U.S. RAILROAD RETIREMENT BOARD

An Agency Overview RRB.gov

January 2024

The Railroad Retirement Board (RRB) is an independent agency in the executivebranch of the federal government. The RRB’s primary function is to administer 

comprehensive retirement-survivor annuities and unemployment-sickness benefits for the 

nation’s railroad workers and their families, under the Railroad Retirement and Railroad 

Unemployment Insurance Acts. As part of the retirement program, the RRB also has 

administrative responsibilities under the Social Security Act for certain benefit payments and 

railroad workers’ Medicare coverage.

In fiscal year 2023, the RRB paid retirement-survivor benefits of approximately 

$14.0 billion to about 493,000 annuitants. The RRB also paid net unemployment-sickness 

benefits of $62 million to more than 15,000 claimants. At the end of fiscal year 2023, the average 

annuity paid to retired rail employees was $3,380 a month, spouse benefits averaged 

$1,235 a month, and benefits for aged widow(er)s averaged $2,105 a month. The maximum 

biweekly rate for unemployment and sickness benefits was $870 prior to sequestration, which 

reduced the maximum benefit amount by 5.7 percent to $820.41. Legislation paused 

sequestration during much of the coronavirus pandemic, but it was reinstated as of May 10, 2023.

Development of the Railroad Retirement and 

Unemployment Insurance Systems

The RRB was created in the 1930s by legislation establishing a retirement program for the 

nation’s railroad workers. The railroad industry had pioneered private industrial pension plans, 

with the first industrial pension plan in North America established by a railroad in 1874. By the 

1930s, railroad pension plans were far more developed than in most other businesses or 

industries, but these plans had serious defects which the Great Depression magnified.

Retirement program.--The economic conditions of the 1930s demonstrated the need for 

retirement plans on a national basis, because few of the nation’s elderly were covered under any 

type of retirement program. While the social security system was in the planning stage, railroad 

workers sought a separate railroad retirement system which would continue and broaden the 

existing railroad programs under a uniform national plan. The proposed social security system 

was not scheduled to begin monthly benefit payments for several years and would not give credit 

for service performed before 1937, while conditions in the railroad industry called for immediate 

payments based on prior service.

RAILRO

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RET IREMENT

B

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U.S.A.
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Legislation enacted in 1934, 1935, and 1937 established a railroad retirement system 

separate from the social security program legislated in 1935. Such legislation, taking into 

account particular circumstances of the rail industry, had some precedent. Many laws pertaining 

to rail operations and safety had already been enacted since the Interstate Commerce Act of 

1887. Since passage of the Railroad Retirement Acts of the 1930s, several other railroad laws 

have subsequently been enacted.

While the railroad retirement system has remained separate from the social security system, 

the two systems are closely coordinated with regard to earnings credits, payments, and taxes. A 

financial interchange links financing of the two systems by coordinating the portion of railroad 

retirement annuities that is equivalent to social security benefits with the social security system. 

The purpose of this financial coordination is to place the social security trust funds in the same 

position they would be in if the social security program covered railroad service instead of the 

railroad retirement program.

Legislation enacted in 1974 restructured railroad retirement annuities into two tiers to 

coordinate them more fully with social security benefits. The first tier is based on combined 

railroad retirement and social security credits, using social security benefit formulas. The second 

tier is based on railroad service only and compares with private pensions paid over and above 

social security benefits in other industries.

Unemployment insurance program.--The railroad unemployment insurance system was 

also established in the 1930s. The Great Depression demonstrated the need for unemployment 

compensation programs, and the Social Security Act of 1935 created state unemployment 

programs. While the state unemployment programs generally covered railroad workers, railroad 

operations which crossed state lines caused special problems. In some instances, one state denied 

compensation for unemployed railroad workers because their employers had paid unemployment 

taxes in another state. Although there were cases where employees appeared to be covered in 

more than one state, they often did not qualify in any.

A federal study commission, which reported on the nationwide state plans for unemployment insurance, recommended that a separate plan cover railroad workers because of complications with the state plans. Congress then enacted the Railroad Unemployment Insurance Act in 

June 1938. The Act established a system of benefits for unemployed railroaders, financed 

entirely by railroad employers and administered by the RRB. Legislation added sickness benefits 

in 1946.

Railroad Retirement Act

Under the Railroad Retirement Act, railroad workers with at least 10 years of service can 

receive retirement and disability annuities. Such annuities are also payable to workers with 

5 years of service if performed after 1995.
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Provisions.--Full age annuities are payable at age 60 to workers with 30 years of service. 

For those with less than 30 years of service, reduced annuities are payable at age 62 and 

unreduced annuities are payable at full retirement age, which varies depending on the year of 

birth. Disability annuities can be paid on the basis of total or occupational disability. Annuities 

are also payable to spouses and divorced spouses of retired workers, widow(er)s, surviving 

divorced spouses, remarried widow(er)s, children, and parents of deceased railroad workers. 

Qualified railroad retirement annuitants receive Medicare coverage just like social security 

beneficiaries.

As noted, the RRB pays retirement annuities to employees, as well as their spouses 

and/or divorced spouses, if the employee had at least 10 years of railroad service, or 5 years if 

performed after 1995. However, for survivor benefits, there is an additional requirement that 

the employee’s last regular employment before retirement or death was in the railroad industry. 

If a railroad employee or his or her survivors do not qualify for a railroad retirement annuity, 

the RRB transfers the employee’s railroad retirement credits to the Social Security 

Administration, which treats them as social security credits.

Financing.--Payroll taxes paid by railroad employers and their employees are the primary 

source of funding for the railroad retirement-survivor annuity programs. Railroad retirement 

taxes, which have historically been higher than social security taxes, are calculated, like 

annuity payments, on a two-tier basis. Railroad retirement tier I payroll taxes are coordinated 

with social security taxes so employees and employers pay tier I taxes at the same rate as social 

security taxes. In addition, both employees and employers pay tier II taxes to finance railroad 

retirement annuity payments beyond social security levels. The ratio of certain asset balances 

to the sum of annuity payments and administrative expenses determines tier II tax rates.

Revenues in excess of annuity payments are invested to provide additional trust fund 

income. The National Railroad Retirement Investment Trust manages and invests railroad 

retirement assets. It invests these funds in non-governmental assets, as well as in governmental 

securities.

Additional trust fund income derives from the financial interchange with the social 

security trust funds, revenues from federal income taxes on railroad retirement benefits, and 

appropriations from general treasury revenues provided after 1974 as part of a phase-out of 

certain vested dual benefits.

Railroad Unemployment Insurance Act

Under the Railroad Unemployment Insurance Act, unemployment insurance benefits are 

paid to railroad workers who are unemployed but ready, willing, and able to work, and sickness 

benefits are paid to railroad workers unable to work because of illness or injury. The RRB also 

operates a placement service to help unemployed railroaders secure employment.
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Benefit year.--A new unemployment-sickness benefit year begins every July 1, with 

eligibility generally based on railroad service and earnings in the preceding calendar year. Up to 

26 weeks of normal unemployment or sickness benefits are payable to an individual in a benefit 

year. Additional extended benefits are payable to persons with 10 or more years of service.

Financing.--Taxes on railroad employers under an experience-rating system finance the 

railroad unemployment-sickness benefits program. The RRB calculates each employer’s payroll 

tax rate annually on the basis of benefit payments to the railroad’s employees.

Railroad Medicare

The Medicare program covers railroad workers just like workers covered under social 

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

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

for at least 24 months or who suffer from chronic kidney disease requiring hemodialysis or 

transplant. In addition to basic hospital insurance (Part A) financed by payroll taxes, there is an 

elective supplementary medical insurance (Part B) that covers many other medical services, such 

as doctor visits, durable medical equipment, and outpatient services that hospital insurance does 

not cover.

Eligible railroad retirement annuitants and social security beneficiaries whose benefits are 

payable by the RRB are automatically enrolled under both plans, but the annuitant or beneficiary 

can decline Medicare Part B. Eligible nonretired persons must apply in order to obtain Medicare 

coverage. The RRB automatically enrolled nearly 21,700 beneficiaries for Medicare during 

fiscal year 2023. As of the end of that fiscal year, about 459,300 people were enrolled in Part A,

and more than 441,600 (96 percent) of them were also enrolled in Part B. Palmetto GBA, a 

subsidiary of Blue Cross and Blue Shield, processes medical insurance (Part B) claims for 

railroad retirement Medicare beneficiaries.

RRB Organization and Functions

A three-member Board appointed by the President of the United States, with the advice and 

consent of the Senate, leads the RRB. The President appoints one member upon the recommendation of railroad employers, another upon the recommendation of railroad labor organizations 

and the third, who is the Chairman, to represent the public interest. The Board Members’ terms 

of office are 5 years and expire in different years.

The primary function of the RRB is the determination and payment of amounts due under 

the retirement-survivor and unemployment-sickness programs. To this end, the RRB employs 

field representatives to help railroad personnel and their families in filing claims for benefits, 

examiners to adjudicate the claims, and information technology staff to ensure equipment and 

programs maintain earnings records, calculate benefits, and process payments.

The RRB also employs actuaries to predict the future income and outlays of the railroad 

retirement system, statisticians to analyze and provide data, and attorneys to interpret legislation 

and represent the RRB in litigation.
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The RRB’s Inspector General is a Presidential appointee, with Senate confirmation, who 

serves as an independent and objective voice to the RRB Board Members and the Congress. The 

Office of Inspector General’s (OIG) staff conducts independent audits, reviews and investigations 

of the RRB’s programs and operations. The OIG also maintains a Hotline to facilitate the reporting of allegations of fraud, waste, abuse, or mismanagement within these programs and operations. Additional details regarding the OIG and the OIG Hotline are available online at RRB.gov.

The RRB and the Federal Government

As an independent agency in the executive branch of the federal government, the RRB 

reports on its operations to the President and the Congress. RRB officials also may testify at 

congressional hearings on issues related to the Railroad Retirement and Railroad Unemployment 

Insurance Acts. Congress has jurisdiction over the amounts available to the railroad retirement 

system for benefit payments and administrative expenses.

The RRB works closely with other federal agencies and with some state agencies. Its 

dealings with some of these agencies, such as the President’s Office of Management and Budget, 

the Office of Personnel Management, the Government Accountability Office, and the 

Department of Treasury, are similar to those of other executive branch agencies. Interactions 

with some others – principally the Social Security Administration, the Centers for Medicare & 

Medicaid Services, state employment security departments and, on a smaller scale, the 

Department of Labor – are specifically related to the RRB’s various payment programs.

The RRB and the National Railroad Retirement Investment Trust

The Railroad Retirement and Survivors’ Improvement Act of 2001 established the National 

Railroad Retirement Investment Trust. The sole purpose of the Trust is to manage and invest 

railroad retirement assets. The Trust is a tax-exempt entity independent from the federal 

government.

The Act authorizes the Trust to invest the assets of the Railroad Retirement Account in a 

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

Before the Act, the law limited investment of Railroad Retirement Account assets to U.S. 

government securities.

The Trust has seven trustees, with railroad labor unions and railroad companies each 

selecting three. These six trustees then select a seventh, independent trustee. In turn, they hire 

professional staff to manage investment of the assets. While the Act does not delegate any 

authority to the RRB with respect to day-to-day activities of the Trust, the Act does provide that 

the RRB may bring a civil action to enjoin any act or practice of the Trust that violates the 

provisions of the Act or to enforce any provision of the Act. The Trust has no powers or authority 

over the administration of benefits under the Railroad Retirement Act.
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The RRB and the Railroad Industry

The administrative organization of the RRB fosters close relations with railroad employers, 

employees and their representatives. Two of the three Board Members are appointed on the 

recommendations of railway labor and management associations, and labor and management 

officials have been active in the development of the railroad retirement and unemployment 

insurance programs since their inception.

In addition, the RRB relies on railroad employers and labor groups for help in keeping 

railroad personnel informed about the benefit programs.

The RRB conducts informational programs for railroad management and labor officials to 

acquaint them with the details of the agency's programs. These officials, in turn, educate railroad 

workers as to their benefit rights and responsibilities.

Railroad employers and railway labor groups also assist the RRB with a joint placement 

program to find jobs for unemployed personnel. These joint placement efforts help to reduce the 

costs of the unemployment insurance program.

The RRB has direct contact with individual railroad employees, in person or by phone, 

through its national network of 53 field offices. Field personnel explain benefit rights and 

responsibilities, help employees apply for benefits, provide related services for annuitants, and 

answer any questions related to the benefit programs. The RRB maintains field offices in railroad 

locales across the United States. A toll-free number (1-877-772-5772) also provides RRB 

customers with easy access to the agency’s field offices.

The RRB’s headquarters is located in the William O. Lipinski Federal Building at 844 

North Rush Street, Chicago, Illinois 60611-1275.

The following pages provide a list of the RRB’s publications.

Information on the RRB is also available online at RRB.gov. 

Prepared by

U.S. RAILROAD RETIREMENT BOARD

Public Affairs

844 North Rush Street

Chicago, Illinois 60611-1275
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Publications

The following leaflets pertaining to benefits payable by the RRB are available at any RRB 

field office, RRB headquarters at 844 North Rush Street, Chicago, Illinois 60611-1275, or on the 

agency’s website at RRB.gov.

• Railroad Retirement and Survivor Benefits, RRB Form IB-2

• Guide to Railroad Retirement and Survivor Benefits

(Spanish-language edition), RRB Form RB-4a

• The Taxation of Railroad Retirement Act Annuities, RRB Form TXB-85

• Medicare for Railroad Workers and Their Families, RRB Form RB-20

• Railroad Unemployment and Sickness Benefits, RRB Form UB-9

• Customer Service Plan, RRB Form IB-3

 The following publications about administrative, financial, statistical, legal and other 

aspects of the railroad retirement and unemployment insurance systems are available on the 

RRB's website.

• Annual Report - yearly summary of RRB’s operations is distributed to officials of railway

management and labor, members of Congress, officials of the federal government, and

requesting libraries.

• Performance and Accountability Report - annual report that highlights goals and accomplishments of the RRB in the most recent fiscal year, future plans, and a summary review of

the agency’s financial statements.

• Railroad Retirement Handbook - a comprehensive single source of authoritative

information on the development and character of the railroad retirement and railroad

unemployment insurance systems.

• RRB News - periodic news releases distributed to editors of railway publications and

major newspapers, railway management and labor officials, and requesting agencies and

organizations.

• Railroad Retirement Information - questions and answers distributed monthly to editors

of railway publications and officials of railway management and labor.
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• Statistical Tables and Quarterly Benefit Statistics - distributed to officials of railway

management and labor organizations and requesting libraries.

• RRB Strategic Plan - long-range planning document, updated every 4 years, that outlines

agency plans to improve RRB operations and provide outstanding customer service.

The RRB headquarters is located in the 

William O. Lipinski Federal Building at 

844 North Rush Street in Chicago, Illinois.

The members of the Board are, left to right, 

Chairman Erhard R. Chorlé, Labor 

Member John Bragg, and Management 

Member Thomas Jayne.