National Railroad Retirement Investment Trust 

OCTOBER 2017 

QUARTERLY UPDATE
 

FOR THE PERIOD ENDING SEPTEMBER 30, 2017 

The National Railroad Retirement Investment Trust (the "Trust") issues a Quarterly Update to 

provide current information on the Trust’s operations and activities relating to its investment operations. 

This update reports on the Trust’s activities for the quarter ending September 30, 2017. Copies of the 

Trust's Annual Management Report and each Quarterly Update are available on the website of the 

Railroad Retirement Board ("RRB"), http://www.rrb.gov. 

As of September 30, 2017, the Trust had received a total of $21.3 billion from the Treasury for 

investment. Most of this amount was transferred to the Trust periodically during the first six months of 

its 2003 fiscal year beginning in October 2002. No transfers were received in the fiscal quarter just 

ended. In the quarter ended September 30, 2017, the Trust continued to transfer monies to the Treasury to 

help fund benefit payments and administrative expenses of the Railroad Retirement Account (“RRA”). 

Transfers to the Treasury during the quarter amounted to $343 million. Since the Trust’s inception, it has 

transferred a total of $21.1 billion to the Treasury. 

Investment Objectives 

The Trust’s primary investment objectives are to establish a portfolio that will achieve a longterm rate-of-return on assets sufficient to enhance the financial strength of the railroad retirement system 

and to do so in a diversified manner that minimizes the risk of large losses. Achievement of these 

objectives will facilitate the payment of benefits by the Railroad Retirement Board and the United States 

Treasury. To further these objectives the Trust has established an asset allocation policy and will seek to 

add value by obtaining returns that are in the aggregate greater than the returns of its strategic policy 

benchmark for this asset allocation. In addition, the Trust takes other appropriate steps to manage 

investment risk and volatility effectively. 

In 2002, the Trust conducted its first comprehensive asset allocation study for the purpose of 

analyzing alternative asset allocation strategies for the Trust. The study analyzed the long-term expected 

return, risk, and return correlation of various asset classes, as well as the expected return and risk of 

various portfolios of these asset classes. In 2004, 2006, 2008, 2009, 2011, 2014 and 2017, the Trust took 

steps to review and update its asset allocation. As a result of these reviews, the Trustees have refined 

periodically the Trust’s asset allocation policy and strategic policy benchmark. 

TRUSTEES: 

 Chair: C. Alec Vincent 

Assistant Vice President Fuel and

George J. Francisco, Jr. 

President Emeritus 

Joel Parker 

Labor Trustee 

William F. Quinn 

Independent Trustee 

 BU-Ops Sourcing 

BNSF Railway Company 

National Conference of Firemen and 

Oilers - SEIU 

Mary S. Jones 

Vice President and Treasurer 

Richard G. Patsy 

Assistant Vice President Pensions and 

 Investments 

William C. Walpert 

National Secretary-Treasurer Emeritus 

Brotherhood of Locomotive Engineers

Union Pacific Corporation CSX Corporation and Trainmen (BLET) 
 

 

 

 

The Trust's current asset allocation policy and strategic policy benchmark are contained in its 

Investment Guidelines which are included as Appendix B of the Trust’s Annual Management Report. 

The investment performance for the Trust, as well as the change in market value of Trustmanaged and RRB-held assets, is summarized below for the most recent quarter. 

Investment Performance – Net of Fees 

for the quarter ended September 30, 2017 

Trust-managed assets: 4.03% 

Strategic Policy Benchmark: 3.89% 

Market Value of Assets 

(Asset values are in billions of dollars) 

Trust-managed assets 

As of June 30, 2017 $25.8 

As of September 30, 2017 $26.5 

Change for quarter ended September 30, 2017 $0.7 

Change in Trust-managed assets since inception 

Total transfers from Treasury since inception $21.3 

Total transfers to Treasury since inception $-21.1 

Total change in assets since inception $26.3 

As of September 30, 2017 $26.5 

Trust-managed assets and RRB assets held in reserve 

As of June 30, 2017 $27.3 

As of September 30, 2017 $27.8 

Change for quarter ended September 30, 2017 $ 0.5 

Financial Market Volatility 

The Trust originally deployed assets received from Treasury into a diversified and balanced 

portfolio of US and non-US equity and US fixed income securities. Over time, the Trust has furthered 

that diversification by allocating a percentage of the portfolio to non-US fixed income securities, private 

equity, real estate, and commodities. As mandated by its statute, the Trust has avoided undue 

concentration of investment in any asset class, type of security, or market sector. This policy of broad 

diversification is intended to serve the Trust well in strong markets and to protect its assets from 

disproportionate market shocks in volatile periods. As part of this diversification process, the Trust holds 

tens of thousands of different securities selected by its investment managers for its portfolio. 

Trustees and investment staff continue to monitor carefully the Trust’s existing investments and 

examine ways to refine its strategies to invest Trust assets in the most effective and prudent manner. The 

Board of Trustees will continue to manage the assets of the Trust as a patient, long-term investor, 

recognizing its responsibilities to the railroad retirement system, its workers and retirees. As a long-term 

investor, the Trust expects to benefit from the long-term recovery of financial markets. 

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Annual Report 

The Trust’s Annual Management Report contains additional information regarding the Trust’s 

investment activities as well as other financial information. This report can be found on the Railroad 

Retirement Board’s website at http://www.rrb.gov. 

National Railroad Retirement Investment Trust | 2001 K Street NW, Suite 1100 | Washington, DC 20006 

Whistleblower Hotline: (877) 888-0002 

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