there were 28 parents' annuities in current-payment status averaging $889 and 970 partition payments

 averaging $294. 

2 Excludes partition payments to spouses and divorced spouses where the employee is deceased. Averages are after court-ordered partitions.3 Numbers include annuities temporarily being paid at spouse annuity rates, pending final adjudication of survivor annuities. 

NOTE.--Data exclude survivor (option) annuities, last payable in December 2005. 
0 0 9 6 9 6 63 89 99 9 5 0

Table 6.--Number and average amount of retirement and survivor annuities awarded during year, 

by type of annuitant and fiscal year, 2003-2012

Retired employees Spouses

and Widowed 

Supple- divorced Aged Disabled mothers Remarried Divorced

Fiscal year Total1 Age Disability mental2 spouses widow(er)s widow(er)s (fathers) Children widow(er)s widow(er)s 

NUMBER AWARDED2003......................... 37,841 8,261 4,955 6,124 8,749 7,800 244 162 645 216 684
 2004......................... 36,083 7,801 4,764 5,590 8,579 7,320 218 186 660 258 702
 20053........................ 37,405 7,958 4,399 5,671 10,380 7,020 239 176 581 221 751
 

2006 ........................ 35,137 7,919 4,128 5,717 8,830 6,820 204 107 504 197 709
 2007......................... 38,743 9,643 3,619 7,273 10,065 6,482 205 113 498 182 661
 2008.......................... 38,591 9,753 3,402 7,090 10,127 6,511 166 143 515 188 693
 2009.......................... 39,317 10,310 3,213 7,015 10,919 6,283 181 142 463 166 622
 2010.......................... 40,191 0, 3,161 ,3 11,256 6,163 189 99 429 157 702
 0, 10,712 3, 7,319 ,5 

2011.......................... 39,647 10,542 3,086 7,087 11,301 6,053 173 110 417 158 718 2012.......................... 38,649 10,054 2,858 6,778 11,479 5,828 181 115 454 164 734 Cumulative 1937-2012 5,091,574 1,483,154 519,791 496,546 1,177,695 1,028,995 18,508 85,101 237,489 15,522 25,231 AVERAGE AMOUNT2003......................... ........ $2,201 $2,092 $41 $733 $1,346 $1,262 $1,384 $953 $775 $743
 2004......................... ........ 2,247 2,168 41 744 1,378 1,257 1,550 998 816 777
 20053........................ ........ 2,285 2,210 41 655 1,416 1,288 1,397 1,023 821 796
 2006 ........ 2 389 2 308 , 41 794 1 493 1,334 1 492 1,056 865 822
 2006......................... 2,389 41 794 1,493 1 334 1,492 1 056 865 822
2007......................... ........ 2,562 2,397 41 890 1,557 1,373 1,585 1,099 885 854
 2008......................... ........ 2,650 2,441 41 911 1,629 1,385 1,721 1,153 964 901
 2009......................... ........ 2,685 2,558 41 931 1,708 1,443 1,709 1,233 1,030 996
 2010......................... ........ 2,786 2,509 41 950 1,740 1,536 1,778 1,203 1,064 963
 2011......................... ........ 2,814 2,524 41 958 1,789 1,531 1,779 1,194 1,077 991
 2012......................... ........ 2,888 2,585 41 981 1,859 1,515 1,647 1,220 1,130 1,049
 

1 Excludes partition payments to spouses and divorced spouses where the employee is deceased or not otherwise entitled to an annuity. Includes 

annuities to parents. Fiscal year 2012 total includes 4 annuities to parents averaging $705. Cumulative total includes 3,542 annuities to parents.

2 Excludes partition payments to spouses and divorced spouses where the employee is deceased. Averages are after court-ordered partitions.3 An unusually large number of spouse awards were made with small or no tier 1 amounts, resulting in larger than normal numbers of spouse awards and smaller

than normal award amounts. than normal award amounts.

NOTE.--Cumulative figures reflect adjustments not made in yearly data, but average amounts for each year include effects of changes in rates made by the end of the year. 

60 2013 Annual Report, U.S. Railroad Retirement Board
 
Table 7.--Retirement and survivor benefits in current-payment status on September 30, 2012, 

by class and state (Amounts in thousands) 

Total1 Retirement benefits2 Survivor benefits

 Monthly Monthly Monthly 

State3 Number amount Number amount Number amount 

Alabama.......................................................................... 11,900 $17,397 9,500 $14,172 2,400 $3,224 

Alaska............................................................................ 200 297 200 238 100 59 

Arizona........................................................................... 11,800 16,383 9,500 13,322 2,300 3,054 

Arkansas........................................................................ 12,400 18,149 10,400 15,445 2,000 2,697 

California........................................................................ 34,500 46,762 27,400 37,692 7,000 9,054 

Colorado......................................................................... 9,700 14,325 8,000 12,026 1,700 2,294 Connecticut...................................................................... 3,000 4,791 2,300 3,840 700 951 

Delaware......................................................................... 2,400 3,675 2,000 3,057 400 618 

Washington DC................................................................. 500 586 400 471 100 115 Florida............................................................................. 36,100 50,811 29,500 42,394 6,600 8,404 

Georgia........................................................................... 20,800 30,476 17,200 25,627 3,600 4,845 

(4) Hawaii............................................................................. 200 254 200 203 51 

Idaho............................................................................... 5,700 8,264 4,700 6,815 1,000 1,447 

Illinois.............................................................................. 42,000 57,950 33,600 46,908 8,200 11,017 

Indiana............................................................................ 20,000 28,614 16,000 23,131 4,000 5,473 

Iowa................................................................................. 11,200 15,773 9,000 12,708 2,200 3,060 

Kansas............................................................................ 17,500 25,593 14,400 21,251 3,100 4,333 

Kentucky......................................................................... 18,500 26,164 14,900 21,264 3,600 4,892 

Louisiana......................................................................... 9,300 13,207 7,400 10,625 1,900 2,579 

Maine.............................................................................. 3,300 4,325 2,600 3,332 700 992 

Maryland......................................................................... 10,500 14,737 8,200 11,732 2,300 3,003 

Massachusetts.................................................................. 4,700 6,469 3,700 5,070 1,100 1,397 

Michigan......................................................................... 17,500 24,396 14,100 19,742 3,400 4,644 

Minnesota........................................................................ 18,300 25,292 14,600 20,328 3,700 4,954 

Mississippi........................................................................ 7,700 10,646 6,100 8,601 1,500 2,043 

Missouri.......................................................................... 23,700 33,548 19,300 27,683 4,400 5,851 

Montana.......................................................................... 7,200 10,497 5,900 8,656 1,300 1,837 

Nebraska......................................................................... 16,000 24,775 13,600 21,298 2,400 3,467 

Nevada............................................................................ 4,100 5,776 3,400 4,771 800 1,003 

New Hampshire................................................................. 1,000 1,438 800 1,141 200 298 

New Jersey....................................................................... 10,300 15,298 7,800 12,111 2,400 3,186
 

New Mexico...................................................................... 5,300 7,430 4,200 5,932 1,100 1,495
 

New York......................................................................... 25,200 38,484 19,700 31,441 5,500 7,037
 

North Carolina.................................................................... 12,700 17,355 10,000 13,946 2,700 3,406
 North Dakota..................................................................... 3,900 5,576 3,000 4,406 800 1,167
 

STATISTICAL TABLES 61
 

See footnotes at end of table. 
Table 7.--Retirement and survivor benefits in current-payment status on September 30, 2012, 

by class and state (Amounts in thousands)- Continued

Total1 Retirement benefits2 Survivor benefits

 Monthly Monthly Monthly 

State3 Number amount Number amount Number amount 

Ohio............................................................................... 

Oklahoma....................................................................... 

Oregon...........................................................................

Pennsylvania....................................................................Rhode Island.................................................................... South Carolina.................................................................. 

South Dakota................................................................... Tennessee...................................................................... 

Texas............................................................................. 

Utah................................................................................

Vermont......................................................................... 

Virginia........................................................................... 

Washington.....................................................................

West Virginia.................................................................... 

Wisconsin....................................................................... 

Wyoming........................................................................ 

Outside United States:Canada...........................................................................Mexico............................................................................

Other.............................................................................. 

32,500 

6,200 

10,000 40,600 

700

8,300 1,900 

15,200 

41,900 

6,400 

900

20 600,13,900 

10,500 

12,300 

4,100 2,500 

300700 

$44,628 

8,803 

14,016 57,464 

936 

11,838 

2,709 

21,888 

61,342 

9,436 

1,158 

29 302,

19,714 

14,785 

16,686 

6,337 1,767 

232 738 

25,200

4,900 7,900 

30,600 

500 

6,700 

1,500 

12,200 

33,900 

5,100 

700 

16 300,

11,200 

8,000 

9,900 

3,400 1,600 

100 400 

 $34,767 

7,126 

11,279 

44,008 

750 

9,727 2,266 

17,870 

50,414 

7,597 

877 

23 648,

15,986 

11,308 

13,426 

5,426 

942 

92 

476 

7,300

1,300 

2,000 

10,000 

100 

1,600 

300 

3,000 

7,900 

1,300 

200 

4 300,

2,700 

2,500 

2,400 

600 900 

100 

200 

 $9,854 

1,674 

2,731 

13,450 

186 

2,107 

442 

4,012 

10,892 

1,837 

281 

5 649,

3,722 

3,474 

3,255 

909 825 140 261

62 2013 Annual Report, U.S. Railroad Retirement Board
 

 Total.............................................................................. 669,000 $949,297 533,700 $769,361 134,300 $179,650
 

1 Includes 1,000 partition payments to spouses and divorced spouses where the employee is deceased or not otherwise entitled to an annuity.
2 Includes 121,600 supplemental annuities to employees receiving regular annuities. In a relatively small number of cases, employees were also receiving spouse or widow(er)'s
 

benefits.


3 State of residence of beneficiary on September 30, 2012.
4 Less than 50.


NOTE.--Retirement benefits include regular and supplemental employee annuities, spouse annuities and divorced spouse annuities. Survivor benefits include annuities to aged and 


disabled widow(er)s, widowed mothers and fathers, remarried and divorced widow(er)s, children, parents, and widow(er)s' annuities temporarily being paid at spouse annuity rates
pending final adjudication of survivor annuities. Benefit amounts exclude social security payments to dual beneficiaries.
 
Table 8.-- Principal administrative data for the unemployment and sickness benefit programs, 

benefit years 2007-2008 through 2011-2012, cash basis

Item 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 

Qualified employees................................. 255,200 255,500 252,300 239,100 235,100
 

Maximum daily benefit rate...................... $59 $61 $64 $66 $66
 

UNEMPLOYMENT BENEFITS

Net amount of benefits paid (thousands) $32,212 $77,804 $138,175 $51,424 $40,691 

Payments:1

Number................................................... 64,600 139,100 241,200 89,300 71,800


 Average amount per two week

claim period......................................... $519 $520 $553 $566 $573
 

Beneficiaries............................................... 10,100 21,400 24,800 11,600 9,200
 

Applications received................................ 13,200 32,600 24,500 14,500 12,300
 

Claims received.......................................... 78,000 166,900 265,900 101,100 81,400
 Normal benefit accounts exhausted........ 2,000 3,100 7,500 2,800 2,200
 

2 (3) (3) (3) (3) (3) Non-compensable waiting period only .. 

SICKNESS BENEFITS

Net amount of benefits paid (thousands) $46,115 $45,158 $52,358 $51,161 $49,056 Payments: 1

Number................................................... 122,400 117,200 120,000 117,100 112,200


 Average amount per two week

claim period......................................... $520 $538 $565 $585 $585
 

Beneficiaries............................................... 18,400 17,600 17,800 17,400 16,700
 

Applications received................................ 22,500 21,500 21,500 21,200 20,600
 

Claims received.......................................... 143,000 137,400 140,400 137,300 131,700
 Normal benefit accounts exhausted........ 3,300 3,100 3,200 3,100 3,000
 

Non-compensable waiting period only2.. 100 100 100 100 100
 

1 Not adjusted for recoveries or settlements of underpayments.
2 Benefits are payable for each day of unemployment or sickness in excess of 7 during the first 14-day registration period in a benefit year.
3 Less than 50.

NOTE.--Data covered program activities during the year, regardless of when unemployment or sickness occurred. Starting in June 2009, includes temporary extended unemployment benefits authorized by the American Recovery and Reinvestment Act of 2009, the Worker,Homeownership, and Business Assistance Act of 2009, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, 

the Temporary Payroll Tax Cut Continuation Act of 2011, and the Middle Class Tax Relief and Job Creation Act of 2012. Net benefits for these temporary payments were $1,058,000 in benefit year 2008-2009, $26,850,000 in 2009-2010, $9,388,000 in 2010-2011 and $7,011,000 in 2011­2012. 

STATISTICAL TABLES 63
 
Table 9.--All employees, new entrants, employees qualified for RUIA benefits, and related data, by employer, 2011 

All employees New entrants Creditable Compensation (thousands)

With 

With 12 months sufficient Qualified Qualified 

of service service for for RUIA for RUIA 

Class or name of employer Total in 2011 RRA annuity benefits Total benefits Tier I Tier II RUIA 

CLASS OF EMPLOYERClass I railroads............................................................... 203,082 159,633 149,804 192,775 20,673 13,489 $12,970,772 $12,095,871 $2,916,393Class II railroads.............................................................. 4,949 3,767 3,550 4,524 450 260 269,128 257,556 68,194 Class III railroads and switching & terminal companies................................. 42,115 33,904 30,594 39,637 2,962 1,643 2,640,305 2,434,075 601,450 Car-loan companies........................................................ 1,427 1,088 993 1,347 227 168 81,287 76,082 20,159 Miscellaneous employers1....................................

... 6,092 4,738 3,389 5,490 772 442 395,644 342,657 83,114

 Total............................................................................... 257,665 203,130 188,330 243,773 25,084 16,002 $16,357,136 $15,206,241 $3,689,310
 SELECTED EMPLOYERS BNSF Railway Co............................................................. 45,653 36,330 34,403 43,135 5,239 3,638 $3,137,165 $2,856,787 $654,638
 Canadian National, U.S. Operations
 Bessemer and Lake Erie Railroad Co........................ 79 58 58 75 7 4 4,317 4,242 1,069


 Chicago Central and Pacific Railroad Co.................. 262 228 226 253 9 4 18,579 16,745 3,922
 Duluth, Missabe and Iron Range Railway Co........... 413 291 223 394 74 64 28,623 25,774 5,678
 Duluth, Winnipeg and Pacific Railway Co................. 106 86 79 100 11 7 8,650 7,569 1,528
 Elgin, Joliet and Eastern Railway Co......................... 236 177 154 227 31 25 14,273 13,796 3,287
 Grand Trunk Western Railroad Co............................ 979 724 785 928 96 60 67,532 60,969 13,771
 Illinois Central Railroad Co......................................... 4,083 3,278 3,131 3,966 269 199 292,406 261,411 59,659
 Pittsburgh and Conneaut Dock Co............................ 32 17 30 27 ..... ..... 1,211 1,211 347


 Wisconsin Central LTD............................................... 1,355 1,061 1,117 1,299 109 71 90,291 83,099 19,400
 Canadian Pacific, Soo Line Corporation Dakota, Minnesota & Eastern Railroad Corp............ 1,288 767 689 1,131 300 171 61,995 60,606 16,279 Delaware and Hudson Railway Co. Inc...................... 572 390 383 531 89 54 31,371 30,048 7,861 Soo Line Railroad Co.................................................. 3,301 2,371 2,144 3,073 551 365 191,853 181,711 45,598 CSX Transportation Inc................................................... 33,533 25,049 24,000 31,271 3,925 2,281 2,092,250 1,961,106 472,193
 Kansas City Southern Railway Co................................. 2,992 2,364 2,053 2,795 326 182 186,349 175,685 42,536
 Gateway Eastern Railway Co..................................... 10 10 8 10 ..... ..... 611 607 160


 Texas Mexican Railway Co......................................... 215 143 143 192 40 20 13,692 12,446 2,860
 

National Railroad Passenger Corp. (Amtrak)................ 22,098 17,704 15,645 21,205 1,554 948 1,373,520 1,284,454 321,445
 Norfolk Southern Corp.................................................... 33,197 26,195 23,061 31,781 3,770 2,614 1,990,779 1,896,584 477,759
 Union Pacific Railroad Co............................................... 52,678 42,390 41,472 50,382 4,273 2,782 3,365,306 3,161,020 766,403
 

64 2013 Annual Report, U.S. Railroad Retirement Board
 

1 Includes labor organizations, lessor companies, employer associations and miscellaneous carrier affiliates.

NOTE.--Tier I compensation excludes miscellaneous compensation taxable at the tier I tax rate. 
     

     

   

     

   

   

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