**Railroad Retirement Board**

**Lost Investment Opportunity (Indefinite Budget Authority)**

**Effective Fiscal 2014**

**RAILROAD RETIREMENT BOARD**

**LOST INVESTMENT OPPORTUNITY (INDEFINITE BUDGET AUTHORITY)**

**EFFECTIVE FISCAL YEAR 2014**

**PREPARED BY:**

**UNITED STATES GENERAL LEDGER ADVISORY DIVISION**

**GOVERNMENTWIDE ACCOUNTING**

**BUREAU OF THE FISCAL SERVICE**

**U.S. DEPARTMENT OF THE TREASURY**

**Background**

***Description of the “Lost Investment Opportunity”***

RRB is an independent agency in the executive branch of the federal government.  The RRB’s primary function is to administer comprehensive retirement-survivor and unemployment-sickness benefit programs for the nation’s railroad workers and their families, under the Railroad Retirement and Railroad Unemployment Insurance Acts.  Per 45 USC 231f (c)(4), after the end of the month, the RRB shall determine the net amount, if any, which if added to or subtracted from the Social Security Trust Funds (Federal Old-Age and Survivors Insurance, Federal Disability Insurance, and Federal Hospital Insurance) would, with respect to each month, place those Trust Funds, taken as a whole, in the same position as if the Railroad Retirement Act had not been enacted.  On a monthly basis RRB borrows from Treasury on the 15th of the month.  Prior to fiscal year 2014 RRB would borrow a principal amount plus the amount RRB would have earned for the number of days hypothetically lost if the funds were invested in the Railroad Retirement Trust Fund (RRTF).  This results in a “Lost Investment Opportunity” for the RRTF.  The funds from the borrowing could have been invested in RRTF as of the close of the preceding month.  

Beginning in fiscal year 2014 RRB will be calculating the actual amount of the “Lost Investment Opportunity” each month.  Based upon this calculation each month Bureau of Fiscal Service (Fiscal Service) will process a warrant for the calculated amount.  This amount will be recorded in 060X0113.  Monthly, the RRB will transfer via the SF-224, the actual “Lost Investment Opportunity” warranted in the 060X0113 account to the 060X8010.004 account.  RRB will do this every month; therefore, there will not be a difference between the total warrant amounts for the year versus the total actual transfers for the year at year end.   There will never be a situation where the RRB will need to transfer an amount back to Treasury due to the fact that at the end of the year the warrant amounts will always total the transferred amounts for the year.  

In our example we are using hypothetical data that the total of the transfers for the year will be $4,320,000 (12 months * $360,000).  This will also be the total of the warrant amounts for the year.

***Applicable Railroad Retirement Board Treasury Account Fund Symbols (TAFSs)***

60X0113, “Federal Payments to the Railroad Retirement Accounts, Railroad Retirement Board”

60X8010, “Social Security Equivalent Benefit Account, Railroad Retirement Board”

60X8010.004 “Advances from the General Fund for Financial Interchange Interest, Social Security Equivalent Benefit Account, Railroad Retirement Board”

**Listing of  USSGL  Accounts Used in This Scenario**

**Illustrative Transactions**

A beginning trial balance is not applicable in this scenario.

**Closing Entries**

� 411900:  SF 133 and P&F Schedule line 1200 [Appropriation -- Authority_Type=P, BEA_Category_Indicator=M]

� 411400: SF 133 and P&F Schedule line 1201 [Appropriation -- Authority_Type = P, BEA_Category_Indicator=M, Fund Type=ET]

3Note:  USSGL TFM S2-14-01  Part 1  has two separate crosswalks for simplicity; we combined the SF 133 and P&F.

**November 2015**

**15 of 15****November 2015**