Twenty-Second

Actuarial Valuation

of the Assets and Liabilities

Under the Railroad Retirement Acts

as of December 31, 2001

with

Technical Supplement

U.S. Railroad Retirement Board 

Bureau of the Actuary 

Chicago, Illinois 
Twenty-Second Actuarial Valuation

of the Assets and Liabilities

Under the Railroad Retirement Acts

as of December 31, 2001

with

Technical Supplement

by

Frank J. Buzzi, Chief Actuary

with Statements of the

Railroad Retirement Board

and the

Actuarial Advisory Committee

U.S. Railroad Retirement Board

Bureau of the Actuary

August 2003
i 

CONTENTS

Statement of the Railroad Retirement Board v

Statement of the Actuarial Advisory Committee vii

Report of the Actuary

I. Introduction 1

II. Summary of Recent Developments and Results 1

III. Regular and Supplemental Benefits and Their Financing 3

IV. Dual Benefits, Their Financing, and the Financial Interchange 7

V. Assumptions, Methodology, and Valuation Results 9

VI. Statement of Actuarial Opinion 15

Appendix

Outline of the benefit and financing provisions of the railroad retirement system as

amended through December 31, 2002 30

Technical Supplement 

General Methodology and Assumptions 39

Mortality and Remarriage Experience 58

Retirement Studies 72

Withdrawal Studies 79

Employee and Beneficiary Censuses, Family Composition, and Miscellaneous Statistics 82
ii 

TABLES 

1. Employment, inflation and interest assumptions 16

2. Progress of the National Railroad Retirement Investment Trust, Railroad Retirement

Account and Social Security Equivalent Benefit Account 18

3. Present value of benefits in millions of dollars 21

4. Present value of benefits as a percentage of the present value of tier 2 payroll 22

5. Balance of the Railroad Retirement and Social Security Equivalent Benefit Accounts

as of December 31, 2001 23

6. Actuarial surplus or (deficiency) for National Railroad Retirement Investment Trust and

Railroad Retirement Account 24

7. Minimum contribution required under ERISA 25

8. Vested dual benefit amounts and average number of beneficiaries 26

9. Supplemental annuity benefit amounts and average number of beneficiaries 27

10. Average number of railroad retirement annuitants and number of annuitants per full

time employee 28

11. Transfers to railroad retirement system under financial interchange with social security

system, 1937-2003 29

S-1. 2001 RRB Annuitants Mortality Table 44

S-2. 2001 RRB Disabled Mortality Table for Annuitants with Disability Freeze 45

S-3. 2001 RRB Disabled Mortality Table for Annuitants without Disability Freeze 46

S-4. 1994 RRB Active Service Mortality Table 47

S-5. 2001 RRB Spouse Total Termination Table 48

S-6. Probability of a retired employee having a spouse eligible for railroad retirement benefits 49

S-7. 1995 RRB Mortality Table for Widows 50

S-8. 1980 RRB Remarriage Table 51

S-9. 1986 RRB Total Termination Table for Disabled Children 52

S-10. Calendar year rates of immediate age retirement 53

S-11. Rates of immediate disability retirement and of eligibility for disability freeze 54

S-12. Calendar year rates of final withdrawal 55

S-13. Service months and salary scales 56

S-14. Family characteristics of railroad employees assumed for the valuation of survivor

benefits 57

S-15. Mortality experience of railroad age annuitants between anniversaries of retirement

in 1997 and 2000, by sex and type of retirement 59
iii 

S-16. Mortality experience of railroad age annuitants between anniversaries of retirement 

in 1997 and 2000, by year 60 

S-17. Mortality ratios for railroad age annuitants on a select and ultimate basis between 

anniversaries of retirement in 1997 and 2000 61 

S-18. Age specific death rates of railroad disability annuitants between anniversaries of 

retirement in 1997 and 2000, by age and duration 62 

S-19. Mortality experience of railroad disability annuitants between anniversaries of 

retirement in 1997 and 2000, by disability freeze status 63 

S-20. Percentages of railroad disability annuitants included in the 22nd valuation mortality studies 

who would have qualified for a benefit under the social security disability standards 64 

S-21. Mortality experience of active railroad employees during calendar years 1995-99 65 

S-22. Total termination experience of spouse annuitants between anniversaries of retirement 

in 1997 and 2000 66 

S-23. Mortality experience of spouse annuitants between anniversaries of retirement 

in 1997 and 2000 67 

S-24. Number of retired employees and number with a spouse eligible for railroad retirement 

benefits, by attained age of employee on December 31, 2000 68 

S-25. Mortality experience of widow annuitants between anniversaries of retirement 

in 1997 and 2000 69 

S-26. Remarriage experience of widows between 1991 and 2000 anniversaries of widowhood 70 

S-27. Total termination experience of disabled children annuitants between anniversaries of 

retirement in 1997 and 2000 71 

S-28. Rates of immediate age retirement 73 

S-29. Immediate age retirement experience of railroad employees with 10-29 years of 

service during calendar years 1998-2000 74 

S-30. Immediate age retirement experience of railroad employees with 30 or more years of 

service during calendar years 1998-2000 75 

S-31. Rates of immediate disability retirement 76 

S-32. Immediate disability retirement experience of railroad employees during calendar 

years 1998-2000 77 

S-33. Percentages of immediate disability retirements in 1998-2000 meeting the disability freeze 

standards of the Social Security Act 78 

S-34. Withdrawal experience of railroad employees during calendar years 1996-1999, 

by attained age and years of service 80 

S-35. Distribution of 2001 active employees by age and completed years of service 83 
iv 

S-36. Census of vested inactive employees in 2001 by age and completed years of service 84 

S-37. Comparison between 2001 and 1998 of selected characteristics of active railroad 

employees 85 

S-38. Census of employee and spouse annuitants on December 31, 2001 86 

S-39. Census of survivor annuitants on December 31, 2001 87 

S-40. Comparison of service months of railroad employees during calendar years 1997-99 

with assumptions used in the 22nd valuation 88 

S-41. Average creditable compensation per service month during 2001 89 

S-42. Age distribution of new entrants during calendar years 1997-2000 and comparison with 

assumptions of the 21st valuation 90 

S-43. Family characteristics of railroad employees who died in 1997-2000 with a current 

connection 91 

S-44. Selected employment and benefit statistics for 1998 and 2001 92 



1 

REPORT OF THE ACTUARY 

I. INTRODUCTION 

Section 15 of the Railroad Retirement Act of 1974 requires that the Railroad Retirement Board, at 

intervals of not more than three years, prepare actuarial valuations of the railroad retirement system. 

Section 22 of the Railroad Retirement Act of 1974 requires that the Railroad Retirement Board 

prepare an annual report containing a five-year projection of revenues to and payments from the 

Railroad Retirement Account and to submit the report to the President and the Congress by July 1. 

Beginning in 2003, the report must also contain a five-year projection of the account benefits ratio 

and average account benefits ratio. If the five-year projection indicates that funds in the Railroad 

Retirement Account will be insufficient to pay full benefits, (1) representatives of railroad 

employees, railroad carriers and the President must submit proposals to the Congress to preserve the 

financial solvency of the Railroad Retirement Account, and (2) the Railroad Retirement Board must 

issue regulations to reduce annuity levels during any fiscal year in which there would be insufficient 

funds to make full payments. 

Section 502 of the Railroad Retirement Solvency Act of 1983 requires the Railroad Retirement 

Board to prepare an annual report on the actuarial status of the railroad retirement system and to 

submit the report to the Congress by July 1. The report must contain recommendations for any 

financing changes which might be advisable, including (1) changes in the tax rates, and (2) whether 

any part of the taxes on employers should be diverted to the Railroad Unemployment Insurance 

Account to aid in the repayment of any debt to the Railroad Retirement Account. 

This report, the 22nd actuarial valuation, is intended to meet these three requirements for 2003. 

II. SUMMARY OF RECENT DEVELOPMENTS AND RESULTS 

Recent actuarial reports have discussed in detail the importance of the level of railroad employment 

to the railroad retirement system's financial stability. The payroll tax on railroad employment has 

been the major source of income to the system since its establishment in the 1930's. It is clear that 

the fewer railroad workers there are, the less money the retirement account collects in payroll taxes, 

and the more likely the system is to require additional funds. Declines in railroad employment over 

a long period, coupled with inflation and subsequent benefit increases, required legislation to 

strengthen the system's financial condition in 1974, 1981, 1983, and 1987. 

The 21st valuation (2000 actuarial report) projected a surplus of 3.34 percent of tier 2 payroll under 

the intermediate employment assumption. This surplus has decreased to 0.24 percent largely due to 

benefit and financing changes contained in the Railroad Retirement and Survivors’ Improvement 

Act of 2001 (RRSIA). The RRSIA, signed into law December 21, 2001, liberalized early retirement 

benefits for 30-year service employees and their spouses, eliminated a cap on monthly retirement 

and disability benefits, lowered the minimum service requirement from 10 years to 5 years of 

service if performed after 1995, and provided increased benefits for some widow(er)s. Financing 

sections in the law provided for investment of railroad retirement funds in non-governmental assets, 
2 

adjustments in payroll tax rates paid by employers and employees, and the repeal of the 

supplemental annuity work-hour tax. 

The 22nd valuation has been prepared under three assumptions as to the future behavior of railroad 

employment. These employment assumptions are similar to the employment assumptions used in 

the 21st valuation. Employment assumptions I and II are based on the stability of employment in 

passenger service (Amtrak and commuter service) as distinguished from freight service. 

Employment assumption III follows the structure of assumptions I and II, except that it has declines 

in passenger employment and steeper declines in freight employment than employment assumptions 

I and II. Employment assumptions I, II and III are intended to provide an optimistic, moderate and 

pessimistic assumption, respectively. The specific results of the projections made in this report of 

the railroad retirement system's financial condition are as follows: 

1. 	 Under employment assumption I, the average tier 2 tax rate is 17.84 percent, and an 

actuarial surplus of 0.29 percent of tier 2 payroll exists as of December 31, 2001. There are 

no cash flow problems during the 75-year projection period. 

2. 	 Under employment assumption II, the average tier 2 tax rate is 20.07 percent, and an 

actuarial surplus of 0.24 percent of tier 2 payroll exists as of December 31, 2001. There are 

no cash flow problems during the 75-year projection period. 

3. 	 Under employment assumption III, the average tier 2 tax rate is 20.66 percent, and an 

actuarial deficiency of 2.10 percent of tier 2 payroll exists as of December 31, 2001. Cash 

flow problems arise in 2022 and remain through the end of the 75-year projection period. 

The average tier 2 tax rate is calculated by dividing the present value of tier 2 payroll taxes by the 

present value of tier 2 compensation as of January 1, 2002. The surplus or deficiency figures given 

above represent the change in the average tier 2 tax rate which would produce a balance of zero in 

the combined National Railroad Retirement Investment Trust, Railroad Retirement Account and 

Social Security Equivalent Benefit Account at the end of the 75-year projection period. 

The actuarial surplus or deficiency figures consider only benefits paid during the 75-year projection 

period, and not benefits earned during the period and paid after the end of the period. The average 

tax increase needed to fund all benefits paid during the 75-year period and to provide a fund balance 

on December 31, 2076, equal to the accrued liability (calculated using the entry age normal method) 

is shown below. 

Employment Average increase in tier 2 

assumption tax beginning January 1, 2004 

I 0.31% 

II 0.23 

III 2.86 

The conclusion is that, barring a sudden, unanticipated, large drop in railroad employment, the 

railroad retirement system will experience no cash flow problems during the next 19 years. The 

long-term stability of the system, however, is not assured. Under the current financing structure, 
3 

actual levels of railroad employment and investment return over the coming years will determine 

whether additional corrective action is necessary. 

As mentioned earlier, this report is intended to meet the requirements of Section 502 of the 1983 

Solvency Act. Section 502 requires recommendations with regard to (1) the tax rates and (2) 

whether any part of the taxes on employers should be diverted to the Railroad Unemployment 

Insurance Account to aid in the repayment of its debt to the Railroad Retirement Account. 

1. This report recommends no change in the rate of tax imposed on employers and employees. 

Because of future financing problems occurring under employment assumption III, as 

discussed above, a decrease in tax rates is not recommended at the current time. On the 

other hand, the absence of projected cash flow problems for at least 19 years under each 

employment assumption indicates that an immediate increase in tax rates is not required. 

2. 	 No diversion of taxes from the Railroad Retirement Account to the Railroad Unemployment 

Insurance Account is recommended. As of May 29, 2003, there are no loans outstanding 

from the Railroad Retirement Account to the Railroad Unemployment Insurance Account. 

Section V of this report presents details of the valuations under the three employment assumptions. 

III. REGULAR AND SUPPLEMENTAL BENEFITS AND THEIR FINANCING 

The Appendix contains a detailed description of the provisions of the current law. Sections III and 

IV provide a more general summary of the law. 

Railroad retirement benefits are paid from four Accounts: the National Railroad Retirement 

Investment Trust (NRRIT), the Railroad Retirement (RR) Account, the Social Security Equivalent 

Benefit (SSEB) Account, and the Dual Benefits Payments Account. Because of their intertwined 

nature, the NRRIT, RR Account and SSEB Account are discussed together in this section. Dual 

benefits and the Dual Benefits Payments Account are discussed in a separate section, Section IV. 

Benefits paid from the NRRIT, RR Account and SSEB Account consist mainly of monthly 

payments to retired or disabled employees, their spouses, and survivors. The various types of 

benefits and their eligibility requirements are described in the Appendix. The Accounts also pay 

out relatively small amounts in lump sums to employees and their survivors in certain cases. The 

monthly benefits consist of three components, known as tier 1, tier 2 and supplemental annuity. 

For all categories of recipients, the gross tier 1 benefit is generally equivalent to the benefit that the 

social security system would pay if all the employee's earnings (railroad and non-railroad) had been 

covered under the Social Security Act. Any benefit actually received from social security is 

subtracted to determine the net tier 1 benefit payable. Section IV explains the logic behind this 

determination. The cost-of-living increase paid to social security beneficiaries automatically carries 

over to the tier 1 component of railroad retirement annuities. 
4 

There are some differences between social security benefits and tier 1 benefits. The most 

significant are as follows: 

1. 	 An employee may not retire before age 62 under the social security system. Under the 

railroad retirement system, an employee may retire at age 60 with 30 years of service. A 

spouse of a 30-year employee may also retire at age 60. If the employee retired after 2001, 

there is no age reduction in either case. 

2. 	 Railroad retirement pays an occupational disability benefit under tier 1 and tier 2. Social 

security requires total and permanent disability. The same five-month waiting period 

applies under both systems. 

3. 	 Widows who retire at age 60 or 61 under railroad retirement are deemed age 62 in the 

computation of the tier 1 benefit, resulting in a smaller age reduction than under social 

security. 

4. 	 From the start of the railroad retirement system through 1984, earnings up to a monthly 

maximum amount were taxed and credited for benefit computation purposes. Social 

security has always used an annual earnings limit. The 1983 Solvency Act changed railroad 

retirement to an annual earnings limit for 1985 and later years, but benefit computations for 

new beneficiaries will reflect the pre-1985 use of a monthly limit for many years into the 

future. All benefits awarded before 1985 reflect a monthly limit exclusively. 

The formula used to compute the tier 2 component of railroad retirement is comparable to a private 

pension formula. Under the formula adopted in 1981, the employee tier 2 benefit is equal to 0.7 

percent of the employee's average monthly railroad earnings for the 60 months of highest earnings, 

multiplied by the number of years of railroad service, less 25 percent of any vested dual benefit. 

Unlike private pensions, tier 2 benefits (1) provide automatic cost-of-living increases, and (2) are 

paid to spouses and survivors without any reduction in employee benefit for the payment of these 

auxiliary benefits. 

The tier 2 benefit for spouses is equal to 45 percent of the employee's tier 2 benefit. The survivor's 

tier 2 benefit is a specified percentage of the employee's tier 2 benefit. The Appendix lists the 

percentages and describes an initial minimum widow(er)’s amount which became payable 

beginning in calendar year 2002. 

The tier 2 cost-of-living increases for employees, spouses and survivors are equal to 32.5 percent of 

the percentage increase which is used in computing social security increases (and tier 1 increases). 

The increase is paid at the same time as the tier 1 cost-of-living increase. 

The portion of tier 1 benefits which is considered equivalent to social security benefits is subject to 

Federal income tax under the rules that apply to social security benefits. Tier 2 benefits, the portion 

of tier 1 benefits in excess of social security benefits, supplemental annuity benefits, and vested dual 

benefits are subject to Federal income tax under the rules that apply to private pensions. 
5 

A railroad retiree may receive a supplemental annuity in addition to his regular annuity if (1) the 

retiree has a "current connection" with the railroad industry at the time of retirement, and (2) the 

retiree has attained age 65 with 25 years of railroad service, or attained age 60 with 30 years of 

railroad service. A current connection is generally defined as at least 12 months of railroad service 

in the 30 months preceding retirement. 

The 1981 amendments added the requirement that an employee must have worked in the railroad 

industry before October 1, 1981, to receive a supplemental annuity. This provision will result in 

phasing out the supplemental annuity over a long period. The first effect will not occur until 

October 2006. The last supplemental annuity check will probably not be paid until after 2060. 

The monthly supplemental annuity benefit is $23, plus $4 for each year of service in excess of 25, 

with a maximum benefit of $43. No cost-of-living increases are applied. Spouses and survivors do 

not receive a supplemental annuity. 

If the recipient of a supplemental annuity receives a private pension from his railroad employer, the 

supplemental annuity is reduced by the portion of the private pension that is attributable to the 

employer's contributions. This reduction is not made if the private pension is reduced for receipt of 

the supplemental annuity. 

Benefits paid from the NRRIT, RR Account and SSEB Account are financed by the following 

sources of income: 

1. Payroll tax. Employees and employers pay a tax at the social security rate on earnings in a 

year up to the social security, or tier 1, earnings limit. (The hospital insurance portion of 

this rate is not subject to an earnings limit). This tax is called the tier 1 tax. In addition, 

employers and employees pay a tier 2 tax equal to a percentage of the employee's earnings 

up to the tier 2 earnings limit. The tier 2 earnings limit is what the social security limit 

would be if the 1977 social security amendments had not been enacted. The 2003 earnings 

limits are $87,000 and $64,500 for tier 1 and tier 2, respectively. 

Beginning with the taxes payable for calendar year 2004, tier 2 taxes on both employers and 

employees will be based on the ratio of certain asset balances to the sum of benefits and 

administrative expenses (the average account benefits ratio). Depending on the average 

account benefits ratio, the tier 2 tax rate for employers will range between 8.2 percent and 

22.1 percent, while the tier 2 tax rate for employees will be between 0 percent and 4.9 

percent. This calculation is described in the Appendix. 

2. Income tax. The tax on tier 1 benefits up to the social security level is credited to the SSEB 

Account and then to social security through the financial interchange. Revenue derived 

from taxing RR Account benefits (tier 2 and the excess of tier 1 over the social security 

level) is transferred to the RR Account. 

3. Investment income. 
6
 

4. 	 The financial interchange with the social security system. This extremely important 

arrangement, which will be discussed in detail in Section IV, has resulted in the large annual 

lump sum transfers of money from social security to railroad retirement shown in Table 11. 

5. 	 Advances from general revenues related to certain features of the financial interchange. 

Financial interchange transfers are made in a lump sum for a whole fiscal year in the June 

following the end of that fiscal year. For example, the transfer reflecting transactions which 

occurred from October 2000 through September 2001 (fiscal year 2001) took place in June 

2002. At any time, therefore, there are between 9 and 21 months' worth of financial 

interchange transfers that are, in a sense, owed to the railroad retirement system. Railroad 

retirement receives interest on this money, so this practice does no long-term harm to the 

financial condition of the railroad retirement system. The lag in the transfers, however, 

could cause short-term cash flow problems. 

In order to avoid the cash flow problems caused by this lag, the 1983 Solvency Act provided 

for monthly loans to railroad retirement from U.S. Treasury general funds. Each loan is 

equal to the transfer the Railroad Retirement Board estimates railroad retirement would have 

received in the preceding month, with interest, if the financial interchange with social 

security were on an up-to-date basis. Railroad retirement must repay these loans when it 

receives the transfer from social security against which the money was advanced. 

The 1983 Solvency Act created the SSEB Account, effective October 1, 1984. Before that date, all 

tier 1 benefits, tier 2 benefits, lump sums and administrative expenses had been paid from the RR 

Account, and all the income described above had been credited to the RR Account. Since then, the 

SSEB Account has paid the social security level of benefits and the administrative expenses 

allocable to that level of benefits. The tier 1 portion of the payroll tax, the income taxes on the 

social security level of benefits, the income from the financial interchange, and the advances from 

general revenues are credited to the SSEB Account. Repayment of the advances is made from the 

SSEB Account. 

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

Retirement Investment Trust to manage and invest amounts collected in the RR Account and SSEB 

Account. The portion of the RR Account that is not needed to pay current administrative expenses 

and the balance of the SSEB Account not needed to pay current benefits and administrative 

expenses must be transferred from time to time to the NRRIT in such manner as will maximize 

investment returns to the Railroad Retirement system. 

The Railroad Retirement and Survivors’ Improvement Act of 2001 also eliminated the Railroad 

Retirement Supplemental Account and supplemental work-hour tax. Prior to 2002, supplemental 

annuity benefits were paid from this account and financed through the work-hour tax. 
7 

IV. DUAL BENEFITS, THEIR FINANCING, AND THE FINANCIAL INTERCHANGE 

In the early 1950's, an arrangement known as the financial interchange was established between the 

railroad retirement and social security systems. The purpose of the financial interchange is to place 

the social security trust funds in the same financial position they would have been if railroad 

employment had always been covered under social security. If railroad employment had been 

covered under social security, social security would have collected taxes on railroad employment, 

and it would have paid benefits based on railroad employment. Under the financial interchange, the 

railroad retirement system gives the social security system the taxes social security would have 

collected, and the social security system gives the railroad retirement system the additional benefits 

social security would have paid to railroad workers and their families over what it actually pays 

them. 

The word "additional" in the preceding sentence is important, because it is possible for a railroad 

employee to be covered under both railroad retirement and social security. The social security 

coverage may be based on earnings from moonlighting while in a railroad job or from coverage 

under the two systems at different times. Fulfilling the purpose of the financial interchange requires 

deducting from social security's fund only the difference between what social security would have 

paid had it covered railroad employment, and what it actually pays the person based on his nonrailroad employment. Under the financial interchange, therefore, social security subtracts an 

employee's social security benefit from the amount it would otherwise give to the railroad 

retirement system. 

This arrangement gave rise to problems that became acute in the early 1970's. The problems arose 

from the weighting in the social security formula in favor of low-earning, short-service workers. A 

railroad employee's non-railroad earnings usually added little to the benefit social security would 

have paid on combined railroad and non-railroad earnings (called gross tier 1 today). However, the 

employee might qualify for the minimum social security benefit, receiving much more from social 

security than his non-railroad earnings added to his gross tier 1 benefit. 

The following example of two hypothetical employees may clarify the problem. The size of the 

benefits is appropriate to the early 1970's. The employees are assumed to have identical dates of 

birth, dates of retirement, and histories of railroad earnings. One employee, however, is assumed to 

have had just enough covered employment under social security to qualify for a social security 

benefit. (The difference in railroad retirement benefits arises from minor reductions in the 1937 Act 

formula for receipt of a social security benefit.) 
8 

Eligible for Not eligible for 

social security social security 

A. Railroad retirement benefit $380 $400 

B. Social security benefit 100 -

C. Total benefit, A + B 480 400 

D. Social security benefit on 

combined earnings (gross tier 1) 240 220 

E. 	 Financial interchange transfer 

from social security to railroad 

retirement, D – B 140 220 

F. Amount to be financed by excess 

of railroad retirement taxes 

over social security taxes, A – E 240 180 

Two conclusions are apparent. First, the employee with benefits under both systems received an 

advantage over the career railroad worker, which many considered unfair. In the example, the 

employee who is eligible for social security collects $80 more than the employee who is not eligible 

(the difference in line C), while, under a completely integrated system, the social security earnings 

would have added only $20 (the difference in line D). Second, because social security subtracted 

the social security benefit in calculating the financial interchange transfer, railroad retirement paid 

most of the cost of these benefits. In the example, this is represented by the $60 difference in line F. 

This situation was a major cause of the poor financial condition of the railroad retirement system in 

the early 1970's. In order to improve the system's financial condition, the Railroad Retirement Act 

of 1974 provided that the tier 1 component of the railroad retirement annuity be reduced by any 

social security benefit. This essentially integrated the two systems and eliminated the advantage of 

qualifying for benefits under both systems. 

However, it was generally considered unfair to eliminate this advantage entirely for those already 

retired or close to retirement when the 1974 Act became effective. The 1974 Act, therefore, 

provided for a restoration of social security benefits that were considered vested at the end of 1974. 

The restored amount is known as the "vested dual benefit." This benefit was available to qualifying 

spouses and survivors as well as to qualifying employees. 

For employees retiring in 1975 or later, the vested dual benefit was to be equal to 

(1) a social security benefit based on social security earnings, plus 

(2) a social security benefit based on railroad earnings, minus 

(3) a social security benefit based on combined railroad and social security earnings. 

Social security or railroad earnings after 1974 were not to be included in this calculation. The 

"social security benefit" referred to in (1), (2) and (3) is the one which would have been calculated 
9 

at the end of 1974. The resulting amount was to be increased by all the automatic social security 

cost-of-living adjustments between 1974 and the date the employee retired. 

For spouses and survivors, the formulas were different and more complicated than those for 

employees. 

The 1981 amendments made significant changes regarding vested dual benefits. Spouses and 

survivors were not to be awarded vested dual benefits after August 13, 1981, though they would 

continue to receive these benefits if they were awarded before that date. Also, vested dual benefits 

awarded to employees would take into account cost-of-living increases only through 1981, rather 

than through the date of retirement. 

Since October 1981, vested dual benefits have been paid from a segregated Dual Benefits Payments 

Account, and appropriations have been made to that account. This means that, starting in fiscal year 

1982, each annual appropriation is to be sufficient to pay the benefits for that year. If the 

appropriation for a fiscal year is less than required for full funding, the Railroad Retirement Board 

must reduce benefits to a level that the amount appropriated will cover. 

The appropriation for vested dual benefits in fiscal year 1982 was less than required for full 

funding, resulting in a cutback in benefits during that year. Full funding was restored for the last 

two months of fiscal year 1982. The appropriation was less than required in fiscal year 1986, 

resulting in a cutback during April-September of that year. The appropriation was again less than 

required in fiscal year 1988, which resulted in a cutback during April-September. Benefits were cut 

back in January 1996 due to a lapse in government funding and then restored later that same month. 

For years other than those mentioned, full benefits have been paid. 

V. ASSUMPTIONS, METHODOLOGY, AND VALUATION RESULTS 

A. Assumptions and Methodology 

Average railroad employment is assumed to be 227,000 in 2002 under each of the three 

employment assumptions. This is the estimated average for the year (subject to later adjustment) 

and was below the range projected for 2002 under the employment assumptions contained in the 

2002 actuarial report. 

Employment assumptions I and II, based on a model developed by the Association of American 

Railroads, assume that (1) passenger employment will remain at the level of 44,000, and (2) the 

employment base, excluding passenger employment, will decline at a constant annual rate (1.5 

percent for assumption I and 3.0 percent for assumption II) for 25 years, at a reducing rate over the 

next 25 years, and remain level thereafter. 

Employment assumption III differs from employment assumptions I and II by assuming that (1) 

passenger employment will decline by 500 per year until a level of 35,000 is reached and then 

remain level, and (2) the employment base, excluding passenger employment, will decline at a 
10 

constant annual rate of 4.5 percent for 25 years, at a reducing rate over the next 25 years, and 

remain level thereafter. 

Because inflation has been fairly stable at relatively low levels in recent years, only one set of 

earnings and price inflation assumptions was used in this valuation. The ultimate earnings increase 

assumption is the same as that used in the 21st valuation. The ultimate cost-of-living increase 

assumption has been lowered to 3.0% in the 22nd valuation from 3.2% in the 21st valuation. The 

ultimate interest rate assumption has been increased to 8.0% in the 22nd valuation from 6.0% in the 

21st valuation due to expanded investment authority in the National Railroad Retirement Investment 

Trust. Table 1 shows the employment, inflation and interest rate assumptions used in the 22nd 

valuation. A comparison of historical and projected employment is illustrated in Figure 1. 

Only one combination of non-economic assumptions (for example, rates of mortality, disability, 

retirement, and withdrawal) was used in this valuation. These assumptions, some of which were 

changed from the previous valuation to reflect recent experience, are discussed in the Technical 

Supplement to this report. 

Projections were made for the various components of income and outgo under each employment 

assumption for the 75 calendar years 2002-2076. The projections of these components were 

combined and the investment income calculated to produce the projected balances in the combined 

NRRIT and RR Account and in the SSEB Account separately for each year. The results are 

summarized in Table 2. Present values of the various components of NRRIT and RR Account 

income and outgo were calculated by discounting amounts in each projection year to December 31, 

2001, using the interest rate series shown in Table 1. The present values were combined to 

calculate the NRRIT and RR Account actuarial surplus or deficiency. The derivation of the surplus 

or deficiency appears in Table 6. 

B. Valuation Results 

This section sets forth the results of the valuation in the form of a discussion of the tables in which 

the results appear. Because it is desirable for the discussion of a table to be reasonably selfcontained, there is some repetition between tables and between this section and preceding sections 

of this report. 

Table 2. Progress of the National Railroad Retirement Investment Trust (NRRIT), Railroad 

Retirement (RR) and Social Security Equivalent Benefit (SSEB) Accounts. Projections were made 

for the various components of income and outgo under each employment assumption for the 75 

calendar years 2002-2076. The projections of these components were combined and the investment 

income calculated to produce the projected balances in the NRRIT, RR Account and the SSEB 

Account at the end of each projection year. The results are summarized in Table 2. 

Table 2 consists of three tables, one for each of employment assumptions I, II, and III. The tables 

show, for each account, (1) the various elements of income and outgo, (2) the account balance on 

December 31, and (3) the account benefits ratio, average account benefits ratio and combined 

employer and employee tier 2 tax rate. 
11 

The balances of the RR Account and NRRIT are combined because amounts not needed to pay 

current administrative costs are transferred from the RR Account to the NRRIT for investment. The 

SSEB Account is assumed to maintain a target balance of 1.5 months of benefit payment for 

contingencies and transfer any excess to the NRRIT. 

Table 2 indicates that no cash-flow problems arise under employment assumptions I and II (Tables 

2-I and 2-II). 

Under employment assumption I, the combined account balance grows to $24,622 million in 2010, 

decreases to $17,756 million in 2026, and grows thereafter through the end of the projection period. 

The combined employer and employee tier 2 tax rate decreases to 17% in 2006-2009, increases to 

23% in 2028-2032, and then decreases until reaching the minimum rate of 8.2%. 

Under employment assumption II, the combined account balance grows to $23,863 million in 2008, 

decreases to $2,388 million in 2034, and grows thereafter through the end of the projection period. 

The combined employer and employee tier 2 tax rate decreases to 17% in 2006-2009, increases to 

the maximum rate of 27% in 2024-2051, and then decreases until reaching the minimum rate of 

8.2%. 

Under employment assumption III, the combined account balance builds to a maximum of $23,415 

million in 2007, and then it begins to decline (Table 2-III). The balance becomes negative in 2022 

and remains negative throughout the remainder of the projection period. Negative after-transfer 

balances indicate the amount that would be owed, including interest, if unreduced benefits were 

paid by borrowing from some unknown source. The SSEB Account is assumed to transfer to the 

NRRIT any excess of income over outgo in 2022 and later. The combined employer and employee 

tier 2 tax rate decreases to 17% in 2006-2008, increases to the maximum rate of 27% in 2022, and 

remains at 27% through the remainder of the projection period. 

Table 3. Present value of benefits in millions of dollars. This table shows, for each employment 

assumption, the present value of tier 2 benefits, supplemental annuity benefits and the portion of 

tier 1 benefits which exceeds the social security level of benefits. The portion of tier 1 benefits in 

excess of the social security level is referred to as "tier 1 liability." The most important components 

of this liability were described in Section III. Supplemental annuity benefits are included with tier 2 

benefits in this table. The present values are shown separately by type of beneficiary (employee, 

spouse, survivor) and by employee status on the valuation date (retired, retired and deceased, active, 

inactive, future entrants). 

Table 4. Present value of benefits as a percentage of the present value of tier 2 payroll. The format 

for this table is the same as for Table 3. Each number in Table 4 was obtained by dividing the 

corresponding number in Table 3 by the appropriate present value of one percent of tier 2 payroll. 

The payroll figures are shown in Table 6. 
12 

Table 5. Balance of the Railroad Retirement and Social Security Equivalent Benefit Accounts as of 

December 31, 2001. This table derives the balance in the two accounts as of December 31, 2001, 

after certain accrual adjustments for amounts due and unpaid on that date. The accrual adjustments 

are appropriate for present value calculations. No adjustment is made for benefit payments due 

January 2, 2002, because these benefits are included in the present value of benefits in the present 

value calculations. The NRRIT is not shown because the NRRIT was not established until February 

1, 2002. 

The item captioned "Market value of market-based specials" reflects the bid price of market-based 

specials. The remaining market-based specials in the RR Account were sold by February 2003, and 

the proceeds were transferred to the NRRIT. 

The amount captioned "Financial interchange - OASDI" is the transfer from social security to the 

SSEB Account of the excess of the OASDI (Old-Age, Survivors, and Disability Insurance) benefit 

payments and related administrative expenses due the railroad retirement system over the OASDI 

taxes due social security. The transfer is made in June for the fiscal year ending the preceding 

September 30. The $4,479 million in the table is the amount transferred in June 2002 for the fiscal 

year ending September 30, 2001, plus that part of the transfer to be made in June 2003 that relates to 

experience for October-December 2001. 

The amount captioned "Financial interchange - HI" is the transfer from the SSEB Account to social 

security of the hospital insurance taxes collected by the Railroad Retirement Board. The period 

covered is the same as for the OASDI accrual adjustment. 

The item "Advances against the financial interchange" is the amount, including interest to 

December 31, 2001, that the Treasury has loaned to the SSEB Account in anticipation of the SSEB 

Account's receipt of the financial interchange transfer from social security. As explained in Section 

III, the SSEB Account will repay the advances made in a fiscal year when it receives the financial 

interchange transfer for that year; in the meantime, this item is a liability. 

Table 6. Actuarial surplus or (deficiency) for National Railroad Retirement Investment Trust and 

Railroad Retirement Account. The top half of Table 6 expresses the asset and liability components 

of the actuarial balance as present values in dollars. The bottom half expresses these components as 

a percentage of tier 2 payroll. The actuarial surplus or deficiency was calculated for the NRRIT and 

RR Account, but not for the SSEB Account, for the following reason. 

The SSEB Account pays the social security level of benefits and administrative expenses allocable 

to those benefits, and it receives as income the social security level of taxes. If there were no other 

source of income or outgo during the course of a year, a surplus or deficiency would build up, 

depending on whether taxes exceeded or were less than benefits. However, the SSEB Account also 

receives or pays any financial interchange transfers. The financial interchange transfer, subject to 

qualifications described in the next paragraph, should be enough to offset any surplus or deficit for 

the year. Furthermore, this would be the case even if the social security level of benefits or taxes 

are raised or lowered. The SSEB Account can thus be regarded as automatically funded, the 

financial interchange being the mechanism for correcting any surplus or deficiency. Therefore, the 

concept of actuarial balance is not meaningful when applied to the SSEB Account. 
13
 

The qualification mentioned above arises because, in a relatively small number of cases, the railroad 

retirement system does not pay benefits when social security would pay benefits. In these cases, 

mainly dependent children of retired railroad employees, the SSEB Account collects an amount 

through the financial interchange but does not pay a corresponding benefit. This imbalance 

between outgo and income is transferred from time to time to the NRRIT. The value of these 

transfers, or amounts available for transfer, is included as an asset in Table 6 as “Available from 

SSEB Account.” 

Revenue derived from taxing NRRIT and RR Account benefits (tier 2 and the excess of tier 1 over 

the social security level) is transferred to the RR Account. The present value of these transfers is 

shown as an asset in Table 6 as “Income taxes on benefits.” 

The cost of the system to the railroad industry may be considered as the excess of “Retirement 

taxes” over “Actuarial surplus or (deficiency).” Table 6 shows that the cost of the system is much 

more stable when expressed in dollars than when expressed as a percentage of payroll. For 

example, the cost of the system under employment assumption III is $37,855 million, or 22.76 

percent of payroll; whereas the cost under employment assumption I is $40,705 million, or 17.55 

percent of payroll. Using employment assumption III as the base, the percentage cost variation in 

dollars between the two valuations is 7.53 percent. As a percentage of payroll, the percentage cost 

variation is 22.89 percent. 

Table 7. Minimum contribution required under ERISA. The railroad retirement system is 

specifically exempt from the minimum funding provisions of the Employee Retirement Income 

Security Act (ERISA). In the past, there has been some interest in what the contribution 

requirement of the system would be if this were not the case. The following discussion is limited to 

the regular minimum funding standard (ERISA Section 302(b)) for multiemployer plans. 

The funding goal of the railroad retirement system is to receive enough funds each year to cover 

benefits and expenses for the year and to maintain a reasonable account balance. In terms of the 

participants in the system, payroll taxes collected each year from rail employers and employees are 

used to pay benefits to rail retirees, their spouses and survivors. In contrast, ERISA essentially 

requires that pension plans be "advance-funded." Under this arrangement, the goal is to receive 

enough funds each year over the employees' working lifetimes to fully fund their retirement 

benefits. 

ERISA recognizes that when a private pension plan is initiated, it will usually have an "accrued 

liability." This liability represents the value placed on future benefits and expenses of the plan that 

is attributable to employee service preceding the date of the plan (often referred to as "past 

service"). As such, the liability might be measured by the amount that would have been 

accumulated if contributions to fund each employee's benefits had been made from the time 

employment began. Since a new plan would have no funds at the time it is initiated, the accrued 

liability is also the unfunded accrued liability. The unfunded accrued liability is specifically 

identified by ERISA, because ERISA has separate funding rules for benefits based on past and 

future service. 
14 

In the case of an existing pension plan which becomes subject to ERISA funding standards, as for a 

new plan, the accrued liability must be determined. This determination is made based on employee 

service preceding the date the plan becomes subject to ERISA standards, but taking into account 

projected future levels of employee pay. The unfunded accrued liability for an existing plan is the 

excess of the accrued liability over the funds on hand. 

Table 7 illustrates what the minimum funding requirements would be for the railroad retirement 

system as of December 31, 2001, using the entry age normal actuarial funding method, if it became 

subject to ERISA on that date. The unfunded accrued liability of $34,263 million shown in Table 7 

may be considered to be the amount needed, in excess of funds on hand and tier 2 payroll taxes at a 

5.41 percent rate, to fund combined NRRIT and RR Account benefits and expenses for former and 

present employees. The 5.41 percent rate (normal cost rate) is the average cost expressed as a 

percentage of tier 2 payroll that would fund each employee's benefits and expenses over the 

employee's working lifetime. 

Under ERISA requirements, the minimum annual contribution to be made would be equivalent to 

tier 2 payroll taxes at the rate of 5.41 percent, plus the level annual amount of $2,964 million which 

would amortize the unfunded accrued liability of $34,263 million over 30 years. 

Since the amortization payment is a level dollar amount, and since the taxable payroll would change 

from year to year, the required contribution expressed as a percentage of payroll would vary during 

the amortization period. Line 10 of the table shows the level percentage of tier 2 payroll that would 

be required to fund the unfunded accrued liability and meet a 5.41 percent payroll tax over the 30 

year amortization period. Under the ERISA requirements, the minimum annual contribution after 

30 years, if all assumptions were realized, would be the 5.41 percent of payroll normal cost. 

In summary, the effect of ERISA would be to accelerate funding for the railroad retirement system. 

Contributions equivalent to an average of 24.52 to 29.64 percent of tier 2 payroll would be required 

for 30 years with 5.41 percent contributions thereafter. 

Table 8. Vested dual benefit amounts and average number of beneficiaries. This table shows a 

projection of vested dual benefit payments for every fiscal year from 2004 through 2030. After 

2030, the amounts become insignificant. The amounts shown assume that the benefits are fully 

funded. Fiscal years are shown because vested dual benefit appropriations are made on a fiscal year 

basis. The table also indicates the average number of vested dual beneficiaries in each fiscal year. 

The table applies to all the employment assumptions discussed in this report. 

The revenue derived from taxing pre-October 1988 vested dual benefits was transferred to the RR 

Account. The revenue derived from taxing vested dual benefits in fiscal years 1989 and later is 

transferred to the Dual Benefits Payments Account, and it reduces the amount of the appropriation 

by the same amount. Therefore, the amount available for the payment of vested dual benefits is 

unaffected by income tax revenues derived from these benefits. 

The 1981 amendments removed much of the uncertainty from projections of future vested dual 

benefit payments. The volatility caused by inflation is gone, since future awards take into account 

cost-of-living increases from 1975 through 1981, rather than through the date of retirement. Also, 

 16 

Table 1. Employment, inflation and interest assumptions 

Calendar Average employment (thousands) Percentage increase over prior year Interest 

year I II III Earnings Cost of living rate 

2002 227 227 227 4.0% 2.6% 11.7% 

2003 224 222 218 4.0 1.4 6.0 

2004 222 216 210 4.0 3.0 8.0 

2005 219 211 202 4.0 3.0 8.0 

2006 216 206 194 4.0 3.0 8.0 

2007 214 201 187 4.0 3.0 8.0 

2008 211 196 180 4.0 3.0 8.0 

2009 209 192 173 4.0 3.0 8.0 

2010 206 187 167 4.0 3.0 8.0 

2011 204 183 160 4.0 3.0 8.0 

2012 201 179 154 4.0 3.0 8.0 

2013 199 175 149 4.0 3.0 8.0 

2014 197 171 143 4.0 3.0 8.0 

2015 194 167 138 4.0 3.0 8.0 

2016 192 163 133 4.0 3.0 8.0 

2017 190 160 128 4.0 3.0 8.0 

2018 188 156 124 4.0 3.0 8.0 

2019 186 153 119 4.0 3.0 8.0 

2020 183 150 115 4.0 3.0 8.0 

2021 181 147 111 4.0 3.0 8.0 

2022 179 144 108 4.0 3.0 8.0 

2023 177 141 105 4.0 3.0 8.0 

2024 175 138 101 4.0 3.0 8.0 

2025 173 135 98 4.0 3.0 8.0 

2026 171 132 96 4.0 3.0 8.0 

2027 169 129 93 4.0 3.0 8.0 

2028 168 127 90 4.0 3.0 8.0 

2029 166 125 88 4.0 3.0 8.0 

2030 164 123 86 4.0 3.0 8.0 

2031 163 121 84 4.0 3.0 8.0 

2032 161 119 82 4.0 3.0 8.0 

2033 160 117 81 4.0 3.0 8.0 

2034 159 115 79 4.0 3.0 8.0 

2035 158 114 78 4.0 3.0 8.0 

2036 157 113 77 4.0 3.0 8.0 

2037 155 111 75 4.0 3.0 8.0 

2038 155 110 74 4.0 3.0 8.0 

2039 154 109 74 4.0 3.0 8.0 

2040 153 108 73 4.0 3.0 8.0 

2041 152 107 72 4.0 3.0 8.0 

2042 152 107 71 4.0 3.0 8.0 

2043 151 106 71 4.0 3.0 8.0 

2044 150 105 70 4.0 3.0 8.0 

2045 150 105 70 4.0 3.0 8.0 

2046 150 104 69 4.0 3.0 8.0 

2047 149 104 69 4.0 3.0 8.0 

2048 149 104 69 4.0 3.0 8.0 

2049 149 104 69 4.0 3.0 8.0 

2050 149 103 69 4.0 3.0 8.0 

2051 149 103 68 4.0 3.0 8.0 

2052 149 103 68 4.0 3.0 8.0 

2053 149 103 68 4.0 3.0 8.0 

2054 149 103 68 4.0 3.0 8.0 

2055-2076 149 103 68 4.0 3.0 8.0 
Figure 1. 

1937 1947 1957 1967 1977 1987 1997 2007 2017 2027 2037 2047 

Calendar Year

50,000

100,000200,000400,000

600,000

800,000

1,000,0001,400,0001,800,000

EmploymEmploymEmploym

Average Railroad Employment 1937-2076, Historical and Projected
 18 

Table 2-I. Progress of the National Railroad Retirement Investment Trust (NRRIT), Railroad Retirement (RR) Account and
 

Social Security Equivalent Benefit (SSEB) Account under Employment Assumption I
 

(Dollar amounts in millions)
 

Average Combined NRRIT and RR Account SSEB Account 

Account account Tier 2 Benefits Benefits Other Combined 

Calendar 

year 

benefits benefits 

ratioa ratiob 

tax 

rate 

and admin- Tax Other Balance, 

istration incomec incomed end year 

and administration Tax income and e incomec expense Balance, 

end year 

balance, 

end year 

2003 19.1% $3,651 $2,639 $2,632 $21,883 $5,275 $2,180 $1,795 $657 $22,540 

2004 6.00 5.80 18.0% 3,781 2,562 1,789 22,453 5,391 2,234 3,171 671 23,124 

2005 5.95 6.00 18.0% 3,905 2,625 1,833 23,006 5,512 2,291 3,237 686 23,692 

2006 5.83 6.10 17.0% 4,045 2,558 1,778 23,298 5,641 2,349 3,223 617 23,915 

2007 5.65 6.10 17.0% 4,221 2,624 1,800 23,500 5,766 2,408 3,459 718 24,218 

2008 5.45 6.20 17.0% 4,420 2,692 1,904 23,676 5,907 2,467 3,458 735 24,411 

2009 5.24 6.10 17.0% 4,611 2,763 1,911 23,739 6,081 2,530 3,573 757 24,496 

2010 5.05 6.00 18.0% 4,796 2,980 1,918 23,841 6,280 2,595 3,709 781 24,622 

2011 4.84 5.90 18.0% 4,991 3,059 1,826 23,735 6,488 2,664 3,752 710 24,445 

2012 4.62 5.70 18.0% 5,190 3,141 1,812 23,498 6,706 2,736 4,092 831 24,329 

2013 4.41 5.50 18.0% 5,380 3,225 1,889 23,232 6,941 2,812 4,161 864 24,096 

2014 4.20 5.40 18.0% 5,564 3,313 1,871 22,853 7,187 2,887 4,331 894 23,747 

2015 3.99 5.20 18.0% 5,738 3,403 1,842 22,360 7,436 2,965 4,501 925 23,285 

2016 3.77 5.00 18.0% 5,887 3,496 1,688 21,657 7,692 3,049 4,582 864 22,521 

2017 3.56 4.80 18.0% 6,007 3,592 1,651 20,893 7,949 3,138 4,936 989 21,882 

2018 3.39 4.60 18.0% 6,106 3,690 1,697 20,174 8,197 3,231 4,997 1,020 21,194 

2019 3.22 4.40 18.0% 6,183 3,791 1,647 19,429 8,429 3,328 5,130 1,049 20,478 

2020 3.07 4.20 18.0% 6,240 3,895 1,596 18,681 8,642 3,430 5,238 1,075 19,756 

2021 2.91 4.00 18.0% 6,278 4,001 1,398 17,802 8,833 3,535 5,271 1,048 18,850 

2022 2.80 3.80 19.0% 6,300 4,312 1,439 17,253 9,005 3,643 5,435 1,120 18,373 

2023 2.73 3.60 19.0% 6,317 4,429 1,460 16,824 9,159 3,753 5,425 1,139 17,963 

2024 2.69 3.40 20.0% 6,337 4,762 1,444 16,692 9,298 3,864 5,451 1,156 17,848 

2025 2.67 3.30 20.0% 6,361 4,889 1,441 16,661 9,430 3,977 5,470 1,173 17,834 

2026 2.64 3.10 20.0% 6,383 5,019 1,276 16,572 9,562 4,092 5,482 1,184 17,756 

2027 2.66 3.00 20.0% 6,408 5,151 1,440 16,756 9,699 4,208 5,512 1,206 17,962 

2028 2.78 2.90 23.0% 6,446 6,008 1,498 17,816 9,840 4,328 5,530 1,223 19,039 

2029 2.95 2.90 23.0% 6,500 6,171 1,589 19,075 9,989 4,451 5,556 1,241 20,316 

2030 3.14 2.80 23.0% 6,555 6,342 1,697 20,559 10,148 4,581 5,587 1,261 21,820 

2031 3.35 2.80 23.0% 6,610 6,520 1,676 22,145 10,321 4,716 5,626 1,282 23,427 

2032 3.62 2.90 23.0% 6,663 6,706 1,956 24,144 10,512 4,858 5,677 1,306 25,450 

2033 3.83 3.00 20.0% 6,703 6,068 2,088 25,597 10,725 5,008 5,744 1,332 26,929 

2034 4.05 3.10 20.0% 6,740 6,246 2,214 27,317 10,947 5,165 5,810 1,360 28,677 

2035 4.30 3.20 20.0% 6,806 6,433 2,361 29,306 11,167 5,328 5,866 1,387 30,693 

2036 4.55 3.40 20.0% 6,905 6,630 2,414 31,445 11,386 5,496 5,917 1,414 32,859 

2037 4.79 3.60 19.0% 7,014 6,521 2,693 33,645 11,625 5,672 5,983 1,443 35,088 

2038 5.07 3.80 19.0% 7,117 6,726 2,875 36,130 11,889 5,857 6,065 1,476 37,606 

2039 5.34 4.00 18.0% 7,210 6,605 3,068 38,592 12,173 6,053 6,156 1,511 40,103 

2040 5.63 4.30 18.0% 7,328 6,820 3,274 41,359 12,459 6,256 6,239 1,547 42,906 

2041 5.91 4.50 18.0% 7,493 7,047 3,423 44,337 12,740 6,467 6,308 1,581 45,918 

2042 6.19 4.80 18.0% 7,682 7,286 3,749 47,690 13,039 6,687 6,389 1,619 49,309 

2043 6.51 5.00 18.0% 7,874 7,536 4,022 51,373 13,371 6,919 6,493 1,660 53,033 

2044 6.84 5.30 18.0% 8,073 7,798 4,323 55,420 13,728 7,163 6,610 1,704 57,124 

2045 7.19 5.60 18.0% 8,296 8,074 4,654 59,852 14,101 7,419 6,728 1,750 61,602 

2050 8.72 7.10 15.0% 9,668 8,193 6,541 84,394 16,306 8,911 7,455 2,024 86,418 

2055 9.75 8.60 10.0% 11,224 6,895 8,517 109,221 19,069 10,829 8,313 2,367 111,588 

2060 10.04 9.60 8.2% 12,905 7,016 10,101 129,216 22,278 13,192 9,171 2,765 131,981 

2065 10.36 10.10 8.2% 14,918 8,483 12,030 154,277 26,008 16,060 10,047 3,228 157,505 

2070 10.72 10.40 8.2% 17,511 10,273 14,568 187,334 30,555 19,538 11,139 3,793 191,127 

2075 11.03 10.70 8.2% 20,904 12,464 17,850 230,093 36,292 23,773 12,675 4,505 234,598 

2076 11.09 10.80 8.2% 21,698 12,958 18,608 239,961 37,614 24,726 13,052 4,669 244,630 

a The fair market value of the assets in the RR Account and NRRIT as of the close of the fiscal year (September 30) divided by the total benefits and administrative 

expenses paid from the RR Account and NRRIT during the fiscal year. b The average of the account benefits ratios for the 10 most recent fiscal years ending before the calendar year. 

c Includes payroll taxes and income taxes on benefits. 

d Includes investment income and transfers from SSEB Account. e Other income includes financial interchange income, advances from general revenues, and interest income. Other expense includes repayment of advances 

from general revenues and transfers to the NRRIT. 
 19 

Table 2-II. Progress of the National Railroad Retirement Investment Trust (NRRIT), Railroad Retirement (RR) Account and
 

Social Security Equivalent Benefit (SSEB) Account under Employment Assumption II
 

(Dollar amounts in millions)
 

Average Combined NRRIT and RR Account SSEB Account 

Account account Tier 2 Benefits Benefits Other Combined 

Calendar 

year 

benefits benefits 

ratioa ratiob 

tax 

rate 

and admin- Tax Other Balance, 

istration incomec incomed end year 

and administration Tax income and e incomec expense Balance, 

end year 

balance, 

end year 

2003 19.1% $3,651 $2,619 $2,631 $21,862 $5,275 $2,164 $1,811 $657 $22,519 

2004 5.98 5.80 18.0% 3,781 2,521 1,785 22,388 5,391 2,198 3,207 671 23,059 

2005 5.91 6.00 18.0% 3,905 2,561 1,826 22,870 5,512 2,234 3,293 686 23,556 

2006 5.77 6.10 17.0% 4,044 2,472 1,763 23,060 5,641 2,269 3,303 617 23,677 

2007 5.57 6.10 17.0% 4,221 2,512 1,777 23,128 5,766 2,303 3,564 718 23,846 

2008 5.33 6.20 17.0% 4,420 2,553 1,868 23,128 5,907 2,336 3,589 735 23,863 

2009 5.08 6.10 17.0% 4,610 2,594 1,860 22,972 6,080 2,371 3,731 757 23,729 

2010 4.85 6.00 18.0% 4,795 2,770 1,848 22,795 6,279 2,408 3,896 781 23,576 

2011 4.58 5.80 18.0% 4,989 2,815 1,731 22,353 6,486 2,446 3,968 710 23,063 

2012 4.29 5.60 18.0% 5,187 2,862 1,690 21,718 6,703 2,487 4,338 831 22,549 

2013 4.01 5.40 18.0% 5,376 2,911 1,733 20,986 6,937 2,531 4,439 863 21,849 

2014 3.72 5.20 18.0% 5,558 2,961 1,676 20,065 7,180 2,571 4,640 893 20,958 

2015 3.42 5.00 18.0% 5,731 3,013 1,602 18,950 7,426 2,615 4,842 924 19,874 

2016 3.09 4.70 18.0% 5,878 3,067 1,397 17,534 7,678 2,662 4,955 863 18,397 

2017 2.77 4.40 18.0% 5,996 3,121 1,302 15,961 7,931 2,712 5,343 987 16,948 

2018 2.46 4.20 18.0% 6,091 3,177 1,281 14,327 8,172 2,766 5,436 1,017 15,344 

2019 2.17 3.90 19.0% 6,164 3,387 1,162 12,712 8,397 2,823 5,602 1,045 13,757 

2020 1.88 3.60 19.0% 6,218 3,448 1,041 10,983 8,600 2,882 5,743 1,070 12,053 

2021 1.57 3.30 20.0% 6,251 3,670 769 9,172 8,780 2,943 5,808 1,041 10,213 

2022 1.29 3.00 20.0% 6,267 3,736 725 7,366 8,939 3,006 6,004 1,112 8,478 

2023 1.06 2.70 23.0% 6,276 4,302 665 6,057 9,078 3,069 6,026 1,129 7,186 

2024 0.94 2.40 27.0% 6,289 5,058 597 5,423 9,198 3,132 6,081 1,144 6,567 

2025 0.84 2.10 27.0% 6,304 5,148 553 4,821 9,309 3,194 6,128 1,157 5,978 

2026 0.72 1.90 27.0% 6,315 5,240 341 4,087 9,417 3,257 6,168 1,166 5,253 

2027 0.63 1.60 27.0% 6,326 5,333 453 3,546 9,525 3,321 6,222 1,184 4,730 

2028 0.55 1.40 27.0% 6,348 5,429 420 3,047 9,634 3,386 6,261 1,197 4,244 

2029 0.48 1.20 27.0% 6,382 5,531 385 2,580 9,745 3,454 6,305 1,211 3,791 

2030 0.41 1.00 27.0% 6,414 5,639 352 2,158 9,863 3,526 6,352 1,225 3,383 

2031 0.33 0.90 27.0% 6,442 5,755 178 1,647 9,989 3,603 6,402 1,241 2,888 

2032 0.28 0.80 27.0% 6,466 5,877 288 1,347 10,128 3,684 6,461 1,258 2,605 

2033 0.24 0.70 27.0% 6,472 6,008 270 1,153 10,282 3,773 6,528 1,277 2,430 

2034 0.23 0.60 27.0% 6,472 6,148 264 1,092 10,438 3,867 6,590 1,296 2,388 

2035 0.24 0.50 27.0% 6,496 6,296 268 1,161 10,584 3,965 6,636 1,314 2,475 

2036 0.24 0.50 27.0% 6,535 6,454 167 1,247 10,724 4,068 6,674 1,331 2,578 

2037 0.29 0.40 27.0% 6,571 6,620 296 1,592 10,880 4,177 6,722 1,351 2,943 

2038 0.36 0.40 27.0% 6,604 6,797 332 2,116 11,043 4,293 6,771 1,371 3,487 

2039 0.47 0.40 27.0% 6,626 6,985 383 2,858 11,215 4,416 6,820 1,392 4,250 

2040 0.60 0.40 27.0% 6,668 7,183 453 3,827 11,383 4,545 6,859 1,413 5,240 

2041 0.76 0.40 27.0% 6,738 7,395 460 4,943 11,539 4,679 6,879 1,432 6,375 

2042 0.95 0.40 27.0% 6,820 7,617 638 6,379 11,709 4,821 6,909 1,453 7,832 

2043 1.18 0.50 27.0% 6,908 7,853 762 8,085 11,890 4,970 6,942 1,476 9,561 

2044 1.44 0.60 27.0% 7,001 8,102 907 10,094 12,084 5,128 6,980 1,500 11,594 

2045 1.74 0.70 27.0% 7,112 8,366 1,077 12,426 12,287 5,295 7,017 1,525 13,951 

2050 3.77 1.80 27.0% 7,855 9,946 2,362 29,972 13,504 6,290 7,248 1,676 31,648 

2055 5.91 3.60 19.0% 8,716 8,654 4,067 51,693 15,086 7,606 7,522 1,873 53,566 

2060 7.95 5.70 18.0% 9,644 9,960 5,976 77,269 16,945 9,239 7,755 2,103 79,372 

2065 10.24 7.80 14.0% 10,831 9,560 8,592 111,430 19,144 11,221 7,983 2,376 113,806 

2070 11.22 9.90 8.2% 12,457 7,167 10,853 139,621 21,945 13,626 8,397 2,724 142,345 

2075 11.78 11.10 8.2% 14,686 8,680 13,373 172,721 25,651 16,558 9,195 3,184 175,905 

2076 11.87 11.30 8.2% 15,219 9,022 13,966 180,489 26,524 17,218 9,414 3,292 183,781 

a The fair market value of the assets in the RR Account and NRRIT as of the close of the fiscal year (September 30) divided by the total benefits and administrative 

expenses paid from the RR Account and NRRIT during the fiscal year. b The average of the account benefits ratios for the 10 most recent fiscal years ending before the calendar year. 

c Includes payroll taxes and income taxes on benefits. 

d Includes investment income and transfers from SSEB Account. e Other income includes financial interchange income, advances from general revenues, and interest income. Other expense includes repayment of advances 

from general revenues and transfers to the NRRIT. 
 20 

Table 2-III. Progress of the National Railroad Retirement Investment Trust (NRRIT), Railroad Retirement (RR) Account and
 

Social Security Equivalent Benefit (SSEB) Account under Employment Assumption III
 

(Dollar amounts in millions)
 

Average Combined NRRIT and RR Account SSEB Account 

Account account Tier 2 Benefits Benefits Other Combined 

Calendar 

year 

benefits benefits 

ratioa ratiob 

tax 

rate 

and admin- Tax Other Balance, 

istration incomec incomed end year 

and administration Tax income and e incomec expense Balance, 

end year 

balance, 

end year 

2003 19.1% $3,651 $2,596 $2,631 $21,838 $5,275 $2,145 $1,830 $657 $22,495 

2004 5.96 5.80 18.0% 3,781 2,473 1,781 22,312 5,391 2,156 3,249 671 22,983 

2005 5.88 6.00 18.0% 3,905 2,486 1,816 22,709 5,512 2,168 3,359 686 23,395 

2006 5.71 6.10 17.0% 4,044 2,373 1,746 22,785 5,641 2,177 3,395 617 23,402 

2007 5.47 6.10 17.0% 4,220 2,384 1,749 22,697 5,766 2,183 3,684 718 23,415 

2008 5.20 6.10 17.0% 4,419 2,394 1,826 22,498 5,907 2,187 3,737 735 23,233 

2009 4.92 6.00 18.0% 4,609 2,525 1,807 22,222 6,080 2,192 3,909 757 22,979 

2010 4.64 5.90 18.0% 4,793 2,535 1,778 21,741 6,278 2,198 4,104 781 22,522 

2011 4.31 5.80 18.0% 4,986 2,545 1,636 20,935 6,485 2,205 4,207 709 21,644 

2012 3.95 5.50 18.0% 5,184 2,556 1,563 19,871 6,701 2,213 4,608 830 20,701 

2013 3.59 5.30 18.0% 5,372 2,568 1,571 18,638 6,932 2,223 4,741 863 19,501 

2014 3.21 5.00 18.0% 5,553 2,581 1,472 17,138 7,173 2,229 4,974 893 18,031 

2015 2.81 4.70 18.0% 5,724 2,594 1,350 15,359 7,416 2,237 5,209 923 16,282 

2016 2.38 4.40 18.0% 5,869 2,608 1,090 13,188 7,663 2,248 5,354 861 14,049 

2017 1.93 4.10 18.0% 5,984 2,621 933 10,759 7,910 2,261 5,773 984 11,743 

2018 1.50 3.70 19.0% 6,076 2,756 847 8,286 8,144 2,276 5,898 1,013 9,299 

2019 1.07 3.40 20.0% 6,145 2,891 659 5,691 8,360 2,293 6,094 1,040 6,731 

2020 0.61 3.00 20.0% 6,193 2,906 457 2,860 8,553 2,310 6,266 1,064 3,924 

2021 0.15 2.60 23.0% 6,221 3,297 105 41 8,720 2,335 6,355 1,034 1,075 

2022 -0.07 2.20 27.0% 6,231 3,819 1,103 (1,268) 8,866 2,361 5,470 - (1,268) 

2023 -0.47 1.80 27.0% 6,238 3,851 (117) (3,772) 8,987 2,388 6,599 - (3,772) 

2024 -0.89 1.40 27.0% 6,246 3,884 (315) (6,449) 9,087 2,414 6,672 - (6,449) 

2025 -1.34 1.00 27.0% 6,253 3,916 (527) (9,313) 9,175 2,440 6,735 - (9,313) 

2026 -1.84 0.50 27.0% 6,255 3,949 (929) (12,547) 9,256 2,466 6,790 - (12,547) 

2027 -2.36 0.10 27.0% 6,254 3,982 (1,011) (15,829) 9,335 2,491 6,843 - (15,829) 

2028 -2.91 -0.40 27.0% 6,261 4,019 (1,271) (19,342) 9,409 2,518 6,890 - (19,342) 

2029 -3.49 -0.90 27.0% 6,277 4,060 (1,550) (23,109) 9,479 2,547 6,932 - (23,109) 

2030 -4.12 -1.30 27.0% 6,288 4,107 (1,849) (27,140) 9,554 2,580 6,974 - (27,140) 

2031 -4.81 -1.80 27.0% 6,292 4,159 (2,315) (31,589) 9,631 2,617 7,014 - (31,589) 

2032 -5.53 -2.30 27.0% 6,289 4,217 (2,521) (36,182) 9,716 2,658 7,058 - (36,182) 

2033 -6.31 -2.80 27.0% 6,265 4,283 (2,884) (41,048) 9,808 2,705 7,103 - (41,048) 

2034 -7.16 -3.40 27.0% 6,229 4,355 (3,268) (46,190) 9,893 2,756 7,136 - (46,190) 

2035 -8.05 -4.00 27.0% 6,211 4,434 (3,674) (51,641) 9,962 2,810 7,151 - (51,641) 

2036 -9.01 -4.70 27.0% 6,189 4,522 (4,221) (57,530) 10,024 2,870 7,154 - (57,530) 

2037 -10.04 -5.40 27.0% 6,150 4,615 (4,570) (63,635) 10,098 2,934 7,164 - (63,635) 

2038 -11.14 -6.20 27.0% 6,114 4,716 (5,052) (70,085) 10,160 3,002 7,158 - (70,085) 

2039 -12.32 -7.00 27.0% 6,065 4,825 (5,560) (76,885) 10,219 3,076 7,142 - (76,885) 

2040 -13.58 -7.90 27.0% 6,030 4,942 (6,097) (84,069) 10,271 3,154 7,117 - (84,069) 

2041 -14.90 -8.80 27.0% 6,005 5,068 (6,746) (91,753) 10,305 3,236 7,069 - (91,753) 

2042 -16.29 -9.90 27.0% 5,976 5,202 (7,272) (99,799) 10,349 3,323 7,026 - (99,799) 

2043 -17.75 -10.90 27.0% 5,962 5,345 (7,909) (108,325) 10,385 3,415 6,970 - (108,325) 

2044 -19.28 -12.10 27.0% 5,949 5,498 (8,583) (117,360) 10,423 3,513 6,910 - (117,360) 

2045 -20.87 -13.30 27.0% 5,952 5,661 (9,299) (126,950) 10,464 3,616 6,848 - (126,950) 

2050 -29.76 -20.40 27.0% 6,100 6,659 (13,616) (184,882) 10,782 4,244 6,538 - (184,882) 

2055 -40.83 -29.20 27.0% 6,358 8,008 (19,502) (263,914) 11,369 5,096 6,273 - (263,914) 

2060 -54.72 -40.10 27.0% 6,706 9,682 (27,580) (372,460) 12,194 6,161 6,033 - (372,460) 

2065 -70.88 -53.70 27.0% 7,288 11,723 (38,790) (523,276) 13,316 7,457 5,859 - (523,276) 

2070 -88.39 -69.50 27.0% 8,230 14,215 (54,551) (735,540) 14,928 9,038 5,891 - (735,540) 

2075 -107.00 -86.80 27.0% 9,603 17,257 (76,949) (1,037,431) 17,223 10,972 6,251 - (1,037,431) 

2076 -110.87 -90.40 27.0% 9,935 17,942 (82,471) (1,111,895) 17,777 11,409 6,368 - (1,111,895) 

a The fair market value of the assets in the RR Account and NRRIT as of the close of the fiscal year (September 30) divided by the total benefits and administrative 

expenses paid from the RR Account and NRRIT during the fiscal year. b The average of the account benefits ratios for the 10 most recent fiscal years ending before the calendar year. 

c Includes payroll taxes and income taxes on benefits. 

d Includes investment income and transfers from SSEB Account. e Other income includes financial interchange income, advances from general revenues, and interest income. Other expense includes repayment of advances 

from general revenues and transfers to the NRRIT. 
 21
 

Table 3. Present value of benefits in millions of dollars
 

Employment assumption I Employment assumption II Employment assumption III 

Tier 1 Tier 1 Tier 1 

Tier 2a liability Total Tier 2a liability Total Tier 2a liability Total 

Employee annuities 

Retired $11,671 $ 4,253 $15,924 $11,671 $ 4,253 $15,924 $11,671 $ 4,253 $15,924 

Active 15,065 7,829 22,893 15,065 7,829 22,893 15,065 7,829 22,893 

Inactive 1,203 489 1,692 1,203 489 1,692 1,203 489 1,692 

Future entrants 3,013 1,299 4,312 2,243 968 3,211 1,507 650 2,158 

Total 30,952 13,870 44,821 30,182 13,538 43,720 29,446 13,221 42,667 

Spouse annuities 

Retired 3,272 927 4,200 3,272 927 4,200 3,272 927 4,200 

Active 3,702 2,709 6,411 3,702 2,709 6,411 3,702 2,709 6,411 

Inactive 257 112 369 257 112 369 257 112 369 

Future entrants 603 274 877 450 205 655 302 138 440 

Total 7,834 4,023 11,857 7,681 3,954 11,635 7,533 3,887 11,420 

Survivor annuities 

Retired & deceased 4,597 777 5,374 4,597 777 5,374 4,597 777 5,374 

Active 1,858 226 2,084 1,858 226 2,084 1,858 226 2,084 

Inactive 57 20 76 57 20 76 57 20 76 

Future entrants 414 85 498 310 63 373 208 43 251 

Total 6,925 1,107 8,032 6,821 1,086 7,907 6,720 1,065 7,785 

All annuities combined 

Retired & deceased 19,540 5,957 25,497 19,540 5,957 25,497 19,540 5,957 25,497 

Active 20,624 10,764 31,388 20,624 10,764 31,388 20,624 10,764 31,388 

Inactive 1,517 621 2,138 1,517 621 2,138 1,517 621 2,138 

Future entrants 4,030 1,658 5,687 3,003 1,236 4,239 2,018 831 2,849 

Total annuities $45,711 $19,000 $64,710 $44,684 $18,578 $63,262 $43,699 $18,173 $61,872 

Lump sum payments 71 71 71 

Total benefits $64,781 $63,333 $61,943 

Note: Detail may not add to totals due to rounding. 

a Includes supplemental annuity benefits. 
 22
 

Table 4. Present value of benefits as a percentage of the present value of tier 2 payroll
 

Employment assumption I Employment assumption II Employment assumption III 

Tier 1 Tier 1 Tier 1 

Tier 2a liability Total Tier 2a liability Total Tier 2a liability Total 

Employee annuities 

Retired 5.03% 1.83% 6.87% 5.90% 2.15% 8.05% 7.02% 2.56% 9.57% 

Active 6.50 3.38 9.87 7.61 3.96 11.57 9.06 4.71 13.76 

Inactive 0.52 0.21 0.73 0.61 0.25 0.86 0.72 0.29 1.02 

Future entrants 1.30 0.56 1.86 1.13 0.49 1.62 0.91 0.39 1.30 

Total 13.35 5.98 19.33 15.26 6.84 22.10 17.70 7.95 25.65 

Spouse annuities 

Retired 1.41 0.40 1.81 1.65 0.47 2.12 1.97 0.56 2.52 

Active 1.60 1.17 2.76 1.87 1.37 3.24 2.23 1.63 3.85 

Inactive 0.11 0.05 0.16 0.13 0.06 0.19 0.15 0.07 0.22 

Future entrants 0.26 0.12 0.38 0.23 0.10 0.33 0.18 0.08 0.26 

Total 3.38 1.73 5.11 3.88 2.00 5.88 4.53 2.34 6.87 

Survivor annuities 

Retired & deceased 1.98 0.33 2.32 2.32 0.39 2.72 2.76 0.47 3.23 

Active 0.80 0.10 0.90 0.94 0.11 1.05 1.12 0.14 1.25 

Inactive 0.02 0.01 0.03 0.03 0.01 0.04 0.03 0.01 0.05 

Future entrants 0.18 0.04 0.21 0.16 0.03 0.19 0.13 0.03 0.15 

Total 2.99 0.48 3.46 3.45 0.55 4.00 4.04 0.64 4.68 

All annuities combined 

Retired & deceased 8.42 2.57 10.99 9.88 3.01 12.89 11.75 3.58 15.33 

Active 8.89 4.64 13.53 10.42 5.44 15.87 12.40 6.47 18.87 

Inactive 0.65 0.27 0.92 0.77 0.31 1.08 0.91 0.37 1.29 

Future entrants 1.74 0.71 2.45 1.52 0.62 2.14 1.21 0.50 1.71 

Total annuities 19.71% 8.19% 27.90% 22.59% 9.39% 31.98% 26.27% 10.92% 37.19% 

Lump sum payments 0.03 0.04 0.04 

Total benefits 27.93% 32.01% 37.24% 

Note: Detail may not add to totals due to rounding. 

a Includes supplemental annuity benefits. 
 23 

Table 5. Balance of the Railroad Retirement and Social Security Equivalent
 

Benefit Accounts as of December 31, 2001
 

(Dollar amounts in millions)
 

RR SSEB 

Account Account 

Securities: 

Par value specialsa $ 7,755 $ 1,849 

Accrued interest 25 5 

Market value of market-based specialsb 10,878 -

Cash accounts (2) -

Total securities 18,656 1,854 

Present value of transfers from Railroad Retirement 

Supplemental Accountc 65 

Accrual adjustmentsd: 

Retirement taxes 68 72 

Financial interchange - OASDI - 4,479 

Benefit accruals (12) (11) 

Financial interchange - HI - (520) 

Advances against the financial interchange - (3,792) 

Balance $18,777 $ 2,082 

a Par value specials are securities issued by the Treasury directly to the Railroad 

Retirement and Social Security Equivalent Benefit Accounts, 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 three years away. 

b A market-based special may be any marketable Treasury bill, note or bond, except 

that notes and bonds within six 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 Treasury, so as not to affect the securities market. 

c The balance of the Railroad Retirement Supplemental Account was transferred to 

the National Railroad Retirement Investment Trust (NRRIT) on September 18, 

2002. This amount is shown as an asset of the RR Account because the balances in 

the RR Account and NRRIT (established February 1, 2002) are combined in the 

actuarial projections. 

d Excludes benefit payments due January 2, 2002, because these benefits are 

included in the present value of benefits in the present value calculations. 
 24 

Table 6. Actuarial surplus or (deficiency) for National Railroad Retirement 

Investment Trust and Railroad Retirement Account 

Employment assumption
 

I II III
 

Present values in millions of dollars 

Funds on hand, 12/31/2001 $ 18,777 $ 18,777 $ 18,777 

Retirement taxes 41,377 39,707 34,365 

Income taxes on benefits 5,073 4,959 4,850 

Available from SSEB Account 2,070 2,042 2,016 

Total, present and prospective assets 67,297 65,485 60,008 

Benefit payments 64,781 63,333 61,943 

Administrative expenses 1,844 1,668 1,555 

Total liabilities 65,001 66,625 63,498 

Actuarial surplus or (deficiency) 484 672 (3,490) 

One percent of tier 2 payroll $ 2,319 $ 1,978 $ 1,664 

Present values as a 

percentage of tier 2 payroll 

Funds on hand, 12/31/2001 8.10% 9.49% 11.29% 

Retirement taxes 17.84 20.07 20.66 

Income taxes on benefits 2.19 2.51 2.92 

Available from SSEB Account 0.89 1.03 1.21 

Total, present and prospective assets 29.02 33.10 36.07 

Benefit payments 27.93 32.01 37.24 

Administrative expenses 0.80 0.84 0.93 

Total liabilities 28.73 32.85 38.17 

Actuarial surplus or (deficiency) 0.29 0.24 (2.10) 
 25 

Table 7. Minimum contribution required under ERISA 

(Dollar amounts in millions) 

Amount or rate 

1. Present value of benefits for former and present employees $59,094 

2.	 Present value of administrative expenses for former and present 

employees 1,557 

3. Present value of 1 percent of tier 2 payroll for present employees 1,022 

4. Normal cost as a percentage of tier 2 payroll 5.41% 

5.	 Present value of future service costs for present employees = 5,529 

(3) x (4) 

6. Accrued liability = (1) + (2) - (5) 55,122 

7. Funds on hand 12/31/2001a 20,859 

8. Unfunded accrued liability = (6) - (7) 34,263 

9. Level amount to fund accrued liability in 30 years 2,964 

Employment Assumption 

I II III 

10.	 Level tax rate to fund accrued liability and meet normal costs 

for next 30 years 24.52% 26.74% 29.64% 

11. Tax rate after 30 years (normal cost rate) 5.41% 5.41% 5.41% 

a The amount shown is the sum of the RR and SSEB Account balances shown in Table 5. 
 26
 

Table 8. Vested dual benefit amounts and average number of beneficiaries
 

Fiscal 

Vested dual 

benefit amountsa Average 

number of 

year (Millions) beneficiaries 

2004 $119 66,000 

2005 108 59,000 

2006 97 53,000 

2007 87 47,000 

2008 77 41,000 

2009 69 36,000 

2010 60 32,000 

2011 53 28,000 

2012 46 24,000 

2013 40 21,000 

2014 35 18,000 

2015 30 15,000 

2016 25 13,000 

2017 21 11,000 

2018 18 9,000 

2019 15 8,000 

2020 12 6,000 

2021 10 5,000 

2022 8 4,000 

2023 7 4,000 

2024 5 3,000 

2025 4 2,000 

2026 3 2,000 

2027 3 1,000 

2028 2 1,000 

2029 2 1,000 

2030 1 1,000 

a When projected amounts are used to determine the appropriation 

needed for benefit payments, a margin must be added to ensure 

payment of full benefits. 
 27
 

Table 9. Supplemental annuity benefit amounts and average number of beneficiaries
 

Supplemental Average 

Calendar benefit amounts number of 

year (Millions) beneficiariesa 

2003 $65 130,000 

2004 64 126,000 

2005 62 123,000 

2006 61 121,000 

2007 60 120,000 

2008 59 119,000 

2009 59 118,000 

2010 59 118,000 

2011 59 118,000 

2012 59 118,000 

2013 59 118,000 

2014 58 117,000 

2015 58 117,000 

2016 58 116,000 

2017 57 114,000 

2018 56 112,000 

2019 54 109,000 

2020 53 106,000 

2021 51 102,000 

2022 49 97,000 

2023 46 92,000 

2024 44 88,000 

2025 41 83,000 

2026 39 78,000 

2027 36 73,000 

2028 34 68,000 

2029 31 63,000 

2030 29 58,000 

2031 27 53,000 

2032 24 49,000 

2033 22 45,000 

2034 20 40,000 

2035 18 36,000 

2036 16 33,000 

2037 14 29,000 

2038 13 26,000 

2039 11 22,000 

2040 10 19,000 

a Average number in a year. Excludes cases where the supplemental annuity is totally 

eliminated because of a private pension. On January 1, 2002, there were about 33,000 

of these cases. 
 28
 

Table 10. Average number of railroad retirement annuitants and number of annuitants per full time employee
 

Average number of annuitants Average number of annuitants 

Calendar under each employment assumption per full time employee 

year I II III I II III 

2003 632,200 632,200 632,200 2.82 2.85 2.90 

2004 617,500 617,500 617,500 2.79 2.86 2.94 

2005 603,500 603,500 603,500 2.76 2.86 2.99 

2006 590,600 590,600 590,600 2.73 2.87 3.04 

2007 579,200 579,200 579,200 2.71 2.88 3.10 

2008 569,700 569,700 569,600 2.70 2.90 3.17 

2009 561,600 561,600 561,500 2.69 2.93 3.24 

2010 554,600 554,500 554,500 2.69 2.96 3.33 

2011 548,500 548,400 548,200 2.69 2.99 3.42 

2012 543,200 543,000 542,800 2.70 3.03 3.51 

2013 538,500 538,200 537,900 2.71 3.08 3.62 

2014 534,100 533,700 533,300 2.72 3.12 3.72 

2015 529,700 529,100 528,500 2.73 3.17 3.83 

2016 524,800 524,100 523,300 2.73 3.21 3.93 

2017 519,500 518,500 517,400 2.74 3.24 4.04 

2018 513,300 512,100 510,700 2.73 3.27 4.13 

2019 506,300 504,700 502,900 2.73 3.30 4.22 

2020 498,200 496,300 494,100 2.72 3.31 4.30 

2021 489,100 486,800 484,100 2.70 3.32 4.35 

2022 479,300 476,500 473,300 2.67 3.32 4.39 

2023 468,900 465,500 461,800 2.65 3.31 4.42 

2024 458,200 454,200 449,800 2.61 3.30 4.43 

2025 447,400 442,800 437,600 2.58 3.28 4.44 

2026 436,700 431,300 425,300 2.55 3.26 4.45 

2027 426,200 419,900 413,000 2.52 3.24 4.45 

2028 416,200 409,000 401,000 2.48 3.22 4.44 

2029 406,700 398,400 389,300 2.45 3.19 4.42 

2030 397,500 388,100 377,900 2.42 3.17 4.39 

2031 388,700 378,100 366,600 2.39 3.14 4.36 

2032 380,500 368,600 355,800 2.36 3.10 4.32 

2033 372,600 359,300 345,100 2.33 3.07 4.28 

2034 365,000 350,200 334,400 2.30 3.03 4.22 

2035 357,900 341,500 324,100 2.27 3.00 4.16 

2036 351,300 333,100 313,800 2.24 2.96 4.10 

2037 345,100 325,100 303,900 2.22 2.92 4.03 

2038 339,400 317,400 294,200 2.20 2.88 3.95 

2039 333,900 309,800 284,500 2.17 2.84 3.87 

2040 328,800 302,500 275,200 2.15 2.79 3.78 

2041 324,000 295,500 266,000 2.13 2.75 3.70 

2042 319,700 288,900 257,100 2.11 2.71 3.61 

2043 315,800 282,600 248,500 2.09 2.67 3.51 

2044 312,100 276,600 240,200 2.07 2.62 3.42 

2045 308,800 270,900 232,300 2.06 2.58 3.33 

2050 296,200 247,000 198,500 1.99 2.39 2.90 

2055 286,100 227,800 172,600 1.92 2.20 2.52 

2060 275,100 210,300 152,000 1.85 2.03 2.22 

2065 263,700 194,800 135,900 1.77 1.88 1.99 

2070 253,900 182,800 124,600 1.71 1.77 1.82 

2075 247,200 174,900 117,600 1.66 1.69 1.72 

2076 246,300 173,800 116,600 1.66 1.68 1.70 
 29 

Table 11. Transfers to railroad retirement system under financial interchange with social security system, 1937-2003a 

(Millions of dollars) 

Benefit Tax Cash transfers toc 

Fiscal credits to credits to railroad retirement 

Determination 

number 

years 

covered 

railroad 

retirementb 

social 

security 

Year of 

Amount transfer 

1-20 1937-71 d 12,981.3 6,572.3 6,636.3 d 1953-72 d
 

21 1972 1,217.1 470.9 802.5 1973
 

22 1973 1,412.8 556.4 930.9 1974
 

23 1974 1,575.6 653.5 1,010.3 1975
 

24 1975 1,853.3 718.7 1,238.7 1976
 

25 1976 1,872.2 f 772.0 1,207.5 1977
 

26 1977 e 2,556.6 f 1,060.8 1,618.5 1978
 

27 1978 2,230.3 902.6 1,477.4 1979
 

28 1979 2,389.5 1,089.9 1,429.9 1980
 

29 1980 2,683.4 1,204.8 1,614.3 1981
 

30 1981 2,973.7 1,322.5 1,819.7 1982
 

31 1982 3,321.9 1,296.0 2,278.6 1983
 

32 1983 3,471.8 1,287.9 2,425.6 1984
 

33 1984 3,524.1 1,472.8 2,352.9 1985
 

34 1985 3,658.5 1,443.1 2,652.8 1986
 

35 1986 3,744.8 1,398.7 2,614.2 1987
 

36 1987 3,864.4 1,305.0 2,851.3 1988
 

37 1988 4,028.8 1,427.3 2,933.5 1989
 

38 1989 4,149.5 1,418.9 3,049.2 1990
 

39 1990 4,415.3 1,451.1 3,456.7 1991
 

40 1991 4,434.7 1,476.5 3,206.4 1992
 

41 1992 4,720.1 1,523.1 3,435.3 1993
 

42 1993 4,796.5 1,583.3 3,525.6 1994
 

43 1994 5,199.6 1,515.5 4,120.1 1995
 

44 1995 4,836.2 f 1,545.1 3,556.3 1996
 

45 1996 5,008.0 1,566.8 3,747.2 1997
 

46 1997 5,114.1 1,615.4 3,819.0 1998
 

47 1998 5,173.5 1,641.9 3,816.0 1999
 

48 1999 5,195.6 1,767.5 3,697.6 2000
 

49 2000 4,767.8 f 1,750.9 3,282.8 2001
 

50 2001 5,180.5 1,756.9 3,646.8 2002
 

51 2002 5,217.5 1,748.2 3,747.4 2003
 

Total 1937-2002 47,316.4 127,569.1 88,001.6 

a Financial interchange transactions with the Hospital Insurance Trust Fund are not included. These involve mainly a transfer of collected 

taxes to the Centers for Medicare and Medicaid Services, with some adjustments for difference in earnings bases under the two systems. 

b Benefit amounts were credited to Railroad Retirement Account for covered years 1983 and earlier and to Social Security Equivalent 

Benefit Account for covered years 1984 and later. Amounts include allowances for administrative expenses and adjustments to previous 

determinations. 

c

 Cash transfers were made to Railroad Retirement Account in 1984 and earlier and to Social Security Equivalent Benefit Account in 

1985 and later. Transfers include interest, which is not shown in table. 

d First determination covered period January 1937-June 1952. Initial balance of $488.2 million was never transferred to social security; 

only interest was paid until debt was liquidated by subsequent offsets in favor of railroad retirement. 

e

 1977 figure covered 15 months (July 1976 - September 1977) because of change in definition of fiscal year. 

f

 Includes adjustment for pre-1957 military service. 
30 

A P P E N D I X 
 

Outline of the benefit and financing provisions 
 

of the railroad retirement system as amended through December 31, 2002
 

EMPLOYEE BENEFITS
 

1. Normal age annuity 

Requirement of 10 years of service or 5 years of service after 1995 for retirement at social security retirement age (see definition at end of 

outline). Employees with less than 10 years of service must meet Social Security Act eligibility requirements to receive a tier 1 benefit. 

2. Prenormal age annuity 

A. Eligible upon later of (1) attainment of age 60 and (2) completion of 30 years of service (60/30 eligibility). 

1. If became eligible before 7-1-84 or employee retires after 12-31-01, unreduced benefit for retirement at age 60. 

2. If became eligible after 6-30-84 and employee retires before 1-1-02, unreduced benefit for retirement at age 62. 

3. 	 If became eligible after 12-31-85 and employee retires before 1-1-02 and before age 62, tier 1 benefit on annuity beginning date 

is equal to what social security would have paid an individual retiring at age 62 after applying any age reduction, except that 

the number of benefit computation years depends on the employee's actual year of birth. Tier 1 benefit is frozen until 

attainment of age 62, when it is recomputed to equal what social security would have paid the individual had he retired at that 

time. Tier 2 benefit is not reduced for age. If became eligible between 7-1-84 and 12-31-85, the same procedure applies, 

except that the age reduction in tier 1 benefit is only one-half the amount applicable after 12-31-85 and before 1-1-02. 

B. Eligible upon later of (1) attainment of age 62 and (2) completion of 10 years of service or 5 years of service after 1995. If 

employee retires before attaining social security retirement age with less than 30 years of service, the benefit is reduced by 1/180 for 

each of the first 36 months and by 1/240 for each additional month the employee is under social security retirement age. (Reduction 

for age in excess of 36 months applies only to tier 1 benefit if employee had any service before 8-12-83.) 

3. Total and permanent disability annuity 

10-year service requirement or 5 years of service after 1995. Benefit may not begin earlier than the later of (1) the first day of the sixth 

month following date disability begins and (2) the first day of the twelfth month before the month in which the application is filed. 

Employees with less than 10 years of service and at least 5 years of service after 1995 who meet Social Security eligibility requirements 

may qualify for a tier 1 benefit only (an age reduced tier 2 benefit would be payable at age 62). 

4. Occupational disability annuity 

Requirement of 20 years of service or attainment of age 60 with 10 years of service; current connection (see definition at end of outline) 

required. Benefit may not begin earlier than the later of (1) the first day of the sixth month following date disability begins and (2) the first 

day of the twelfth month before the month in which the application is filed. 

5. Supplemental annuity 

Requirement of attainment of age 60 with 30 years of service if retired on or after 7-1-74, or age 65 with 25 years of service. Must have 

service before 10-1-81. Current connection required. 
31
 

6. Vested dual benefit 

A. Requirement of fully insured (see definition at end of outline) status under Social Security Act effective 12-31-74 and either 

(1) 25 years of railroad service before 1975 or (2) 10 years of railroad service before 1975, with some railroad work in 1974 or a 

current connection on 12-31-74 or at the time the annuity begins, or 

B. Requirement of fully insured status under Social Security Act as of last year of railroad work before 1975 and 10 years of railroad 

service before 1975. 

7. Work restrictions 

Suspension of annuity for any month annuitant is employed by a railroad. For disabilities, loss of one month's annuity for each $400 in 

excess of $4,800 earned in a year with the last $200 of such excess treated as $400 (no annuity is lost for any month with earnings below 

$400). In addition, the tier 1 portion of a regular annuity based on railroad earnings (see definition at end of outline) after 1974 and all 

social security earnings (see definition at end of outline) is subject to social security work restrictions, unless a social security benefit is 

also being paid. If annuitant is employed by last non-railroad employer preceding retirement, the tier 2 portion and the supplemental 

annuity are also affected, being reduced one dollar for each two dollars of earnings, subject to a maximum reduction of 50 percent. All 

vested dual benefits are subject to social security work restrictions. 

8. Creditable service (continuity not required) 

All service after December 31, 1936. Service before 1937 may be used if annuitant had employment relation on August 29, 1935 or 6 

months of service after August 29, 1935 and before 1946. No limit on service except 30-year maximum if pre-1937 service used. 

Additional service months may be deemed, for years after 1984, where employee does not work in every month of year, but railroad 

earnings exceed monthly prorations of annual tier 2 maximum earnings creditable. 

9. Creditable and taxable railroad earnings 

From 1966 through 1978, the maximum monthly earnings were one-twelfth of the annual social security maximum. The 1977 social 

security amendments introduced a difference between the maximum monthly earnings creditable for tier 1 and tier 2 benefits starting 

in 1979. 

before July 1, 1954 $ 300 Tier 1 Tier 2 
 

July 1, 1954 - May 31, 1959 350 1979 $1,908.33 $1,575 
 

June 1, 1959 – Oct. 31, 1963 400 1980 2,158.33 1,700 
 

Nov. 1, 1963 – Dec. 31, 1965 450 1981 2.475 1,850 
 

1966-67 550 1982 2,700 2,025 
 

1968-71 650 1983 2,975 2,225 
 

1972 750 1984 3,150 2,350 
 

1973 900 
 

1974 1,100 
 

1975 1,175 
 

1976 1,275 
 

1977 1,375 
 

1978 1,475 
 

Starting in 1985, earnings are credited on an annual rather than a monthly basis. The annual maximums are: 

Tier 1 Tier 2 Tier 1 Tier 2 

1985 $39,600 $29,700 1995 $61,200 $45,300 

1986 42,000 31,500 1996 62,700 46,500 

1987 43,800 32,700 1997 65,400 48,600 

1988 45,000 33,600 1998 68,400 50,700 

1989 48,000 35,700 1999 72,600 53,700 

1990 51,300 38,100 2000 76,200 56,700 

1991 53,400 39,600 2001 80,400 59,700 

1992 55,500 41,400 2002 84,900 63,000 

1993 57,600 42,900 2003 87,000 64,500 

1994 60,600 45,000 
32
 

10. Creditable military service and earnings 

Military service is creditable in war and national emergency periods, and in some cases between June 15, 1948 and December 15, 1950, if 

preceded by railroad service in the year of entry into military service or the preceding year. 

Earnings: 	 $160 before 1968 

$260 after 1967 but before 1975 

For each calendar year after 1974, earnings are the same as that credited under social security. 

11. Basic monthly annuity computation 

Tier 1: Social security benefit based on combined railroad and social security earnings, less social security benefit actually payable (based 

on social security earnings only). See item 2 for computation of tier 1 benefit for employees with 60/30 eligibility. 

Tier 2: 0.7% of the average monthly compensation (AMC) multiplied by the number of years of service. This amount is then reduced by 

25% of the employee's gross vested dual benefit. The AMC is the average of an individual's highest 60 months of railroad earnings 

up to the tier 2 maximum. For each month of service in a year for which the Railroad Retirement Board's records do not show 

earnings on a monthly basis, the total earnings for the year divided by the months of service in that year will be considered the 

monthly earnings for each month of service in the year. 

12. Vested dual benefit computation 

A. 	 For employees satisfying requirements in item 6.A., benefit is social security benefit based on railroad earnings through 1974, plus 

social security benefit based on social security earnings through 1974, less social security benefit based on combined railroad and 

social security earnings through 1974. 

B. 	 For employees satisfying requirements of item 6.B., benefit is the same as in A., except for the exclusion of all earnings after last 

pre-1975 year employee had railroad employment. 

In both cases, benefit might be proportionally reduced so that the total amount paid out in vested dual benefits in any fiscal year does 

not exceed the total amount appropriated for that year (see item 40). 

13. Supplemental annuity computation 

For employees who were entitled to supplemental annuities or who would have been entitled, but for last person service, prior to 1975, the 

monthly benefit is a minimum of $45 increased by $5 for each year of service over 25, with a maximum benefit of $70. These employees 

have a reduction in their regular railroad retirement annuity because of the supplemental annuity. For employees first entitled or potentially 

entitled after 1974, the monthly benefit is a minimum of $23 increased by $4 for each year of service over 25, with a maximum benefit of 

$43. These employees have no reduction in their regular railroad retirement annuity. Supplemental annuity will be reduced if employee 

receives a private pension from railroad employer based on employer contributions. 

14. Cost-of-living increases (annually, effective with January 1 payments) 

Tier 1: Same as social security increases. 

Tier 2: 32.5% of social security increases. 

Vested dual benefits: Frozen at the 1974 level, except that social security cost-of-living increases effective between 12-31-74 and the 

earlier of January 1, 1982 and the annuity beginning date are included in the benefit computation. 

Supplemental annuity: None. 

15. Tax rebate lump sum 

Employee who has at least 10 years of railroad service and is not eligible for the vested dual benefit will receive a lump sum at retirement 

computed by summing for each year from 1951 through 1974 the product of the social security tax rate for the year times the excess of the 

employee's combined railroad and social security earnings for the year over (approximately) the maximum creditable for the year under the 

1937 Act. Survivors of employee may receive refund if employee dies before receiving it. 
33
 

16. Separation/severance lump sum 

Lump sum, equal to tier 2 payroll taxes deducted from separation or severance payments, will be paid at retirement to employees with at 

least 10 years of service or 5 years of service after 1995 to the extent that separation or severance payments did not yield additional tier 2 

service credits. 

SPOUSE BENEFITS
 

17. Eligibility 

A. Unreduced annuity: 

1. 	 Spouse retiring at age 60 (or any age with a child in care), if (a) employee attained 60/30 eligibility before 7-1-84 or after 12-

31- 01 and retired at age 60 or later, (b) employee attained 60/30 eligibility after 6-30-84 and before 1-1-02 and retired at age 

62 or later, or (c) spouse retired after 12-31-01, and employee retired from disability, has 30 or more years of service and is age 

60 or over. 

2. 	 Spouse retiring at social security normal retirement age (or any age with a child in care), if (a) employee retired before 1-1-75 

and is age 65 or over, (b) employee retired after 12-31-74 and is age 62 or over, or (c) employee retired after 6-30-74, has 30 or 

more years of service and is age 60 or over. 

B. Reduced annuity: 

1. 	 Spouse retiring at age 60 if employee attained 60/30 eligibility after 6-30-84 and retired before 1-1-02 before attaining age 62. 

If employee and spouse have not both attained age 62, spouse tier 1 is one-half the tier 1 the employee received before attaining 

age 62. If employee and spouse have both attained age 62, spouse tier 1 is equal to a social security spouse benefit after 

applying an age reduction based on the spouse's age at the time both employee and spouse became age 62; in this case, if 

employee attained 60/30 eligibility between 7-1-84 and 12-31-85, spouse age reduction is one-half the amount otherwise 

applicable. 

2. 	 Spouse retiring at age 60 before 1-1-02, if employee attained 60/30 eligibility after 6-30-84 and retired from disability after 6-

30-84 and before 1-1-02. Age reduction in tier 1 is 1/144 for each of first 36 months and 1/240 for each additional month 

spouse is under social security retirement age; spouses retiring at 60-61 are deemed 62. 

3. 	 Spouse retiring at age 62, if employee has less than 30 years of service, is retired, and has attained age 62. Age reduction is 

1/144 for each of the first 36 months spouse is under social security retirement age and 1/240 for each month in excess of 36 

that spouse is under retirement age. (Reduction for age in excess of 36 months applies to tier 1, but not tier 2, if employee had 

any service before 8-12-83.) 

18. Work restrictions 

Same as employee; in addition, spouse is not paid for any month employee annuity is not payable by virtue of work restrictions, and spouse 

is reduced $1 for each $2 of employee's earnings for last non-railroad employer preceding employee's retirement (see item 7). 

19. Annuity computation 

Tier 1: One-half of social security benefit based on employee's combined railroad and social security earnings. See item 17 for 

computation of spouse tier 1 in cases where employee is receiving a reduced 60/30 benefit. If spouse is entitled to a social security 

benefit, tier 1 is reduced by the amount of the benefit, but not below 0. If spouse is entitled to employee annuity or a public service 

pension, certain additional restrictions apply. 

Tier 2: 45% of employee's tier 2 benefit. Spouse receives additional benefit if spouse is also an employee annuitant and either the 

employee or spouse has railroad service prior to 1975. 

20. Vested dual benefit 

A spouse receiving a vested dual benefit on August 13, 1981 will continue to receive a benefit (adjusted as described in item 12). No 

vested dual benefits will be awarded after that date. 
34 

21. Divorced spouse 

Entitled to a tier 1 benefit only. Employee must be age 62 and retired. Divorced spouse must be social security retirement age (or age 62 

for reduced benefit), unmarried, and have been married for at least 10 consecutive years to employee. 

22. Cost-of-living increases for spouses 
 

Each tier is subject to same percentage increase as corresponding tier of employee benefit. 
 

SURVIVOR AND DEATH BENEFITS
 

23. Residual lump sum death benefit 

Payable when it appears no further benefits will derive from deceased employee except possibly to a widow, widower or parent at a future 

date. In this case, survivor must waive the right to all future benefits based on the deceased employee's railroad service. The amount 

payable is the sum of 4% of taxable railroad earnings from 1-1-37 to 12-31-46, 7% from 1-1-47 to 12-31-58, 7-1/2% from 1-1-59 to 

12-31-61, 8% from 1-1-62 to 12-31-65, 8.1% from 1-1-1966 to 12-31-1966, 8.65% from 1-1-1967 to 12-31-1967, 8.8% from 1-1-1968 to 

12-31-1968, 9.45% from 1-1-1969 to 12-31-1970, 9.85% from 1-1-1971 to 12-31-1972, 10.1% from 1-1-1973 to 9-30-1973, 5.35% from 

10-1-1973 to 12-31-1973, and 5.45% from 1-1-1974 to 12-31-1974. Railroad earnings after 1974 are not taken into account. The amount 

actually paid is reduced by the amount of benefits paid deriving from the deceased employee. 

24. Employee requirement for survivor benefits 

All benefits except residual lump sum require deceased employee to have 10 years of railroad service or 5 years of service after 1995 and a 

current connection. If employee does not meet above conditions, his earnings record is transferred to social security, which pays any 

survivor benefits. 

25. Aged widow's and widower's eligibility 

A widow or widower must be age 60 and unremarried. Those age 60-61 are deemed age 62 in computing the benefit. For those born 

before 1940, the benefit reduction is 19/40% for each month of age under 65 when benefits begin. For those born after 1939, the age 

reduction depends on the age at retirement and the social security retirement age. In this case, the monthly reduction factor is that 

percentage which would cause retirement at age 60 to result in a 28.5 percent reduction. 

26. Disabled widow's and widower's eligibility 

A widow or widower must be at least age 50 and under age 60, unremarried, and totally and permanently disabled if disability occurs 

within 7 years of employee's death or within 7 years after widowed mother's or father's status terminated. Age reduction is 28.5%. Benefit 

may not begin earlier than the later of (1) the first day of the sixth month following the date disability begins and (2) the first day of the 

twelfth month before the month in which the application is filed. 

27. Widowed mother's and father's eligibility 

Unremarried surviving spouse of a deceased employee who is under social security retirement age and who at the time of filing an 

application has in his or her care a minor or disabled child of the deceased employee. 
35 

28. Divorced widow(er)'s and remarried widow(er)'s eligibility 

The following are eligible for a tier 1 benefit only. 

A. 	 Divorced widow(er) - must (1) have been married to employee at least 10 years, be unmarried or remarried after age 60 (after age 

50 and disability onset if disabled), and have attained age 60 or age 50 if disabled, or (2) be unmarried and any age and have a child 

of the employee in care. 

B. 	 Remarried widow(er) - must have remarried after age 60 (after age 50 and disability onset if disabled), or the remarriage must have 

ended. Widow(er) must have attained age 60, be between 50 and 59 and disabled or be any age with a child in care. 

Benefits for divorced aged widow(er)s and remarried aged widow(er)s are reduced for the full number of months under social security 

retirement age. 

29. Child's eligibility 

A child of a deceased employee must be under 18 or under 19 and a full-time elementary or secondary school student. Unmarried children 

continuously disabled since before age 22 are also eligible, regardless of age. 

30. Parent's eligibility 

A parent of a deceased employee who has attained age 60 and received at least one-half of his or her support from the employee will be 

eligible for an annuity. If the employee died leaving a widow, widower or child who is or might become eligible in the future, the parent 

will be eligible for a tier 1 benefit only. In certain instances, a remarried parent of a deceased employee will be eligible for a tier 1 benefit. 

31. Work restrictions 

Annuity not payable for any month in which survivor engages in railroad employment. Entire benefit subject to social security work 

restrictions. 

32. Annuity computation 

Tier 1: Amount payable to survivor under Social Security Act, based on the deceased employee's combined railroad and social security 

earnings after 12-31-36, less the amount of any social security benefit received. Additional restrictions exist for a widow or 

widower who also receives an annuity as a railroad employee or who receives a public service pension. 

Tier 2: Widow or widower - 50% of employee tier 2 benefit 

Parent - 35% of employee tier 2 benefit 

Children - 15% of employee tier 2 benefit for each child 

The total family tier 2 benefit has a minimum of 35% and a maximum of 80% of the employee's tier 2 benefit (a maximum 

of 130% is used for the purpose of calculating the widow(er) intitial minimum amount). 

For a widow or widower an “initial minimum amount” based on the two-tier annuity amount that would have been payable to the railroad 

employee at the time the widow(er)’s annuity is awarded is computed with a widow(er)’s tier 2 amount equal to 100 percent of the 

employee’s tier 2 amount. Widow(er)s’ annuities computed on the basis of the initial minimum amount are not adjusted for annual cost-ofliving increases until the total annuity amount is exceeded by the annuity amount the widow(er) would have been paid under prior law (tier 

2 amount equal to 50 percent of the employee’s tier 2 amount), with all interim cost-of-living increases otherwise payable. 

For an aged widow or widower, the total benefit exclusive of any vested dual benefit may not be less than amount received as spouse in 

month before employee's death. 

All percentages are before deductions for work or entitlement to social security benefit or railroad retirement employee annuity. 

33. Vested dual benefit for widow or widower 

A widow or widower receiving a vested dual benefit on August 13, 1981 will continue to receive a benefit (adjusted as described in item 

12). No vested dual benefits will be awarded after that date. 
36
 

34. Insurance lump sum 

Payable if employee leaves no survivor eligible for monthly benefits in the month of his death. 

A. 	 If employee had 10 years of service before 1-1-75, the benefit is 10 times the basic amount. The basic amount is 52.4% of the first 

$75 of average monthly remuneration (AMR), plus 12.8% of the remainder, increased by 1% for each year before 1975 with 

earnings of $200 or more. The AMR is combined railroad and social security earnings before 1975 divided by the number of 

months after 1936 or age 22 and up to retirement or death. 

B. 	 If employee had less than 10 years of service as of 12-31-74, the amount will be the amount social security would have paid 

(currently $255). This amount will only be paid to a widow or widower living with the employee at the time of the employee's 

death. 

35. Cost-of-living increases for survivors 
 

Each tier is subject to same percentage increase as corresponding tier of employee benefit. 
 

FINANCING, INVESTMENTS AND TAXATION OF BENEFITS 
 

36. Employee and employer payroll taxes 

Employees and employers contribute at the prevailing social security rate up to the tier 1 earnings limit. In addition, employees and 

employers pay a tier 2 tax up to the tier 2 earnings limit. The employer tier 2 tax rate is 15.6 percent in 2002 and 14.2 percent in 2003, 

while the employee rate is 4.9 percent in both 2002 and 2003. Beginning with the taxes payable for calendar year 2004, tier 2 taxes on both 

employers and employees will be based on the ratio of certain asset balances to the sum of benefits and administrative expenses (the 

average account benefits ratio). 

At the end of each fiscal year (September 30), an Account Benefits Ratio (ABR) is calculated by dividing the fair market value of the assets 

in the RR Account and of the NRRIT (and for years before 2002, the SSEB Account) as of the close of such fiscal year by the total benefits 

and administrative expenses paid from the RR Account and the NRRIT during such fiscal year. The Average Account Benefits Ratio 

(AABR), with respect to any calendar year, is then calculated as the average of the account benefits ratios for the 10 most recent fiscal 

years ending before such calendar year. If the AABR is not a multiple of 0.1, it is increased to the next highest multiple of 0.1. Beginning 

in calendar year 2004, the tier 2 tax rate is determined from a tax rate table based on the AABR. 

AABR Tier 2 tax rate 

At least But less than Employer Employee 

2.5 22.1 4.9 

2.5 3.0 18.1 4.9 

3.0 3.5 15.1 4.9 

3.5 4.0 14.1 4.9 

4.0 6.1 13.1 4.9 

6.1 6.5 12.6 4.4 

6.5 7.0 12.1 3.9 

7.0 7.5 11.6 3.4 

7.5 8.0 11.1 2.9 

8.0 8.5 10.1 1.9 

8.5 9.0 9.1 0.9 

9.0 8.2 0.0 

Contributions to 401(k) deferred compensation plans and the value of employer-paid premiums for group term life insurance coverage in 

excess of $50,000 are included in railroad earnings for payroll tax purposes. 

37. Supplemental annuity tax 
 

As of 1-1-02, the supplemental annuity work-hour tax has been repealed. 
 
37
 

38. Financial interchange 

Railroad retirement system pays to social security system the taxes social security would have collected and receives the additional amount 

of benefits and administrative expenses social security would have paid if railroad employment had been covered under social security. 

The net difference (including interest) is transferred in the June after the fiscal year for which the transfer is made. 

The Railroad Retirement Board estimates the amount and direction of the financial interchange transfer that would be made for each month 

if transfers were on a current monthly basis. If this estimate favors the railroad retirement system, Treasury advances the amount with 

interest to the Railroad Retirement Account, as a loan from the general fund, by the middle of the succeeding month. Within 10 days after 

receipt of the annual financial interchange for a fiscal year, the RRB must repay the amount, with interest, advanced during the fiscal year. 

39. Investments 

Amounts in the Railroad Retirement Account not needed to pay current administrative expenses and amounts in the Social Security 

Equivalent Benefit Account not needed to pay current benefits and administrative expenses are transferred to the National Railroad 

Retirement Investment Trust whose Board of seven trustees is empowered to invest Trust assets in non-governmental assets, such as 

equities and debt, as well as in governmental securities. 

40. Financing of vested dual benefits 

General revenue appropriations finance all vested dual benefit payments since September 1981. Beginning October 1, 1981, each annual 

appropriation is placed in the Dual Benefits Payments Account. Total benefits paid in any fiscal year (starting with 1982) may not exceed 

the total available in the account. The account may borrow at the end of a fiscal year the amount that the Railroad Retirement Board 

estimates will be necessary to pay vested dual benefits for the first month of the next fiscal year. 

41. Taxability of benefits 

The portion of tier 1 benefits equivalent to social security benefits is taxed under the same rules as are social security benefits. Tier 1 

benefits in excess of social security equivalent benefits, tier 2 benefits, vested dual benefits, and supplemental annuities are taxed under the 

rules by which private pensions are taxed. 

Revenues from taxes on social security equivalent benefits are transferred to the social security system through the financial interchange. 

Revenues from taxes on tier 1 benefits in excess of social security equivalent benefits and tier 2 benefits are transferred to the Railroad 

Retirement Account. Revenue derived from taxing vested dual benefits is transferred to the Dual Benefits Payments Account. 

MISCELLANEOUS PROVISIONS
 

42. Benefit preservation 

Each year the Railroad Retirement Board must report to the President and Congress the results of a five-year projection of anticipated 

revenues to and payments from the railroad retirement account. If the results show that the funds in the account will be insufficient to pay 

full benefits at any time during the five-year period, the report must indicate (1) the first fiscal year in which benefits would have to be 

reduced because of insufficient funds in the absence of any changes, and (2) the amount of adjustments necessary to preserve financial 

solvency. Within 180 days after publication of this report, representatives of railroad labor and management are obligated to submit 

proposals designed to preserve the fund's solvency. The Railroad Retirement Board will publish regulations necessary to provide a 

constant level of benefits at the maximum level possible and to insure that no individual receives less than what he would have had all his 

earnings been covered under social security. The Railroad Retirement Board's regulations will take effect beginning with the first year in 

which benefit reductions will be necessary and continue until legislative action supersedes them. 

43. Minimum annuity 

The overall minimum guaranty for employees and dependents is 100% of the amount, or the additional amount, the family would receive 

under the Social Security Act if the employee's railroad earnings after 1936 were credited as social security earnings. 
38 

44. Automatic benefit eligibility adjustments 

Liberalizations in social security eligibility requirements will automatically be reflected in railroad retirement eligibility requirements, but 

reductions in social security requirements for categories not entitled to railroad retirement annuities under the 1937 act will not confer 

railroad retirement eligibility. If the Social Security Act is amended to provide benefits to a class not previously entitled under social 

security, the new class will also be provided railroad retirement benefits. The amount will be the social security benefit based on the 

employee's combined railroad and social security earnings. 

45. Transfer of credits 

Transfer of railroad retirement credits is made to social security if an employee had less than 10 years of railroad service and less than 5 

years of service after 1995 or, in the case of a survivor, if the employee lacked a current connection. 

DEFINITIONS 
 

The meanings of terms used in the outline are defined below: 

Railroad earnings - earnings derived from covered railroad employment, up to the maximums specified in item 9. 

Social security earnings - earnings derived from employment covered under the Social Security Act (excludes railroad earnings), up to 

the maximums allowed. 

Current connection - generally defined as having at least 12 months of railroad service in the 30 months preceding death or retirement. 

An employee whose last 12 months of railroad service occurred prior to the 30 months before retirement or death may maintain a 

current connection if the employee did not perform any regular employment between the end of the 30 month period containing the last 

12 months of railroad service and the month of retirement or death. For purposes of the supplemental annuity or survivors' benefits, an 

employee who was terminated involuntarily and without fault on or after October 1, 1975, after 25 years of service and did not 

thereafter decline an offer of employment in the same class or craft in the railroad industry is deemed to have a current connection. 

Fully insured - insured for retirement at age 62 under social security; does not necessarily imply an insured status for disability benefits 

or for survivor benefits for death before age 62. 

Social security benefit - when used in describing the computation of the vested dual benefit, the term "social security benefit" means a 

primary insurance amount computed by using the social security formula in effect in 1974 and the specified earnings; it does not imply 

an actual benefit. 

Social security retirement age - the age at which an individual may receive an unreduced benefit at retirement under the Social Security 

Act, as follows: 

Year of attainment 
 

of early retirement age 
 

(62 for employees and spouses, 
 

60 for widows and widowers)
 

1999 or earlier
 

2000 
 

2001 
 

2002 
 

2003 
 

2004 
 

2005-2016 
 

2017 
 

2018 
 

2019 
 

2020 
 

2021 
 

2022 or later
 

Retirement age 

(age for unreduced benefit) 

65 years, 0 months 

65 years, 2 months 

65 years, 4 months 

65 years, 6 months 

65 years, 8 months 

65 years, 10 months 

66 years, 0 months 

66 years, 2 months 

66 years, 4 months 

66 years, 6 months 

66 years, 8 months 

66 years, 10 months 

67 years, 0 months 
39 

TECHNICAL SUPPLEMENT 

GENERAL METHODOLOGY AND ASSUMPTIONS 

1. Approach. The 22nd valuation presents results under three different employment assumptions. 

The same set of earnings inflation, price inflation, and interest rate assumptions was used with 

each of the three employment assumptions. This set of assumptions is discussed in Section V 

and listed in Table 1 of the valuation report. 

A projection of the progress of the railroad retirement fund through 2076 is shown under each of 

the three employment assumptions. All the projections are based on an open group (that is, they 

include future entrants). The calculations were arranged so that closed-group valuations, limited 

to former and present employees, could be obtained as a by-product. A balance sheet deriving 

actuarial surplus or deficiency is also shown. 

2. Basic data. All data concerning current beneficiaries were derived from a "universe" file (file 

including all beneficiaries as of December 31, 2001). This included information needed to 

project benefits for this group and to derive exposures and terminations for mortality and 

remarriage studies. 

Active and inactive census data and data needed to study the withdrawal, mortality, and age and 

disability retirement experience of active employees were also compiled from a universe file. 

3. Service tables. For the projections of employees in active service and new entrants, service 

tables by years of service and attained age were prepared. 

Five sets of withdrawal rates were used with the differentiation made by attained age. Three 

sets of rates for disability retirement and two sets of rates for age retirement were used, with the 

differentiation made by completed years of service. Rates of death in active service are 

aggregate. 

4. Actuarial assumptions. 

Mortality after age retirement. Mortality studies for nondisability retirements covering the 

period 1997-2000 showed that the pattern of improved mortality at the younger ages found in 

the 1994-1997 experience continued. Based on the thinning of margin and the degree of fit by 

attained age, a new table, the 2001 RRB Annuitants Mortality Table, was constructed. 

Mortality after disability retirement. The overall ratio of actual to expected deaths after 

disability retirement based on the 21st valuation standard was 102.1% and 103.5% for annuitants 

with and without disability freeze, respectively. Based on the improvement in mortality and the 

degree of fit by five-year age group, two new tables, the 2001 RRB Disabled Mortality Table 

for Annuitants with Disability Freeze and the 2001 RRB Disabled Mortality Table for 

Annuitants without Disability Freeze, were constructed. 
40 

Mortality of employees in active service. Mortality studies for active employees showed an 

overall ratio of actual to expected deaths of 103.7%. Based on the degree of fit by attained age 

and actual to expected ratio, the 21st valuation standard, the 1994 RRB Active Service Mortality 

Table, was retained. 

Total termination for spouses. Total termination rates are used in projecting future tier 1 and 

tier 2 benefits for spouses receiving these benefits on the valuation date. Spouse benefits 

terminate at either the spouse's or the employee's death. A spouse receiving benefits at the time 

of the employee's death would begin to receive survivor benefits. 

The overall ratio of actual terminations to those expected on the basis of the 21st valuation 

standard was 102.2%. Based on the thinning of the margin and the unevenness of actual to 

expected ratios by five-year age group, with the highest ratios for the youngest and oldest ages, 

a new table, the 2001 RRB Spouse Total Termination Table, was constructed. 

Probability of a retired employee having an eligible spouse. Projected tier 1 and tier 2 benefits 

for spouses of active employees and future entrants were determined by applying factors to the 

projected employee tier 1 and tier 2 benefits, respectively. These factors, shown in Table S-6, 

reflect the age-by-age probability that an employee annuitant has a spouse receiving benefits. 

Although the overall ratio of the actual number of spouses on December 31, 2000, to the 

expected number based on the 21st valuation standard was 98.8% and 99.9%, for 10-29 years of 

service employees and 30 or more years of service employees, respectively, it has been past 

practice to update this table for each new valuation. 

Mortality of widow annuitants. The ratio of actual to expected deaths for widow annuitants was 

111.1% based on the 21st valuation standard, the 1995 RRB Mortality Table for Widows. 

Recently enacted increases in widow benefits may serve to improve the standard of living of 

widows and contribute to mortality improvement. Since it is not expected that widow mortality 

will continue to decline, the 21st valuation standard was retained. 

Remarriage of widows. The overall ratio of actual to expected remarriages on the basis of the 

21st valuation standard, the 1980 RRB Remarriage Table, was 121.9%. When consideration was 

given to the volatility of remarriage experience over the years, it was decided to retain the 21st 

valuation standard. 

Total termination for disabled children. The overall ratio of actual terminations to those 

expected on the basis of the 21st valuation standard, the 1986 RRB Total Termination Table for 

Disabled Children, was 120.3%. Based on the variability of recent experience and the relatively 

small impact on the valuation results, the 21st valuation standard was retained. 

Withdrawal from the railroad industry. The overall ratio of actual final withdrawals 

(withdrawals net of re-entrants) to those expected on the basis of the 21st valuation standard was 

89.4%. Based on this result and the persistent long select period, a new withdrawal standard 

was constructed (Table S-12). Rates are grouped by attained age and service in the 22nd 

valuation rather than by entry age and elapsed time since entry as in the 21st valuation. 
41 

Age retirement. A normal age annuity is payable at social security normal retirement age 

(SSNRA) with 10 years of total service or 5 years of service after 1995. For employees with 30 

or more years of service, an unreduced benefit is payable to those who retire after the attainment 

of age 60. Benefits are reduced for employees who retire from age 62 to SSNRA with 5-29 

years of service. A supplemental annuity is payable to employees who have attained age 60 

with 30 or more years of service, or attained age 65 with 25 or more years of service. 

A comparison between the rates of age retirements assumed in the 21st and 22nd valuations and 

the crude rates during calendar years 1998-2000 is shown in Table S-28. For employees with 

10-29 years of service, the assumed 22nd valuation rates are close to the 1998-2000 crude rates 

at ages under 69 and constant for ages over 68. The rates for employees with 10-29 years of 

service were also used for employees with 5-9 years of service. For employees with 30 or more 

years of service, the assumed 22nd valuation rates are between the 21st valuation rates and the 

crude rates for ages 64-68 and constant for ages over 68. Because of legislated changes in early 

retirement benefits, the 1998-2000 experience for employees with 30 years of service at ages 

60-63 is not indicative of expected future experience. The recommended rates at ages 60-63 

were based in part on consideration of the experience during 1980-1982, which was the most 

recent study period for which unreduced benefits were available at age 60 with 30 years of 

service. 

Disability retirement. An employee is eligible for disability retirement based on total and 

permanent disability at any age with at least 10 years of service or 5 years of service after 1995. 

Eligibility for occupational disability requires (i) permanent disability for an employee's regular 

railroad occupation, (ii) attainment of age 60 with 10 years of service or any age with 20 years 

of service, and (iii) a current connection. 

For employees with 10-19 years of service, the ratio of actual disability retirements during 

1998-2000 to those expected based on the 21st valuation standard was 93.3%. The ratio of 

actual to expected disability retirements for employees with 20-29 years of service was 97.2%, 

and for employees with 30 or more years of service it was 107.3%. The overall ratio of actual to 

expected disability retirements for all employees was 99.6%. Based on these results, a new 

table of rates of disability retirement was constructed. 

Disability retirements are not projected for participants with 5-9 years of service because the 

benefits are limited to what social security would pay and are reimbursed through the financial 

interchange. These employees become eligible for tier 2 benefits at age 62 and are treated as 

vested withdrawals in our projections. 

The ratio of actual to expected disability retirements qualifying for a disability freeze based on 

the 21st valuation standard was 99.3% and 107.3% for employees with 10-19 years of service 

and 20 or more years of service, respectively. A new table of percentages eligible for a 

disability freeze was constructed for the 22nd valuation. Since there was no clear pattern of 

difference between the disability freeze rates for the 20-29 years of service group and the 30 or 

more years of service group, a single set of rates was used for employees with 20 or more years 

of service. These rates are shown in Table S-11. 
42
 

Other assumptions. Assumptions involving (1) service months and salary scales, (2) family 

composition, and (3) the age distribution of new entrants are shown in Tables S-13, S-14, and 

S-42, respectively. 

A complete list of the assumptions and the tables that present them follows. 
43 

List of assumptions and tables used in the 22nd valuation 

Item Assumption or table 

A. Mortality and total termination rates 

1. 	 After age retirement 
 

(a) Current retirements 
 

(b) Future retirements 
 

2. 	 After disability retirement 
 

(a) with Disability Freeze 
 

(b) without Disability Freeze 
 

3. Employees in active service 
 

4. Spouses 
 

5. Nondisabled 	 widows 

(a) Widows of deceased employees 
 

(b) Widows coming from future 
 

employee deaths 

6. Disabled widows 
 

7. Children under age 18 

8. Disabled children age 18 and over 
 

B. Remarriage rates for widows 
 

C. Retirement rates 

1. Age retirement 
 

2. 	 Disability (with "disability 
 

freeze" percentages) 
 

D. Withdrawal rates 
 

E. Other assumptions 

1. 	 Probability of a retired employee 
 

having an eligible spouse 
 

2. Economic assumptions 

3. Service months and salary scales 
 

4. Family composition 
 

5. Age distribution of future entrants 
 

Table S-1 
 

Table S-1 with a 1-year rateback in age 
 

Table S-2 
 

Table S-3 
 

Table S-4 
 

Table S-5 
 

Table S-7 
 

Table S-7 with a 1-year rateback in age 
 

Table S-2 
 

Disregarded 
 

Table S-9 
 

Table S-8 
 

Table S-10 
 

Table S-11 
 

Table S-12 
 

Table S-6 
 

Table 1 of valuation report 
 

Table S-13 
 

Table S-14 
 

Table S-42 
 
 44
 

Table S-1. 2001 RRB Annuitants Mortality Table
 

Agea 1,000qx Agea 1,000qx 

60 7.61 

61 8.64 

62 9.80 

63 11.10 

64 12.55 

65 14.17 

66 15.98 

67 17.99 

68 20.22 

69 22.70 

70 25.45 

71 28.48 

72 31.83 

73 35.52 

74 39.58 

75 44.03 

76 48.90 

77 54.22 

78 60.03 

79 66.34 

80 73.20 

81 80.63 

82 88.65 

83 97.31 

84 106.62 

85 116.61 

86 127.30 

87 138.71 

88 150.86 

89 163.75 

90 177.40 

91 191.80 

92 206.96 

93 222.86 

94 239.49 

95 256.82 

96 274.83 

97 290.06 

98 304.43 

99 318.11 

100 330.97 

101 342.89 

102 352.12 

103 359.73 

104 366.12 

105 371.35 

106 375.51 

107 378.65 

108 380.83 

109 382.11 

110 1,000.00 

a Age nearest birthday. 
 45
 

Table S-2. 2001 RRB Disabled Mortality Table for Annuitants with Disability Freeze a
 

Ageb 1,000qx Ageb 1,000qx Ageb 1,000qx 

30 17.03 

31 17.13 

32 17.25 

33 17.37 

34 17.51 

35 17.65 

36 17.81 

37 17.99 

38 18.18 

39 18.38 

40 18.61 

41 18.86 

42 19.12 

43 19.41 

44 19.72 

45 20.07 

46 20.45 

47 20.85 

48 21.29 

49 21.78 

50 22.30 

51 22.88 

52 23.50 

53 24.18 

54 24.92 

55 25.72 

56 26.59 

57 27.73 

58 29.26 

59 30.91 

60 32.68 

61 34.59 

62 36.63 

63 38.83 

64 41.19 

65 43.73 100 356.59 

66 46.45 101 364.73 

67 49.37 102 371.64 

68 52.51 103 377.41 

69 55.87 104 382.16 

70 59.48 105 385.96 

71 63.35 106 388.91 

72 67.50 107 391.08 

73 71.94 108 392.54 

74 76.71 109 393.37 

75 81.80 110 1,000.00 

76 87.26 

77 93.10 

78 99.33 

79 106.00 

80 113.12 

81 120.72 

82 128.83 

83 137.47 

84 146.67 

85 156.46 

86 166.87 

87 177.92 

88 189.65 

89 202.07 

90 215.23 

91 229.13 

92 243.80 

93 259.26 

94 275.53 

95 292.61 

96 309.04 

97 323.48 

98 336.10 

99 347.09 

a Qualified under social security definition of disability. 

b Age nearest birthday. 
 46
 

Table S-3. 2001 RRB Disabled Mortality Table for Annuitants without Disability Freeze a
 

Ageb 1,000qx Ageb 1,000qx Ageb 1,000qx 

40 3.69 

41 3.76 

42 3.84 

43 3.91 

44 3.99 

45 4.11 

46 4.48 

47 4.88 

48 5.32 

49 5.80 

50 6.27 

51 6.83 

52 7.44 

53 8.15 

54 8.94 

55 9.82 

56 10.78 

57 11.84 

58 12.99 

59 14.26 

60 15.66 

61 17.18 

62 18.86 

63 20.70 

64 22.71 

65 24.92 

66 27.33 

67 29.98 

68 32.88 

69 36.06 

70 39.53 100 342.46 

71 43.33 101 352.18 

72 47.49 102 360.51 

73 52.04 103 367.55 

74 57.00 104 373.40 

75 62.43 105 378.12 

76 68.34 106 381.78 

77 74.80 107 384.44 

78 81.84 108 386.16 

79 89.19 109 386.99 

80 96.81 110 1,000.00 

81 105.04 

82 113.92 

83 121.78 

84 130.18 

85 139.25 

86 149.02 

87 159.50 

88 170.72 

89 182.69 

90 195.41 

91 208.90 

92 223.14 

93 238.13 

94 253.86 

95 270.31 

96 287.44 

97 303.90 

98 318.46 

99 331.26 

a Not qualified under social security definition of disability. 

b Age nearest birthday. 
 47
 

Table S-4. 1994 RRB Active Service Mortality Tablea
 

Ageb 1,000qx-1/2 Ageb 1,000qx-1/2 

17 .91 

18 .91 

19 .92 

20 .92 

21 .93 

22 .94 

23 .94 

24 .95 

25 .96 

26 .97 

27 .98 

28 1.00 

29 1.01 

30 1.03 

31 1.05 

32 1.07 

33 1.09 

34 1.12 

35 1.15 

36 1.19 

37 1.22 

38 1.27 

39 1.32 

40 1.37 

41 1.44 

42 1.51 

43 1.59 

44 1.68 

45 1.78 

46 1.89 

47 2.02 

48 2.17 

49 2.33 

50 2.51 

51 2.72 

52 2.95 

53 3.22 

54 3.51 

55 3.85 

56 4.22 

57 4.65 

58 5.12 

59 5.66 

60 6.27 

61 6.95 

62 7.72 

63 8.59 

64 9.57 

65 10.67 

66 11.91 

67 13.31 

68 14.88 

69 16.66 

70 18.66 

71 20.91 

72 23.45 

73 26.31 

74 29.54 

75 33.17 

a Deaths in active service are those of employees who last worked in the 

railroad industry in the year in which death occurred or in the preceding 

calendar year. The exposures correspond to this definition. 

b Age attained in calendar year of exposure. 
 48
 

Table S-5. 2001 RRB Spouse Total Termination a

 Table
 

Ageb 

1,000qx

t Ageb 

1,000qx

t

60 26.78 

61 28.77 

62 30.93 

63 33.27 

64 35.81 

65 38.57 

66 41.56 

67 44.82 

68 48.35 

69 52.20 

70 56.38 

71 60.93 

72 65.88 

73 71.26 

74 77.12 

75 83.50 

76 90.44 

77 97.99 

78 106.21 

79 115.14 

80 124.85 

81 135.41 

82 146.87 

83 159.32 

84 172.81 

85 187.42 

86 203.24 

87 220.32 

88 238.74 

89 258.57 

90 279.00 

91 299.29 

92 319.43 

93 339.38 

94 359.12 

95 378.64 

96 397.91 

97 416.91 

98 435.62 

99 454.02 

100 472.11 

101 489.87 

102 507.27 

103 524.32 

104 541.00 

105 557.30 

106 573.21 

107 588.73 

108 603.85 

109 618.56 

110 1,000.00 

a Mainly death of employee or death of spouse. 

b Age nearest birthday. 
49
 

Table S-6. Probability of a retired employee having a spouse eligible for railroad retirement benefits
 

Employees with Employees with 

Agea of 30 or more less than 30 

employee years of service years of service 

59 and under 0.000 0.000 

60 0.191 0.000 

61 0.316 0.000 

62 0.427 0.159 

63 0.520 0.227 

64 0.596 0.295 

65 0.657 0.361 

66 0.703 0.422 

67 0.737 0.475 

68 0.760 0.519 

69 0.774 0.550 

70 0.780 0.568 

71 0.780 0.577 

72 0.776 0.578 

73 0.768 0.576 

74 0.759 0.571 

75 0.748 0.565 

76 0.738 0.557 

77 0.726 0.548 

78 0.713 0.537 

79 0.700 0.525 

80 0.684 0.512 

81 0.667 0.498 

82 0.649 0.482 

83 0.629 0.465 

84 0.606 0.447 

85 0.581 0.428 

86 0.555 0.408 

87 0.527 0.388 

88 0.497 0.366 

89 0.466 0.343 

90 0.434 0.320 

91 0.400 0.297 

92 0.366 0.272 

93 0.331 0.247 

94 0.295 0.222 

95 0.259 0.196 

96 0.222 0.170 

97 0.186 0.143 

98 0.149 0.117 

99 & over 0.113 0.090 

a Age last birthday. 
 50
 

Table S-7. 1995 RRB Mortality Table for Widows
 

Agea 1,000qx Agea 1,000qx Agea 1,000qx 

20 0.23 55 5.42 90 128.50 

21 0.25 56 5.93 91 140.66 

22 0.27 57 6.49 92 153.98 

23 0.30 58 7.11 93 168.56 

24 0.33 59 7.78 94 184.52 

25 0.36 60 8.52 95 201.99 

26 0.39 61 9.32 96 221.00 

27 0.43 62 10.21 97 241.15 

28 0.47 63 11.17 98 261.92 

29 0.52 64 12.23 99 282.85 

30 0.56 65 13.39 100 303.44 

31 0.62 66 14.66 101 323.26 

32 0.68 67 16.04 102 341.87 

33 0.74 68 17.56 103 358.88 

34 0.81 69 19.23 104 373.89 

35 0.89 70 21.05 105 386.55 

36 0.97 71 23.04 106 396.55 

37 1.06 72 25.22 107 403.60 

38 1.16 73 27.61 108 407.43 

39 1.27 74 30.22 109 407.86 

40 1.39 75 33.08 110 1,000.00 

41 1.53 76 36.21 

42 1.67 77 39.64 

43 1.83 78 43.40 

44 2.00 79 47.51 

45 2.19 80 52.00 

46 2.40 81 56.93 

47 2.63 82 62.32 

48 2.88 83 68.22 

49 3.15 84 74.67 

50 3.45 85 81.74 

51 3.77 86 89.48 

52 4.13 87 97.96 

53 4.52 88 107.23 

54 4.95 89 117.38 

a Age nearest birthday. 
 51 

Table S-8. 1980 RRB Remarriage Table 

(Probabilities of remarriage) 

m

Agea at 1,000q[ x]+n for n equal to 

widowhood [x] 0 1 2 3 4 Agea

 x 1,000qx

m

20 76.00 131.82 86.31 73.35 66.58 25 40.70 

21 73.40 129.32 84.50 72.55 66.08 26 39.80 

22 69.80 126.17 82.48 71.85 65.68 27 38.79 

23 65.58 122.58 80.07 71.25 65.44 28 37.68 

24 61.98 118.99 78.33 69.65 64.00 29 36.78 

25 58.58 115.40 77.03 67.83 62.23 30 36.11 

26 55.09 111.81 75.97 66.30 60.70 31 35.62 

27 51.35 108.22 74.98 65.32 59.71 32 35.26 

28 47.36 104.63 73.95 64.85 59.26 33 34.96 

29 43.25 101.04 72.78 64.59 59.07 34 34.61 

30 39.27 97.45 71.44 64.02 58.61 35 34.09 

31 35.72 93.86 69.90 62.48 57.22 36 33.28 

32 32.90 90.27 68.16 59.38 54.28 37 32.05 

33 30.94 85.38 66.20 54.47 49.55 38 30.37 

34 29.71 79.96 63.97 48.05 43.32 39 28.26 

35 28.78 74.22 61.40 41.03 36.55 40 25.85 

36 27.54 68.43 58.40 34.72 30.58 41 23.34 

37 25.57 62.75 54.93 30.04 26.33 42 20.87 

38 22.68 57.34 50.94 27.36 25.02 43 18.49 

39 19.06 52.15 46.52 26.26 24.90 44 16.18 

40 15.20 47.15 41.91 26.32 24.87 45 14.00 

41 11.77 42.22 37.44 26.22 24.78 46 12.00 

42 9.70 37.33 33.36 25.31 23.90 47 10.21 

43 9.02 32.46 29.78 23.37 21.47 48 8.66 

44 8.72 27.70 26.65 20.68 17.91 49 7.35 

45 8.35 23.22 23.89 17.61 13.80 50 6.29 

46 7.92 19.24 21.36 14.69 10.04 51 5.45 

47 7.43 15.91 18.93 12.33 7.28 52 4.81 

48 6.83 13.30 16.59 10.61 6.69 53 4.38 

49 5.98 11.34 14.40 9.38 6.22 54 4.15 

50 5.03 9.94 12.43 8.56 5.85 55 4.06 

51 4.33 8.93 10.75 7.98 5.58 56 4.04 

52 4.01 8.20 9.44 7.52 5.41 57 4.03 

53 3.81 7.96 8.51 7.15 5.28 58 4.02 

54 3.66 7.76 7.91 6.93 5.16 59 3.99 

55 3.56 7.60 7.56 6.78 5.06 60 3.95 

56 3.46 7.48 7.34 6.70 4.97 61 3.90 

57 3.37 7.40 7.17 6.63 4.88 62 3.82 

58 3.29 7.35 7.01 6.57 4.82 63 3.72 

59 3.22 7.32 6.87 6.49 4.77 64 3.59 

60 3.16 7.30 6.72 6.38 4.73 65 3.43 

61 3.08 7.26 6.54 6.19 4.68 66 3.21 

62 2.98 7.16 6.32 5.92 4.53 67 2.95 

63 2.78 6.89 6.05 5.55 4.23 68 2.63 

64 2.38 6.53 5.72 5.07 3.84 69 2.27 

65 2.08 6.08 5.33 4.54 3.40 70 1.89 

66 1.83 5.59 4.91 4.01 2.95 71 1.53 

67 1.64 5.09 4.47 3.51 2.55 72 1.24 

68 1.51 4.57 4.01 3.06 2.20 73 1.02 

69 1.40 4.04 3.52 2.65 1.90 74 0.86 

70 1.30 3.52 3.04 2.28 1.64 75 0.75 

71 1.20 3.04 2.60 1.95 1.38 76 0.66 

72 1.10 2.63 2.22 1.66 1.19 77 0.57 

73 1.01 2.29 1.91 1.41 1.02 78 0.48 

74 0.92 2.03 1.67 1.19 0.87 79 0.40 

75 0.84 1.81 1.51 1.01 0.73 80 0.33 

76 0.76 1.64 1.31 0.87 0.59 81 0.26 

77 0.68 1.48 1.16 0.76 0.46 82 0.21 

78 0.60 1.33 1.02 0.66 0.38 83 0.17 

79 0.52 1.16 0.87 0.57 0.33 84 0.14 

80 0.44 0.98 0.71 0.48 0.29 85 0.12 

81 0.36 0.78 0.56 0.39 0.25 86 0.10 

82 0.28 0.55 0.40 0.30 0.21 87 0.09 

83 0.21 0.37 0.28 0.22 0.16 88 0.08 

84 0.15 0.25 0.19 0.14 0.11 89 0.07 

a Age nearest birthday. 
 52
 

Table S-9. 1986 RRB Total Termination Table for Disabled Children
 

Agea 1,000qx

t Agea 1,000qxt Agea 1,000qxt

18 18.95 

19 18.82 

20 18.63 

21 18.38 

22 18.08 

23 17.72 

24 17.32 

25 16.89 

26 16.43 

27 15.95 

28 15.47 

29 14.99 

30 14.49 

31 14.00 

32 13.52 

33 13.07 

34 12.67 

35 12.35 

36 12.12 

37 11.98 

38 11.91 

39 11.90 

40 11.92 

41 11.95 

42 12.01 

43 12.10 

44 12.24 

45 12.46 

46 12.77 

47 13.18 

48 13.69 

49 14.30 

50 15.01 85 129.41 

51 15.82 86 139.81 

52 16.73 87 150.77 

53 17.74 88 162.29 

54 18.85 89 174.44 

55 20.06 90 187.31 

56 21.37 91 201.04 

57 22.77 92 215.75 

58 24.22 93 231.78 

59 25.71 94 249.20 

60 27.24 95 267.59 

61 28.81 96 286.29 

62 30.42 97 305.02 

63 32.07 98 324.06 

64 33.76 99 344.16 

65 35.49 100 366.41 

66 37.26 101 392.04 

67 39.14 102 422.27 

68 41.11 103 458.24 

69 43.11 104 500.99 

70 45.18 105 551.42 

71 47.34 106 610.34 

72 49.64 107 678.45 

73 52.17 108 1,000.00 

74 54.94 

75 58.05 

76 61.79 

77 66.17 

78 72.03 

79 78.55 

80 85.69 

81 93.38 

82 101.57 

83 110.28 

84 119.57 

a Age nearest birthday. 
53 

Table S-10. Calendar year ratesa of immediateb age retirement 

(Retirements per 1,000 exposed) 

Years of service 

Agec 5-29 30 & over 

60
 

61
 

62
 

63
 

64
 

65
 

66
 

67
 

68
 

69
 

70
 

71
 

72
 

73
 

74
 

75 & over
 

600 

400d 

200 400d 

170 400 

130 420 

530 460 

390 390 

370 350 

330 310 

250 250 

250 250 

250 250 

250 250 

250 250 

250 250 

250 250 

a Technically probabilities. 

b Immediate retirements are defined as those for which the calendar year of retirement 

is the same as, or the year following, the calendar year of last employment in the 

railroad industry. 

c The age interval is from x-.5 to x+.5, except as indicated below: 

Interval for 

Age Years of service Exposure Retirements 

60 30 or more 59.5-60.5 60-60.5 

62 5-29 61.5-62.5 62-62.5 

d For calendar year 2002 only, a rate of 800 per 1,000 is used. 
 54
 

Table S-11. Ratesa

 of immediateb disability retirement and of eligibility for disability freeze c
 

Percent of retirements eligible 

Calendar year rates per 1,000 exposed for disability freeze 

10-19 years 20-29 years 30 or more 10-19 years 20 or more 

Aged of service of service years of service of service years of service 

Under 35 1.0 4.7 3.0 95.9% 30.9% 

35 1.3 5.3 3.4 95.9 30.9 

36 1.5 5.9 3.8 95.9 31.0 

37 1.8 6.6 4.4 95.9 31.0 

38 2.2 7.4 5.0 95.9 31.1 

39 2.6 8.2 5.6 95.9 31.2 

40 3.0 9.1 6.2 95.9 31.3 

41 3.4 10.0 6.9 95.9 31.5 

42 3.9 11.0 7.7 95.9 31.8 

43 4.5 12.1 8.5 95.9 32.1 

44 5.1 13.3 9.5 95.9 32.5 

45 5.8 14.6 10.5 95.9 33.1 

46 6.5 16.0 11.5 95.9 34.0 

47 7.3 17.5 12.7 95.9 35.1 

48 8.3 19.1 14.0 95.9 36.5 

49 9.3 20.9 15.5 95.9 38.6 

50 10.4 22.8 17.0 95.9 41.3 

51 11.6 24.9 18.7 95.9 44.9 

52 12.9 27.1 20.4 95.9 49.8 

53 14.4 29.5 22.4 95.9 56.5 

54 16.0 32.1 24.6 95.9 65.4 

55 17.8 35.0 26.9 95.9 77.6 

56 19.8 38.0 29.5 95.9 84.2 

57 22.0 41.3 32.3 95.9 84.2 

58 24.5 44.9 35.3 95.9 84.2 

59 27.1 48.8 38.6 95.9 84.2 

60 44.2 53.0 37.7 79.6 84.2 

61 48.0 57.5 0.0 79.6 84.2 

62 52.1 62.4 0.0 79.6 84.2 

63 49.3 59.1 0.0 79.6 84.2 

64 34.7 41.6 0.0 79.6 84.2 

65 6.1 7.3 0.0 79.6 84.2 

a Technically probabilities. 

b Immediate retirements are defined as those for which the calendar year of retirement is the same as, 

or the year following, the calendar year of last employment in the railroad industry. 

c Qualified under the social security definition of disability. 

d Age attained in calendar year of exposure. 
 55 

Table S-12. Calendar year ratesa

 of final withdrawal 

Years of Attained agec 

serviceb Under 25 25-34 35-44 45-54 55 & over 

0 0.196 0.148 0.177 0.208 0.269 

1 0.171 0.116 0.115 0.106 0.116 

2 0.097 0.087 0.077 0.072 0.110 

3 0.072 0.072 0.059 0.058 0.103 

4 0.062 0.062 0.052 0.047 0.093 

5 0.054 0.054 0.046 0.039 0.082 

6 0.049 0.049 0.042 0.032 0.071 

7 0.044 0.044 0.038 0.028 0.060 

8 0.041 0.041 0.035 0.024 0.049 

9 0.038 0.038 0.032 0.022 0.040 

10 0.036 0.036 0.030 0.021 0.032 

11 0.034 0.034 0.028 0.020 0.027 

12 0.032 0.032 0.026 0.019 0.023 

13 0.030 0.030 0.024 0.018 0.020 

14 0.028 0.028 0.023 0.017 0.019 

15 0.026 0.026 0.021 0.016 0.018 

16 0.024 0.024 0.019 0.015 0.017 

17 0.022 0.022 0.017 0.014 0.017 

18 0.021 0.021 0.016 0.013 0.016 

19 0.019 0.019 0.014 0.013 0.016 

20 0.017 0.017 0.013 0.012 0.015 

21 0.015 0.015 0.011 0.011 0.014 

22 0.013 0.013 0.010 0.010 0.014 

23 0.011 0.011 0.009 0.009 0.013 

24 0.010 0.010 0.008 0.009 0.012 

25 0.008 0.008 0.008 0.008 0.011 

26 0.007 0.007 0.007 0.007 0.010 

27 0.007 0.007 0.007 0.007 0.010 

28 0.006 0.006 0.006 0.006 0.009 

29 0.006 0.006 0.006 0.005 0.008 

30 & over 0.014 0.014 0.014 0.014 0.022 

a Technically probabilities. 

b Rounded up to nearest whole year. 

c Age attained in calendar year of exposure. 
 56
 

Table S-13. Service months and salary scales
 

Years Increase in average monthly salary 

of Service from prior service level 

servicea months Tier 1 Tier 2 

0 6.3 

1 11.3 12.9% 11.9% 

2 11.4 9.6% 8.8% 

3 11.5 7.2% 6.5% 

4 11.6 5.2% 4.6% 

5 11.6 3.5% 3.0% 

6 11.6 2.0% 1.5% 

7 11.6 1.2% 0.8% 

8 11.6 1.1% 0.7% 

9 11.7 1.1% 0.7% 

10 11.7 1.0% 0.6% 

11 11.7 1.0% 0.6% 

12 11.7 0.9% 0.6% 

13 11.7 0.8% 0.5% 

14 11.7 0.8% 0.5% 

15 11.7 0.8% 0.5% 

16 11.7 0.7% 0.5% 

17 11.8 0.7% 0.4% 

18 11.8 0.6% 0.4% 

19 11.8 0.6% 0.4% 

20 11.8 0.6% 0.4% 

21 11.9 0.5% 0.3% 

22 11.9 0.5% 0.3% 

23 11.9 0.5% 0.3% 

24 11.9 0.5% 0.3% 

25 11.9 0.4% 0.3% 

26 11.9 0.4% 0.3% 

27 11.9 0.4% 0.3% 

28 11.9 0.4% 0.2% 

29 11.9 0.3% 0.2% 

30 11.9 0.3% 0.2% 

31 11.9 0.3% 0.2% 

32 11.9 0.3% 0.2% 

33 11.9 0.3% 0.2% 

34 11.9 0.3% 0.2% 

35 11.9 0.3% 0.2% 

36 11.9 0.2% 0.2% 

37 11.9 0.2% 0.1% 

38 11.9 0.2% 0.1% 

39 11.9 0.2% 0.1% 

40 11.9 0.2% 0.1% 

41 11.9 0.2% 0.1% 

42 11.9 0.2% 0.1% 

43 11.9 0.2% 0.1% 

44 11.9 0.2% 0.1% 

45 & over 11.9 0.2% 0.1% 

a Rounded up to nearest whole year. 
 57
 

Table S-14. Family characteristics of railroad employees assumed for the valuation of survivor benefits
 

Percent married 

Widow under 60 with 

eligible child Percent with 

Widow Widow Widow Youngest Youngest Youngest eligible child 

Age of age age under child child child Minor Disabled 

employee

a Total 62 & over 60-61 age 60 under 16 age 16-17 disabled child child 

Under 35 71.9 - - 71.9 60.5 - - 77.8 -

35 - 39 71.9 - - 71.9 60.5 - - 86.0 -

40 - 44 71.9 - - 71.9 52.1 7.2 0.7 75.1 2.2 

45 - 49 71.9 - - 71.9 31.9 8.2 1.5 53.0 2.2 

50 - 54 71.9 1.6 0.7 69.6 16.0 5.5 1.5 25.2 2.2 

55 - 59 71.9 3.6 2.8 65.5 6.1 2.5 1.5 10.8 2.2 

60 - 64 71.9 18.9 15.6 37.4 2.4 0.9 0.9 5.1 2.1 

65 - 69 71.9 53.5 7.5 10.9 0.6 0.2 0.3 1.6 1.6 

70 - 74 71.9 66.0 1.9 4.0 0.3 0.1 0.1 0.7 1.4 

75 - 79 67.8 65.6 0.7 1.5 0.1 - - 0.3 1.0 

80 - 84 61.4 60.4 0.3 0.7 0.1 - - 0.2 0.9 

85 - 89 49.7 49.2 0.1 0.4 - - - 0.1 0.7 

90 & over 30.7 30.3 0.1 0.3 - - - 0.1 0.6 

Average ages of widows 

employe

Widow under 60 with 

eligible child Average ages of children Average 

Widow Widow Widow Youngest Youngest Youngest Youngest All All number 

Age of age age under child child child child minor disabled of minor 

e

a 62 & over 60-61 age 60 under 16 age 16-17 disabled under 16b children children childrenc 

Under 35 - - 32 32 - - 5 5 - 2.3 

35 - 39 - - 37 36 - - 7 8 - 2.0 

40 - 44 - - 41 40 42 44 10 11 20 2.0 

45 - 49 - - 45 42 46 46 10 12 21 1.7 

50 - 54 65 61 49 46 47 50 11 12 24 1.5 

55 - 59 65 61 53 48 50 53 11 12 27 1.3 

60 - 64 66 61 56 49 50 57 11 13 32 1.3 

65 - 69 67 61 56 50 52 57 11 13 35 1.3 

70 - 74 70 61 55 47 52 58 12 12 38 1.3 

75 - 79 74 61 54 46 - - 12 12 42 1.3 

80 - 84 78 61 54 46 - - 11 12 46 1.3 

85 - 89 82 61 54 - - - - 12 48 1.3 

90 & over 86 61 53 - - - - 12 56 1.3 

a Age nearest birthday at time of death. 

b Includes families with widows under 60 and children under 16 only. 

c Includes families with minor children only. 
58 

MORTALITY AND REMARRIAGE EXPERIENCE 

1. 	 Mortality of age annuitants. The mortality studies conducted for age annuitants are summarized 

in Tables S-15 through S-17. The tables show actual-to-expected ratios by age, sex, year and 

duration on the basis of the 21st and 22nd valuation standards. 

2. 	 Mortality after disability retirement. The mortality studies conducted for disability annuitants 

are summarized in Tables S-18 through S-20. The tables show select, ultimate and aggregate 

crude death rates, actual-to-expected ratios, and disability freeze percentages. 

3. 	 Mortality in active service. The mortality experience of active railroad employees is shown in 

Table S-21. The table provides crude rates and actual-to-expected ratios. 

4. 	 Total termination, mortality and probability of spouse. Tables S-22 and S-23 show, 

respectively, the total termination and mortality experience of spouse annuitants between 

anniversaries of retirement in 1997 and 2000. Spouse mortality is not used directly in any part 

of the valuation. Table S-24 shows, as of December 31, 2000, the number of retired employees 

and the number of eligible spouses of employees, by age of employee. The probabilities shown 

in Table S-6 are based on the results shown in Table S-24. 

5. 	 Mortality and remarriage of widows. Table S-25 shows ratios of actual deaths of widow 

annuitants to those expected on the basis of the 21st valuation standard, which was retained for 

the 22nd valuation. Table S-26 shows ratios of actual remarriages to those expected on the basis 

of the 1980 RRB Remarriage Table. 

6. 	 Termination of disabled children. Table S-27 shows ratios of actual terminations of disabled 

children annuitants to those expected on the basis of the 1986 RRB Total Termination Table for 

Disabled Children. 
 59
 

Table S-15. Mortality experience of railroad age annuitantsa between anniversaries of retirement in 1997 and 2000, by sex and type of retirement
 

Attained ageb 

All ages 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95 & over 

A. Both sexes combined 

Exposed 53,302 757,102 129,220 185,404 169,896 119,332 62,717 28,253 8,978 

Actual deaths 48,175 619 2,541 6,490 9,486 9,053 11,226 5,947 2,813 

Age specific death rates (per thousand) 63.6 11.6 19.7 35.0 55.8 94.1 144.3 210.5 313.3 

Ratio of actual to expected deaths 

1994 GAM malesc 122.1% 102.5% 106.8% 121.6% 123.0% 126.6% 126.7% 118.8% 116.4% 

1998 RRBd 104.3% 97.8% 98.7% 102.8% 99.7% 106.0% 107.2% 105.8% 112.2% 

2001 RRBe 106.0% 106.0% 105.7% 108.3% 103.1% 107.4% 106.2% 104.4% 108.5% 

B. Male 

Exposed 48,971 679,629 119,288 166,563 152,264 108,363 54,641 22,847 6,692 

Actual deaths 43,868 602 2,408 6,089 8,844 8,175 10,544 5,016 2,190 

Age specific death rates (per thousand) 64.5 12.3 20.2 36.6 58.1 97.3 149.6 219.5 327.3 

Ratio of actual to expected deaths 

1994 GAM malesc 127.0% 108.6% 109.6% 127.3% 127.8% 131.0% 131.7% 124.2% 122.0% 

1998 RRBd 108.3% 103.5% 101.2% 107.6% 103.6% 109.7% 111.4% 110.5% 117.5% 

2001 RRBe 110.2% 112.2% 108.4% 113.4% 107.2% 111.1% 110.3% 109.1% 113.7% 

C. Female 

Exposed 77,473 4,331 9,932 17,632 18,841 10,969 8,076 5,406 2,286 

Actual deaths 4,307 17 133 401 642 682 878 931 623 

Age specific death rates (per thousand) 55.6 3.9 13.4 21.3 36.4 62.2 108.7 172.2 272.5 

Ratio of actual to expected deaths 

1995 RRB Widowsf

, 1-year rateback 110.9% 38.7% 90.0% 89.4% 101.6% 110.1% 121.4% 124.7% 119.5% 

1998 RRBd 75.7% 32.8% 68.0% 61.0% 65.7% 69.9% 79.4% 85.8% 96.7% 

2001 RRBe 76.3% 35.6% 72.8% 64.2% 68.0% 70.8% 78.5% 84.7% 93.5% 

D. Immediate

g 

Exposed 31,748 494,725 73,767 114,892 117,002 44,672 86,362 19,536 6,746 

Actual deaths 33,346 350 1,437 4,045 6,537 8,203 6,457 4,189 2,128 

Age specific death rates (per thousand) 67.4 11.0 19.5 35.2 55.9 95.0 144.5 214.4 315.4 

Ratio of actual to expected deaths 

1998 RRBd 104.8% 92.6% 97.6% 102.9% 99.4% 106.9% 107.5% 107.6% 112.6% 

2001 RRBe 106.4% 100.3% 104.5% 108.5% 102.8% 108.2% 106.5% 106.2% 109.0% 

E. Deferred

g 

Exposed 21,554 262,377 55,453 70,512 52,894 32,970 18,045 8,717 2,232 

Actual deaths 14,829 269 1,104 2,445 2,949 3,023 2,596 1,758 685 

Age specific death rates (per thousand) 56.5 12.5 19.9 34.7 55.8 91.7 143.9 201.7 306.9 

Ratio of actual to expected deaths 

1998 RRBd 103.1% 105.5% 100.2% 102.5% 100.4% 103.8% 106.5% 101.7% 110.7% 

2001 RRBe 105.2% 114.3% 107.3% 108.0% 103.9% 105.2% 105.4% 100.4% 107.1% 

a Nondisability retirement. 

b Age attained during the calendar year in which the year of exposure begins, which is on the date or an anniversary of retirement. 

Approximates age nearest birthday at the beginning of the year of exposure. 

c 1994 Group Annuity Mortality Static Table. 

d 1998 RRB Annuitants Mortality Table. 

e 2001 RRB Annuitants Mortality Table. 

f

 1995 RRB Mortality Table for Widows. 

g Immediate retirements are those which occur in the same calendar year as, or the calendar year following, the year of last employment 

in the railroad industry; all others are deferred retirements. 
60
 

Table S-16. Mortality experience of railroad age annuitantsa

 between anniversaries of retirement in 1997 and 2000, by year
 

Attained ageb 

All ages 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95 & over 

1. 1997-2000 experience 

Exposed 757,102 53,302 129,220 185,404 169,896 119,332 62,717 28,253 8,978 

Actual deaths 48,175 619 2,541 6,490 9,486 11,226 9,053 5,947 2,813 

Crude rate per 1,000 63.6 11.6 19.7 35.0 55.8 94.1 144.3 210.5 313.3 

Ratio Act./Exp.c 104.3% 97.8% 98.7% 102.8% 99.7% 106.0% 107.2% 105.8% 112.2% 

Ratio Act./Exp.d 106.0% 106.0% 105.7% 108.3% 103.1% 107.4% 106.2% 104.4% 108.5% 

2. Crude rate per 1,000 for 

individual yearse 

1997 - 1998 63.0 11.8 20.4 36.0 55.7 95.3 145.1 206.1 312.2 

1998 - 1999 63.4 11.5 19.1 34.2 56.1 93.1 144.0 209.1 320.8 

1999 - 2000 64.6 11.5 19.4 34.6 55.7 93.8 143.9 216.6 307.0 

3. Ratio Act./Exp.c

 for 

individual yearse 

1997 - 1998 105.1% 99.4% 102.4% 106.3% 99.5% 107.5% 107.6% 103.7% 111.7% 

1998 - 1999 103.7% 96.9% 95.6% 100.6% 100.3% 105.0% 107.0% 105.0% 114.7% 

1999 - 2000 104.0% 96.8% 97.5% 101.1% 99.3% 105.5% 107.1% 108.7% 110.1% 

4. Ratio Act./Exp.d

 for 

individual yearse 

1997 - 1998 106.8% 107.8% 109.6% 112.0% 102.9% 108.9% 106.5% 102.4% 108.0% 

1998 - 1999 105.4% 105.0% 102.4% 106.0% 103.8% 106.4% 105.9% 103.7% 111.0% 

1999 - 2000 105.7% 105.0% 104.4% 106.6% 102.8% 106.8% 106.1% 107.3% 106.6% 

a Nondisability retirement. 

b Age attained during the calendar year in which the year of exposure begins, which is on the date or an anniversary of 

retirement. Approximates age nearest birthday at the beginning of the year of exposure. 

c Expected based on 1998 RRB Annuitants Mortality Table. 

d Expected based on 2001 RRB Annuitants Mortality Table. 

e Exposure is between anniversaries of retirement in indicated years. 
61 

Table S-17. Mortality ratios for railroad age annuitants on a select and ultimate 

basis between anniversaries of retirement in 1997 and 2000 

Actual Crude rate Ratio Ratio 

Duration Exposure deaths per 1,000 Act./Exp.a Act./Exp.b 

0 20,881 246 11.8 96.0% 103.8% 

1 20,810 264 12.7 92.1 99.3 

2 21,709 336 15.5 100.4 108.1 

3 22,368 371 16.6 95.9 102.9 

4 24,105 421 17.5 89.3 95.5 

5 26,567 575 21.6 98.5 105.0 

6 29,339 740 25.2 102.9 109.4 

7 31,923 871 27.3 101.0 107.0 

8 34,655 1,061 30.6 101.9 107.7 

9 37,465 1,243 33.2 97.6 102.6 

10 & over 487,280 42,047 86.3 105.2 106.2 

All durations 757,102 48,175 63.6 104.3% 106.0% 

a Expected based on 1998 RRB Annuitants Mortality Table. 

b Expected based on 2001 RRB Annuitants Mortality Table. 
 62 

Table S-18. Age specific death rates of railroad disability annuitants between anniversaries 

of retirement in 1997 and 2000, by age and duration 

Select section 

Age at retirementa 

All ages Under 40 40-44 45-49 50-54 55-59 60-64 

Exposed 

Duration 0 13,791 117 1,220 2,654 4,001 3,859 1,941 

1 13,558 155 1,416 2,788 3,702 3,562 1,936 

2 13,522 222 1,554 2,902 3,537 3,374 1,935 

3 13,483 282 1,726 2,903 3,310 3,309 1,954 

4 12,964 335 1,792 2,771 3,053 3,166 1,847 

Actual deaths 

Duration 0 489 b 22 62 132 170 100 

1 336 b 23 53 71 101 85 

2 277 b 23 54 66 74 57 

3 263 b 13 36 65 86 60 

4 260 b 25 42 50 79 61 

Crude rate per 1,000 

Duration 0 35.5 b 18.0 23.4 33.0 44.1 51.5 

1 24.8 b 16.2 19.0 19.2 28.4 43.9 

2 20.5 b 14.8 18.6 18.7 21.9 29.5 

3 19.5 b 7.5 12.4 19.6 26.0 30.7 

4 20.1 b 14.0 15.2 16.4 25.0 33.0 

Ultimate section, durations 5 and over 

Attained Actual Crude rate 

agec Exposed deaths per 1,000 

Under 50 8,006 92 11.5 

50-54 13,454 187 13.9 

55-59 16,959 340 20.0 

60-64 22,521 706 31.3 

65-69 36,041 1,618 44.9 

70-74 38,855 2,467 63.5 

75-79 25,086 2,346 93.5 

80-84 14,083 1,801 127.9 

85 & over 10,065 2,021 200.8 

All ages 185,069 11,578 62.6 

a Age attained in calendar year of retirement. Those retiring before birthday in year of attainment of age 65 

included in group 60-64. 

b Fewer than 10 actual deaths. 

c Age attained during the calendar year in which the year of exposure begins, which is on the date or an 

anniversary of retirement. Approximates age nearest birthday at the beginning of the year of exposure. 
Table S-19. Mortality experience of railroad disability annuitants between anniversaries of retirement in 1997 and 2000, by 

All disability annuitants Annuitants with disability freeze 

Attained Actual Crude rate Actual Crude rate Ratio Ratio Actual Cru

Annuitants with

age

a Exposed deaths per 1,000 Exposed deaths per 1,000 Act./Expb Act./Expc Exposed deaths per 

Under 40 479 f f 449 f f f f 30 f 

40-44 5,649 78 13.8 3,621 71 19.6 86.2% 101.5% 2,028 f 45-49 18,658 275 14.7 9,656 224 23.2 93.8 110.5 9,002 51 50-54 30,581 537 17.6 16,212 431 26.6 95.6 112.6 14,369 106 55-59 34,186 810 23.7 21,919 662 30.2 92.6 107.4 12,267 148 60-64 36,653 1,170 31.9 25,147 939 37.3 93.7 101.5 11,507 231 65-69 38,092 1,691 44.4 23,795 1,216 51.1 100.3 103.0 14,297 475 70-74 38,855 2,467 63.5 22,666 1,641 72.4 107.8 107.6 16,189 826 75-79 25,086 2,346 93.5 16,377 1,651 100.8 109.9 108.9 8,709 695 80-84 14,083 1,801 127.9 9,790 1,308 133.6 105.3 105.4 4,293 493 85-89 6,953 1,205 173.3 4,685 813 173.5 96.9 99.2 2,268 392 90-94 2,435 598 245.6 1,388 372 268.0 110.9 114.2 1,047 226 

95 & over 677 218 322.0 217 81 373.3 118.9 118.9 460 137 

All ages 252,386 13,203 52.3 155,922 9,416 60.4 102.1% 106.0% 96,465 3,787 

a Age attained during the calendar year in which the year of exposure begins, which is on the date or an anniversary of retirement. Appro

birthday at the beginning of the year of exposure. 

b Expected based on 1998 RRB Disabled Mortality Table for Annuitants with Disability Freeze. c Expected based on 2001 RRB Disabled Mortality Table for Annuitants with Disability Freeze. d Expected based on 1998 RRB Disabled Mortality Table for Annuitants without Disability Freeze. e Expected based on 2001 RRB Disabled Mortality Table for Annuitants without Disability Freeze. f Fewer than 10 actual deaths. 
64 

Table S-20. Percentages of railroad disability annuitants included in the 22nd valuation mortality studies 

who would have qualified for a benefit under the social security disability standards 

Period between anniversaries of retirement 

1997-1998 1998-1999 1999-2000 

Duration and type Actual Actual Actual 

of freeze decisiona Exposures deaths Exposures deaths Exposures deaths 

Duration 0 

Freeze allowed 

Freeze disallowed 

No freeze decisiona 

Duration 1 

Freeze allowed 

Freeze disallowed 

No freeze decision 

Duration 2 

Freeze allowed 

Freeze disallowed 

No freeze decision 

Duration 3 

Freeze allowed 

Freeze disallowed 

No freeze decision 

Duration 4 

Freeze allowed 

Freeze disallowed 

No freeze decision 

Duration 5 and over 

Freeze allowed 

Freeze disallowed 

No freeze decision 

65.9% 85.9% 65.4% 90.3% 63.8% 90.7% 

34.0 14.1 34.4 9.7 33.9 9.3 

0.1 0.0 0.2 0.0 2.3 0.0 

64.6 81.5 65.2 81.7 64.5 89.8 

35.4 18.5 34.7 18.3 35.2 9.3 

0.0 0.0 0.1 0.0 0.2 0.9 

65.4 83.3 64.1 84.3 64.8 86.0 

34.5 15.7 35.9 15.7 35.1 14.0 

0.0 1.0 0.0 0.0 0.1 0.0 

61.5 84.5 65.0 90.7 63.7 82.9 

38.5 15.5 35.0 9.3 36.3 17.1 

0.0 0.0 0.0 0.0 0.0 0.0 

58.7 81.9 61.0 77.4 64.4 83.9 

41.2 18.1 38.9 22.6 35.6 16.1 

0.1 0.0 0.0 0.0 0.0 0.0 

61.7 69.5 60.9 69.3 60.4 69.2 

38.3 30.5 39.0 30.6 39.6 30.8 

0.0 0.0 0.0 0.1 0.0 0.1 

a No decision is made if death occurs within 5 months of onset of disability. For the mortality studies, 

these were included as though a freeze was allowed. 
65
 

Table S-21. Mortality experience of activea railroad employees during calendar years 1995-99
 

Actual Crude rate Ratio 

Ageb Exposed deaths per 1,000 Act./Exp.c 

Under 35 201,643 201 1.0 97.9% 

35-39 142,514 180 1.3 101.7 

40-44 258,990 452 1.7 114.2 

45-49 301,350 655 2.2 106.8 

50-54 236,889 718 3.0 103.1 

55-59 150,676 739 4.9 106.4 

60-64 65,706 443 6.7 93.7 

65 & over 7,466 101 13.5 93.4 

All ages 1,365,233 3,489 2.6 103.7% 

a An employee is said to have died in active service if he died before retirement and had last 

worked in the railroad industry in the calendar year of his death or the calendar year 

immediately preceding. 

b Age attained in calendar year of exposure. 

Expected deaths based on 1994 RRB Active Service Mortality Table. c 
66
 

Table S-22. Total termination experience of spouse annuitants between anniversaries of retirement in 1997 and 2000a
 

Attained ageb 

All ages 60-64 65-69 70-74 75-79 80-84 85-89 90 & over 

1. 1997-2000 experience 

Exposedc 545,389 75,979 135,599 141,663 110,702 56,491 20,068 4,887 

Actual terminations 45,220 2,597 6,628 9,813 11,335 8,777 4,433 1,637 

Crude rate per 1,000 82.9 34.2 48.9 69.3 102.4 155.4 220.9 335.0 

Ratio Act./Exp. Id 102.2% 104.7% 103.4% 99.6% 100.0% 103.7% 103.8% 114.2% 

Ratio Act./Exp. IIe 106.0% 106.3% 107.6% 104.8% 105.3% 108.1% 103.7% 106.1% 

2. Crude rate per 1,000 for 

individual years 

1997 - 1998 81.8 36.1 49.3 68.5 102.5 157.0 216.5 330.9 

1998 - 1999 83.4 34.1 48.3 70.1 103.3 154.7 223.2 349.0 

1999 - 2000 83.6 32.2 49.0 69.2 101.4 154.5 222.9 324.3 

3. Ratio Act./Exp. for 

individual years Id 

1997 - 1998 102.5% 110.4% 104.6% 98.6% 100.3% 104.7% 101.8% 113.0% 

1998 - 1999 102.7% 104.2% 102.1% 100.7% 100.9% 103.4% 104.9% 118.9% 

1999 - 2000 101.4% 98.6% 103.6% 99.4% 98.9% 103.1% 104.6% 110.3% 

4. Ratio Act./Exp. for 

individual years IIe 

1997 - 1998 106.3% 112.2% 108.8% 103.8% 105.6% 109.2% 101.8% 105.0% 

1998 - 1999 106.5% 105.9% 106.2% 106.0% 106.3% 107.8% 104.8% 110.6% 

1999 - 2000 105.1% 100.1% 107.8% 104.6% 104.1% 107.4% 104.5% 102.5% 

a Excludes spouses under age 60 with child in care. 

b Age attained during the calendar year in which the year of exposure begins, which is on the date or an anniversary of 

retirement. Approximates age nearest birthday at the beginning of the year of exposure. 

Exposure is between anniversaries of retirement in indicated years. 

d Expected based on 1995 RRB Spouse Total Termination Table. 

e Expected based on 2001 RRB Spouse Total Termination Table. 

c 
67
 

Table S-23. Mortality experience of spouse annuitants between anniversaries of retirement in 1997 and 2000 a
 

Attained ageb 

All ages 60-64 65-69 70-74 75-79 80-84 85-89 90 & over 

1. 1997-2000 experience 

Exposedc 530,037 75,022 133,194 138,262 106,820 53,610 18,699 4,431 

Actual deaths 14,516 682 1,818 3,011 3,570 3,015 1,695 725 

Crude rate per 1,000 27.4 9.1 13.6 21.8 33.4 56.2 90.6 163.6 

Ratio Act./Exp.d 85.1% 83.8% 82.2% 83.9% 82.0% 87.7% 89.5% 96.2% 

2. Crude rate per 1,000 for 

individual years 

1997 - 1998 27.1 10.0 14.1 21.5 33.8 56.1 89.2 165.8 

1998 - 1999 27.6 8.7 13.8 22.2 33.6 56.8 91.5 162.7 

1999 - 2000 27.4 8.5 13.0 21.6 32.8 55.8 91.2 162.2 

3. Ratio Act./Exp. for 

individual yearsd 

1997 - 1998 85.8% 91.8% 84.8% 82.9% 83.2% 87.3% 88.3% 98.1% 

1998 - 1999 85.8% 80.5% 83.1% 85.6% 82.4% 88.8% 90.3% 94.8% 

1999 - 2000 83.7% 78.2% 78.2% 83.2% 80.4% 86.9% 89.7% 95.7% 

a Excludes spouses under age 60 with child in care. 

b Age attained during the calendar year in which the year of exposure begins, which is on the date or an anniversary of 

retirement. Approximates age nearest birthday at the beginning of the year of exposure. 

Exposure is between anniversaries of retirement in indicated years. 

d Expected based on 1995 RRB Mortality Table for Widows. 

c 
68 

Table S-24. Number of retired employees and number with a spouse eligible for railroad retirement 

benefits, by attained age of employee on December 31, 2000 

30 or more years of service Less than 30 years of service 

Number of Ratio of Number of Ratio of 

Agea

 of Number of eligible spouses to Number of eligible spouses to 

employee employees spouses employees employees spouses employees 

60 1,143 218 0.191 

61 1,692 519 0.307 

62 3,656 1,556 0.426 2,967 471 0.159 

63 4,186 2,206 0.527 3,394 770 0.227 

64 4,116 2,440 0.593 3,435 1,013 0.295 

65 4,496 3,007 0.669 4,302 1,553 0.361 

66 4,881 3,441 0.705 4,384 1,867 0.426 

67 4,771 3,496 0.733 4,337 2,012 0.464 

68 5,263 3,950 0.751 4,550 2,407 0.529 

69 5,631 4,324 0.768 4,543 2,504 0.551 

70 6,293 4,881 0.776 4,963 2,791 0.562 

71 6,814 5,393 0.791 4,987 2,897 0.581 

72 7,720 6,002 0.777 5,448 3,139 0.576 

73 8,458 6,518 0.771 5,757 3,376 0.586 

74 8,271 6,296 0.761 5,696 3,223 0.566 

75 7,899 5,851 0.741 5,444 3,057 0.562 

76 7,945 5,871 0.739 5,275 2,921 0.554 

77 7,621 5,526 0.725 5,120 2,812 0.549 

78 7,106 5,045 0.710 4,650 2,484 0.534 

79 6,753 4,813 0.713 4,437 2,307 0.520 

80 6,623 4,503 0.680 3,783 1,912 0.505 

81 5,789 3,815 0.659 3,272 1,598 0.488 

82 5,563 3,609 0.649 3,252 1,595 0.490 

83 4,894 3,094 0.632 2,891 1,403 0.485 

84 4,344 2,632 0.606 2,548 1,159 0.455 

85 3,718 2,158 0.580 2,118 924 0.436 

86 3,038 1,680 0.553 1,946 818 0.420 

87 2,556 1,384 0.541 1,729 677 0.392 

88 2,056 1,030 0.501 1,575 575 0.365 

89 1,660 759 0.457 1,273 431 0.339 

90 1,324 561 0.424 1,076 342 0.318 

91 1,073 428 0.399 965 266 0.276 

92 906 333 0.368 783 185 0.236 

93 673 215 0.319 711 172 0.242 

94 534 161 0.301 481 87 0.181 

95 405 107 0.264 413 82 0.199 

96 298 69 0.232 313 56 0.179 

97 208 39 0.188 167 34 0.204 

98 159 28 0.176 120 18 0.150 

99 & over 304 30 0.099 240 30 0.125 

a Age last birthday. 
Table S-25. Mortality experience of widow annuitants between anniversaries of retirement in 1997 

Attained agea 

All ages under 50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-

1. 1997-2000 experience 

Exposed 645,723 3,037 799 687 21,175 50,629 90,084 129,799 134,968 113

Actual deaths 51,482 5 3 12 255 972 2,627 5,607 9,132 12Crude rate per 1,000 79.7 1.6 3.8 17.5 12.0 19.2 29.2 43.2 67.7 1

Ratio Act./Exp.b 111.1% 86.0% 91.8% 268.6% 113.1% 115.6% 112.9% 107.2% 107.9% 112

2. Crude rate per 1,000 for 

individual yearsc 

1997 - 1998 77.8 0.0 7.4 21.6 11.8 19.7 28.4 41.0 68.0 1

1998 - 1999 80.0 1.0 3.8 4.4 11.4 18.9 30.5 43.1 66.5 1

1999 - 2000 81.5 4.2 0.0 26.4 12.9 18.9 28.6 45.6 68.5 1

3. Ratio Act./Exp. for 

individual yearsc 

1997 - 1998 109.6% 0.0% 177.9% 331.9% 111.2% 118.9% 110.0% 102.1% 108.4% 112

1998 - 1999 111.4% 51.6% 94.9% 68.2% 107.2% 114.1% 117.9% 107.2% 106.1% 113

1999 - 2000 112.4% 216.3% 0.0% 401.0% 121.7% 113.5% 110.7% 112.7% 109.4% 112

a Age attained during the calendar year in which the year of exposure begins, which is on the date or an anniversary of retirement. App

age nearest birthday at the beginning of the year of exposure. 

b Expected based on 1995 RRB Mortality Table for Widows. c Exposure is between anniversaries of retirement in indicated years. 
 70
 

Table S-26. Remarriage experience of widows between 1991 and 2000 anniversaries of widowhood
 

Agea 

All ages Under 35 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70 & over 

1. Exposed 

Durationb 0 85,373 151 308 474 468 656 933 7,419 13,020 61,946 

1 85,448 168 328 481 451 731 1,826 8,132 13,637 59,694 

2 84,791 187 327 432 429 716 2,745 8,604 14,109 57,243 

3 84,063 199 320 370 405 721 3,591 9,101 14,581 54,775 

4 83,315 214 297 325 423 718 4,466 9,658 14,993 52,222 

5 or more 1,636,039 195 802 1,616 1,764 2,661 6,054 49,086 117,640 1,456,222 

2. Actual remarriages 

Durationb 0 147 c c c c c c 38 33 62 

1 336 c c 10 c c 18 73 81 129 

2 301 c c 13 c c 26 63 82 96 

3 269 c 10 c c c 30 71 62 71 

4 249 c 11 c c c 40 70 54 55 

5 or more 1,442 c 27 25 25 20 19 241 322 759 

3. Crude remarriage rate per 1,000 

Durationb 0 1.72 c c c c c c 5.12 2.53 1.00 

1 3.93 c c 20.80 c c 9.86 8.98 5.94 2.16 

2 3.55 c c 30.09 c c 9.47 7.32 5.81 1.68 

3 3.20 c 31.25 c c c 8.35 7.80 4.25 1.30 

4 2.99 c 37.06 c c c 8.96 7.25 3.60 1.05 

5 or more 0.88 c 33.69 15.47 14.17 7.52 3.14 4.91 2.74 0.52 

4. Ratio Act./Exp.d 

Durationb 0 134.9% c c c c c c 181.4% 152.6% 158.5% 

1 114.5% c c 55.9% c c 133.7% 128.6% 119.2% 146.4% 

2 113.6% c c 88.7% c c 134.7% 117.9% 132.9% 136.0% 

3 123.7% c 98.8% c c c 127.0% 135.8% 122.1% 143.1% 

4 146.4% c 130.5% c c c 184.4% 166.6% 141.4% 163.1% 

5 or more 120.6% c 108.8% 75.0% 134.5% 154.1% 78.1% 130.7% 97.1% 135.9% 

a For durations 0-4, age nearest birthday on date of employee's death. For durations 5 and over, age nearest birthday at beginning 

of year of exposure which is on an anniversary of employee's death. 

b Completed years since employee's death. 

c Fewer than 10 actual remarriages. 

d Expected based on 1980 RRB Remarriage Table. 
71 

Table S-27. Total termination experience of disabled children annuitants 

between anniversaries of retirement in 1997 and 2000 

Actual Ratio 

Agea Exposed terminations Act./Exp.b 

Under 25 644 13 111.4% 

25-29 798 14 110.8 

30-34 1,445 9 46.5 

35-39 2,485 24 80.3 

40-44 3,417 39 94.7 

45-49 3,822 65 128.0 

50-54 4,175 78 110.8 

55-59 3,852 100 114.7 

60-64 3,229 144 146.8 

65-69 2,889 134 118.2 

70-74 2,665 182 137.7 

75 & over 3,301 348 120.3 

All ages 32,722 1,150 120.3% 

a Age attained during the calendar year in which the year of 

exposure begins, which is on the date or an anniversary of 

retirement. Approximates age nearest birthday at the beginning 

of the year of exposure. 

b Expected based on 1986 RRB Total Termination Table for 

Disabled Children. 
72 

RETIREMENT STUDIES 

1. Age retirement. Age retirement studies covering experience during calendar years 1998-2000 

are summarized in Tables S-28 through S-30. Table S-28 shows a comparison among crude 

retirement rates for 1998-2000, the 21st valuation retirement rates, and the 22nd valuation 

retirement rates. Tables S-29 and S-30 show ratios of actual retirements to those expected for 

employees with 10-29 years of service and for employees with 30 or more years of service, 

respectively. 

2. Disability retirement. Table S-31 shows a comparison of crude disability retirement rates for 

1998-2000 with the 21st and 22nd valuation standards. Table S-32 shows ratios of actual 

retirements in 1998-2000 to those expected by age and service. 

Table S-33 shows percentages of disability retirements in 1998-2000 that were eligible for a 

disability freeze. Disability freeze standards are needed because of the financial interchange 

with social security. Assumptions must be made regarding the percentage of railroad retirement 

disability annuitants who would qualify under the social security definition of disability. Only 

these disabilities qualify for reimbursement under the financial interchange. 
73
 

Table S-28. Ratesa of immediate age retirement
 

10-29 years of service 30 or more years of service 

Assumed Assumed 1998-2000 Assumed Assumed 1998-2000 

rates 21st rates 22nd Crude rates 21st rates 22nd Crude 

Ageb valuation valuationc rates valuation valuation rates 

60 0.13 0.60 0.112 

61 0.13 0.40d 0.102 

62 0.23 0.20 0.194 0.72 0.40d 0.744 

63 0.19 0.17 0.167 0.51 0.40 0.537 

64 0.14 0.13 0.125 0.39 0.42 0.433 

65 0.50 0.53 0.537 0.45 0.46 0.484 

66 0.37 0.39 0.391 0.40 0.39 0.383 

67 0.33 0.37 0.370 0.33 0.35 0.360 

68 0.25 0.33 0.330 0.25 0.31 0.360 

69 0.25 0.25 0.336 0.25 0.25 0.221 

70 0.25 0.25 0.273 0.25 0.25 0.309 

71 0.25 0.25 0.229 0.25 0.25 0.225 

72 0.25 0.25 0.310 0.25 0.25 0.230 

73 0.25 0.25 e 0.25 0.25 0.353 

74 0.25 0.25 e 0.25 0.25 e 

75 & over 0.25 0.25 0.173 0.25 0.25 0.233 

a Technically probabilities, because exposures were not adjusted for other separations. 

b Age attained in calendar year of exposure. 

c Assumed rates for 22nd valuation apply to employees with 5-29 years of service. 

d For calendar year 2002 only, a rate of 0.80 is used. 

e Insufficient data. 
74 

Table S-29. Immediate agea retirement experience of railroad employees with 

10-29 years of service during calendar years 1998-2000 

Actual Crude rated Ratio Ratio 

Ageb Exposedc retirements per 1,000 Act./Exp. Ie Act./Exp. IIe 

62 3,405 662 194.4 84.5% 97.2% 

63 2,214 369 166.7 87.7 98.0 

64 1,550 193 124.5 88.9 95.8 

65 1,137 611 537.4 107.5 101.4 

66 478 187 391.2 105.7 100.3 

67 276 102 369.6 112.0 99.9 

68 182 60 329.7 131.9 99.9 

69 140 47 335.7 134.3 134.3 

70-74 252 66 261.9 104.8 104.8 

75 & over 81 14 172.8 69.1 69.1 

All ages 9,715 2,311 237.9 95.5 99.3 

a Nondisability retirement. 

b Age attained in calendar year of exposure. 

Exposure includes part of the year in which employees were not eligible for age 

retirement because they were under 62. 

d Technically probabilities, because exposures were not adjusted for other separations. 

e I and II denote expected according to rates used in the 21st and 22nd valuations, 

respectively. 

c 
75 

Table S-30. Immediate agea retirement experience of railroad employees with 

30 or more years of service during calendar years 1998-2000 

Actual Crude rated Ratio Ratio 

Ageb Exposedc retirements per 1,000 Act./Exp. Ie Act./Exp. IIe 

60 9,237 1,030 111.5 85.8% 20.3% 

61 8,174 836 102.3 78.7 25.6 

62 7,357 5,476 744.3 103.4 186.1 

63 2,147 1,154 537.5 105.4 134.4 

64 1,220 528 432.8 111.0 103.0 

65 821 397 483.6 107.5 105.1 

66 478 183 382.8 95.7 98.2 

67 308 111 360.4 109.2 103.0 

68 211 76 360.2 144.1 116.2 

69 136 30 220.6 88.2 88.2 

70-74 338 89 263.3 105.3 105.3 

75 & over 129 30 232.6 93.0 93.0 

All ages 30,556 9,940 325.3 99.4 73.3 

a Nondisability retirement. 

b Age attained in calendar year of exposure. 

Exposure includes part of the year in which employees were not eligible for age 

retirement because they were under 60. 

d Technically probabilities, because exposures were not adjusted for other separations. 

e I and II denote expected according to rates used in the 21st and 22nd valuations, 

respectively. 

c 
 76 

Table S-31. Ratesa

 of immediateb disability retirement 

10-19 years of service 20-29 years of service 30 or more years of service 

Assumed Assumed 1998-2000 Assumed Assumed 1998-2000 Assumed Assumed 1998-2000 

rates 21st rates 22nd Crude rates 21st rates 22nd Crude rates 21st rates 22nd Crude 

Agec valuation valuation rates valuation valuation rates valuation valuation rates 

Under 35 0.0015 0.0010 d 0.0077 0.0047 d 0.0035 0.0030 d 

35 0.0017 0.0013 d 0.0082 0.0053 d 0.0038 0.0034 d 

36 0.0019 0.0015 d 0.0087 0.0059 d 0.0041 0.0038 d 

37 0.0021 0.0018 0.0038 0.0092 0.0066 d 0.0043 0.0044 d 

38 0.0024 0.0022 0.0023 0.0098 0.0074 d 0.0047 0.0050 d 

39 0.0027 0.0026 0.0021 0.0105 0.0082 0.0085 0.0052 0.0056 d 

40 0.0031 0.0030 0.0024 0.0112 0.0091 0.0114 0.0057 0.0062 d 

41 0.0035 0.0034 0.0029 0.0120 0.0100 0.0115 0.0062 0.0069 d 

42 0.0039 0.0039 0.0041 0.0128 0.0110 0.0123 0.0067 0.0077 d 

43 0.0044 0.0045 0.0048 0.0138 0.0121 0.0143 0.0074 0.0085 d 

44 0.0050 0.0051 0.0051 0.0148 0.0133 0.0153 0.0081 0.0095 d 

45 0.0057 0.0058 0.0072 0.0159 0.0146 0.0137 0.0089 0.0105 d 

46 0.0065 0.0065 0.0057 0.0171 0.0160 0.0144 0.0099 0.0115 d 

47 0.0073 0.0073 0.0066 0.0185 0.0175 0.0161 0.0108 0.0127 d 

48 0.0083 0.0083 0.0072 0.0199 0.0191 0.0170 0.0120 0.0140 d 

49 0.0094 0.0093 0.0105 0.0215 0.0209 0.0180 0.0132 0.0155 0.0096 

50 0.0107 0.0104 0.0116 0.0233 0.0228 0.0235 0.0147 0.0170 0.0131 

51 0.0122 0.0116 0.0097 0.0252 0.0249 0.0269 0.0163 0.0187 0.0175 

52 0.0138 0.0129 0.0146 0.0272 0.0271 0.0284 0.0180 0.0204 0.0171 

53 0.0157 0.0144 0.0125 0.0295 0.0295 0.0319 0.0201 0.0224 0.0253 

54 0.0178 0.0160 0.0139 0.0320 0.0321 0.0340 0.0223 0.0246 0.0251 

55 0.0202 0.0178 0.0200 0.0347 0.0350 0.0364 0.0248 0.0269 0.0312 

56 0.0230 0.0198 0.0187 0.0377 0.0380 0.0397 0.0276 0.0295 0.0316 

57 0.0261 0.0220 0.0280 0.0409 0.0413 0.0383 0.0308 0.0323 0.0328 

58 0.0296 0.0245 0.0250 0.0445 0.0449 0.0479 0.0343 0.0353 0.0343 

59 0.0337 0.0271 0.0226 0.0484 0.0488 0.0435 0.0383 0.0386 0.0364 

60 0.0488 0.0442 0.0419 0.0526 0.0530 0.0507 0.0372 0.0377 0.0377 

61 0.0530 0.0480 0.0531 0.0572 0.0575 0.0544 0.0298 0.0000 0.0319 

62 0.0578 0.0521 0.0624 0.0623 0.0624 0.0657 0.0071 0.0000 0.0082 

63 0.0555 0.0493 0.0425 0.0599 0.0591 0.0591 0.0000 0.0000 d 

64 0.0351 0.0347 d 0.0379 0.0416 0.0416 0.0000 0.0000 d 

65 0.0063 0.0061 d 0.0068 0.0073 d 0.0000 0.0000 d 

a Technically probabilities, because exposures were not adjusted for other terminations. 

b Immediate retirements are defined as those for which the calendar year of retirement is the same as, or the year 

following, the calendar year of last employment in the railroad industry. 

c Age attained in calendar year of exposure. 

d Fewer than 10 actual retirements. 
Table S-32. Immediate disability retirement experience of railroad employees during calendar years 199

Attained agea 

All ages Under 40 40-44 45-49 50-54 55-59 60-65b 60 61 62 

1. 10-19 years of service 

Exposed 143,273 35,079 45,198 32,926 17,858 8,297 3,915 1,003 867 80

Actual retirements 1,055 66 175 239 218 187 170 42 46 5

Crude rate per 1,000c 7.4 1.9 3.9 7.3 12.2 22.5 43.4 41.9 53.1 62

Ratio Act./Exp.d 93.3% 90.4% 97.3% 100.4% 90.5% 88.1% 90.9% 85.8% 100.1% 108.0

Ratio Act./Exp.e 100.0% 106.0% 97.3% 100.3% 96.7% 104.4% 100.0% 94.7% 110.5% 119.8

2. 20-29 years of service 

Exposed 306,117 1,987 52,798 118,918 87,426 32,126 12,862 3,569 3,035 2,60Actual retirements 7,041 14 723 1,890 2,447 1,297 670 181 165 17

Crude rate per 1,000c 23.0 7.0 13.7 15.9 28.0 40.4 52.1 50.7 54.4 65

Ratio Act./Exp.d 97.2% 67.9% 101.2% 85.1% 105.0% 100.7% 99.5% 96.4% 95.0% 105.5

Ratio Act./Exp.e 100.1% 87.4% 115.9% 89.7% 105.9% 99.8% 98.7% 95.7% 94.5% 105.3

3. 30 or more years of service 

Exposed 132,153 0 0 4,201 42,948 56,058 28,946 9,230 8,174 7,35

Actual retirements 3,474 f f 33 897 1,858 686 348 261 6Crude rate per 1,000c 26.3 f f 7.9 20.9 33.1 23.7 37.7 31.9 8

Ratio Act./Exp.d 107.3% f f 61.1% 109.8% 107.5% 107.3% 101.4% 107.1% 114.9

Ratio Act./Exp.e g 100.0% f f 52.1% 97.8% 102.8% g 100.0% g g 

a Age attained in calendar year of exposure. b Refers to employees retiring before age 65 in the calendar year in which they will attain age 65. Exposure includes part of the year in which employees wer

disability retirement because they passed their 65th birthday. 

c Technically probabilities of retirement, because exposures were not adjusted for other terminations.d Expected based on 21st valuation disability rates.e Expected based on 22nd valuation disability rates.f Insufficient data.g Actual to expected ratios for 30-year service employees based on 22nd valuation disability rates exclude employees over age 60.
 78 

Table S-33. Percentages of immediatea

 disability retirements in 1998-2000 meeting the disability freeze standards 

of the Social Security Actb 

10-19 years of service 20-29 years of service 30 or more years of service 

Assumed Assumed 1998-2000 Assumed Assumed 1998-2000 Assumed Assumed 1998-2000 

rates 21st rates 22nd Crude rates 21st rates 22nd Crude rates 21st rates 22nd Crude 

Agec valuation valuation rates valuation valuation rates valuation valuation rates 

Under 35 95.9% 95.9% d 21.5% 30.9% d 44.3% 30.9% d 

35 95.9 95.9 d 21.6 30.9 d 44.3 30.9 d 

36 95.9 95.9 d 21.8 31.0 d 44.3 31.0 d 

37 95.9 95.9 100.0% 21.9 31.0 d 44.3 31.0 d 

38 95.9 95.9 100.0 22.1 31.1 d 44.3 31.1 d 

39 95.9 95.9 100.0 22.4 31.2 28.6% 44.3 31.2 d 

40 95.9 95.9 100.0 22.7 31.3 36.6 44.3 31.3 d 

41 95.9 95.9 100.0 23.2 31.5 23.6 44.3 31.5 d 

42 95.9 95.9 87.2 23.7 31.8 29.9 44.3 31.8 d 

43 95.9 95.9 95.3 24.4 32.1 34.0 44.3 32.1 d 

44 95.9 95.9 93.0 25.2 32.5 26.5 44.4 32.5 d 

45 95.9 95.9 92.9 26.3 33.1 30.9 44.4 33.1 d 

46 95.9 95.9 88.1 27.7 34.0 32.6 44.4 34.0 d 

47 95.9 95.9 100.0 29.4 35.1 35.7 44.5 35.1 d 

48 95.9 95.9 92.5 31.6 36.5 36.6 44.6 36.5 d 

49 95.9 95.9 96.3 34.4 38.6 45.2 44.8 38.6 37.0% 

50 95.9 95.9 94.2 37.9 41.3 46.9 45.3 41.3 43.1 

51 95.9 95.9 97.6 42.4 44.9 45.0 46.2 44.9 41.9 

52 95.9 95.9 92.5 48.0 49.8 47.3 48.1 49.8 48.3 

53 95.9 95.9 100.0 55.1 56.5 56.6 51.8 56.5 49.4 

54 95.9 95.9 97.1 64.1 65.4 66.5 59.1 65.4 60.0 

55 95.9 95.9 97.6 75.5 77.6 81.5 73.8 77.6 78.8 

56 95.9 95.9 100.0 78.6 84.2 84.7 80.2 84.2 78.2 

57 95.9 95.9 95.7 78.6 84.2 80.6 80.2 84.2 83.7 

58 95.9 95.9 100.0 78.6 84.2 86.0 80.2 84.2 84.6 

59 95.9 95.9 100.0 78.6 84.2 81.8 80.2 84.2 83.5 

60 84.1 79.6 75.0 78.6 84.2 83.9 80.2 84.2 87.1 

61 84.1 79.6 78.0 78.6 84.2 87.0 80.2 84.2 87.8 

62 84.1 79.6 80.0 78.6 84.2 88.0 80.2 84.2 81.7 

63 84.1 79.6 91.3 78.6 84.2 89.8 80.2 84.2 d 

64 84.1 79.6 d 78.6 84.2 77.1 80.2 84.2 d 

65 84.1 79.6 d 78.6 84.2 d 80.2 84.2 d 

a Immediate retirements are defined as those for which the calendar year of retirement is the same as, or the year 

following, the calendar year of last employment in the railroad industry. 

b Individuals who died within 1 year of the onset of disability were deemed to qualify if no decision was made. 

c Age attained in calendar year of exposure. 

d Insufficient data. 
79 

WITHDRAWAL STUDIES 

Table S-34 shows withdrawal experience for the years 1996-99. The actual withdrawals are 

shown net of re-entrants into the industry for each attained age and service group. Since a reentrant has his earnings record restored for benefit purposes, he cannot be considered a final 

withdrawal. The table presents crude net withdrawal rates by attained age and years of service 

along with ratios of actual net withdrawals to those expected on the basis of both the 21st and 

22nd valuations standards. 
Table S-34. Withdrawal experience of railroad employees during calender years 1996-1999, by attained age and years of 

Years Attained ageb under 25 Attained ageb 25-34 Attained 

of Actual netc Crude rate Ratio Act./Exp. Actual netc Crude rate Ratio Act./Exp. Actual netc 

servicea Exposed withdrawals per 100 Id IId Exposed withdrawals per 100 Id IId Exposed withdrawals 

0 16,943 3,325 19.6 92.3% 100.1% 27,678 4,109 14.8 90.6% 100.3% 16,370 2,895 

1 11,557 1,971 17.1 109.1 99.7 25,015 2,898 11.6 91.7 99.9 14,137 1,649 

2 5,862 597 10.2 86.6 105.0 19,859 1,733 8.7 88.9 100.3 11,077 858 

3 3,156 209 6.6 71.8 92.0 16,704 1,194 7.1 91.8 99.3 9,689 566 

4 1,648 85 5.2 69.5 83.2 14,405 893 6.2 99.1 100.0 9,307 466 

5 610 29 4.8 74.2 88.0 12,227 651 5.3 103.4 98.6 8,780 373 

6 104 e e e e 10,028 510 5.1 116.0 103.8 8,022 384 

7 3 e e e e 8,590 384 4.5 118.2 101.6 8,135 332 

8 3 e e e e 7,251 283 3.9 115.2 95.2 8,442 234 

9 1 e e e e 5,608 177 3.2 102.4 83.1 8,462 200 

10 1 e e e e 3,858 154 4.0 136.1 110.9 8,127 270 11 1 e e e e 2,555 110 4.3 154.4 126.6 7,861 232 12 - e e e e 1,697 53 3.1 113.5 97.6 8,284 224 13 - e e e e 1,024 34 3.3 166.0 110.7 9,171 219 14 - e e e e 579 16 2.8 138.2 98.7 10,529 269 15 - e e e e 309 e e e e 12,251 293 16 - e e e e 81 e e e e 14,700 317 17 - e e e e 4 e e e e 18,032 322 18 - e e e e 1 e e e e 20,609 307 19 - e e e e - e e e e 21,869 263 20 - e e e e - e e e e 21,517 299 21 - e e e e - e e e e 18,393 209 22 - e e e e - e e e e 16,633 169 23 - e e e e - e e e e 13,470 89 24 - e e e e - e e e e 9,271 77 25 - e e e e - e e e e 5,284 38 26 - e e e e - e e e e 1,458 15 27 - e e e e - e e e e 40 e 28 - e e e e - e e e e 2 e 29 - e e e e - e e e e 1 e 

30 & over - e e e e - e e e e - e 

All years 39,889 6,222 15.6 94.9% 99.8% 157,473 13,203 8.4 94.8% 100.0% 319,923 11,570 

a Service as of beginning of calendar year of exposure rounded up to next highest whole year. b Age attained in calendar year of exposure. c Withdrawals less re-entrants. d I and II denote expected according to rates used in the 21st and 22nd valuations, respectively. e Fewer than 10 actual net withdrawals. 
Table S-34. continued 

Years Attained ageb 45-54 Attained ageb 55 and over 

of Actual netc Crude rate Ratio Act./Exp. Actual netc Crude rate Ratio Act./Exp. Actual netc 

Al

servicea Exposed withdrawals per 100 Id IId Exposed withdrawals per 100 Id IId Exposed withdrawals 

0 5,660 1,178 20.8 78.5% 100.1% 939 253 26.9 101.6% 100.2% 67,590 11,760 

1 5,012 531 10.6 74.1 99.9 844 98 11.6 80.1 100.1 56,565 7,147 

2 3,962 283 7.1 65.0 99.2 695 76 10.9 95.3 99.4 41,455 3,547 

3 3,751 222 5.9 67.4 102.0 760 84 11.1 117.6 107.3 34,060 2,275 

4 3,637 172 4.7 66.4 100.6 812 64 7.9 100.2 84.8 29,809 1,680 

5 3,677 125 3.4 57.3 87.2 889 70 7.9 116.0 96.0 26,183 1,248 

6 3,586 139 3.9 78.6 121.1 965 78 8.1 137.6 113.8 22,705 1,117 

7 3,706 95 2.6 60.4 91.6 987 65 6.6 123.4 109.8 21,421 876 

8 3,915 92 2.3 62.3 97.9 1,137 60 5.3 109.6 107.7 20,748 669 

9 3,984 80 2.0 59.5 91.3 1,196 27 2.3 51.0 56.4 19,251 484 

10 3,976 103 2.6 84.3 123.4 968 36 3.7 91.5 116.2 16,930 563 

11 3,893 60 1.5 56.1 77.1 935 32 3.4 94.2 126.8 15,245 434 

12 4,014 94 2.3 92.3 123.3 916 22 2.4 71.1 104.4 14,911 393 

13 4,576 69 1.5 125.7 83.8 954 13 1.4 55.9 68.1 15,725 335 

14 5,320 71 1.3 111.2 78.5 1,030 20 1.9 80.2 102.2 17,458 376 

15 6,445 115 1.8 148.7 111.5 1,164 32 2.7 112.6 152.7 20,169 442 

16 7,899 148 1.9 156.1 124.9 1,453 18 1.2 49.9 72.9 24,133 485 

17 10,666 149 1.4 116.4 99.8 1,893 26 1.4 56.0 80.8 30,595 497 

18 13,373 153 1.1 95.3 88.0 2,374 33 1.4 56.4 86.9 36,357 493 

19 16,473 195 1.2 98.6 91.1 2,885 54 1.9 76.9 117.0 41,227 512 

20 19,452 251 1.3 107.5 107.5 3,292 55 1.7 68.3 111.4 44,261 605 

21 20,372 214 1.1 87.5 95.5 3,361 41 1.2 49.5 87.1 42,126 464 

22 23,718 262 1.1 92.1 110.5 3,741 51 1.4 55.6 97.4 44,092 482 

23 27,309 276 1.0 84.2 112.3 4,075 58 1.4 57.6 109.5 44,854 423 

24 29,768 223 0.7 62.4 83.2 4,318 41 0.9 38.2 79.1 43,357 341 

25 33,848 292 0.9 71.9 107.8 5,056 58 1.1 46.0 104.3 44,188 388 

26 34,679 255 0.7 61.3 105.0 5,673 54 1.0 38.1 95.2 41,810 324 

27 32,586 204 0.6 52.2 89.4 6,448 66 1.0 41.0 102.4 39,074 271 

28 29,122 159 0.5 45.5 91.0 7,339 80 1.1 43.7 121.1 36,463 239 

29 23,926 146 0.6 50.9 122.0 8,013 48 0.6 23.7 74.9 31,940 194 

30 & over 52,212 713 1.4 113.8 97.5 65,954 1,435 2.2 81.5 98.9 118,166 2,148 

All years 444,517 7,069 1.6 77.6% 100.0% 141,066 3,148 2.2 73.3% 99.2% 41,212 1,102,868 

a Service as of beginning of calendar year of exposure rounded up to next highest whole year. b Age attained in calendar year of exposure. c Withdrawals less re-entrants. d I and II denote expected according to rates used in the 21st and 22nd valuations, respectively. e Fewer than 10 actual net withdrawals. 
82 

EMPLOYEE AND BENEFICIARY CENSUSES, FAMILY COMPOSITION, AND 

MISCELLANEOUS STATISTICS 

Age and service distributions of active and inactive employees are shown in Tables S-35 and S-36. 

A comparison between 1998 and 2001 active censuses is shown in Table S-37. 

Tables S-38 and S-39 provide a census of beneficiaries on December 31, 2001. Also included are 

their tier 1, tier 2, vested dual benefit and supplemental annuity amounts. 

Table S-40 shows the average number of service months in a year for calendar years 1997-1999 by 

attained age group and years of service. The number of service months credited to an employee for 

a given year is equal to the employee's total creditable tier 2 earnings in the year, divided by onetwelfth of the tier 2 earnings base for the year, with a maximum of 12 and a minimum of the 

number of months in which the individual had service. 

The average creditable earnings per service month during 2001 are shown in Table S-41. Because 

of the difference in the maximum creditable earnings for tier 1 and tier 2 benefits, separate salary 

scales were constructed. 

The age distribution of new entrants during calendar years 1997-2000 is shown in Table S-42, as is 

the distribution for 1994-1997. 

Table S-43 presents family characteristics of railroad employees who died in the period 1997-2000 

with a current connection. 

Table S-44 provides selected employment and benefit statistics for 1998 and 2001. 
Table S-35. Distribution of 2001 active employeesa by age and completed years of service 

Age in Completed years of service 

2001 Total 0 1 2-4 5-9 10-14 15-19 20-24 25-29 30-34 

Total 263,409 10,535 11,624 36,446 31,739 20,919 18,481 40,524 46,628 32,984 

Under 20 447 374 68 5 0 0 0 0 0 0 

20-24 7,582 2,267 2,028 3,080 207 0 0 0 0 0 25-29 17,197 2,082 2,418 8,217 4,362 118 0 0 0 0 30-34 23,753 1,805 2,240 8,454 8,157 3,050 47 0 0 0 35-39 23,252 1,450 1,733 6,200 6,653 5,138 1,914 164 0 0 40-44 34,151 1,082 1,418 4,777 5,155 4,670 5,757 10,168 1,124 0 45-49 53,979 751 931 3,140 3,561 3,745 5,518 16,159 18,672 1,502 50-54 54,702 423 464 1,613 2,199 2,383 3,229 9,023 18,146 16,533 55-59 34,927 200 229 704 957 1,185 1,385 3,641 6,409 12,353 60-64 12,197 63 76 208 400 532 531 1,232 2,080 2,491 65-69 974 28 11 33 67 78 82 120 172 86 

70 & over 248 10 8 15 21 20 18 17 25 19 

a Employees alive and not retired at the end of 2001 with some railroad service in 2001. 
84 

Table S-36. Census of vesteda inactive employeesb in 2001 by age and 

completed years of service 

Age in Completed years of service 

2001 Total 5-9 10-14 15-19 20-24 25-29 30 & over 

Total 65,664 60 35,457 16,127 7,599 3,109 3,312 

Under 35 176 28 147 1 0 0 0 

35-39 835 11 758 65 1 0 0 

40-44 4,978 9 3,512 1,212 245 0 0 

45-49 14,850 1 9,385 3,711 1,485 262 6 

50-54 20,091 0 10,845 5,428 2,473 968 377 

55-59 16,706 5 6,957 3,924 2,337 1,224 2,259 

60-64 7,438 5 3,439 1,679 1,014 640 661 

65 & over 590 1 414 107 44 15 9 

a Employees with at least 10 years of total service, or 5 years of service after 1995. 

b Employees alive and not retired at the end of 2001 with no railroad work in 2001. 
85 

Table S-37. Comparison between 2001 and 1998 of selected characteristics of activea 

railroad employees 

Change from 1998 to 2001 

2001 1998 Number Percent 

Number alive and not retired 

Percent with 5 or more years 

of service 

Number age 60 or over 

Number age 65 or over 

Number age 60-64 with 30 or 

more years of service 

Average age on December 31 

Median age on December 31 

Average years of service 

All employees 

Employees under age 45 

Employees age 45-49 

Employees age 60 or over 

Employees age 65 or over 

263,409 289,036 -25,627 -8.9% 

77.8% 77.0% b b 

13,419 12,735 684 5.4% 

1,222 1,227 -5 -0.4% 

7,075 6,213 862 13.9% 

45.7 44.7 1.0 b 

47.5 46.0 1.5 b 

18.0 17.3 0.7 b 

8.0 9.2 -1.2 b 

20.5 20.7 -0.2 b 

29.6 29.8 -0.2 b 

27.2 27.6 -0.4 b 

a Active employees were those with some railroad service during the year. 

b Not applicable. 
86
 

Table S-38. Census of employee and spouse annuitants on December 31, 2001a
 

Monthly benefitsb 

Agec Number Tier 1 Tier 2 Vested dual Supplemental 

1. Employee age annuitants 

60-64 15,563 

65-69 33,855 

70-74 47,268 

75-79 52,778 

80-84 37,999 

85-89 19,859 

90-94 7,435 

95 & over 2,231 

Total 216,988 

2. Employee disability annuitants 

Under 40	 65 

40-44 995 

45-49 5,474 

50-54 12,024 

55-59 14,288 

60-64 12,863 

65-69 10,907 

70-74 11,047 

75-79 8,274 

80-84 4,507 

85-89 1,860 

90-94 675 

95 & over 146 

Total 83,125 

3. Spouse annuitants 

Under 60	 1,008 

60-64 21,386 

65-69 34,891 

70-74 39,578 

75-79 32,338 

80-84 18,262 

85-89 5,998 

90-94 1,155 

95 & over 143 

Total 154,759 

$ 19,725,911 $ 11,458,138 $ 132,598 $ 335,546 

36,412,615 19,923,915 678,968 657,155 

46,747,518 24,291,190 1,646,974 956,441 

49,216,974 21,684,094 2,714,495 1,101,203 

35,793,252 11,154,346 2,291,972 881,785 

17,479,709 4,517,431 1,077,020 461,392 

4,700,847 1,229,148 393,246 200,384 

1,201,572 218,368 141,116 69,785 

$ 211,278,398 $ 94,476,630 $ 9,076,389 $ 4,663,691 

$ 84,970 $ 17,623 $ - $ -

1,359,095 375,331 - -

7,495,276 2,384,807 - -

16,298,646 5,867,923 - -

18,876,821 7,499,706 2,323 -

15,936,435 6,628,265 97,155 144,585 

12,156,471 4,870,557 242,770 205,277 

11,329,219 4,082,706 422,756 236,564 

7,704,339 2,035,770 449,854 168,872 

3,718,653 698,892 243,855 80,567 

1,273,105 207,852 99,785 28,707 

435,140 66,140 29,125 15,801 

78,947 6,971 5,977 1,237 

$ 96,747,117 $ 34,742,543 $ 1,593,600 $ 881,610 

$ 570,894 $ 268,825 $ - $ -

9,766,589 6,870,768 156 -

11,767,528 8,658,091 95 -

13,132,312 8,499,863 300 -

10,463,116 5,847,986 1,375 -

5,748,656 2,677,939 396,283 -

1,356,623 729,562 356,655 -

193,821 121,716 67,192 -

23,756 12,545 7,382 -

$ 53,023,295 $ 33,687,295 $ 829,438 $ -

a Includes annuities which were in withheld status as of December 31, 2001. 

Therefore, these figures may disagree with other published data. 

b Amounts shown reflect benefits paid in January 2002. 

c Age attained in 2001. 
87
 

Table S-39. Census of survivor annuitants on December 31, 2001a
 

Monthly benefitsb 

Agec Number Tier 1 Tier 2 Vested dual 

1. Aged widows and widowersd 

60-64 5,866 $ 5,437,893 

65-69 12,856 10,831,110 

70-74 24,795 20,290,999 

75-79 36,547 28,914,889 

80-84 41,972 31,861,788 

85-89 32,754 20,105,875 

90-94 18,869 10,070,390 

95 & over 8,000 4,101,851 

Total 181,659 $ 131,614,795 

2. Other survivorse 

0-4 53 $ 39,230 

5-9 316 273,654 

10-14 1,162 1,013,329 

15-19 1,760 1,610,619 

20-24 140 127,684 

25-29 241 191,668 

30-34 384 291,054 

35-39 800 565,978 

40-44 1,325 940,567 

45-49 1,577 1,083,917 

50-54 1,922 1,254,594 

55-59 2,401 1,515,364 

60-64 2,247 1,379,416 

65-69 1,838 1,070,709 

70-74 1,753 950,158 

75-79 1,495 753,782 

80-84 1,013 480,351 

85-89 483 234,122 

90-94 106 51,603 

95 & over 2 621 

Total 21,018 $ 13,828,418 

$ 1,056,594 $ -

2,278,265 -

4,081,988 -

5,570,984 -

5,475,728 88,782 

3,870,186 218,050 

2,179,846 135,837 

947,156 55,506 

$ 25,460,747 $ 498,175 

$ 3,238 $ -

26,210 -

93,122 -

168,812 -

13,868 -

20,957 -

36,747 -

78,009 -

147,450 -

174,936 -

214,465 -

280,157 -

248,966 -

177,649 -

166,389 4,230 

153,183 11,900 

102,423 12,884 

49,102 3,633 

10,633 399 

154 -

$ 2,166,471 $ 33,046 

a Includes annuities which were in withheld status as of December 31, 2001. 

Therefore, these figures may disagree with other published data. 

b Amounts shown reflect benefits paid in January 2002. 

c Age attained in 2001. 

d Includes divorced and remarried aged widows and widowers, and parents. 

e Includes disabled widows and widowers, remarried and divorced disabled widows 

and widowers, widowed mothers and fathers, remarried and divorced widowed 

mothers and fathers, minor children, student children and disabled children. 
able S-40. Comparison of service months of railroad employees during calendar years 1997-99 with assumptions used in the 22nd 

(For employees not separated in the year) 

Years 22

of Service months by attained age Service months by calendar year valu

servicea Under 25 25-34 35-44 45-54 55 & over Total 1997 1998 1999 Total assum

0 6.0 6.4 6.3 6.2 6.3 6.3 5.9 6.4 6.6 6.3 1 10.9 11.4 11.4 11.3 10.9 11.3 11.2 11.3 11.3 11.3 12 11.3 11.5 11.5 11.4 11.3 11.4 11.4 11.5 11.4 11.4 13 11.4 11.6 11.5 11.4 11.2 11.5 11.5 11.6 11.5 11.5 14 11.7 11.7 11.6 11.4 11.4 11.6 11.5 11.7 11.6 11.6 15 11.7 11.7 11.6 11.5 11.5 11.6 11.5 11.6 11.7 11.6 16 11.9 11.7 11.5 11.5 11.4 11.6 11.5 11.6 11.6 11.6 17 11.7 11.6 11.5 11.5 11.6 11.6 11.6 11.6 11.6 18 11.8 11.6 11.6 11.4 11.7 11.7 11.7 11.6 11.7 19 11.8 11.7 11.6 11.7 11.7 11.7 11.7 11.7 11.7 1

10 11.8 11.7 11.6 11.6 11.7 11.6 11.7 11.7 11.7 111 11.9 11.7 11.5 11.6 11.6 11.6 11.6 11.7 11.6 112 11.8 11.7 11.6 11.7 11.7 11.6 11.7 11.7 11.7 113 11.8 11.7 11.6 11.6 11.7 11.7 11.7 11.7 11.7 114 11.8 11.7 11.6 11.6 11.7 11.6 11.7 11.7 11.7 115 11.9 11.7 11.6 11.6 11.7 11.7 11.7 11.7 11.7 116 11.9 11.8 11.7 11.7 11.7 11.7 11.8 11.7 11.7 117 11.8 11.7 11.6 11.8 11.8 11.8 11.7 11.8 118 11.8 11.8 11.7 11.8 11.8 11.8 11.8 11.8 119 11.9 11.8 11.7 11.8 11.8 11.8 11.8 11.8 120 11.9 11.8 11.7 11.8 11.8 11.8 11.8 11.8 121 11.9 11.8 11.7 11.9 11.9 11.9 11.9 11.9 122 11.9 11.9 11.8 11.9 11.9 11.9 11.9 11.9 123 11.9 11.9 11.8 11.9 11.9 11.9 11.9 11.9 124 11.9 11.9 11.8 11.9 11.9 11.9 11.9 11.9 125 11.9 11.9 11.8 11.9 11.9 11.9 11.9 11.9 126 12.0 11.9 11.8 11.9 11.9 11.9 11.9 11.9 127 11.9 11.8 11.9 11.9 11.9 11.9 11.9 128 11.9 11.9 11.9 11.9 11.9 11.9 11.9 129 11.9 11.9 11.9 11.9 11.9 11.9 11.9 1

30 & over 11.9 11.9 11.9 11.9 11.9 11.9 11.9 1

a Rounded up to nearest whole year. 
 89
 

Table S-41. Average creditablea compensation per service month during 2001
 

Years 

of 

serviceb Tier 1 Tier 2 

0 $2,790 $2,758 

1 3,093 3,024 

2 3,403 3,306 

3 3,671 3,575 

4 3,967 3,804 

5 4,068 3,887 

6 4,305 4,050 

7 4,349 4,074 

8 4,215 3,947 

9 4,138 3,903 

10 4,168 3,900 

11 4,304 4,019 

12 4,392 4,055 

13 4,387 4,060 

14 4,367 4,013 

15 4,423 4,048 

16 4,417 4,071 

17 4,438 4,083 

18 4,337 4,018 

19 4,335 4,025 

20 4,480 4,132 

21 4,496 4,150 

22 4,611 4,225 

23 4,720 4,289 

24 4,693 4,279 

25 4,726 4,304 

26 4,701 4,274 

27 4,787 4,321 

28 4,912 4,378 

29 4,892 4,367 

30 4,922 4,390 

a Maximum creditable annual compensation during 2001 was $80,400 and $59,700 

for tier 1 and tier 2, respectively. 

b Completed service at beginning of year rounded up to nearest whole year. 
90 

Table S-42. Age distribution of new entrants during calendar years 1997-2000 

and comparison with assumptions of the 21st valuation 

Age at Year of entry 21st Val. 

entrya 1997 1998 1999 2000 1997-00b 1994-97 

All ages 

Number 16,579 23,753 15,226 14,541 70,099 56,066 

Percent 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 

Under 20 3.5% 3.3% 3.4% 3.4% 3.4% 4.2% 

20-24 21.6 21.3 20.0 20.9 21.0 22.7 

25-29 24.3 23.7 21.3 20.5 22.6 23.6 

30-34 18.1 17.6 17.6 17.0 17.6 18.6 

35-39 14.1 14.8 14.7 14.0 14.4 13.3 

40-44 9.4 9.8 11.5 11.2 10.3 8.8 

45-49 5.3 5.6 6.6 7.1 6.1 8.8 

50-54 2.5 2.6 3.1 3.5 2.9 0.0 

55 & over 1.2 1.3 1.9 2.3 1.6 0.0 

Average age 

at entry 31.3 31.6 32.4 32.6 31.9 31.1 

Median age 

at entry 29.6 29.9 30.8 30.8 30.2 29.4 

a Age attained in the year of entry (year of entry minus year of birth). 

b Used in 22nd valuation. 
 91
 

Table S-43. Family characteristics of railroad employees who died in 1997-2000 with a current connection
 

Percent married 

Widow under 60 with 

eligible child Percent with 

Widow Widow Widow Youngest Youngest Youngest eligible child 

Age of Number age age under child child child Minor Disabled 

employee

a of deathsb Total 62 & over 60-61 age 60 under 16 age 16-17 disabled child child 

Under 35 9 66.7 - - 66.7 55.6 - - 77.8 -

35 - 39 43 72.1 - - 72.1 60.5 - - 86.0 2.3 

40 - 44 265 72.8 - - 72.8 52.1 7.2 0.4 75.1 0.4 

45 - 49 598 67.6 - - 67.6 31.9 8.2 0.8 53.0 2.3 

50 - 54 1,058 74.5 1.6 0.7 72.2 15.0 5.5 2.2 25.2 2.8 

55 - 59 1,434 72.7 3.6 2.8 66.3 6.1 2.5 1.3 10.8 2.0 

60 - 64 2,067 71.5 18.6 15.6 37.3 2.4 0.9 0.9 5.1 2.1 

65 - 69 4,010 71.5 53.1 7.5 10.9 0.6 0.2 0.2 1.6 1.6 

70 - 74 8,439 72.1 66.2 1.9 4.0 0.3 - 0.1 0.7 1.4 

75 - 79 11,773 67.8 65.6 0.7 1.5 0.1 0.1 - 0.3 1.0 

80 - 84 13,546 61.4 60.4 0.3 0.7 0.1 - - 0.2 0.9 

85 - 89 10,947 49.7 49.2 0.1 0.4 - - - 0.1 0.7 

90 & over 11,107 30.7 30.3 0.1 0.3 - - - 0.1 0.6 

Average ages of widows 

employe

Widow under 60 with 

eligible child Average ages of children Average 

Widow Widow Widow Youngest Youngest Youngest Youngest All All number 

Age of age age under child child child child minor disabled of minor 

e

a 62 & over 60-61 age 60 under 16 age 16-17 disabled under 16c children children childrend 

Under 35 e e e e e e e 4.8 e 2.3 

35 - 39 e e 37.3 36.3 e e 7.4 8.1 e 2.0 

40 - 44 e e 41.2 39.9 43.6 e 9.6 10.6 e 2.0 

45 - 49 e e 44.9 42.4 46.4 e 10.1 11.7 21.4 1.7 

50 - 54 66.2 60.6 49.3 46.0 47.3 49.5 11.3 11.6 24.1 1.5 

55 - 59 65.6 60.9 53.4 48.7 50.3 53.0 11.4 12.2 27.1 1.3 

60 - 64 65.2 60.9 55.9 48.2 50.1 57.2 11.5 13.3 32.1 1.3 

65 - 69 66.8 61.1 55.7 51.2 52.1 56.9 11.0 12.2 34.7 1.3 

70 - 74 70.3 61.0 55.1 47.4 e 58.1 11.7 12.8 37.8 1.3 

75 - 79 74.4 61.0 54.3 43.6 e e 11.6 12.0 42.5 1.4 

80 - 84 78.4 61.0 53.9 50.2 e e 10.5 11.4 46.2 1.1 

85 - 89 81.8 60.7 54.4 e e e e 12.9 47.8 1.6 

90 & over 85.7 60.8 53.1 e e e e 14.4 56.0 1.3 

a Age nearest birthday at time of death. 

b Includes employees with 120 or more service months only. 

c Includes families with widows under 60 and children under 16 only. 

d Includes families with minor children only. 

e Insufficient data. 
92 

Table S-44. Selected employment and benefita statistics for 1998 and 2001 

Percentage 

1998 2001 change 

1. Membership (thousands of employees) 

Average employment for the year 256 238 -7.0% 

Active census, Dec. 31 289 263 -9.0 

Retired, Dec. 31 324 300 -7.4 

Nonretired employees with vested rightsb

, total 260 271 +4.2 

Active census, Dec. 31 194 205 +5.7 

Inactive census, Dec. 31 66 66 +0.0 

Employees in active census with 

30 or more years of service 36 47 +30.6 

2. Number of beneficiaries (thousands), Dec. 31, totalc 719 651 -9.5 

Retired employees 324 300 -7.4 

Spouses 175 155 -11.4 

Survivors 228 203 -11.0 

3. Average monthly benefits paid in December 

Retired employees $1,304.08 $1,492.49 +14.4 

Spouses 507.88 565.65 +11.4 

Survivors 750.24 856.54 +14.2 

4. Amount of monthly benefit payments for the year (millions), total $8,158 $8,373 +2.6 

Retired employees and their spouses 6,110 6,310 +3.3 

Survivors 2,048 2,063 +0.7 

5. Miscellaneous information 

Tier 1 taxable payroll as a percentage of total payroll 93.6% 96.6% 

Benefit payments in year as a percentage of tier 1 taxable payroll 62.0% 63.3% 

Number of beneficiaries per 100 full-time employees 281 274 

Percentage distribution of amount of monthly benefit payments in year 

Retired employees 61.9% 63.0% 

Spouses 13.1 12.4 

Survivors 25.0 24.6 

a Includes tier 1, tier 2 and vested dual benefit payments. Excludes supplemental annuities. 

b Employees with at least 10 years of total service, or 5 years of service after 1995. 

c Individuals receiving more than one type of benefit (for example, an employee and a spouse benefit) are 

counted separately in each category but only once in total.