U.S. Railroad Retirement Board

Mission Statement

T

he 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

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.

Visit the Railroad Retirement Board’s Web Site at

www.rrb.gov

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: 

Office of Public Affairs, U.S. Railroad Retirement Board,

844 North Rush Street,Chicago, IL 60611-2092.
September 8, 1999

TO THE PRESIDENT OF THE UNITED STATES OF AMERICA:

Pursuant to the provisions of section 7(b)(6) of the Railroad Retirement Act and

section 12(l) of the Railroad Unemployment Insurance Act, we have the honor to

submit the 1999 report of the United States Railroad Retirement Board for the

fiscal year ended September 30, 1998.

Respectfully,

Cherryl T. Thomas

V. M. Speakman, Jr.

Jerome F. Kever
UNITED STATES

RAILROAD RETIREMENT BOARD

1999 Annual Report

For Fiscal Year Ended September 30, 1998

THE REPORT IN BRIEF 1

A REVIEW OF OPERATIONS 7

LEGISLATIVE AND ADMINISTRATIVE DEVELOPMENTS 34

LEGAL RULINGS 40

STATISTICAL TABLES 45
THE REPORT IN BRIEF

1

Benefits and Beneficiaries

B

enefits paid under the Railroad Retirement and Railroad Unemployment

Insurance Acts totaled some $8.3 billion in the fiscal year ending

September 30, 1998. Retirement and survivor benefits were paid by the

Railroad Retirement Board to 772,000 beneficiaries during the fiscal year, of whom

718,000 were on the Board’s annuity rolls at the end of the year. Some 31,000 railroad

employees were paid unemployment and/or sickness insurance benefits. About 4,000

beneficiaries received payments under both the Railroad Retirement Act and the

Railroad Unemployment Insurance Act.

Retirement and survivor benefit payments of $8.2 billion during the 1998 fiscal year

were $41 million more than payments in the prior year. Employee and spouse annuitants were paid $6.2 billion, accounting for 75 percent of the total payments. Employees

received $3.7 billion in age annuities, $1.3 billion in disability annuities and $79 million in supplemental annuities, while spouses and divorced spouses received $1.1 billion. Survivors were paid $2 billion in annuities and $6 million in lump-sum benefits.

The total number of beneficiaries who received retirement and survivor benefits

declined by some 27,000 from Fiscal Year 1997.

Gross unemployment and sickness benefits paid in Fiscal Year 1998 totaled $92.4

million. Net benefits totaled some $59.3 million after adjustment for recoveries of benefit payments, including injury settlements, some of which were made in prior years.

Total gross and net benefit payments decreased by approximately $12 million and

$13.6 million, respectively, from the preceding year. Gross unemployment benefits

totaling $28.8 million ($25.9 million net) were paid to 11,000 claimants, while gross

sickness benefits of $63.6 million ($33.4 million net) were paid to 21,000.

Railroad retirement and unemployment insurance benefits totaling

some $8.3 billion were paid by the Railroad Retirement Board to about 800,000 beneficiaries in Fiscal Year 1998. Financial reports issued in 1999 on the solvency of the railroad retirement and railroad unemployment insurance systems were favorable.
Financing

A

t the end of Fiscal Year 1998, the net position of all of the Railroad Retirement

Board trust funds was almost $16.6 billion, with financing sources for the year

exceeding costs by almost $1.2 billion. Investment earnings of almost $1.2 billion during the year, including capital gains of $198.1 million on the sale of investments, were

a major portion of the increase in the net position of the trust funds.

The Board’s 1999 railroad retirement financial report to Congress, which addressed

the 25-year period 1999-2023, contained generally favorable information concerning

railroad retirement financing. It indicated that no cash-flow problems arise over the

25-year projection period. This was an improvement over the previous year’s report

and reflected continued favorable employment experience in the railroad industry.

However, like previous reports, the 1999 report indicated that the long-term stability of

the system, under its current financing structure, is still dependent on future railroad

employment levels.

The Board’s 1999 railroad unemployment insurance financial report was also favorable, indicating that even as maximum benefit rates increase 43 percent from $44 to

$63 from 1998 to 2009, experience-based contribution rates are expected to keep the

unemployment insurance system solvent, except under the Board’s most pessimistic

employment assumption. Even then, projections show only a small, short-term cashflow problem with quick repayment of the loans. The average employer contribution

rate remains well below the maximum throughout the projection period.

No financing changes were recommended by the Board for the railroad retirement

or unemployment insurance systems. The 1999 railroad retirement and railroad

unemployment insurance financial reports are reprinted at the back of this

Annual Report.

Officials

C

herryl T. Thomas continues to serve as Chair of the Railroad Retirement

Board. V. M. Speakman, Jr. continues to serve as Labor Member and

Jerome F. Kever continues to serve as Management Member. 

In December 1998, the Board announced several executive appointments and the

expansion of its Executive Committee as part of an administrative reorganization.

2 1999 Annual Report, U.S. Railroad Retirement Board
Legislation

P

ublic Law 105-33, enacted August 5, 1997, clarified that non-resident aliens are

eligible for benefits under the Railroad Retirement and Railroad Unemployment Insurance Acts. Public Law 105-277, enacted October 21, 1998, provided for the

restoration of annuities to certain divorced spouses of workers whose widows previously

elected to receive lump-sum payments. 

Legal Rulings

T

welve cases involving the Railroad Retirement Board were resolved by the

courts during Fiscal Year 1998. Eight were decided in the Board’s favor and

four were dismissed. A number of significant legal opinions were issued. Four legal

opinions described in the Legal Rulings section of this Report dealt with earnings

restrictions applicable to annuities paid under the Railroad Retirement Act.

Service

T

he Board updated its Customer Service Plan in Fiscal Year 1998, revising several of the plan’s service standards. The agency met its standards in most categories. In response to a White House initiative, the Board also participated in

Conversations with America, a national effort to engage customers in an ongoing dialogue about improving customer service in the Federal Government.

Approaching the Year 2000, all of the Board’s mission-critical computer systems

were Y2K-compliant at the beginning of 1999. The agency’s most important information exchange systems are with the Department of the Treasury and the Social Security

Administration. The Board exchanges data with the Department of the Treasury in

order to issue benefit payments, and the Board’s staff expects a smooth transition in

that area. The Board also coordinates benefit payments with the Social Security

Administration, and these systems have already been tested to ensure that the data

exchanges will function correctly.

During Fiscal Year 1998, the Board procured and installed a new mainframe

processor as part of the agency’s data center modernization plan. The new mainframe

provides considerable cost savings because it requires significantly less air conditioning, electrical power, and floor space than the old equipment.

Estate Gift of $1.9 Million Left to

Railroad Retirement Account

F

rank Bartz, who died in 1993 at age 100, and his wife Mary, who died in 1998 at

age 97, left $1.9 million to the Railroad Retirement Account as part of their

estate. Mr. Bartz worked for the Detroit, Toledo and Ironton Railroad for 40 years. He

was a freight agent and teletype operator at a depot in Napoleon, Ohio. Mrs. Bartz also

worked at the depot. Mr. and Mrs. Bartz were not survived by children or close relatives. This estate gift is one of the largest ever received by the account.

THE REPORT IN BRIEF 3
Office of Inspector General

D

uring Fiscal Year 1998, the Board’s Office of Inspector General continued its

efforts to assist management in increasing the efficiency of agency programs.

Twenty-three audits and evaluations issued during the year contained findings for

improvement in both administrative and program operations. Investigative activities

resulted in 100 criminal convictions, 73 civil judgments, 42 indictments/informations,

and $1.98 million in court-ordered restitutions, fines, recoveries, and prevention of

overpayments. The Office of Inspector General also continued to pursue prosecution of

cases under the Department of Justice’s Affirmative Civil Enforcement Program.

Thirty-three civil judgments under this program were entered by Federal district

courts which will result in the return of $304,504 to the Railroad Retirement Board’s

accounts when the funds are collected.

4 1999 Annual Report, U.S. Railroad Retirement Board
Retirement-Survivor

Employee age annuities

 Number awarded 6,800 7,400

 Number being paid at end of period 245,900 255,700

 Average being paid at end of period $1,264 $1,223

Employee disability annuities

 Number of total disability annuities awarded 1,300 1,300

 Number of occupational disability 

 annuities awarded 3,400 3,600

 Number of total disability annuities being paid at

 end of period 20,600 20,700

 Number of occupational disability annuities 

 being paid at end of period 58,400 58,400

 Average total disability annuity 

 being paid at end of period $888 $845

 Average occupational disability annuity 

 being paid at end of period $1,508 $1,450

Supplemental employee annuities

 Number awarded 4,400 4,500

 Number being paid at end of period 149,300 155,700

 Average being paid at end of period 1

$43 $43

Spouse and divorced spouse annuities

 Number awarded, total 8,700 9,200

 Number being paid to divorced 

 spouses at end of period 3,700 3,700

 Number being paid at end of period, total 174,500 181,400

 Average being paid to divorced spouses 

 at end of period $312 $303

 Average being paid at end 

 of period, total $502 $487

Survivor annuities

 Number awarded to aged widow(er)s 9,600 9,900

 Number awarded, total 12,000 12,300

 Number being paid to aged widow(er)s 

 at end of period 190,200 197,400

 Number being paid at end of period, total 227,300 234,900

Average being paid at end of period to

 Aged widow(er)s $768 $740

 Disabled widow(er)s $672 $650

 Widowed mothers (fathers) $957 $916

 Remarried widow(er)s $531 $507

 Divorced widow(er)s $546 $526

 Children $646 $627

Lump-sum survivor benefits awarded

 Number of lump-sum death benefits 5,800 5,800

 Average lump-sum death benefit $887 $877

 Number of residual payments 100 100

 Average residual payment $3,382 $3,424

 Fiscal Year 

 1998

 Fiscal Year 

 1997

Selected Data on Benefit Operations

THE REPORT IN BRIEF 5
6 1999 Annual Report, U.S. Railroad Retirement Board

Employees and Earnings2

Fiscal Year 

1998

Fiscal Year 

1997

Average employment 256,000 253,000

Creditable earnings, Railroad Retirement 

 Act (billions):

 Tier I $13.14 $12.31

 Tier II $11.74 $11.02

Creditable compensation, Railroad

 Unemployment Insurance Act (billions) $2.90 $2.76

Unemployment-Sickness

Benefit Year 

1997-1998

Benefit Year 

1996-1997

Qualified employees 276,600 284,800

Unemployment benefits

 Net amount paid (millions) $27.0 3

($25.9) $38.2

 Beneficiaries 11,300 3

(11,300) 15,300

 Number of payments 71,500 105,500

 Normal benefit accounts exhausted 2,100 2,700

 Average payment per 2-week registration period $375.04 $357.69

Sickness benefits

 Net amount paid (millions) $33.1 3

($33.4) $32.5

 Beneficiaries 20,500 3

(20,800) 20,500

 Number of payments 147,500 154,600

 Normal benefit accounts exhausted 4,300 4,300

 Average payment per 2-week registration period $385.40 $372.03

1

 Supplemental annuities awarded under the 1974 Act, which averaged $42, constituted 

 95 percent of all supplemental annuities being paid, up from 94 percent a year earlier.

2

 Except for fiscal year 1997 employment, all figures in this section are preliminary.

3 Data in parentheses are for the fiscal year (October 1, 1997 - September 30, 1998).

Selected Data on Benefit Operations (Continued)
A REVIEW OF OPERATIONS

7

RAILROAD RETIREMENT AND

SURVIVOR PROGRAM

FINANCIAL OPERATIONS

R

ailroad retirement and survivor benefit programs are financed through five

accounts. Financing sources for the five accounts exceeded costs by almost

$1.2 billion during Fiscal Year 1998 and the net position of the retirement

trust funds increased by almost $1.2 billion to almost $16.5 billion during the year.

The Social Security Equivalent Benefit (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 Railroad Retirement

(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. A Railroad Retirement Supplemental (RRS) Account, funded by payroll taxes on employers, pays supplemental annuities to career rail employees; and the

Dual Benefits Payments (DBP) Account and Federal Payments Account (FPA), funded

by congressional appropriations from general revenues, finance the phase-out costs of

certain vested dual benefits and interest on unnegotiated checks, respectively. The five

accounts together incurred $8.3 billion in benefit obligations, net of recoveries (excluding $1.1 billion in social security benefits which were reimbursed by the Social Security

Administration) during Fiscal Year 1998.

During Fiscal Year 1998, benefits totaling some $8.3 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 some $59.3 million.

Financial information (except when the term “paid” or “collected” is used) is presented on the accrual

basis of accounting instead of the cash basis of accounting. However, benefit operations data presented

on pages 14-25 for the railroad retirement and survivor program and pages 29-32 for the railroad unemployment and sickness insurance program are on a cash basis of accounting.

The primary difference between the two bases of accounting is that the accrual basis recognizes revenue

when it is earned and expenditures when they are incurred. The cash basis, on the other hand, recognizes revenue and expenditures only when cash is received or paid.
8 1999 Annual Report, U.S. Railroad Retirement Board
Financing Sources

F

or Fiscal Year 1998 as compared to Fiscal Year 1997, total financing sources for

the railroad retirement and survivor program increased by a net of $530.2 million (5.75 percent) to almost $9.8 billion.

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 almost $4.7 billion, 48 percent of total financing sources and $284 million more than

in Fiscal Year 1997.

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

social security taxes. The rate of 7.65 percent is divided into 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 1998 was $68,400, and all earnings were subject to the 1.45 percent Medicare tax. In Calendar Year 1997, the maximum amount subject to the 6.20 percent tax was $65,400, with all earnings subject to

the 1.45 percent Medicare tax. 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 $50,700 in 1998 and $48,600 in 1997, was 4.9 percent on

employees and 16.1 percent on employers.

Tier I and tier II taxes for Fiscal Year 1998 amounted to $2 billion and $2.5 billion,

respectively. Total payroll taxes also included $122.8 million in supplemental annuity

taxes. These taxes finance a supplemental annuity program for career rail employees,

financed on a pay-as-you-go basis by a cents-per-hour tax levied solely on railroad

employers.

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 Old-Age, Survivors and Disability Insurance (OASDI) and Hospital Insurance

(HI) 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.

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

A REVIEW OF OPERATIONS 9
10 1999 Annual Report, U.S. Railroad Retirement Board

Other 0.1%

 $12

Gain on Sale of 

Securities 2% 

$198.1

General 

Appropriations 

2% 

$188.9

Federal Income 

Taxes 3.1% 

$302

Interest on 

Investments 

10.1% 

$984.7

Financial 

Interchange 

34.7% 

$3,385.8

Payroll Taxes 

48.0% 

$4,683.4

Financing Sources - Fiscal Year 1998 (In Millions)

Costs - Fiscal Year 1998 (In Millions )

Interest Expense 

2.8% 

$243.9

Salaries and 

Expenses 1.1% 

$94

Other 0.1%

$2.9

Benefit 

Payments 96% 

$8,256.9

RETIREMENT AND SURVIVOR PROGRAM

TOTAL: $9,754.9

TOTAL: $8,597.7
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 1998 amounted to almost $3.4

billion.

Interest and Gain on the Sale of Investments

All railroad retirement funds not needed for immediate payment of benefits are

invested in special issues of the U.S. Treasury. Currently, the Railroad Retirement

Board purchases three types of special issues: market-based specials, par value specials and market-based zero-coupon bonds. A market-based special may be any marketable Treasury bill, note or bond, except that notes and bonds within 6 months of

maturity are not currently available to the Railroad Retirement Board. The price is

the same as the market price, but purchases and sales are made directly with the U.S.

Treasury so as not to affect the securities market. Par value specials are securities

issued by the U.S. Treasury maturing on the first business day of the month following

the month of issue. Their yield rate each month is the average yield rate, computed as

of the last day of the previous month, of marketable Treasury notes with maturity

dates not less than 3 years away. Market-based zero-coupon bonds are nonmarketable

securities that will mature at least 10 years from the date of issue on a date that is the

same as the maturity date of a marketable Treasury STRIPS security (the principal

and interest component of Treasury bonds that have been stripped through the

Treasury Separate Trading of Registered Interest and Principal of Securities Program).

In Fiscal Year 1998, the average yield on all holdings of the retirement trust funds

was 6.31 percent, and interest on investments was $984.7 million. In addition to this

amount, $198.1 million of capital gains was realized in 1998 from the sale of securities

prior to maturity. It is anticipated that investing these sale proceeds in other special

issues will result in a higher yield than if held to maturity.

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. Revenue from

income taxes on social security equivalent railroad retirement benefits is transferred to

the SSEB Account.* 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.

A REVIEW OF OPERATIONS 11

* Legislation enacted in 1993 subjected a larger amount of social security benefits and social security

equivalent railroad retirement benefits to Federal income tax for taxpayers in higher income brackets.

This provision was effective beginning with taxable year 1994, and the additional revenue raised is transferred to the Federal Hospital Insurance Trust Fund.
12 1999 Annual Report, U.S. Railroad Retirement Board

 RRA benefits 

treated as

SSA benefits 

Taxable year

 SSEB

tier I

benefits 

Tier II &

non-SSEB tier I1

 Vested dual

benefits 

SSEB Account2 RR Account DBP Account3

Transfers during the year

1989 $36 4

$177 $20

1990 39 5

184 19

1991 44 191 24

1992 48 6198 22

1993 56 6192 20

1994 52 6

197 19

1995 50 191 16

1996 57 192 14

1997 61 195 12

1998 74 196 12

Reconciliation adjustments 7

1989 (1991) +3 +3 +3

1990 (1992) +6 +2 +4

1991 (1993) +3 -5 -2

1992 (1994) -2 -14 -4

1993 (1995) -9 -12 -3

1994 (1997) -4 -12 -3

1995 (1999) +9 +27 . . .

 RRA benefits treated as

private or public pensions 

Revenue from taxes on

1 Includes non-SSEB 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 Includes $44 million for October-December 1989 transferred in January 1990.

5 Includes $46 million for October-December 1990 transferred in January 1991.

6 Includes amounts transferred in August 1994 under the Social Security Independence

and Program Improvements Act: $49 million for October-December 1992; $192 million for 1993;

and $148 million for January-September 1994.

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

Federal Income Tax Transfers by Recipient Account and

Benefit Component, Taxable Years 1989-1998 (Millions)
A REVIEW OF OPERATIONS 13

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. Original tax transfers for Fiscal Year 1998 amounted to $266 million during the year. Original transfers

for Fiscal Year 1997 totaled $267 million. There were no reconciliation adjustments in

Fiscal Year 1998. Net income tax transfers after adjustments were $248 million for

Fiscal Year 1997.

The table on the previous page shows income tax transfers to the Accounts for taxable years 1989 through 1998, including reconciliation adjustments through 1995.

General Appropriations

General revenue appropriations were provided by the Railroad Retirement Act of

1974 to fund the phase-out costs of certain dual railroad retirement/social security benefits considered vested prior to 1975 and by the Railroad Retirement Solvency Act of

1983 to fund interest on unnegotiated checks. The total amounts appropriated by the

Congress for vested dual benefits were $205.5 million for Fiscal Year 1998 and $223

million for Fiscal Year 1997. These amounts include $12 million and $10 million in

Federal income tax transfers, respectively, and unexpended appropriations of $4.6 million for Fiscal Year 1998 and $6.6 million for Fiscal Year 1997. The amount appropriated for Fiscal Year 1998 was 7.8 percent less than Fiscal Year 1997, reflecting the continuing decrease in eligibility for these benefits which are not increased for the cost of

living. The total amounts appropriated by the Congress for interest on unnegotiated

checks were $50,000 for Fiscal Years 1998/1999 and $300,000 for Fiscal Years

1997/1998.

Other Financing Sources

Other financing sources consisted of $0.6 million in interest, penalties and handling

costs charged on program accounts receivables as well as collection agency fees,

$7.3 million to be provided by the Office of Personnel Management to pay future retirement benefits to Railroad Retirement Board employees, and $13.8 million in

transfers-in for salaries and expenses from the railroad unemployment trust funds.

These financing sources were offset by $5.2 million in interest on carriers’ refunds and

uncashed checks and transfers-out of $4.5 million for salaries and expenses of the

Board’s Office of Inspector General.

Costs 

T

he Railroad Retirement Board 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, about $14.9 million of the amount shown on page 8 for salaries and

expenses and about $1.2 million of the amount shown for other financing sources for

Fiscal Year 1998 are for the unemployment and sickness insurance program. The
14 1999 Annual Report, U.S. Railroad Retirement Board

Fiscal Year 1997 amount included about $14.8 million in salaries and expenses and

about $1.3 million in other financing sources for the unemployment and sickness insurance program.

Excluding $16.1 million from total costs of $8,597.7 million for Fiscal Year 1998

and $16.1 million from total costs of $8,560.7 million for Fiscal Year 1997, total costs

for the railroad retirement and survivor program for Fiscal Year 1998 increased $37

million or 0.4 percent.

Benefit Payments

During Fiscal Year 1998, railroad retirement benefit payments increased $38.5 million or 0.5 percent to almost $8.3 billion, including $200.9 million in vested dual benefits and $78.3 million in supplemental annuities. 

Interest Expense

Interest expense included interest on the financial interchange advances made by

the U.S. Treasury of $243.9 million.

Salaries and Expenses

Excluding unemployment and sickness insurance salaries and expenses of $14.9

million and $14.8 million for Fiscal Years 1998 and 1997, respectively, salaries and

expenses for the railroad retirement and survivor program were about $79.1 million

for Fiscal Year 1998 and about $79.7 million for Fiscal Year 1997, a $0.6 million or 0.8

percent decrease. Adjusted by the $14.9 million in salaries and expenses and $1.2 million in other costs for the unemployment and sickness insurance program, Fiscal Year

1998 administrative expenses for the railroad retirement and survivor program were

about 0.9 percent of total costs.

Other Costs

Other costs consist primarily of post-retirement benefits for Railroad Retirement

Board employees of $6.1 million for the railroad retirement and survivor program and

$1.2 million for the unemployment and sickness insurance program. They were offset

by a $4 million reimbursement from the Health Care Financing Administration for

Part B Medicare costs and an approximately $0.4 million reimbursement from the

Board’s Office of Inspector General for Board-incurred expenses.

BENEFIT OPERATIONS

R

etirement and survivor benefits paid, including vested dual benefits and supplemental employee annuities, totaled $8.2 billion in Fiscal Year 1998, $41

million more than in Fiscal Year 1997. Benefits were paid to some 772,000

beneficiaries in Fiscal Year 1998. Approximately 718,000 beneficiaries were being

paid at the end of the year. The table on the next page presents retirement and survivor benefit payments for Fiscal Years 1998 and 1997, by type of benefit, and the percent changes in payments between the 2 years.
A REVIEW OF OPERATIONS 15

Under the two-tier railroad

retirement formulas, the tier I

annuity portion approximates a

social security benefit and increases by the cost-of-living percentage

applied to social security benefits.

The tier II portion, which is comparable to retirement benefits

paid over and above social security benefits to workers in other

industries, increases by 32.5 percent of the social security percentage. Effective December 1996,

tier I portions increased by 2.9

percent while tier II portions

increased by 0.9 percent.

Increases of 2.1 percent for

tier I and 0.7 percent for tier II

were effective December 1997.

The December 1996 and

December 1997 cost-of-living increases provided additional benefit payments of approximately $136 million in Fiscal Year 1998, compared to payments in Fiscal Year 1997.

Monthly retirement and survivor benefits being paid numbered about 876,000 at the

end of the 1998 fiscal year, about 31,000 less than at the end of the prior year. Monthly

beneficiaries on the rolls declined by 24,000 over the year, from 742,000 to 718,000. 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 1998 numbered 325,000, nearly 10,000 less than at the end of the previous fiscal year. The number

of age annuities being paid dropped from 256,000 to 246,000 over the year, while disability

annuities remained the same at some 79,000. Supplemental annuities being paid dropped

some 6,000, numbering 149,000 at the end of the year. The number of divorced spouse

annuities being paid remained the same at 3,700. Spouse and divorced spouse annuities

together declined by nearly 7,000, totaling 174,000 at year-end. Some 227,000 monthly

survivor benefits were being paid at the end of Fiscal Year 1998, a decrease of 8,000 from

the previous year.

Fiscal Year

1998

Fiscal Year 

1997

Retirement benefits

Employee annuities

 Age $3,747.3 $3,749.8 -0.1

 Disability 1,305.2 1,258.8 +3.7

 Supplemental 78.6 82.4 -4.6

Spouse and divorced

 spouse annuities 1,067.9 1,075.3 -0.7

 Total 6,199.0 6,166.3 +0.5

Survivor benefits

Annuities 2,041.9 2,033.8 +0.4

Lump-sum benefits 5.6 5.5 +1.2

 Total 2,047.5 2,039.4 +0.4

 Grand total $8,246.6 $8,205.7 +0.5

Amount

(in millions)

Percent

change

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

Type of benefit
Retirement

Regular employee annuities

Awards of regular employee annuities numbered 11,400 in Fiscal Year 1998, 900

fewer than in Fiscal

Year 1997. 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 are eligible for

regular annuities

based on age and service at age 62. Early

retirement annuity

reductions are

applied to such annuities awarded before

age 65, currently the

normal retirement

age. The reduction for early retirement is currently computed as 1/180 of the full annuity amount for each month the employee is under age 65 when the annuity begins. 

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 to

such annuities awarded

before age 62 unless the

employee attained age

60 and completed 30

years of service prior to

July 1, 1984, but these

age reductions are

applied only to

16 1999 Annual Report, U.S. Railroad Retirement Board

Employee

annuities

awarded in 

Fiscal Year 1998 Number

PercentMonthly

amount

Years of

service

Age at

retirement

Age

Beginning at

age 65 or over 1,200 10 $1,296 22.0 66.5

Unreduced, beginning

at ages 62-64 2,400 21 2,147 37.9 62.6

Reduced, beginning at 

ages 60-64 3,200 28 1,254 24.0 62.0

Disability 4,600 41 1,649 23.6 52.4

Total 11,400 100 $1,608 26.5 58.7

Average

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

372

325

207

174

265

227

Employee Spouse

(includes

divorced

spouses)

Survivor

1993 1998

Number of monthly beneficiaries,

September 30, 1993, and 1998 (Thousands)
the tier I annuity

portion. No age

reductions are

applied to the

annuities of 30-

year employees

retiring at age 62

or older.

Employees who

retire at ages 60-64

with at least 30

years of railroad

service are referred

to as 60/30

retirees. 

The 3,200

reduced age annuities awarded during Fiscal Year

1998 included

1,100 reduced

60/30 awards and 2,100 awards where the employee had less than 30 years of service.

Average monthly annuity amounts for the two groups were $1,812 and $955, respectively, while railroad service averaged 36 years and 18 years.

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. An

employee is considered totally disabled if medical

A REVIEW OF OPERATIONS 17

$4,826

$5,131

$1,070 $1,068

$1,976 $2,048

Employee Spouse Survivor

1993 1998

1 2

Amount of benefits paid,

Fiscal Years 1993 and 1998 (Millions)

Average monthly amount,

September 30, 1993, and 1998

$1,052

$1,284

$426

$502

$628

$768

Employee Spouse Aged widow(er)

1993 1998

1 2

1

Includes $98 million in Fiscal Year 1993 and $78.6 million in Fiscal 

Year 1998 for supplemental annuities.

2

Includes divorced spouses.

1 Without supplemental annuity.

2

Includes divorced spouses.
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 4,600 disability awards, 1,200 averaging $1,162 per month were for

total disability and 3,400 averaging $1,832 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 three-fifths of all employees 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 1998, about

7,400, or 65 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 $1,912 per month,

compared to $1,032 for

the 3,900 awards based

on deferred retirement.

Immediate retirees averaged 31 years of railroad

service, considerably

more than the average of

19 years for deferred

retirees. Of the year’s

awards, some 46 percent

of normal age retire18 1999 Annual Report, U.S. Railroad Retirement Board

Employee

annuities in 

current-payment status 

on September 30, 1998 Number Percent

Average

monthly

amount

Percent

immediate

retirements

Age

Beginning at 

age 65 or over 46,400 14 $ 958 52

Unreduced, beginning

at ages 60-64 101,500 31 1,641 95

Reduced, beginning

at ages 60-64 98,000 30 1,019 41

Disability 79,000 24 1,346 79

Total 324,900 100 $ 1,284 69

Note. --Detail may not add to total due to rounding.
ments were immediate. While 83 percent of all 60/30 retirements were immediate, only

20 percent of the reduced age awards to employees with less than 30 years of service

were immediate. Immediate retirements accounted for 77 percent of the year’s disability awards.

The 325,000 retired employees on the rolls as of September 30, 1998, were being

paid regular monthly annuities averaging $1,284. The table on the previous page gives

data by type of annuity for these benefits.

Of the 79,000 disability annuities being paid, 21,000 were for total disability and

58,000 for occupational disability. The two types of disability annuities averaged $888

and $1,508, respectively. In Fiscal Year 1998, some $224 million was paid in total disability annuities and $1,081 million in occupational disability annuities.

Some 223,000 employees on the rolls at the end of Fiscal Year 1998 were immediate

retirees and their regular annuities averaged $1,545 per month. Annuities of the

102,000 deferred retirees averaged $712. Although their average railroad retirement

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

social security benefits--45 percent compared to 9 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 $1,015, while combined

benefits to immediate retirees averaged $1,320. The table on this page gives 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 age 65 with less than 30 years of railroad service, but are

made only in the tier I

component of 60/30

annuities awarded

before age 62. 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

A REVIEW OF OPERATIONS 19

Dual benefit

status Total Immediate Deferred

Receiving social security benefit

Number 67,000 21,100 45,900

Average monthly amount:

 Railroad retirement (regular) $441 $862 $247

 Social security 671 458 769

 Combined benefit 1,112 1,320 1,015

Not receiving social security benefit

Number 257,900 202,000 55,900

Average monthly amount $1,503 $1,617 $1,094

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

Type of retirement
1998 averaged $1,060 per month. Tier I amounts of some 9,000 employees were completely offset by social security benefits. Tier I amounts being paid averaged $907.

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

amounts being paid at the end of Fiscal Year 1998 averaged $378. 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 89,000 retirees were receiving vested dual benefits averaging $152 at the end of

the fiscal year.

Supplemental employee annuities

Nearly 4,400 supplemental annuities were awarded in Fiscal Year 1998, 100 fewer

than in Fiscal Year 1997. About 3,200 of the awards (72 percent) began concurrently

with the employee’s regular annuity, while the remaining 1,200 were to employees

already receiving a regular annuity. Supplemental annuity awards averaged about $41

per month; 82 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, 1,000 supplemental annuities were not awarded

because they were entirely offset by private pensions. Fewer than 50 of the year’s

awards were partially offset by pensions. For a small number of awards, the supplemental annuity was not offset because the pension was reduced. There were no cases

in which both the private pension and the supplemental annuity were reduced.

Supplemental annuities were being paid to some 149,000, or 46 percent, of the

retired employees on the rolls at the end of the 1998 fiscal year. These annuities averaged $43; fewer than 8,000 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

8,700 in Fiscal Year 1998, 400 less than in the previous year. The table on the next

page presents numbers and average amounts of spouse and divorced spouse annuities

awarded during the year and being paid at the end of the year, by type of annuity and

whether subject to age reduction.

If an employee retires with 10-29 years of railroad service and the employee is at

least age 62, the employee’s spouse is eligible for an annuity at age 62. Early retirement reductions are applied to the spouse annuity if the spouse retires before age 65,

currently the full retirement age. The reduction for early retirement is currently 1/144

for each month the spouse is under age 65 when the annuity begins.

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

age 60, the employee’s spouse is eligible for an annuity at age 60. Certain early retirement reductions are applied to the tier I component of such a spouse annuity if the

20 1999 Annual Report, U.S. Railroad Retirement Board
employee retires before age

62, unless the employee

attained age 60 and completed 30 years’ service prior

to July 1, 1984. If a 30-year

employee retires at age 62, no

age reduction applies to the

spouse annuity.

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 4,100 reduced

spouse annuities awarded

in Fiscal Year 1998, 1,800

averaging $687 per month

were to spouses of 30-year employees and 2,300 averaging $321 were to spouses of

employees with less than 30 years of service.

At the end of Fiscal Year 1998, about 171,000 spouse annuities averaging $506 per

month were being paid. Approximately 4,000 divorced spouse annuities averaging

$312 per month were also being paid. Families with an employee and spouse on the

rolls were paid combined railroad retirement benefits averaging $1,897. This included

$1,391 in regular and supplemental employee annuities and $506 in spouse annuities.

Some 70,000, or 40 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 $756 per month, including $215 in railroad

retirement benefits and $541 in social security benefits. Railroad retirement annuities

to the 102,000 spouses not receiving social security benefits averaged $701, while railroad retirement annuities to the 2,000 divorced spouses not receiving social security

benefits averaged $450.

Like regular employee annuities, spouse annuities consist of up to three components. The tier I component equals one-half 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

A REVIEW OF OPERATIONS 21

Monthly spouse

benefits

Number

Average

amount Number

Average

amount

Beginning at age 

65 or over 1,600 $293 27,100 $286

With minor or 

disabled child in 

care 300 646 1,500 634

Unreduced, 

beginning at ages 

60-64 2,300 862 72,500 679

Reduced rate 4,100 485 69,700 410

 Total 8,300 559 170,800 506

Divorced spouse 

annuities 500 306 3,700 312

 Grand total 8,700 $545 174,500 $502

Awarded in

Fiscal Year 1998

In current-payment

status on

September 30, 1998

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

There is a ceiling on the total amount of monthly benefits, excluding vested dual

benefits, payable to an employee and spouse at the time the employee’s annuity begins.

The ceiling is normally geared to the employee’s final creditable earnings, but is subject

to a minimum of $1,200. Reductions required by the railroad retirement maximum are

made, as necessary, only in the tier II components or supplemental employee annuity.

Of the 171,000 spouses on the rolls at the end of Fiscal Year 1998, 127,000 were

being paid tier I amounts averaging $423 per month. The tier I amounts of 44,000

spouses were completely offset by other benefits also due. Spouse tier II amounts averaged $193. In about 13,000 cases, the tier II component was reduced an average of $70

for the railroad retirement maximum. Vested dual benefits averaging $116 were being

paid to 15,000 spouses. The 4,000 divorced spouses on the rolls at the end of Fiscal

Year 1998 were being paid tier I amounts averaging $319 per month.

Lump-sum retirement benefits

A lump-sum 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 $1.8 million was paid in separation/severance

lump-sum benefits during Fiscal Year 1998.

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 1951-74. 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 1998 fiscal year, the Board paid nearly 3,900 dual

retirement tax refunds averaging $97. Most of the payments were to employees retiring during the year. Some 200 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 12,000 during Fiscal Year 1998, 300 less than the previous year. Some 227,000 survivor annuities

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

22 1999 Annual Report, U.S. Railroad Retirement Board
or divorced spouse annuity rates pending recomputation to widow(er)s’ rates. Some

190,000, or 84 percent, of the survivor annuities were to aged widows and widowers.

The table on

this 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. Some

of the survivor option

annuities,

which were

being paid under laws in effect before August 1946, were to widows also receiving aged

widows’ annuities.

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 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--

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 is 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 are

proportionately adjusted when either limit applies. 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.

A REVIEW OF OPERATIONS 23

Monthly survivor

benefits

Number

Average

amount Number

Average 

amount

Aged widow(er)s' 9,600 $920 190,200 $768

Disabled widow(er)s' 200 810 6,000 672

Widowed mothers'

 (fathers') 200 908 1,400 957

Remarried widow(er)s' 400 642 6,000 531

Divorced widow(er)s' 700 599 9,100 546

Children's:

 Under age 18 600 831 3,700 822

 Student 100 894 200 886

 Disabled 200 710 10,500 580

Parents' * 680 100 570

Survivor option . . . . . . * 82

Total 12,000 . . . 227,300 . . .

Awarded in

Fiscal Year 1998

In current-payment

status on

September 30, 1998

*Fewer than 50.

Note.--Data 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 age 65, currently the full retirement age.

The current reduction is 19/40 of one percent for each month the widow(er) is under age

65 when the annuity begins, with a maximum reduction of 36 months, or about 17 percent. Excluding some 300 annuities temporarily paid at spouse or divorced spouse

rates, aged widow(er)s’ annuities being paid at the end of the 1998 fiscal year included

87,000 which were reduced for age. Aged widow(er)s’ tier I amounts being paid averaged $680 per month. In about 15,000 cases, the tier I amount was wholly offset by

reductions for other benefits. Approximately 83,000 aged widow(er)s were also receiving social security benefits, and these averaged $534. Tier II amounts averaged $138.

About 14,000 vested dual benefits averaging $58 were being paid to aged widow(er)s.

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

50-59, are reduced 28-1/2 percent for age. Tier I amounts being paid to disabled

widow(er)s on the rolls at the end of Fiscal Year 1998 averaged $576 (in some 300

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

to 1,700 disabled widow(er)s averaged $510. Tier II amounts averaged $121, while the

600 vested dual benefits being paid averaged $74.

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 1998

averaged $773 for widowed mothers and fathers and $584 for children. Fewer than 50

mothers (fathers) and nearly 2,600 children received social security benefits averaging

$627 and $389, respectively. Tier II amounts paid mothers (fathers) and children averaged, respectively, $192 and $78. None of the widowed mothers received a vested dual

benefit.

Lump-sum survivor benefits

A lump-sum 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 lump-sum

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 lump-sum death benefit is limited to $255, the maximum benefit

payable under social security law, and only the living-with widow or widower is eligible

for the benefit. Some 5,800 lump-sum death benefits averaging $887 were awarded

during Fiscal Year 1998. Over 700 benefits were to widow(er)s, while 5,100 were to

other individuals who paid the funeral expenses, mostly adult children of the employee.

24 1999 Annual Report, U.S. Railroad Retirement Board
Another lump-sum 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

pre-1975 railroad retirement taxes. The 120 residual payments awarded in the 1998

fiscal year averaged $3,382. Widow(er)s and parents who elected to waive future

monthly benefits in order to receive a residual benefit were awarded about 20 of the

payments. The remaining awards were to widow(er)s of employees not insured for

monthly benefits under the Railroad Retirement Act, other relatives, designated beneficiaries, or the employee’s estate.

Medicare Enrollments

T

he Medicare program provides health insurance to persons aged 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 or who suffer from chronic kidney disease

requiring hemodialysis or transplant. In addition to the basic hospital insurance, or

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

Eligible railroad retirement annuitants and social security beneficiaries whose benefits are payable by the Railroad Retirement Board are automatically enrolled under

both plans, but Part B may be declined. Eligible nonretired persons must apply in

order to obtain Medicare coverage. The Board automatically enrolled approximately

25,000 beneficiaries for Medicare during Fiscal Year 1998. As of the end of the fiscal

year, some 659,000 persons were enrolled in the Part A plan, and about 645,000 (98

percent) of them were also enrolled in Part B.

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

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

Hospital Insurance Trust Fund, the same as 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 $673 million in the 1998 fiscal year.

The regular monthly premium for medical insurance during Fiscal Year 1998 was

$43.80. The Board generally withholds Medicare premiums for annuitants from their

benefit payments, and at the end of the fiscal year, almost 610,000 annuitants were

having their premiums withheld. Of the remaining Part B enrollees, some 8,000 were

paying premiums to the Board, either directly or through an intermediary, and 27,000

had their premiums paid by State agencies. The Board periodically transfers premiums

to the SMI Trust Funds.

A REVIEW OF OPERATIONS 25
26 1999 Annual Report, U.S. Railroad Retirement Board

RAILROAD UNEMPLOYMENT AND SICKNESS

INSURANCE PROGRAM

FINANCIAL OPERATIONS

F

inancing sources for the railroad unemployment and sickness insurance program during Fiscal Year 1998 exceeded costs by $17.5 million and the net posi-

(text continues on p. 28)
A REVIEW OF OPERATIONS 27

Employer Payroll 

Taxes 94.2%

$86.5

Other 0.8%

$0.7

Interest Income 

5.0% 

$4.6

Financing Sources - Fiscal Year 1998 (In Millions)

Costs - Fiscal Year 1998 (In Millions )

Benefit Payments 100%

$59.2

UNEMPLOYMENT AND SICKNESS

INSURANCE PROGRAM

GROSS TOTAL $91.8

TOTAL $59.2

Net of Transfer = $76.7
28 1999 Annual Report, U.S. Railroad Retirement Board

tion increased by $17.5 million from $85 million at the end of Fiscal Year 1997 to

$102.5 million at the end of Fiscal Year 1998. For Fiscal Year 1998 as compared to

Fiscal Year 1997, total financing sources for the railroad unemployment and sickness

insurance program increased by $55.2 million (256.7 percent) to $76.7 million.

Financing Sources

T

he primary 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

1998, the taxable earnings base was the first $925 of each employee’s monthly earnings. The earnings base is indexed each year by a rate which is equal to approximately

two-thirds of the annual rate of increase in the maximum base for railroad retirement

tier I taxes.

In 1998, the basic tax rates on railroad employers, including covered commuter

railroads, ranged from a minimum of 0.65 percent to a maximum of 12 percent. A surcharge of 1.5 percent was added to the basic rate as the unemployment account balance

was less than $100 million on June 30, 1997. Most employers were assessed the minimum rate in 1998. New employers in 1998 paid an initial rate of 1.18 percent; the surcharge did not apply to them.

Employer Payroll Taxes

Payroll taxes by employers totaled $86.5 million during Fiscal Year 1998. This was

an increase of 194.2 percent or $57.1 million over the previous year. The increase was

the result of the imposition of the 1.5 percent surcharge described above and an

increase in the monthly wage base.

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 6.78 percent in Fiscal Year 1998, of which the Railroad Retirement Board earned

$4.6 million as its pro rata share.
A REVIEW OF OPERATIONS 29

Other Financing Sources

Other financing sources consist of interest, penalties and handling costs charged on

program accounts receivables of $0.7 million for both Fiscal Years 1998 and 1997, cash

transfers of $13.8 million and $14.3 million to the Limitation on Administration

Account to fund salaries and expenses for the unemployment and sickness insurance

program for Fiscal Years 1998 and 1997, respectively, and cash transfers of $1.3 million

and $1.2 million to fund administrative expenses of the Board’s Office of Inspector

General for Fiscal Years 1998 and 1997, respectively. OMB Bulletin 97-01 requires

that transfers-in and transfers-out be shown as offsets to financing sources.

Costs

Total costs for the railroad unemployment and sickness insurance program

decreased by $12.9 million (17.9 percent) to $59.2 million.

Benefit Payments

During Fiscal Year 1998, unemployment insurance benefit payments decreased by

$10 million (27.9 percent) to $25.8 million. Sickness insurance benefit payments

decreased $2.9 million (8.0 percent) to $33.4 million.

BENEFIT OPERATIONS

N

et unemployment and sickness benefits totaling $60.1 million were paid in the

1997-1998 benefit year, $10.6 million less than in the prior year. Beneficiaries

numbered 31,000 in comparison to the previous year’s total of some 34,000.

Approximately 1,200 employees received both unemployment and sickness benefits during the 1997-1998 benefit year. The number of unemployment benefit claimants

decreased by almost 26 percent, while sickness benefit claimants stayed the same.

Total unemployment benefit payments decreased by 29 percent, while net sickness benefits increased by about 2 percent. The number of employees qualified for benefits

under the Railroad Unemployment Insurance Act fell 3 percent to 276,600.

Prior to October 1996 legislation, no benefits were payable for the first claims for

unemployment and sickness in a benefit year, generally resulting in a 2-week waiting

period. As a result of the legislation, 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. During Benefit Year 1997-1998, there were 9,000 and 14,000 unemployment and

sickness benefit waiting period claims, respectively. The average number of waiting

period non-compensable days was 3.0 for both unemployment and sickness, down 2.0

days and 3.9 days, respectively, from the prior benefit year.

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.
30 1999 Annual Report, U.S. Railroad Retirement Board

Unemployment

S

ome 11,300 railroad workers were paid $27 million in unemployment benefits

during the 1997-1998 benefit year. The number of benefit claimants decreased

by over 3,900 from the prior year total of 15,300, while the benefit amount fell $11.2

million from the year-earlier total of $38.2 million. The average number of compensable days per unemployment benefit claimant was 60 in Benefit Year 1997-1998 as

compared to 63 in the previous benefit year.

The mid-month unemployment count in the 1997-1998 benefit year began with a

July count of 2,600 claimants. The count peaked at 5,100 in January, and dropped to

1,600 in June 1998. For the 1997-1998 benefit year as a whole, the weekly number of

claimants averaged 3,000 in comparison to an average of 4,700 in the 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

Item Total

Unemployment Sickness TotalUnemployment Sickness

Applications 40,300 13,700 26,600 47,000 19,500 27,400

Claims 257,900 86,800 171,100 314,500 130,200 184,300

Beneficiaries 1

30,600 11,300 20,500 134,400 15,300 20,500

Net amount of benefits $60,092,400 $27,034,200 $33,058,200 $70,723,600 $38,248,700 $32,474,900

Number of payments

 Normal 191,200 63,000 128,100 221,700 90,800 130,800

 Extended 27,800 8,400 19,400 38,400 14,600 23,800

 Total 219,000 71,500 147,500 260,100 105,500 154,600

Average amount per

2-week registration period

 Normal $384.09 $375.04 $388.66 $367.17 $358.21 $373.66

 Extended 365.69 375.04 361.77 359.66 354.13 362.94

 Total 381.97 375.04 385.40 366.10 357.69 372.03

Benefit Year 1997-1998 Benefit Year 1996-1997

1

Benefits for both unemployment and sickness were paid to approximately 1,400 employees in Benefit Year 1996-1997 and 1,200 

employees in Benefit Year 1997-1998. Those claimants who had only a non-compensable waiting period are not included in the 

beneficiary counts since no benefits were paid.

Major unemployment and sickness benefit operations,

Benefit Years 1997-1998 and 1996-1997

(text continues on p. 32)
A REVIEW OF OPERATIONS 31

18,629

21,570

18,686

20,985

16,834

20,445

15,296

20,469

11,349

20,452

1993-1994 1994-1995 1995-1996 1996-1997 1997-1998

Unemployment

Sickness

500

200

1,900 1,800

4,000

5,500

3,700

8,400

1,200

4,500

0

100

Under 25 25-34 35-44 45-54 55-64 65 & Over

Unemployment

Sickness

Less 

than 

50

Unemployment and Sickness Benefit Claimants By Age,

Benefit Year 1997-1998

Beneficiaries under the Railroad Unemployment Insurance Act,

Benefit Years 1993-1994 through 1997-1998

NOTE.--Data partially estimated.
32 1999 Annual Report, U.S. Railroad Retirement Board

the previous year’s level of 5 per 100 qualified. The last time the rate was lower was in

Benefit Year 1944-1945. The median age of all unemployment benefit claimants was 43

years, the same as the previous benefit year.

New jobs were found for 40 unemployed railroad workers during the 1997-1998 benefit year as a result of cooperative placement activities by railroad management, railroad labor organizations, State employment service offices and the Railroad Retirement

Board.

Sickness

T

he number of sickness benefit claimants during the 1997-1998 benefit year was

20,500, about the same as in the previous year. Gross sickness benefits of $63.4

million were paid, $2.8 million more than in the prior benefit year. Net sickness benefits totaled $33.1 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

increased by $0.6 million in comparison with the previous year. 

Despite a decrease in

the number of qualified

employees, the number of

sickness claimants has

remained unchanged for the

last 3 benefit years. This

reflects a modest increase in

the utilization rate. In contrast, however, the average duration of sickness declined during this period.

Among the most common causes of sickness were injuries other than fractures

(affecting 20 percent of beneficiaries), mental disorders, including drug and alcohol

addictions (12 percent), heart disease (8 percent) and fractures (8 percent). The median

age of all sickness benefit claimants was 48 years, one higher than the previous benefit

year.

RAILROAD EMPLOYMENT

A

verage monthly railroad employment in Fiscal Year 1998 rose 1.2 percent to

256,000 from the 253,000 average of the previous year. This is the first time

average employment has increased since 1979. September 1998 had the highest level of

employment in Fiscal Year 1998 with 261,000 and February 1998 had the low of

252,000.

Benefit Utilization Per Average

Year 100 Qualified Compensable

Employees Days

1995-1996 7.1 74

1996-1997 7.2 70

1997-1998 7.4 69
A REVIEW OF OPERATIONS 33

235,000

245,000

255,000

265,000

275,000

Dec-1993

Jun-1994

Dec-1994

Jun-1995

Dec-1995

Jun-1996

Dec-1996

Jun-1997

Dec-1997

Jun-1998

0

Average Railroad Employment

Fiscal Years 1984 through 1998
LEGISLATIVE AND

ADMINISTRATIVE DEVELOPMENTS

34

Customer Service

T

he Board updated its Customer Service Plan in Fiscal Year 1998, revising several

of the plan’s service standards. The plan promotes the principles and objectives of

customer-driven quality service agency-wide and states specifically the level of

service that customers can expect. An important part of the plan is a pledge to keep beneficiaries informed of how well the Board is meeting the plan’s standards. 

The Customer Service Plan provides that persons who filed for a railroad retirement

employee or spouse annuity in advance will receive the first payment, or a decision, within

35 days of the beginning date of the annuity. Persons who did not file in advance will

receive the first payment, or a decision, within 65 days of the date the application was

filed. Of the cases processed during Fiscal Year 1998, 92 percent of employee and 95.5 percent of spouse applicants who filed in advance received a payment, or a decision, within 35

days of their annuity beginning date. Also, of the cases processed, 95.7 percent of employee

and 87.5 percent of spouse applicants who had not filed in advance received a payment, or

a decision, within 65 days of their filing dates.

The plan provides that those filing for a railroad retirement disability annuity will

receive a decision within 105 days of the date the application was filed. If entitled to disability benefits, the first payment will be received within 25 days of the date of the Board’s

decision, or the earliest possible payment date, whichever is later. Of the cases processed

during Fiscal Year 1998, 28.1 percent of disability applications met the decision standard

and 84.2 percent met the payment standard.

Those filing for a railroad retirement survivor annuity or a lump-sum benefit will

receive their first payment, or a decision, within 65 days of the date they filed their application, or became entitled to benefits, if later. If already receiving a spouse annuity, the

person will receive the first payment, or a decision, within 35 days of the date the Board

receives notice of the employee’s death. Of the cases processed during Fiscal Year 1998,

The Railroad Retirement Board continued efforts to improve

agency operations and better serve its customers. 

The following describes some major issues addressed in 1998 and 1999.
76.5 percent of the applicants for a survivor annuity were issued a payment or a decision within 65 days. In addition, 91 percent of the applicants for a lump-sum benefit

were issued a payment or a decision within 65 days. In cases where the survivor was

already receiving a spouse annuity, 90 percent of the applicants were issued a payment

or a decision within 35 days of the Board being notified of the employee’s death.

Persons filing an application for unemployment or sickness insurance benefits will

receive a claim form, or a decision, within 15 days of the date they filed their application. If they file a claim for subsequent biweekly unemployment or sickness insurance

benefits, they will receive a payment, or a decision, within 15 days of the date the

Board receives their claim form. During Fiscal Year 1998, 97.1 percent of unemployment benefit applications processed and 99.2 percent of sickness applications processed

met the Board’s standard. In addition, 99.2 percent of subsequent claims processed for

unemployment and sickness benefits met the standard. 

In Fiscal Year 1998, 98.2 percent of all correspondence the Board received was

responded to, either with an acknowledgement or with a final reply, within the agency’s

15-day standard.

Year 2000 Project

A

t the beginning of 1999, all of the Board’s mission-critical computer systems

were Year 2000 (Y2K)-compliant. 

The Board’s computer systems process benefit payments, issue informational

notices, enroll beneficiaries in Medicare, withhold Federal income tax and perform

other functions essential to the Board’s ongoing operations and service to the railroad

public. Having met the Y2K goal, the Board began a series of comprehensive tests of

its mission-critical systems to ensure that all interfaces, connections, and links between

the various systems remain in sync and are fully functional. The Board also plans to

complete work on those systems that are not mission-critical by September 30, 1999.

The agency’s most important information exchange systems are with the

Department of the Treasury and the Social Security Administration. The Board

exchanges data with the Department of the Treasury in order to issue benefit payments, and the Board’s staff expects a smooth transition in that area. The Board also

coordinates benefit payments with the Social Security Administration, and these systems have already been tested to ensure that the data exchanges will function correctly

in the year 2000.

Executive Appointments

C

herryl T. Thomas continues to serve as Chair of the Railroad Retirement Board.

V. M. Speakman, Jr. continues to serve as Labor Member and Jerome F. Kever

continues to serve as Management Member.

LEGISLATIVE AND ADMINISTRATIVE DEVELOPMENTS 35
36 1999 Annual Report, U.S. Railroad Retirement Board

In December 1998, the Board announced several executive appointments and the

expansion of its Executive Committee as part of an administrative reorganization.

John L. Thoresdale was appointed Director of Administration and was also appointed to serve for 2 years as the Chair of the Board’s Executive Committee. The Chair position will then be rotated among the Executive Committee members. Mr. Thoresdale,

who previously served as Director of Policy and Systems, succeeded Kenneth P. Boehne,

who was named Chief Financial Officer. Steven A. Bartholow, who was Deputy General

Counsel, was appointed General Counsel.

These three executives, along with Director of Programs Bobby V. Ferguson and

Chief Information Officer Robert T. Rose, serve on the expanded agency Executive

Committee. The committee is responsible for the day-to-day operations of the agency

and for making recommendations to the three-member Board on agency-related policy

issues. The reorganization also provided for the Board’s Chief Actuary, Frank J. Buzzi,

to report directly to the Board Members.

Legislative Developments

P

ublic Law 105-33, enacted August 5, 1997, clarified that non-resident aliens are

eligible for benefits under the Railroad Retirement and Railroad Unemployment

Insurance Acts. Public Law 105-277, enacted October 21, 1998, provided for the restoration of annuities to certain divorced spouses of workers whose widows previously elected

to receive lump-sum payments. 

House Concurrent Resolution 52 was a non-binding resolution which urged all parties of the railroad community, including rail labor, rail management and railroad

retiree organizations, to begin open discussions for the purpose of adequately funding an

amendment to the Railroad Retirement Act to increase benefits for widows and widowers. A hearing on this resolution was held on September 17, 1998, before the

Subcommittee on Railroads of the House Committee on Transportation and

Infrastructure, but the bill was not considered by the House or Senate prior to adjournment.

Key Initiatives

T

he Railroad Retirement Board implemented various initiatives during 1998 and

1999 to improve agency operations and provide the best possible service to its

customers.

Data Center Improvements

During Fiscal Year 1998, the Board procured and installed a new mainframe processor, the IBM System 390 Multiprise 200/C5. The new mainframe provides considerable

cost savings because it requires significantly less air conditioning, electrical power, and

floor space than the old equipment. The new mainframe was the second step in the

agency’s overall data center modernization plan. The first step, installation of DASD
LEGISLATIVE AND ADMINISTRATIVE DEVELOPMENTS 37

(direct access storage devices) with RAID (redundant array of independent disks)

equipment was completed during Fiscal Year 1997. The next major step in the plan is

installation of new tape storage and handling equipment to replace aging cartridge tape

equipment during Fiscal Year 1999.

Communications Vendor

The Board selected Sprint to provide long-distance telephone, data and other

telecommunications services. The services are provided through the General Services

Administration contract called FTS 2001, which retains many key features of FTS

2000, in particular, aggressive price competition. Over the past 10 years, telecommunications services have gone from a national average of 27 cents per minute in 1988 to 5.5

cents per minute under FTS 2000. Prices under FTS 2001 start at about 4 cents per

minute and drop to less than 1 cent per minute by the end of the contract.

Medicare Plus Choice

The Railroad Retirement Board worked with the Health Care Financing

Administration in Fiscal Year 1998 to ensure that railroad retirement beneficiaries

were informed about their new health care options under the Medicare Plus Choice program. This program, provided by the Balanced Budget Act of 1997, created new health

plan options for Medicare beneficiaries. In addition to the traditional fee-for-service

arrangements and Health Maintenance Organizations, qualified beneficiaries can elect

to receive their health care benefits from a Provider Sponsored Organization, a

Preferred Provider Organization, a Health Maintenance Organization with a Point of

Service Option, a Private Fee-For-Service Plan, or under a Medical Savings Account

plan. Medicare Plus Choice information was mailed to all railroad retirement Medicare

beneficiaries in November 1998.

Legal Information Available on Internet

The Board has begun the process of placing its legal information on the Internet.

The Board’s Web site, www.rrb.gov, has links to an index of all Board Legal Opinions

from 1982 and the text of all Board Legal Opinions issued since January 1, 1997. There

are also links to the various laws administered by the Board and the regulations promulgated by the agency. The full text of all Board Coverage Decisions issued since

1993 is available. Finally, there is a link to the “Attorney’s Guide to the Partition of

Railroad Retirement Annuities,” which provides helpful information in connection with

the property division of railroad retirement benefits in a divorce proceeding.

Office of Equal Opportunity

The Board’s Office of Equal Opportunity published a “Guide to the Prevention of

Sexual Harassment” for distribution to all agency employees and also conducted training on the prevention of sexual harassment for managers, supervisors and team leaders. The Director of Equal Opportunity coordinated the Chicago Federal Executive

Board’s Make-A-Difference Day Welfare to Work Clothing Drive, conducted at the
38 1999 Annual Report, U.S. Railroad Retirement Board

Board’s headquarters facility and three other Chicago-area Federal facilities. Federal

employees donated approximately 4,000 men’s and women’s garments and accessories

during the 2-day drive.

Public Information Activities

T

he Board 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 Board 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, Board representatives describe and discuss the benefits available under the railroad retirement-survivor, unemployment-sickness and Medicare programs, and the attendees are provided with comprehensive informational materials.

During 1998, 2,210 railroad labor union officials attended 46 informational conferences

held in cities throughout the United States. In addition, railroad labor unions frequently request that a Board representative speak before their meetings, seminars and conventions. In 1998, the Labor Member’s Office was represented at 16 union gatherings

attended by 4,646 railroad labor officials. Field personnel addressed 141 local union

meetings with 8,766 members in attendance.

At seminars for railroad executives and managers, Board representatives review

programs, financing, and administration, with special emphasis on those areas which

require cooperation between railroads and Board offices. The Board also conducts informational seminars on benefit programs for employees at the request of railroad management. During 1998, the Board’s Management Member’s Office conducted 11 seminars for railroad officials. It also conducted pre-retirement counseling seminars attended by railroad employees and their spouses, and benefit update presentations.

In response to a White House initiative, the Board in 1998 participated in

Conversations with America, a national effort to engage customers in an ongoing dialogue about improving customer service in the Federal Government. As part of this initiative, the Board is systematically gathering and analyzing feedback from its customers to discover what is important to them and what can be done to meet their expectations. Upcoming Conversations with America events are posted on the Board’s Web

site at www.rrb.gov.
LEGISLATIVE AND ADMINISTRATIVE DEVELOPMENTS 39

Office of Inspector General

D

uring Fiscal Year 1998, the Office of Inspector General continued its efforts to

assist management in increasing the efficiency of agency programs. Twentythree audits and evaluations issued during the year contained findings for improvement in both administrative and program operations. Two audit reports will have an

estimated financial impact of $2.4 million when Board management completes necessary corrective actions. Reviews were conducted of significant activities which included

the status of the conversion of information systems to ensure compliance with the Year

2000, the investment of agency trust funds, and agency progress in meeting the

requirements of the Government Performance and Results Act. Auditors concluded

that project management was adequately directing the Year 2000 implementation project, but the Office of Inspector General again expressed concern regarding the lack of

experience of the agency’s Investment Committee members and their increased trading

of trust fund monies. As a result, management was provided with recommendations for

improvement.

The Office of Inspector General completed its first independent audit of the agency’s

financial statements and related internal controls for the period October 1, 1996,

through September 30, 1997. This audit included a disclaimer of opinion for the fifth

consecutive year because of problems with the financial interchange, the annual funds

transfer between the Railroad Retirement Board and the Social Security Administration. Auditors also cited additional weaknesses concerning the overall control environment at the agency, the accuracy of benefit payments and the lack of controls to ensure

the proper crediting of railroad retirement tax deposits to the railroad retirement trust

funds.

The Office of Inspector General continued its efforts to ensure the integrity of the

benefit programs administered by the Railroad Retirement Board through the identification and referral for prosecution of those individuals who defraud the agency’s benefit

programs. Substantial effort was devoted to more complex fraud schemes involving collusion between railroad employers, retired railroad workers and third party employers.

These schemes have a substantial impact on the agency’s trust funds because the

retirees are receiving benefits to which they are not entitled and, at the same time, the

employers are not submitting contributions to the trust funds as required.

Investigative activities resulted in 100 criminal convictions, 73 civil judgments, 42

indictments/informations, and $1.98 million in court-ordered restitutions, fines, recoveries, and prevention of overpayments. The Office of Inspector General also continued

to pursue prosecution of cases under the Department of Justice’s Affirmative Civil

Enforcement Program. Thirty-three civil judgments under this program were entered

by Federal district courts which will result in the return of $304,504 to the Railroad

Retirement Board’s trust funds when the funds are collected.





STATISTICAL 

TABLES
Total1 Retirement2 Survivor2 Unemploy

BENEFICIARIES (in thousands)

1989....................................................... 1,024 659 322 33 1990....................................................... 1,002 650 315 29 1991....................................................... 980 638 307 30 1992....................................................... 956 626 301 25 1993....................................................... 935 615 298 20 1994....................................................... 912 599 288 21 1995....................................................... 879 582 282 16 1996....................................................... 849 565 272 17 1997....................................................... 830 549 263 15 1998....................................................... 800 530 254 11 BENEFIT PAYMENTS (in millions)1989....................................................... $7,027.8 $5,140.9 $1,797.6 $58.8 1990....................................................... 7,289.3 5,357.0 1,837.6 59.0 1991....................................................... 7,570.9 5,593.2 1,897.6 60.2 1992....................................................... 7,771.7 5,754.0 1,939.9 354.6 

1993....................................................... 7,941.6 5,896.0 1,976.2 347.7 1994....................................................... 8,044.9 5,978.9 1,999.9 340.9 1995....................................................... 8,120.6 6,042.9 2,016.3 35.7 1996....................................................... 8,179.1 6,089.1 2,024.4 40.7 1997....................................................... 8,278.6 6,166.3 2,039.4 37.5 1998....................................................... 8,305.9 6,199.0 2,047.5 25.9 

1 Benefit payments 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 extended unemployment benefits paid to claimants with less than 10 years of service and additional extended benefits to those with 10

Table 1.--Beneficiaries and benefits paid under the Railroad Retirement Act and the Railroad Unemployment Insurance Act, by 

Fiscal year

NOTE.-- Number of beneficiaries represents all individuals paid benefits in year. In total number for each year, beneficiaries are counted only onreceived more than one type of benefit. In fiscal year 1998, 12,500 individuals received both retirement and survivor benefits, 1,000 employees rand sickness benefits, and 3,900 employees received benefits under both the Railroad Retirement Act and the Railroad Unemployment Insurancestimated, and totals for earlier years are similarly adjusted.
Table 2.--Status of the Railroad Retirement, Social Security Equivalent Benefit, Supplemental, and Dual Benefits Payments Accounts, by fiscal 

Receipts Expenditures

Repa

Advances of a

against ag

financial fin

Fiscal year interchange4 inte

RAILROAD RETIREMENT ACCOUNT 1989.............. 6$2,447.5 $699.1 ............ ............ 7$2,477.5 $28.3 ........... 

1990.............. 92,478.1 9 734.2 $19.0 ............ 2,523.0 ........... 

1991.............. 2,491.4 810.5 ............ ............ 2,618.3 ........... 1992.............. 2,605.6 1,157.0 ............ ............ 2,715.7 ........... 1993.............. 2,334.2 754.1 ............ ............ 2,799.4 ........... 

1994.............. 112,619.1 879.0 ............ ............ 2,847.6 ........... 

1995.............. 122,523.9 13 1,071.0 ............ ............ 142,906.1 ........... 

1996.............. 152,474.7 16 913.0 ............ ............ 2,854.5 ........... 

1997.............. 2,518.7 17 1,348.9 ............ ............ 172,225.5 ........... 

1998.............. 2,660.8 1,730.2 ............ ............ 2,888.3 ........... SOCIAL SECURITY EQUIVALENT BENEFIT ACCOUNT18

1989.............. 6$1,790.6 $52.9 $2,933.5 $2,502.6 19$4,003.4 $23.5 $378.8 

1990.............. 1,754.4 62.2 3,030.1 2,577.4 4,223.8 367.4 1991.............. 1,797.8 70.9 3,456.7 2,764.9 4,434.8 352.2 1992.............. 1,895.7 119.2 3,206.4 2,907.9 4,571.0 374.5 1993.............. 1,850.8 73.4 3,435.4 2,939.9 4,685.3 400.5 1994.............. 111,849.5 76.2 3,525.5 3,019.3 4,768.0 412.9 

1995.............. 121,924.3 13 75.2 4,120.1 3,077.9 144,811.3 396.1 

1996.............. 151,918.3 16 123.3 3,556.3 3,150.1 4,939.4 401.3 

1997.............. 2,046.5 17 (116.2) 3,747.2 3,183.9 175,681.4 419.1 

1998.............. 2,208.7 90.7 3,819.1 3,145.1 5,078.8 419.4 See footnotes at end of table.

...........................................................................................................................................................................................

23.325.326.2

.................................

50.847.149.533.725.028.525.324.126.7

Dual 

benefit 

transfers3

Benefit

payments

Net 

transfers to

administration 

35.2

Transfers

under 

financial 

interchange2

41.049.249.549.750.5

 Tax

 transfers1

Transfers

under 

financial 

interchange2

Interest and

profit on

investments
Table 2.--Status of the Railroad Retirement, Social Security Equivalent Benefit, Supplemental, and Dual Benefits Payments Accounts, by fiscal year, 1

Receipts Expenditures

Repa

Advances of a

against ag

financial fin

Fiscal year interchange4 inte

RAILROAD RETIREMENT SUPPLEMENTAL ACCOUNT1989.............. 6$112.1 $3.6 ............ ............ $111.8 $1.9 ........... 

1990.............. 105.8 3.7 ............ ............ 108.0 2.4 ........... 

1991.............. 95.0 3.0 ............ ............ 106.0 2.0 ........... 

1992.............. 100.0 2.3 ............ ............ 102.1 2.3 ........... 

1993.............. 112.6 2.0 ............ ............ 98.5 2.3 ........... 

1994.............. 11 88.1 1.5 ............ ............ 94.0 2.3 ........... 

1995.............. 12 77.0 13 1.1 ............ ............ 90.3 2.3 ........... 

1996.............. 15 68.3 16 (20.5) ............ ............ 86.2 2.2 ........... 

1997.............. 103.6 (0.9) ............ ............ 82.4 2.2 ........... 1998.............. 118.1 0.7 ............ ............ 78.6 2.0 ........... DUAL BENEFITS PAYMENTS ACCOUNT20

1989.............. ......... .......... ............ $350.7 ........... $345.9 .......... ........... 1990.............. ......... .......... ............ 340.0 ........... 339.8 .......... ........... 1991.............. ......... .......... ............ 21337.4 ........... 331.8 .......... ........... 1992.............. ......... .......... ............ 319.1 ........... 305.0 .......... ........... 1993.............. ......... .......... ............ 294.0 ........... 289.2 .......... ........... 1994.............. ......... .......... ............ 277.0 ........... 269.4 .......... ........... 1995.............. ......... .......... ............ 254.0 ........... 251.5 .......... ........... 1996.............. ......... .......... ............ 239.0 ........... 233.4 .......... ........... 1997.............. ......... .......... ............ 223.0 ........... 216.4 .......... ........... 1998.............. ......... .......... ............ 205.5 ........... 200.9 .......... ........... See footnotes at end of table.

...........

Dual 

benefit 

transfers3

........................................................................................

 Tax

 transfers1

...........

transfers to financial 

interchange2

profit on financial Benefit

investments interchange2 payments administration

Transfers

Interest and under Net under 

Transfers
.

Table 2.--Status of the Railroad Retirement, Social Security Equivalent Benefit, Supplemental, and Dual Benefits Payments Accounts, by fiscal year, 1

 1 Includes Federal income tax transfers under section 72(r) of the Internal Revenue Code as amended. In fiscal years 1989-1994, the Railroad Retirement Account includes repayment taxes un

 Revenue Code, as amended, applied against outstanding loans due from the Railroad Unemployment Insurance Account.

2 Transfers to or from OASDHI Trust Funds under section 5(k)(2) of the 1937 Railroad Retirement Act and section 7(c)(2) of the 1974 Railroad Retirement Act. Fiscal year 1990 includes revers

 the Railroad Retirement and Social Security Equivalent Benefit Accounts representing adjustments for years for which the interchange was with the Railroad Retirement Account.

3 Transfers from U.S. Treasury under section 15(d) of the Railroad Retirement Act of 1974. Beginning fiscal year 1989, includes Federal income tax transfers under section 72(r) of the Internal 4 Advances, including interest, from U.S. Treasury to offset lag in receipt of financial interchange funds under section 7(c)(4) of the 1974 Railroad Retirement Act as amended.5 Through fiscal year 1995, all Account balances include liabilities for uncashed check credits received from U.S. Treasury. Beginning in fiscal year 1996, only the Railroad Retirement Account 

 Railroad Retirement Account balance also reflects (a) the current net difference between Board payments of social security benefits and the receipt of reimbursements for such payments, (b)  returns and recoveries, and (c) loans to and repayments from the Railroad Unemployment Insurance or the Supplemental Accounts. Beginning fiscal year 1996, the Supplemental Account b repayments (including interest) to the Railroad Retirement Account. The Dual Benefits Payments Account balance does not carry over to the following year.

6 Includes positive adjustments for payroll tax errors in fiscal years 1986 through 1988: Railroad Retirement Account $50.8 million, Social Security Equivalent Benefit Account $41.1 million, Sup7 Includes $45.9 million in adjustments for fiscal years 1985 through 1987.8 Reflects adjustments for prior years.

 9 Net of adjustments for payroll tax refunds for prior years: $27.8 million in taxes and $56.9 million in interest.10 Reflects payment during the year of the entire debt balance from the Railroad Unemployment Insurance Account, $83.1 million in principal and $97.1 million in interest.11 Reflects adjustments for current and prior fiscal years for carrier refunds and misclassified taxes: +$26.3 million for the Railroad Retirement Account, -$6.5 million for the Social Security Equiv +$5.9 million for the Supplemental Account. The Railroad Retirement Account also includes an income tax transfer adjustment of +$193 million for fiscal year 1993.12 Net of U.S. Treasury adjustments for payroll tax refunds to certain carriers and their employees for prior years: Railroad Retirement Account $19.3 million, Social Security Equivalent Benefit A Supplemental Account $0.8 million.13 Net of interest on U.S. Treasury adjustments for payroll tax refunds: Railroad Retirement Account $28.5 million, Social Security Equivalent Benefit Account $10.0 million, and Supplemental A interest on benefit payment adjustments for fiscal years 1985 through 1994: Railroad Retirement Account +$28.4 million, and Social Security Equivalent Benefit Account -$28.4 million.14 Reflects transfers between the Railroad Retirement and Social Security Equivalent Benefit Accounts for benefit payment adjustments for fiscal years 1985 through 1994: Railroad Retirement  Security Equivalent Benefit Account -$53.7 million.15 Net of U.S. Treasury adjustments for payroll tax refunds to certain carriers and their employees for prior years: Railroad Retirement Account $36.4 million, Social Security Equivalent Benefit A Supplemental Account $29.9 million. Reflects adjustment for misclassified supplemental annuity tax refunds for fiscal year 1996 and prior fiscal years: Railroad Retirement Account -$13.4 mi Benefit Account -$14.5 million, and Supplemental Account +$27.9 million.16 Net of interest on U.S. Treasury adjustments for payroll tax refunds: Railroad Retirement Account $11.3 million, Social Security Equivalent Benefit Account $8.0 million, and Supplemental Ac adjustment for misclassified supplemental annuity tax refunds for fiscal year 1996 and prior fiscal years: Railroad Retirement Account -$11.0 million, Social Security Equivalent Benefit Accou Supplemental Account +$21.8 million.17 Reflects adjustment in benefit payments (Railroad Retirement Account -$676.8 million, Social Security Equivalent Benefit Account +$676.8 million) charged to the Social Security Equivalent B December 1995, as compared to actual financial interchange benefits, with interest (Railroad Retirement Account +$241.6 million, Social Security Equivalent Benefit Account -$241.6 million) 18 Established October 1, 1984, to keep track of the financing and payment of social security level portions of railroad retirement benefits.19 Net of $62.1 million in adjustments for fiscal years 1985 through 1988.20 Established October 1, 1981, to keep track of the financing and payment of vested dual benefits.21 Includes $10.5 million in interest on the invested appropriation.
Table 3-Status of the Railroad Unemployment Insurance Account, by fiscal year, 1994-1998 (In thousands)

Fiscal year

 Item 1994 1995 1996 199RECEIPTS Taxes ........................................................................ $8,781 $5,806 $6,232 $11,19 Interest ..................................................................... 17,077 114,587 11,015 7,00

 Transfer from Administration fund under sec. 11(d) of the RUI Act ........................... .... 538 689 69 Undistributed recoveries of benefit payments2 .... (513) 309 (84) (33

 Loan repayment tax transfer from RR Account.... 32,733 .... .... .. Total ...................................................................... $58,078 $21,240 $17,851 $18,55EXPENDITURES Benefit payments .................................................... 3$65,967 $61,440 $65,576 $72,86

 Funding for Office of Inspector General ............... 1,426 1,218 1,186 1,03

 Net transfer to SMIF ................................................ 165 59 21 .. Total ...................................................................... $67,557 $62,717 $66,783 $73,89Cash balance end of period ..................................... 1$211,608 $173,608 $124,676 $69,33

1 The cash balance at the beginning of fiscal year 1995 was increased $3,478,000 to $215,085,000 and fiscal year 1995 interest was decreased $

 year 1994 audit adjustment.

2 Net of distributed payments.3 Includes benefits under Title V of the Emergency Unemployment Compensation Act of 1991, as amended, which provided extended unemploym

 with less than 10 years of service and additional extended benefits to those with 10-14 years.
Table 4-Status of the RUIA Administration Fund, by fiscal year, 1989-1998 (In thousands)

Transfer to

Railroad

Unemployment

Insurance

Taxes and Administrative Account under 

Fiscal year interest expenditures1 Sec. 11d2 

1989...................................... $15,646 $13,584 .......... 1990...................................... 17,398 15,559 $1,412 1991...................................... 18,482 18,892 3,762 1992...................................... 18,560 20,331 3,572 1993...................................... 16,703 17,716 1,064 1994...................................... 17,416 16,484 .......... 1995...................................... 317,597 16,462 538 

1996...................................... 17,373 16,497 689 1997...................................... 16,891 16,136 694 1998...................................... 19,081 13,123 2,993 

1 Expenditures for each year included encumbrances as of end of year.2 Transfers to the Railroad Unemployment Insurance Account are based on an accrual balance of $6,000,000 on Sep3 The cash balance at the beginning of fiscal year 1995 was increased $72,000 to $4,037,000 and fiscal year 1995 int

 decreased $72,000 due to a fiscal year 1994 audit adjustment.
Retired employees Spouses

and Widowed

Supple- divorced Aged Disabled mothers 

Total1 Age Disability mental spouses widow(er)s2 widow(er)s (fathers)2 Chi

NUMBER AT END OF YEAR1989 ............................ 1,111,630 321,420 81,035 197,610 220,483 253,318 7,296 2,191 16

1990 ............................ 1,094,112 316,049 79,996 194,615 218,475 246,892 7,229 2,078 161991 ............................ 1,074,199 309,535 79,192 190,650 215,733 241,032 7,058 1,956 161992 ............................ 1,050,546 302,184 78,474 186,146 212,036 233,809 6,904 1,829 151993 ............................ 1,024,439 293,454 78,282 180,603 206,967 227,087 6,799 1,786 151994 ............................ 996,280 284,168 78,183 174,505 201,327 220,021 6,620 1,735 15

1995 ............................ 967,175 274,603 78,566 168,231 195,082 212,639 6,525 1,617 151996 ............................ 936,428 265,030 78,647 161,806 188,281 204,969 6,371 1,525 141997 ............................ 906,741 255,664 79,063 155,721 181,399 197,447 6,202 1,462 141998 ............................ 875,905 245,900 79,017 149,260 174,467 190,222 6,031 1,427 14AVERAGE AMOUNT1989 ............................ ......... $860 $811 $46 $355 $521 $480 $526 

1990 ............................ ......... 909 869 45 372 546 501 554 1991 ............................ ......... 964 936 45 393 578 528 596 1992 ............................ ......... 1,010 996 45 410 604 549 626 1993 ............................ ......... 1,052 1,052 44 426 628 568 734 1994 ............................ ......... 1,091 1,108 44 441 652 586 804 1995 ............................ ......... 1,133 1,171 44 456 680 607 844 1996 ............................ ......... 1,175 1,228 43 471 708 628 882 1997 ............................ ......... 1,223 1,291 43 487 740 650 916 1998 ............................ ......... 1,264 1,346 43 502 768 672 957 

1 Includes annuities to parents. On September 30, 1998, there were 73 parents' annuities in current-payment status averaging $570. 2 Numbers include annuities temporarily being paid at spouse annuity rates, pending final adjudication of survivor annuities. 

NOTE.--Data exclude survivor (option) annuities. On September 30, 1998, there were 9 survivor (option) annuities in current-payment stat

Fiscal year

Table 5-Number and average amount of retirement and survivor annuities in current-payment status at end 

by type of annuitant and fiscal year, 1989-1998
 Table 6-Number and average amount of retirement and survivor annuities awarded during year, by type of annuitant and fiscal year, 1989-1998

 

Retired employees Spouses

and Widowed

Supple- divorced Aged Disabled mothers Remarried Divorced

 Total1 Age Disability mental spouses widow(er)s widow(er)s (fathers) Children widow(er)s widow(er)s

 

NUMBER AWARDED

1989......................... 66,572 16,375 4,494 9,534 19,583 13,540 265 318 1,113 566 775

1990......................... 60,743 14,497 4,489 8,703 17,036 12,793 299 338 1,199 562 815

1991......................... 55,181 12,446 4,566 7,422 15,641 12,232 267 277 1,087 471 762

1992......................... 52,298 11,645 4,553 7,079 14,442 11,700 251 269 1,092 490 764

1993......................... 49,014 9,965 4,849 5,877 12,719 12,529 272 272 1,023 601 900

1994......................... 44,378 9,000 4,885 5,320 11,847 10,631 229 241 909 469 836

1995......................... 42,072 7,962 5,094 4,715 10,407 11,021 297 222 1,074 419 853

1996......................... 38,635 7,415 4,878 4,414 9,576 9,979 233 204 825 365 737

1997......................... 38,293 7,422 4,872 4,494 9,175 9,868 240 222 855 381 757

1998......................... 36,508 6,756 4,620 4,399 8,739 9,566 248 236 851 360 727

 

Cumulative 1937-1998 4,563,956 1,359,689 462,848 409,426 1,044,275 928,231 15,642 83,095 229,649 12,312 15,299

 

AVERAGE AMOUNT

1989......................... ........ $992 $1,124 $42 $342 $570 $531 $523 $507 $388 $378

1990......................... ........ 1,062 1,188 41 385 620 575 579 546 408 420

1991......................... ........ 1,124 1,252 41 419 676 595 630 602 417 462

1992......................... ........ 1,202 1,323 41 439 707 659 652 625 454 478

1993......................... ........ 1,223 1,354 41 448 740 676 843 664 483 496

1994......................... ........ 1,277 1,431 41 464 784 713 869 686 521 527

1995......................... ........ 1,346 1,504 41 482 820 737 927 713 541 537

1996......................... ........ 1,435 1,527 41 505 858 770 955 741 594 564

1997......................... ........ 1,506 1,593 41 521 888 782 868 760 607 564

1998......................... ........ 1,579 1,649 41 545 920 810 908 805 642 599

 

1

 Includes annuities to parents. Fiscal year 1998 total includes 6 annuities to parents averaging $680. Cumulative total includes 3,490 annuities to parents

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.

Fiscal year
Total Retirement benefits2 

 Monthly Monthly 

State1 Number amount Number amount 

Alabama.......................................................................... 13,800 $10,908 9,800 $ 7,902 

Alaska............................................................................ 300 179 200 135 Arizona........................................................................... 15,200 11,466 11,800 8,923 

Arkansas........................................................................ 12,600 10,086 9,300 7,725 

California........................................................................ 52,700 39,044 39,000 29,233 

Colorado......................................................................... 11,300 8,966 8,300 6,697 

Connecticut...................................................................... 4,700 3,553 3,400 2,628 Delaware......................................................................... 2,600 2,090 1,800 1,516 

Washington DC................................................................. 1,200 725 900 506 Florida............................................................................. 47,300 35,666 36,300 27,947 

Georgia........................................................................... 20,900 16,546 15,300 12,484 Hawaii............................................................................. 400 173 300 128 Idaho............................................................................... 6,800 5,397 5,300 4,231 

Illinois.............................................................................. 56,900 43,569 42,600 33,011 

Indiana............................................................................ 24,100 19,258 17,900 14,571 Iowa................................................................................. 14,100 10,793 10,600 8,165 Kansas............................................................................ 20,600 16,501 15,700 12,708 Kentucky......................................................................... 21,000 17,098 15,400 12,894 Louisiana......................................................................... 12,100 9,561 8,900 7,036 Maine.............................................................................. 4,800 3,829 3,600 2,889 Maryland......................................................................... 16,100 12,722 11,800 9,469 

Massachusetts.................................................................. 8,500 5,970 6,100 4,271 Michigan.......................................................................... 22,000 17,389 16,900 13,587 

Minnesota........................................................................ 25,800 20,031 19,700 15,429 Mississippi........................................................................ 8,500 6,614 6,100 4,897 

Missouri.......................................................................... 29,500 22,452 21,900 16,914 

Montana.......................................................................... 9,200 7,474 7,200 5,869 

Nebraska......................................................................... 14,900 12,211 11,400 9,510 

Nevada............................................................................ 4,800 3,747 3,800 2,983 

New Hampshire................................................................. 1,500 1,061 1,100 750 New Jersey....................................................................... 16,300 12,582 11,800 9,299 

New Mexico...................................................................... 7,200 5,511 5,500 4,176 

New York......................................................................... 38,400 28,357 27,500 20,833 

North Carolina.................................................................... 14,500 11,280 10,700 8,508 North Dakota..................................................................... 5,000 4,062 3,700 3,086 

See footnotes at end of table.

Table 7.--Retirement and survivor benefits in current-payment status on September 30, 1998, by class and state (Amounts in tho
Total Retirement benefits2 

 Monthly Monthly 

State1 Number amount Number amount 

Ohio................................................................................ 47,400 $37,554 34,700 $27,719 Oklahoma........................................................................ 7,800 5,948 5,600 4,405 

Oregon............................................................................ 13,400 10,348 10,300 8,019 

Pennsylvania..................................................................... 67,400 53,377 48,500 38,744 Rhode Island..................................................................... 1,100 726 700 507 

South Carolina................................................................... 8,600 6,836 6,300 5,127 South Dakota.................................................................... 1,900 1,429 1,400 1,039 Tennessee....................................................................... 17,300 13,271 12,100 9,572 Texas.............................................................................. 48,200 37,938 35,500 28,199 Utah................................................................................. 8,900 7,008 6,700 5,284 Vermont.......................................................................... 1,700 1,208 1,300 877 Virginia............................................................................ 26,400 21,442 19,200 16,124 

Washington...................................................................... 17,200 13,657 13,200 10,644 West Virginia..................................................................... 15,700 12,706 11,500 9,421 Wisconsin........................................................................ 16,600 12,678 12,600 9,738 Wyoming........................................................................ 4,500 3,632 3,500 2,811 Outside United States:Canada............................................................................ 4,500 2,462 3,100 1,515 

Mexico............................................................................ 700 458 400 253 

Other............................................................................... 1,000 643 500 350 

 Total............................................................................... 875,900 $680,196 648,600 $511,258 

Table 7.--Retirement and survivor benefits in current-payment status on September 30, 1998, by class and state (Amounts in thousand

1 State of residence of beneficiary on September 30, 1998.2 Includes 149,300 supplemental annuities to employees receiving regular annuities. In a relatively small number of cases, employees were also receiving s

benefits.NOTE.--Retirement benefits include regular and supplemental employee annuities, spouse annuities and divorced spouse annuities. Survivor benefits includdisabled widow(er)s, widowed mothers and fathers, remarried and divorced widow(er)s, children, parents, survivor (option) annuities, and widow(er)s annuitispouse 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 1993-1994 through 1997-1998

 

Item 1993-1994 1994-1995 1995-1996 1996-1997 1997-1998

 

Qualified employees................................. 302,053 294,764 289,048 284,826 276,628

Maximum daily benefit rate...................... $33 $36 $36 $42 $43

UNEMPLOYMENT BENEFITS

Net amount of benefits paid (thousands) 1

$40,441 $37,357 $40,678 $38,249 $27,034

Payments:2

 Number................................................... 158,700 129,900 134,800 105,500 71,500

 Average amount per two week

 claim period......................................... $293.38 $312.84 $314.31 $357.69 $375.04

Beneficiaries............................................... 18,600 18,700 16,800 15,300 11,300

Applications received................................ 22,600 23,700 22,400 19,500 13,700

Claims received.......................................... 187,700 158,000 162,400 130,200 86,800

Normal benefit accounts exhausted........ 4,000 2,900 3,400 2,700 2,100

Non-compensable waiting period only3

.. 1,400 1,200 1,900 1,400 200

 

SICKNESS BENEFITS

Net amount of benefits paid (thousands) $25,437 $24,198 $25,759 $32,475 $33,058

Payments:2

 Number................................................... 170,000 163,000 162,900 154,600 147,500

 Average amount per two week

 claim period......................................... $312.94 $336.36 $337.84 $372.03 $385.40

Beneficiaries............................................... 21,600 21,000 20,400 20,500 20,500

Applications received................................ 30,900 29,100 28,000 27,400 26,600

Claims received.......................................... 205,100 196,200 194,100 184,300 171,100

Normal benefit accounts exhausted........ 4,700 4,300 4,400 4,300 4,300

Non-compensable waiting period only3

.. 3,100 2,900 2,700 1,300 200

 

1

 Includes benefits under Title V of the Emergency Unemployment Compensation Act of 1991, as amended, which provided extended

 unemployment benefits to claimants with less than 10 years of service and additional extended benefits to those with 10-14 years.

2

 Not adjusted for recoveries or settlements of underpayments.

3

 Prior to the October 1996 legislation, no benefits were payable for the first claim in a benefit year, generally resulting in a 2-week waiting period.

 As a result of the legislation, 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.

NOTE.--Data covered program activities during the year, regardless of when unemployment or sickness occurred. 
Table 9.-- All employees, new entrants, employees qualified for RUIA benefits, and related data, by employer, 1997 

All employees New entrants Credita

With 12 Months With 10 or Qualified Qualified

of service more years for RUIA for RUIA

Class or name of employer Total in 1997 of service benefits Total benefits Tier I 

CLASS OF EMPLOYERClass I railroads............................................ 228,674 189,409 171,980 218,627 11,605 6,473 $ 10,020,359 Class II railroads........................................... 11,249 8,450 6,749 10,417 1,085 640 420,276 Class III railroads.......................................... 32,732 25,240 18,989 30,150 2,723 1,446 1,343,224 Switching and terminal companies.................. 7,011 5,320 4,679 6,171 484 181 261,894 Car-loan companies....................................... 2,975 2,516 1,405 2,882 130 74 111,010 Miscellaneous employers1.............................. 4,823 3,556 2,772 4,197 513 218 193,244 

 Total.......................................................... 287,464 234,491 206,574 272,444 16,540 9,032 $12,350,006 SELECTED EMPLOYERSBurlington Northern and Santa Fe Ry. Co.......... 50,537 42,131 35,409 48,722 3,474 2,337 2,318,176 

Consolidated Rail Corp. (Conrail).................... 22,188 18,491 18,984 21,338 197 100 992,315 CSX Transportation Inc.................................. 31,741 26,457 27,426 30,617 1,177 604 1,390,963 Grand Trunk Western RR. Co.......................... 2,605 2,060 2,157 2,526 24 15 110,787 Illinois Central Gulf RR. Co............................. 3,509 2,926 3,000 3,313 135 80 159,821 Kansas City Southern Ry. Co.......................... 2,650 2,271 1,822 2,563 147 95 119,265 Soo-Kansas City Southern Joint Agency.......... 149 123 112 145 6 3 6,058 

National Railroad Passenger Corp. (Amtrak)..... 26,112 20,360 15,657 24,580 1,968 1,025 947,524 

Norfolk Southern Corp................................... 25,272 21,425 18,970 24,288 1,494 917 1,067,647 Soo Line RR. Co............................................ 3,994 2,974 2,902 3,782 158 57 163,197 Union Pacific RR. Co...................................... 59,917 50,191 45,541 56,753 2,825 1,240 2,744,606 

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.