RAILROAD RETIREMENT BOARD

PERFORMANCE AND 

ACCOUNTABILITY REPORT

FISCAL YEAR 2019
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Railroad Retirement Board

Performance and Accountability Report

Fiscal Year 2019

TABLE OF CONTENTS

PAGE

Message from the Board Members...................................................................... 3

Management’s Discussion and Analysis............................................................. 7

Overview of the Railroad Retirement Board (RRB)..................................................... 7

Mission .................................................................................................................. 7

Major Program Areas............................................................................................. 7

Railroad Retirement Act .................................................................................... 8

Railroad Unemployment Insurance Act ............................................................. 9

Reporting Components .......................................................................................... 10

RRB Organizational Structure................................................................................ 10

Performance Goals, Objectives, and Results.............................................................. 13

Summary of Achievement by Strategic Goal............................................................... 13

Strategic Goals and Objectives................................................................................... 14

Analysis of Financial Statements and Stewardship Information .................................. 21

Comparison of Net Cost of Operations and Financing Sources.............................. 23

Railroad Retirement Investments at Treasury ........................................................ 27

National Railroad Retirement Investment Trust...................................................... 28

Social Insurance: Key Measures................................................................................ 29

Analysis of Systems, Controls and Legal Compliance ................................................ 31

Management Assurances ...................................................................................... 31

Management Control Review Program .................................................................. 33

Financial Statement Audit ...................................................................................... 33

Federal Information Security Modernization Act..................................................... 34

Financial Management Systems Strategy .............................................................. 35

Forward-Looking Information...................................................................................... 35

Information Technology Modernization .................................................................. 35

Human Capital Management.................................................................................. 36

Summary of Actuarial Forecast.............................................................................. 36

Limitations of the Financial Statements ...................................................................... 37

Performance Section ................................................................................................. 41

 Government Performance and Results Act Report .................................................... 41
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TABLE OF CONTENTS

PAGE

Financial Section.................................................................................................... 57

Consolidated Balance Sheet....................................................................................... 57

Consolidated Statement of Net Cost........................................................................... 58

Consolidated Statement of Changes in Net Position................................................... 59

Combined Statement of Budgetary Resources ........................................................... 61

Statement of Social Insurance.................................................................................... 62

Statement of Changes in Social Insurance Amounts .................................................. 63

Notes to the Financial Statements .............................................................................. 64

Required Supplementary Information ......................................................................... 92

Social Insurance ................................................................................................... 92

Program Financing........................................................................................... 92

 Benefits............................................................................................................ 92

Program Finances and Sustainability ............................................................... 93

Combining Statement of Budgetary Resources...................................................... 102

Auditor’s Report.......................................................................................................... 103

Other Information................................................................................................... 133

Inspector General’s Statement on Management and Performance Challenges .......... 133

Management’s Comments.......................................................................................... 147

Payment Integrity........................................................................................................ 153

Summaries of Financial Statement Audit and Management Assurances .................... 157

Civil Monetary Penalty Adjustment for Inflation........................................................... 157

Appendices............................................................................................................. 161

Glossary of Acronyms and Abbreviations ................................................................... 161

RRB Board Members, Inspector General, and Executive Committee ......................... 164

RRB’s fiscal year 2019 Performance and Accountability Report is available online at: RRB.gov
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MESSAGE FROM THE BOARD MEMBERS
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Message from the Board Members

This fiscal year 2019 Performance and Accountability Report highlights the goals and 

accomplishments of the Railroad Retirement Board (RRB) in achieving its mission of 

administering the retirement, disability, and survivor benefit programs provided under the 

Railroad Retirement Act (RRA), and the unemployment and sickness insurance benefit 

programs provided under the Railroad Unemployment Insurance Act (RUIA). This report 

describes our continuing efforts to provide timely and useful information to RRB managers, the 

Office of Management and Budget (OMB), Congress, and our constituents. We are proud of the 

agency’s dedicated employees whose achievements are reflected in this report.

Under provisions of the Budget Control Act of 2011 (BCA), across-the-board cuts in Federal 

spending took effect March 1, 2013. While railroad retirement, survivor and disability payments 

are not affected by this measure, unemployment and sickness insurance benefits payable 

October 1, 2018 through September 30, 2019, were reduced by 6.2 percent. The reduction was 

required by the sequestration order issued by the President in accordance with the BCA. For 

fiscal year 2020, a sequestration reduction of 5.9 percent was applied starting October 1, 2019.

We believe the performance and financial data presented in this report are complete and 

reliable in accordance with OMB guidance. The adequacy and effectiveness of our 

management controls and the compliance of our financial management systems with 

government-wide requirements are delineated in the Systems, Controls and Legal Compliance

part of the Management’s Discussion and Analysis section. That part also provides status of 

actions we are taking and progress we are making to correct internal control deficiencies 

identified by the Office of Inspector General (OIG). While we disagree that those deficiencies 

rise to the level of material weakness, we continue to strengthen internal controls and 

implement solutions that enhance our operational effectiveness and efficiency. 

We will continue to apply information technology and innovation to provide excellent customer 

service to the railroad employers, railroad employees, and the beneficiaries whom we serve. 

We are also committed to prudent stewardship over the agency trust.

Original signed by:

Erhard R. Chorlé, Chairman

John Bragg, Labor Member

Thomas Jayne, Management Member

November 15, 2019
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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Management’s Discussion and Analysis

Overview of the Railroad Retirement Board

Mission

The RRB is an independent agency in the executive branch of the Federal Government. The 

agency’s mission statement is as follows:

The RRB’s mission is to administer retirement/survivor and unemployment/sickness 

insurance benefit programs for railroad workers and their families under the Railroad 

Retirement Act and the Railroad Unemployment Insurance Act. These programs provide 

income protection during old age and in the event of disability, death or temporary 

unemployment and sickness. The RRB also administers aspects of the Medicare program 

and has administrative responsibilities under the Social Security Act and the Internal 

Revenue Code. In carrying out its mission, the RRB will pay benefits to the right people, in 

the right amounts, in a timely manner, and will take appropriate action to safeguard our 

customers’ trust funds. The RRB will treat every person who comes into contact with the 

agency with courtesy and concern, and respond to all inquiries promptly, accurately and 

clearly.

Major Program Areas

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

nation’s railroad workers. Private industrial pension plans had been pioneered in the railroad 

industry; the first industrial pension plan in North America was established on a railroad in 1874. 

By the 1930s, pension plans were far more developed in the rail industry than in most other 

businesses or industries, but these plans had serious defects which were magnified by the Great 

Depression.

The economic conditions of the 1930s demonstrated the need for retirement plans on a national 

basis because few of the nation’s elderly were covered under any type of retirement program. 

While the social security system was in the planning stage, railroad workers sought a separate 

railroad retirement system which would continue and broaden the existing railroad programs 

under a uniform national plan. The proposed social security system was not scheduled to begin 

monthly benefit payments for several years and would not give credit for service performed prior 

to 1937, while conditions in the railroad industry called for immediate benefit payments based on 

prior service.

Legislation was enacted in 1934, 1935, and 1937 to establish a railroad retirement system 

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

particular circumstances of the rail industry, was not without precedent. Numerous laws 

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

Act of 1887. Since passage of the Railroad Retirement Acts of the 1930s, numerous other 

railroad laws have been enacted.

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

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

The financing of the two systems is linked through a financial interchange under which, in effect,

the portion of railroad retirement annuities that is equivalent to social security benefits is 

coordinated with the social security system. The purpose of this financial coordination is to place 
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the social security trust funds in the same position they would be in if railroad service were 

covered by the social security program instead of the railroad retirement program.

Legislation enacted in 1974 restructured railroad retirement benefits into two tiers, so as to 

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

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

tier is based on railroad service only and is comparable to the private pensions paid over and 

above social security benefits in other industries.

The railroad unemployment insurance system was also established in the 1930s. The Great 

Depression demonstrated the need for unemployment compensation programs, and State 

unemployment programs had been established under the Social Security Act in 1935. While the 

State unemployment programs generally covered railroad workers, railroad operations which 

crossed State lines caused special problems. Unemployed railroad workers were denied 

compensation by one State because their employers had paid unemployment taxes in another 

State. Although there were cases where employees appeared to be covered in more than one 

State, they often did not qualify in any.

A Federal study commission, which reported on the nationwide State plans for unemployment 

insurance, recommended that railroad workers be covered by a separate plan because of the 

complications their coverage had caused the State plans. Congress subsequently enacted the 

RUIA in June 1938. The RUIA established a system of benefits for unemployed railroad workers, 

financed entirely by railroad employers and administered by the RRB. Sickness insurance 

benefits were added in 1946.

Railroad Retirement Act

Under the RRA, retirement and disability annuities are paid to railroad workers with at least 10 

years of service. Such annuities are also payable to workers with 5 years of service if performed 

after 1995.

Full age annuities are payable at age 60 to workers with 30 years of service. For those with less 

than 30 years of service, reduced annuities are payable at age 62 and unreduced annuities are 

payable at full retirement age, which is gradually rising from 65 to 67, depending on the year of 

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

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

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

Qualified railroad retirement beneficiaries are covered by Medicare at age 65, or earlier if 

disabled, in the same way as social security beneficiaries.

Jurisdiction over the payment of retirement and survivor benefits is shared by the RRB and the 

Social Security Administration (SSA). The RRB has jurisdiction over the payment of retirement 

benefits if the employee had at least 10 years of railroad service, or 5 years if performed after 

1995. For survivor benefits, there is an additional requirement that the employee’s last regular 

employment before retirement or death was in the railroad industry. If a railroad employee or his 

or her survivors do not qualify for railroad retirement benefits, the RRB transfers the employee’s 

railroad retirement credits to SSA, where they are treated as social security credits.

Payroll taxes paid by railroad employers and their employees are the primary source of funding 

for the railroad retirement and survivor benefit programs. By law, railroad retirement taxes are 

coordinated with social security taxes. Employees and employers pay tier I taxes at the same 

rate as social security taxes. In addition, both employees and employers pay tier II taxes which 

are used to finance railroad retirement benefit payments over and above social security levels. 
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Tier II taxes are based on the ratio of certain asset balances to the sum of benefit payments and 

administrative expenses. Historically, railroad retirement taxes have been considerably higher 

than social security taxes.

Revenues in excess of benefit payments are invested to provide additional trust fund income, and 

legislation enacted in 2001 allows for Railroad Retirement (RR) Account funds transferred to the 

National Railroad Retirement Investment Trust (NRRIT) to be invested in non-governmental 

assets, as well as in governmental securities. Funds transferred from the Social Security 

Equivalent Benefit (SSEB) Account to the NRRIT are allowed to be invested only in governmental 

securities. The legislation also established the NRRIT, whose Board of seven trustees oversees 

these investments. The Board of Trustees is comprised of three members selected by rail labor, 

three members selected by rail management, and one independent member selected by a 

majority of the other six members.

Another major source of income to the railroad retirement and survivor benefit program consists 

of transfers from the social security trust funds under a financial interchange between the two 

systems. The financial interchange is intended to place the social security trust funds in the same 

position in which they would have been had railroad employment been covered by the Social 

Security Act and Federal Insurance Contributions Act. In fiscal year 2019, the RRB trust funds 

realized a net of $4.7 billion, representing 40 percent of RRB financing sources (excluding 

transfers to/from the NRRIT and the change in NRRIT net assets), through the financial 

interchange.

Other sources of income currently include revenue resulting from Federal income taxes on 

railroad retirement benefits (tier I, tier II, and vested dual benefits), and appropriations from 

general Department of the Treasury (Treasury) revenues provided after 1974 as part of a phaseout of certain vested dual benefits.

Railroad Unemployment Insurance Act

Under the RUIA, unemployment insurance benefits are paid to qualified railroad workers who are 

unemployed but ready, willing, and able to work, and sickness insurance benefits are paid to 

railroad workers who are unable to work because of illness, injury, or pregnancy. The RRB also 

operates a placement service to assist unemployed railroad workers in securing employment.

A new unemployment and sickness insurance benefit year begins every July 1, with eligibility 

generally based on railroad service and earnings in the preceding calendar year. Up to 26 weeks 

of normal unemployment and 26 weeks of sickness insurance benefits are payable to an 

individual in a benefit year. Additional extended benefits are payable for up to 13 weeks to 

persons with 10 or more years of service.

The railroad unemployment and sickness insurance benefit program is financed by taxes on 

railroad employers under an experience rating system initiated in 1991. Each employer’s payroll 

tax rate is determined annually by the RRB on the basis of benefit payments to the railroad’s 

employees.
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Reporting Components

The RRB, as an independent agency in the executive branch of the U.S. Government, is 

responsible for administering the RRA and the RUIA. The financial statements include the 

accounts of all funds under the control of the RRB and the OIG. These funds consist of three 

administrative funds, four trust funds, three general funds, one American Recovery and 

Reinvestment Act of 2009 fund, and two Worker, Homeownership, and Business Assistance Act 

of 2009 funds.

RRB Organizational Structure

The RRB is headed by three Board Members appointed by the President of the United States, 

with the advice and consent of the Senate. One member is appointed upon recommendation of 

railroad employers; one is appointed upon recommendation of railroad labor organizations; and 

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

terms of office are 5 years and are scheduled to expire in different years. The Chairman of the 

Board is Erhard R. Chorlé, the Labor Member is John Bragg, and the Management Member is 

Thomas Jayne. The President also appoints an Inspector General for the RRB; the Inspector 

General is Martin J. Dickman.

The primary function of the RRB is the determination and payment of benefits under the railroad 

retirement and survivor and the unemployment and sickness insurance programs. To this end, 

the RRB employs field representatives to assist railroad personnel and their families in filing 

claims for benefits, examiners to adjudicate the claims, and information technology staff to 

ensure equipment and programs maintain earnings records, calculate benefits, and process 

payments. The RRB also employs actuaries to predict the income and outlays of the agency’s 

trust funds and accounts, statisticians and economists to provide vital data, and attorneys to 

interpret legislation and represent the RRB in litigation. Internal administration requires a 

procurement staff, a budget and accounting staff, quality assurance staff, and personnel 

specialists. The Inspector General employs auditors and investigators to detect waste, fraud, or 

abuse in the benefit programs.

The RRB’s headquarters is located at 844 North Rush Street in Chicago, Illinois. The RRB field 

structure is comprised of 53 offices located throughout the United States as shown on page 12.
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Performance Goals, Objectives, and Results 

During fiscal year 2019 (ended September 30, 2019), benefit payments totaled $13.3 billion, net 

of recoveries and offsetting collections. Of this amount, benefit payments for the railroad 

retirement and survivor benefits program totaled $13.1 billion and totaled $93.2 million for the 

railroad unemployment and sickness insurance benefits program, net of recoveries and offsetting 

collections. During fiscal year 2019, the RRB also paid benefits on behalf of SSA (for which the 

RRB is reimbursed) amounting to $1.9 billion to about 125,500 beneficiaries.

In fiscal year 2019, the RRB continued to focus its efforts on providing excellent customer 

service to current and former railroad workers and their family members. Our regular workloads 

in fiscal year 2019 included:

• Providing payments to about 535,000 retirement and survivor beneficiaries.

• Providing payments to about 9,300 unemployment insurance beneficiaries.

• Providing payments to about 14,700 sickness insurance beneficiaries.

• Processing 19,223 retirement, survivor, and disability applications for benefits (through 

April 30, 2019).

• Processing 75,409 applications and claims for unemployment and sickness insurance 

benefits (through April 30, 2019).

• Issuing 262,750 certificates of employee railroad service and compensation (mailed on 

June 15, 2019).

During fiscal year 2019, the RRB used 28 specific program performance objectives, including 

several with multiple indicators, to manage and track progress in meeting its long-term strategic 

plan goals. These objectives were accomplished with a direct appropriation of $123,500,000, 

where $113,500,000 was for ongoing administration of the RRB and $10,000,000 was for the 

agency’s IT modernization program. (A breakdown of administrative expenses by strategic goal 

is not available at the time of this report.) Agency performance with respect to the key 

performance indicators is covered in the following section. For most performance measures, 

actual full-year performance results for fiscal year 2019 were not available at the time this report 

was published. For those objectives, we reported part-year performance information for fiscal 

year 2019, if available. We also reported actual results from prior years, as applicable.

Summary of Achievement by Strategic Goal

Strategic Goal I: Modernize Information Technology (IT) Operations to sustain mission 

essential services. For fiscal year 2019, we plan to transform systems and deliver online 

retirement forms.

Strategic Goal II: Provide Excellent Customer Service. For fiscal year 2019, we expect to

meet or exceed most of our timeliness goals and increase Internet services available to

employers.

Strategic Goal III: Serve as Responsible Stewards for Our Customers’ Trust Funds and

Agency Resources. The RRB is committed to fulfilling its fiduciary responsibilities to the rail

community. For fiscal year 2019, we expect that benefit payment accuracy rates will exceed 

99 percent.
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Strategic Goals and Objectives

The RRB has a long and distinguished tradition of excellence in serving our customers, and we 

will strive to continue that tradition in the coming years. We have achieved high levels of 

accuracy and timeliness in processing retirement/survivor and unemployment/sickness insurance 

benefits, while embracing new technology, especially in areas where it can improve customer 

service and efficiency. We have also achieved very high scores for customer service in 

independent assessments of our operations related to initial railroad retirement applications, 

unemployment and sickness insurance benefits, survivor applications and disability applications.

The three overriding strategic initiatives for the upcoming planning period relate to modernizing 

Information Technology (IT) operations, customer service and trust fund stewardship. The 

IT operations initiative involves transforming current legacy systems through automation and 

building modern digital services while safeguarding information. The service initiative involves 

our ability to continue to meet our customers’ expectations for personal, high quality service, and 

our ability to position the agency to meet rising customer expectations for new and improved 

services in the future. The stewardship initiative has multiple aspects, some of which arise from 

legislative changes and others which relate to our ongoing ability to meet our program integrity 

responsibilities and to maintain effective, efficient and secure agency operations. To effectively 

address these initiatives, we have established three strategic goals on which we will focus our 

efforts.

Modernize Information Technology (IT) Operations to sustain mission essential services

Significant investment is essential to update the agency’s outdated IT systems, reduce 

cybersecurity risk, and sustain mission operations. Our Annual Performance Plan for Fiscal Year 

2019 reflects one strategic objective that focuses on the specifics of achieving this goal.

• Legacy systems modernization.

Provide excellent customer service

We aim to satisfy our customers’ expectations for quality service both in terms of service delivery 

options and levels and manner of performance. Our Annual Performance Plan for Fiscal Year 

2019 reflects two strategic objectives that focus on the specifics of achieving this goal.

• Pay benefits timely.

• Provide a range of choices in service delivery methods.

Serve as responsible stewards for our customers’ trust funds and agency resources

The RRB is committed to fulfilling its fiduciary responsibilities to the rail community. Our 

performance budget reflects four objectives that direct our focus on this goal.

• Ensure that trust fund assets are protected, collected, recorded, and 

reported appropriately.

• Ensure the accuracy and integrity of benefit programs.

• Ensure effectiveness, efficiency, and security of operations.

• Effectively carry out responsibilities with respect to the NRRIT.
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The RRB of the future will continue to be customer-focused, quality-driven, and fiscally 

responsible. Our overall mission and responsibilities as a Federal agency will remain 

unchanged, even though our organization may be smaller in terms of staff and budget resources. 

We will use creativity, automation and innovation to continue to deliver best-in-class service 

while ensuring cost-effective and efficient operations.

Our customers will have a broad range of choices for conducting their business with the agency, 

including more Internet options that will allow for private, secure transactions from their homes at 

any time of the day. Railroad employers will be able to conduct most, if not all, of their routine 

transactions with the RRB through secure and efficient electronic systems. Direct customer 

feedback will shape our planning efforts and enhance our responsiveness. Our customer service 

levels will serve as a standard of excellence for the rest of the Federal community.

The agency’s internal culture will reflect a strong commitment to its employees, and a drive to 

ensure continual learning at all levels. Given the large percentage of employees who will be 

eligible for retirement in the near future, senior employees will engage in knowledge transfer and 

sharing as a top priority.

Our ultimate measures of success will be the sustained satisfaction level of our customers and 

our ability to respond to their needs and concerns.

Validation of Performance Information. The RRB has implemented comprehensive 

administrative procedures to ensure that reported performance information is accurate and valid. 

Administrative Circular RRB-2 establishes standards and assigns responsibility for collecting, 

documenting, validating, certifying, reporting and retaining information related to the actual

performance data reported for objectives in the RRB’s Annual Performance Budget and 

Government Performance and Results Act Report.

The procedures require that reporting managers develop and maintain written procedures for:

• Collecting data related to each objective,

• Testing and validating performance data to ensure accuracy,

• Retaining source documents for future reference, and

• Attesting to the accuracy of performance information reported.

Members of the RRB’s Executive Committee review performance issues related to their areas of 

responsibility and assign follow-up action, as necessary. The Executive Committee also reviews 

and approves performance reports before releasing the drafts for approval by the Board 

Members.

______________ ______________ ______________ ______________

The following begins a discussion of our key performance indicators.
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Discussion of Key Performance Indicators

The RRB has identified the following 10 key performance indicators, which represent our most 

important responsibilities.

Key performance indicator 1: Timeliness of initial railroad retirement annuity payments, 

when advanced filed (Objective II-A-1)

FY 2019 goal: 94.0%

Our FY 2019 performance: 95.1%

through the 2nd quarter

We are achieving our goal. Automation plays a 

key role in assuring benefit payment timeliness 

for this performance indicator. 

FY 2018 goal: 94.0%

Our FY 2018 performance: 94.9%

Data definition: This goal is included in the 

RRB Customer Service Plan.

Key performance indicator 2: Timeliness of initial railroad retirement annuity payments, 

if not advanced filed (Objective II-A-2)

FY 2019 goal: 94.0%

Our FY 2019 performance: 95.3%

through the 2nd quarter

We are achieving our goal. Automation plays a 

key role in assuring benefit payment timeliness 

for this performance indicator. 

FY 2018 goal: 94.0%

Our FY 2018 performance: 96.5%

Data definition: This goal is included in the RRB 

Customer Service Plan. 

FY16 FY17 FY18 FY19

Goal 95.0% 95.0% 94.0% 94.0%

Actual 94.0% 95.0% 94.9% 95.1%

85%

90%

95%

100%

The RRB makes a decision to pay or 

deny a railroad retirement employee or 

spouse initial annuity application within 

35 days of the annuity beginning date, if 

advanced filed.

(FY 19 actual is through 3-31-19)

FY16 FY17 FY18 FY19

Goal 95.0% 95.0% 94.0% 94.0%

Actual 96.3% 95.5% 96.5% 95.3%

85%

90%

95%

100%

The RRB makes a decision to pay or 

deny a railroad retirement employee or 

spouse initial annuity application within 

60 days of the date the application was 

filed.

(FY 19 actual is through 3-31-19)
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Key performance indicator 3: Timeliness of new survivor benefit payments 

(Objective II-A-3)

FY 2019 goal: 94.0%

Our FY 2019 performance: 95.7%

through the 2nd quarter

We are achieving our goal. Automation plays 

a key role in assuring benefit payment 

timeliness for this performance indicator. 

FY 2018 goal: 94.0%

Our FY 2018 performance: 96.2%

Data definition: This goal is included in the 

RRB Customer Service Plan.

Key performance indicator 4: Timeliness of spouse to survivor benefit payment 

conversions (Objective II-A-4)

FY 2019 goal: 94.0%

Our FY 2019 performance: 96.1%

through the 2nd quarter

We are achieving our goal. Automation 

plays a key role in assuring benefit payment 

timeliness for this performance indicator.

FY 2018 goal: 93.5%

Our FY 2018 performance: 96.5%

Data definition: This goal is included in the 

RRB Customer Service Plan.

FY16 FY17 FY18 FY19

Goal 94.0% 94.0% 94.0% 94.0%

Actual 96.0% 96.9% 96.2% 95.7%

85%

90%

95%

100%

RRB makes a decision to pay, deny or 

transfer to SSA an initial annuity 

application for a retirement survivor not 

already receiving a benefit within 60 days 

of the annuity beginning date or date filed 

(whichever is later).

(FY 19 actual is through 3-31-19)

FY16 FY17 FY18 FY19

Goal 94.5% 94.5% 93.5% 94.0%

Actual 95.1% 96.1% 96.5% 96.1%

85%

90%

95%

100%

RRB makes a decision to pay, deny or 

transfer to SSA an initial annuity 

application for a survivor already receiving 

benefits as a spouse within 30 days of the 

RRB's receipt of first notice of the 

employee's death. 

(FY 19 actual is through 3-31-19)
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Key performance indicator 5: Timeliness of unemployment or sickness insurance 

payments (Objective II-A-6)

FY 2019 goal: 98.0%

Our FY 2019 performance: 99.9%

through the 2nd quarter

We are achieving our goal. Automation plays 

a key role in assuring benefit payment 

timeliness for this performance indicator.

FY 2018 goal: 98.0%

Our FY 2018 performance: 99.9%

Data definition: This goal is included in the 

RRB Customer Service Plan. 

Key performance indicator 6: Timeliness of disability decisions (Objective II-A-7)

FY 2019 goal: 70.0%

Our FY 2019 performance: 11.0%

through the 2nd quarter

We are not achieving our goal. 

FY 2018 goal: 70.0%

Our FY 2018 performance: 11.3%

Initial disability decision timeliness performance 

was below the goal of 70% within 100 days for 

multiple reasons, including a continued effort in 

the Disability Benefits Division (DBD) to make 

decisions on cases that were greater than 2 

years old. At the start of the fiscal year, cases 

with filing dates 2015 and earlier were 3.4% of 

the total workload balance. At the end of the 

fiscal year, this balance was significantly 

reduced to approximately 14% of the pending 

work, a 96% reduction. During FY 2018, DBD reduced the number of cases with filing dates 

before 2017. At the start of FY 2018, there were over 2,000 cases pending including 33% of 

cases with filing dates prior to 2017. At the end of FY 2018, the pending balance increased to 

over 2,100 but less than 6% of these cases had filing dates prior to 2017. 

FY16 FY17 FY18 FY19

Goal 99.4% 99.5% 98.0% 98.0%

Actual 99.9% 99.9% 99.9% 99.9%

85.0%

90.0%

95.0%

100.0%

RRB certifies a payment or releases a 

letter of denial of UI or SI benefits 

within 10 days of the date the RRB 

receives the claim. 

(FY 19 actual is through 3-31-19)

FY16 FY17 FY18 FY19

Goal 70.0% 70.0% 70.0% 70.0%

Actual 17.4% 14.7% 11.3% 11.0%

5%

30%

55%

80%

The RRB makes a decision to pay or deny 

a benefit for a disabled applicant or family 

member within 100 days of the date the 

application is filed. 

(FY 19 actual is through 3-31-19)
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In an effort to reduce the number of pending cases and improve timeliness, DBD hired additional 

initial claims examiners. The initial training phase took approximately 8 months. The new hires 

began production in the last quarter of FY 2018. During the last month of training, the new 

examiners production accounted for 20% of DBD’s total completed cases. As their production 

continues to increase, the benefits to timeliness will be reflected in the Division’s overall 

performance.

Data Definition: This goal is included in the RRB Customer Service Plan. 

Key performance indicator 7: Initial recurring retirement payment accuracy 

(Objective III-B-1a)

Our overall strategic goal is to achieve a railroad retirement benefit payment recurring accuracy 

rate of at least 99 percent on our initial processing of applications for retirement (employee, 

spouse and widow) benefits.

FY 2019 goal: 99.60%

Our FY 2019 performance: 99.99%

FY 2018 goal: 99.50%

Our FY 2018 performance: 99.87%

We achieved our goal.

Automation plays a key role in assuring initial 

benefit payment accuracy by reducing the number 

of erroneous payments. Automation will become 

more critical in this area as experienced personnel 

retire in the coming years.

Data definition: This is the percentage of the 

dollar value of initial recurring retirement benefit 

payments paid correctly as a result of adjudication 

actions performed, based on a review of a sample 

of cases.

FY16 FY17 FY18 FY19

Goal 99.60% 99.60% 99.50% 99.60%

Actual 99.69% 98.89% 99.87% 99.99%

98%

99%

100%

Initial Retirement Payment 

Accuracy

(FY 19 Actual is through 3-31-19)
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Key performance indicator 8: Unemployment insurance payment accuracy 

(Objective III-B-2a)

Our overall strategic goal is to achieve a railroad 

unemployment insurance benefit payment accuracy 

rate of at least 99 percent.

FY 2019 goal: 97.00%

Our FY 2019 performance: 96.09%

through the 2nd quarter

We are not achieving our goal; however, we 

expect to meet the goal by the end of fiscal year 

2019. Automation plays a key role in assuring 

benefit payment accuracy by reducing the number 

of erroneous payments. 

FY 2018 goal: 97.00%

Our FY 2018 performance: 96.09%

Data definition: This is the percentage of the dollar value of unemployment insurance benefit 

payments paid correctly as a result of adjudication actions performed, based on a review of a 

sample of cases.

Key performance indicator 9: Sickness insurance payment accuracy (Objective III-B-2b)

Our overall strategic goal is to achieve a railroad 

sickness insurance benefit payment accuracy rate of 

at least 99 percent. 

FY 2019 goal: 97.50%

Our FY 2019 performance: 96.68%

through the 2nd quarter

We are not achieving our goal; however, we 

expect to meet the goal by the end of fiscal year 

2019. Automation plays a key role in assuring benefit 

payment accuracy by reducing the number of 

erroneous payments. 

FY 2018 goal: 99.50%

Our FY 2018 performance: 100.00%

Data definition: This is the percentage of the dollar value of sickness insurance benefit 

payments paid correctly as a result of adjudication actions performed, based on a review of a 

sample of cases.

FY16 FY17 FY18 FY19

Goal 99.50% 99.60% 97.00% 97.00%

Actual 99.36% 97.24% 96.09% 96.09%

94%

96%

98%

100%

Unemployment Insurance Payment 

Accuracy

(FY 19 actual is through 3-31-19)

FY16 FY17 FY18 FY19

Goal 99.40% 99.50% 99.50% 97.50%

Actual 99.94% 99.08% 100.00% 96.68%

94%

96%

98%

100%

Sickness Insurance Payment 

Accuracy

(FY 19 actual is through 3-31-19)
- 21 -

Key performance indicator 10: Return on investment in program integrity activities 

(Objective III-B-5)

FY 2019 goal: $ 3.85: $1

Our FY 2019 performance: Not Available

FY 2018 goal: $3.85: $1

Our FY 2018 performance: $3.44: $1

We did not achieve our goal. Our fiscal year 

2018 goal was to achieve a return of $3.85 

for each dollar spent on program integrity 

activities. We achieved a rate of return of 

$3.44 for each dollar spent. 

As part of our fiduciary responsibilities to the rail 

community, we must ensure that the correct benefit amounts are being paid to the right people. 

We match our benefit payments against SSA’s earnings and benefits database, the Centers for 

Medicare & Medicaid Services’ (CMS) utilization and death records, the Office of Personnel 

Management’s benefit records, and State wage reports, usually via data exchange files, and 

administer other benefit monitoring programs to identify and prevent erroneous payments. We 

also refer some cases to the OIG for investigation. After investigation, the OIG may pursue more 

aggressive collection methods, which include civil and criminal prosecution.

Data definition: This is the ratio of the sum of the dollar recoveries and savings, to the labor 

dollars spent.

Analysis of Financial Statements and Stewardship Information 

Amounts in the RR Account not needed to pay current benefits and administrative expenses are 

transferred to the NRRIT whose Board of seven trustees is empowered to invest NRRIT assets 

in non-governmental assets, such as equities and debt, as well as in governmental securities. 

Amounts in the SSEB Account not needed to pay current benefits and administrative expenses 

are transferred to either the RR Account or the NRRIT.

Shown on the following page are snapshots of the net position, financing sources, and benefit 

payments (before elimination of inter-fund transactions) for the RRB accounts. All dollar 

amounts are in millions.

FY16 FY17 FY18 FY19

Goal $4.50 $3.85 $3.85 $3.85

Actual $4.18 $3.70 $3.44 $0.00

$0.00

$2.00

$4.00

$6.00

Achieve a return of at least $3.60 for each 

dollar spent on program integrity 

activities.
- 22 -

Net Position, Financing Sources, and Benefit Payments

(In millions)

2019 2018

NET POSITION AT SEPTEMBER 30

Social Security Equivalent Benefit Account $772.4 $713.0

Railroad Retirement Account 1/ 25,481.1 26,612.8

Railroad Retirement Administrative Fund 46.5 39.1

Railroad Unemployment Insurance Trust Fund -

Benefit Payments 127.4 97.4

Administrative Expenses 9.2 9.1

Limitation on the Office of Inspector General 5.9 3.8

Dual Benefits Payments Account 7.6 7.7

Federal Payments to the Railroad Retirement Accounts 0.8 0.8

American Recovery and Reinvestment Act of 2009

Railroad Unemployment Insurance Extended Benefit Payments – Recovery Act (no year dollars) 9.7 9.5

Worker, Homeownership, and Business Assistance Act of 2009

Railroad Unemployment Insurance Extended Benefits (no year dollars) 134.2 133.0

Administrative Expenses, Railroad Unemployment Insurance Extended Benefit Payments -

Total $26,594.8 $27,626.2

FINANCING SOURCES FOR FISCAL YEAR

Social Security Equivalent Benefit Account $7,612.4 $7,462.4

Railroad Retirement Account 2/ 4,459.7 5,571.5

Railroad Retirement Administrative Trust Fund 146.1 130.2

Railroad Unemployment Insurance Trust Fund -

Benefit Payments 120.0 117.4

Administrative Expenses 0.1 (2.6)

Limitation on the Office of Inspector General 11.2 11.4

Dual Benefits Payments Account 17.3 20.4

Federal Payments to the Railroad Retirement Accounts 3/ -

American Recovery and Reinvestment Act of 2009

Railroad Unemployment Insurance Extended Benefit Payments – Recovery Act (no year dollars) -

Worker, Homeownership, and Business Assistance Act of 2009

Railroad Unemployment Insurance Extended Benefits (no year dollars) 0.3 (0.1)

Administrative Expenses, Railroad Unemployment Insurance Extended Benefit Payments -

Total $12,367.1 $13,310.6

BENEFIT PAYMENTS FOR FISCAL YEAR 4/

Social Security Equivalent Benefit Account $7,553.0 $7,339.3

Railroad Retirement Account 5,594.8 5,756.3

Railroad Unemployment Insurance Trust Fund -

Unemployment Insurance 40.3 43.5

Sickness Insurance 52.9 56.7

Dual Benefits Payments Account 17.3 20.4

American Recovery and Reinvestment Act of 2009

Railroad Unemployment Insurance Extended Benefit Payments – Recovery Act (no year dollars) -

Worker, Homeownership, and Business Assistance Act of 2009

Railroad Unemployment Insurance Extended Benefits (no year dollars) 0.2 (0.1)

Administrative Expenses, Railroad Unemployment Insurance Extended Benefit Payments

Total $13,258.5 $13,216.1

1/ NRRIT-held net assets are a financing source and are included in the Railroad Retirement Account above.

2/ Change in NRRIT-held net assets is included in the Railroad Retirement Account above.

3/ Includes funds subsequently transferred to other accounts. Such inter-fund transfers are eliminated in the

preparation of the consolidated statements.

4/ Net of recoveries and offsetting collections; excludes SSA benefit payments.
- 23 -

The RRB’s financial statements are comprised of: Balance Sheet and Statements of Net Cost, 

Changes in Net Position, Budgetary Resources, and Social Insurance, Changes in Social 

Insurance Amounts, and notes which are an integral part of the statements. We also present, as 

required supplementary information, a discussion of the actuarial outlook for the railroad 

retirement program, and the Disaggregate of Budgetary Resources.

Comparison of Net Cost of Operations and Financing Sources 

The net cost of operations for fiscal years 2019 and 2018 was $13,398.4 million and $13,051.1

million, respectively. The details of the net cost of operations by type, amount, increase or 

decrease, and percentage change from fiscal year 2018 to fiscal year 2019 are shown below. 

Additional information regarding the net cost of operations and financing sources for fiscal years 

2019 and 2018 is shown on the following pages.

NET COST OF OPERATIONS

(In millions)

FY 2019 FY 2018

Amount of

Increase

(Decrease)

Percent of

Increase

(Decrease)

Interest expense – Treasury borrowing $113.8 $106.7 $7.10 6.7%

Salaries and expenses 164.2 163.1 1.1 0.7%

Benefits expense 13,111.4 12,531.4 580.0 4.6%

Other expenses 40.1 292.6 (252.5) (86.3)%

Subtotal 13,429.5 13,093.8 335.7 2.6%

Less: Earned revenues 31.1 42.7 (11.6) (27.2)%

Net cost of operations $13,398.4 $13,051.1 $347.3 2.7%
- 24 -

Totals $13,429.5 million, excluding reimbursements, and earned revenues of $31.1 million.

Totals $13,093.8 million, excluding reimbursements and earned revenues of $42.7 million.

Interest Expense 

$113.8

0.8%

Salaries and 

Expenses 

$164.2

1.2%

Benefits Expense 

$13,111.4

97.7%

Other Expenses 

$40.1

0.3%

FY 2019

NET COST OF OPERATIONS

(In millions)

Interest Expense 

$106.7

0.8%

Salaries and 

Expenses 

$163.1

1.2%

Benefits Expense 

$12,531.4

95.7%

Other Expenses 

$292.6

2.2%

FY 2018

NET COST OF OPERATIONS

(In millions)
- 25 -

The following table shows financing sources (excluding changes in unexpended appropriations)

by type, amount, increase or decrease, and percentage change from fiscal year 2018 to fiscal

year 2019.

FINANCING SOURCES

(in millions)

FY 2019 FY 2018

Amount of 

Increase 

(Decrease)

Percent of

Increase

(Decrease)

Budgetary Financing Sources:

Appropriations used $753.5 $ 795.1 $(41.6) (5.2)%

Taxes and other non-exchange revenues:

Payroll taxes 6,219.5 6,324.1 (104.6) (1.7)%

Interest revenue and other income 45.3 38.5 6.8 17.7%

Carriers refunds – principal (130.1) (4.2) (125.9) 2,997.6%

Railroad Unemployment Insurance (RUI) Revenue 137.3 134.2 3.1 2.3%

Subtotal $7,025.5 $7,287.7 $(262.2) (3.6)%

Transfers in:

Financial Interchange, net 4,709.7 4,285.3 424.4 9.9%

NRRIT 1,794.0 1,809.0 (15.0) (0.8)%

Subtotal $6,503.7 $6,094.3 $409.4 6.7%

TOTAL BUDGETARY FINANCING SOURCES $13,529.2 $13,382.0 $147.2 1.1%

Other Financing Sources :

Imputed financing 8.4 7.2 1.2 16.7%

Change in NRRIT net assets (1,180.6) 101.9 (1,282.5) (1,258.6)%

Gain/(Loss) in Contingency 10.1 (180.5) 190.6 (105.6)%

TOTAL OTHER FINANCING SOURCES (1,162.1) (71.4) (1,090.7) (1,527.6)%

TOTAL FINANCING SOURCES $12,367.1 $13,310.6 $(943.5) (7.1)%

The most significant difference between the RRB’s financial statements for fiscal year 2018 and 

fiscal year 2019 was the change in NRRIT net assets. The decrease in NRRIT net assets of

about $1,180.6 million is due to market fluctuations during the past year. There is a section later 

in this publication that describes the NRRIT, and the NRRIT net assets balances for 2018 and 

2019 are shown in the RRB’s Financial Section of this publication.
- 26 -

Total Financing Sources $12,357.0 million, excluding $10.1 million gain contingency.

Total Financing Sources $13,491.1 million, excluding ($180.5) million loss contingency.

$6,503.7 

753.5

$6,272.0

$8.4 ($1,180.6)

(4,000)

(2,000)

0

2,000

4,000

6,000

8,000

Transfers

In

Appropriations

Used

Taxes and Other

Non-Exchange

Revenues

Imputed

Financing

Change in

NRRIT

Net Assets

FINANCING SOURCES (In Millions) 

FY 2019

$6,094.3

$795.1 

$6,492.6 

$7.2 $101.9 

(4,000)

(2,000)

0

2,000

4,000

6,000

8,000

Transfers

In

Appropriations

Used

Taxes and Other

Non-Exchange

Revenues

Imputed

Financing

Change in

NRRIT

Net Assets

FINANCING SOURCES (In Millions) 

FY 2018
- 27 -

Railroad Retirement Investments at Treasury

The book value of all railroad retirement investments, including accrued interest, increased to 

$1,792.5 million as of September 30, 2019, from $1,671.3 million on September 30, 2018

(excludes NRRIT net assets). The graph below reflects the book value of the railroad retirement 

investments from September 30, 2015, through September 30, 2019. 

The following chart shows the portfolio of the railroad retirement investments as of 

September 30, 2019. 

$1,757.0 

$1,378.0 $1,312.8 

$1,671.3 

$1,792.5 

$1,200.0

$1,300.0

$1,400.0

$1,500.0

$1,600.0

$1,700.0

$1,800.0

2015 2016 2017 2018 2019

INVESTMENT BALANCES HELD AT TREASURY (AT BOOK VALUE)

AT SEPTEMBER 30, 2015 - 2019

(In millions, excluding NRRIT net assets)

RR Account

$698.7

39.0%

SSEB

Account

$1,093.8

61.0%

RAILROAD RETIREMENT INVESTMENTS HELD AT TREASURY

AS OF SEPTEMBER 30, 2019

AT BOOK VALUE

Total $1,792.5

(In millions, excluding NRRIT net assets)
- 28 -

Railroad Retirement Account: On September 30, 2019 and 2018, the book values of the RR 

Account investments, excluding NRRIT assets, including accrued interest, totaled $698,701,028

and $612,862,656, respectively. The balance on September 30, 2019, consisted of 

$697,794,000 in 3.000 percent par value specials (with market value equal to face value) 

maturing on October 1, 2019, and $907,028 in accrued interest. The balance on September 30, 

2018, consisted of $611,973,000 in 3.000 percent par value specials (with market value equal to 

face value) maturing on October 1, 2018, and $889,656 in accrued interest. Par value specials 

mature on the first working day of the month following the month of issue and have a yield based 

on the average yield of marketable Treasury notes with maturity dates at least 3 years away.

Social Security Equivalent Benefit Account: On September 30, 2019 and 2018, the book values 

of the SSEB Account investments, including accrued interest, totaled $1,093,823,176 and 

$1,058,394,566, respectively. The balance on September 30, 2019, consisted of 

$1,091,977,000 in 3.000 percent par value specials maturing on October 1, 2019, and 

$1,846,176 in accrued interest. The balance on September 30, 2018, consisted of 

$1,056,648,000 in 3.000 percent par value specials maturing on October 1, 2018, and 

$1,746,566 in accrued interest.

National Railroad Retirement Investment Trust

The NRRIT was established by the Railroad Retirement and Survivors’ Improvement Act of 2001 

(RRSIA). The sole purpose of the NRRIT is to manage and invest railroad retirement assets. 

The NRRIT is a tax-exempt entity, independent from the Federal Government and not subject to 

Title 31, United States Code (USC). The NRRIT is domiciled in and subject to the laws of the 

District of Columbia.

The NRRIT is comprised of a Board of seven trustees; three selected by railroad labor unions 

and three by railroad companies. The seventh trustee is an independent member selected by 

the other six. Members of the Board of Trustees are not considered officers or employees of the 

Government of the United States.

The RRSIA authorizes the NRRIT to invest railroad retirement assets in a diversified investment 

portfolio in the same manner as those of private sector retirement plans. Prior to the RRSIA, 

investment of railroad retirement assets was limited to U.S. Government securities.

The NRRIT and the RRB are separate entities. The RRB remains a Federal agency and 

continues to have full responsibility for administering the railroad retirement program, including 

eligibility determinations and the calculation of benefit payments. The NRRIT has no powers or 

authority over the administration of benefits under the railroad retirement program. Under the 

RRSIA, the NRRIT is required to act solely in the interest of the RRB, and through it, the 

participants and beneficiaries of the programs funded under the RRA. The RRSIA does not 

delegate any authority to the RRB with respect to day-to-day activities of the NRRIT, but the 

RRSIA provides that the RRB may bring a civil action to enjoin any act or practice of the NRRIT 

that violates the provisions of the RRSIA or to enforce any provision of the RRSIA.

Under the RRSIA, the financial statements of the NRRIT are required to be audited annually by 

an independent public accountant. In addition, the NRRIT must submit an annual management 

report to the Congress on its operations, including a Statement of Financial Position, a Statement 

of Operations, a Statement of Cash Flows, a Statement on Internal Accounting and 

Administrative Control Systems, the independent auditor’s report, and any other information 
- 29 -

necessary to inform the Congress about the operations and financial condition of the NRRIT. A

copy of the annual report must also be submitted to the President, the RRB, and the Director of 

OMB.

Social Insurance: Key Measures

Balance Sheet: The Balance Sheet displayed in the Financial Section presents our assets, 

liabilities, and net position. Total assets for fiscal year 2019 are $32.8 billion, a 2.2 percent 

decrease over last year. Of the total assets, $25.4 billion relates to funds held by the NRRIT.

The net asset value of funds held by the NRRIT decreased from fiscal year 2018 by 4.4 percent. 

Our investments totaled $1.8 billion and we invest those funds not needed to pay current 

expenses or benefits in interest bearing Treasury securities. A chart of investment balances held 

at Treasury can be found on page 27. Total liabilities for fiscal year 2019 are $6.2 billion. 

Liabilities increased by $300.3 million or 5.1 percent in fiscal year 2019. Also, benefits due

increased by $46.8 million. By statute, benefits due in September are not paid until October.

Statement of Net Cost: The Statement of Net Cost displayed in the Financial Section presents 

the annual cost of operating our two major programs: 1) railroad retirement and 2) railroad 

unemployment and sickness insurance. In fiscal year 2019, our net cost of operations was $13.4

billion, an increase over last year of $347.3 million, or 2.7 percent. A table for the net cost of 

operations for fiscal years 2019 and 2018 can be found on page 23.

Statement of Changes in Net Position: The Statement of Changes in Net Position displayed in 

the Financial Section reflects the changes that occurred within cumulative results of operations 

and unexpended appropriations. Total net position for 2019 is $26.6 billion. The statement 

shows a decrease in the net position of the agency of $1,031 million attributable to the change in 

cumulative results of operations. Total financing sources for 2019 are $12.4 billion. A table for 

financing sources for fiscal years 2019 and 2018 can be found on page 25.

Statement of Social Insurance: Federal accounting standards require the presentation of a 

Statement of Social Insurance (SOSI) as a basic financial statement. The SOSI presents the 

present values of estimated future revenue and expenditures of the railroad retirement program. 

The SOSI covers a period of 75 years in the future, and the information and disclosures 

presented are deemed essential to the fair presentation of this statement.

The open group as of the valuation date includes current participants who have attained 

retirement age under the railroad retirement program, current participants who have not yet 

attained retirement age, and those expected to become participants, or new entrants. The 

closed group as of the valuation date includes only current participants: (1) those who have not 

yet retired but are active workers paying payroll taxes, (2) those who have retired and are 

receiving benefits, and (3) those who are not currently working but have sufficient service to be 

eligible for future benefits. The closed group measure represents a reasonably good estimate of 

the extent to which benefits of the closed group are funded by members of the closed group. 

The open group measure is inherently more sensitive to assumptions about the distant future 

than the closed group measure. The open group measure gives a more complete assessment of 

the long-term financial stability of the program because it includes all those who are projected to 

be participants in the program over the given projection period, whether paying payroll taxes or 

receiving benefits. The net present value (NPV) of estimated future expenditures less estimated 

future revenue (net expenditures) for all participants over the next 75 years (open group) 

changed from $26.6 billion as of September 30, 2017 to $26.9 billion as of September 30, 2018, 

a net change in the open group measure of $0.3 billion, when rounded. Note that the Social 

Insurance information in the Table of Key Measures shows future expenditures less future 
- 30 -

revenue, while the Statement of Social Insurance shows future revenue less future expenditures. 

This change in presentation in the Table of Key Measures is done to eliminate any ambiguity in 

the interpretation of percentage changes in negative amounts.

As can be seen on the Statement of Changes in Social Insurance Amounts, a change in the 

open group measure of about $(0.2) billion is due to changes in economic data, assumptions and 

methods. Select assumptions for the Cost-of-Living Adjustment (COLA) were updated in 2019, 

as described in the footnotes to the Statement of Changes in Social Insurance Amounts. The 

change in the valuation period (from fiscal years 2018-2092 to fiscal years 2019-2093) resulted 

in a change of $0.5 billion in the open group measure. There were no changes in the 

demographic assumptions, but there were updates to demographic data. Changes in 

demographic data, assumptions and methods resulted in a minimal change. This year there 

were no changes in law or policy or methodology and programmatic data.

The financial statements are based on the selection of accounting policies and the application of 

significant accounting estimates, some of which require management to make significant 

assumptions. Further, the estimates are based on conditions that may change in the future. 

Actual results could differ materially from the estimated amounts. The financial statements 

include information to assist in understanding the effect of changes in assumptions to the related 

information.

TABLE OF KEY MEASURES

Dollars in Millions As reported in 

FY 2019

As reported 

in FY 2018

Increase / (Decrease)

$ %

COSTS

Total Financing Sources $12,367.1 $13,310.6 (943.5) (7.1)

Less: Net Cost $13,398.4 $13,051.1 347.3 2.7

Net Change of Cumulative Results of Operations $(1,031.3) $259.5 (1,290.8) (497.4)

NET POSITION

Assets $32,762.3 $33,493.4 (731.1) (2.2)

Liabilities $6,167.5 $5,867.2 300.3 5.1

Net Position (Assets minus Liabilities) $26,594.8 $27,626.2 (1,031.4) (3.7)

Dollars in Billions 10/1/2018 10/1/2017 Increase / (Decrease)

$ %

SOCIAL INSURANCE

Social Insurance Net Expenditures (Open Group)

1 $26.9 $26.6 0.3 1.2

1Source: Statement of Social Insurance (SOSI). The SOSI shows future revenue less future expenditures 

while the Key Measure above shows future expenditures less future revenue. This change in presentation is 

done to eliminate any ambiguity in the interpretation of percentage changes in negative amounts. Note that 

detail may not add to total due to rounding. Percentage Increase/(Decrease) is based on unrounded figures.
- 31 -

Analysis of Systems, Controls and Legal Compliance

Management Assurances

The Railroad Retirement Board states and assures that, to the best of our knowledge:

1. In accordance with OMB Circular No. A-123, Management’s Responsibility for Internal 

Control, Section VI, we are issuing a modified statement of assurance as the Office of 

Inspector General (OIG) has asserted material weaknesses exist as described in

paragraph 6. Except as indicated under paragraph 6, we provide reasonable assurance that 

this agency’s system of internal control is functioning and sufficient to ensure the: efficiency 

and effectiveness of programs and operations; reliability of financial and performance 

information; and compliance with laws and regulations. These controls satisfy the 

requirements of the Federal Managers’ Financial Integrity Act of 1982 (FMFIA) §2.

2. In accordance with the Federal Information Security Modernization Act of 2014 (FISMA), this 

agency has established an Information Security Program and practices, and has 

implemented controls to support the Cybersecurity framework; however, additional work is 

needed to achieve a rating of effective. This agency’s financial management system is 

managed under contract and is a comprehensive proprietary software application from CGI 

Federal – Momentum Enterprise Solution – that resides on a cloud hosting service and is 

discussed in detail in the Financial Management Systems Strategy Section. As a result, the 

agency’s FISMA overall maturity level does not directly impact its financial management 

system. 

3. The financial management systems of this agency maintain accountability for assets and 

provide reasonable assurance that obligations and costs are in compliance with applicable 

laws, and that performance data and proprietary and budgetary accounting transactions 

applicable to the agency are properly recorded and accounted for to permit the timely 

preparation of accounts and reliable performance information. The financial management 

systems at this agency satisfy the requirements of the FMFIA §4.

4. The financial management systems of this agency provide the agency with reliable, timely, 

complete, and consistent performance and other financial information to make decisions, and 

efficiently operate and evaluate programs and substantially satisfies the requirements of the 

Government Performance and Results Act of 1993 and OMB Circular No. A-11, Preparation, 

Submission and Execution of the Budget.

5. In accordance with Office of Management and Budget (OMB), M-18-16, Appendix A to OMB 

Circular No. A-123, Management of Reporting and Data Integrity Risk, we can provide 

reasonable assurance that the Data Quality Plan and its associated internal controls 

substantially support the reliability and validity of this agency’s account-level and award-level 

data reported for display on USASpending.gov in compliance with the Digital Accountability 

and Transparency Act of 2014 (DATA Act). 
- 32 -

6. For fiscal year 2019 the OIG has asserted that material weaknesses existed in (1) financial 

reporting and that the agency has (2) deficient internal controls at the agency-wide level. We 

disagree that the asserted deficiencies rise to the level of material weakness. These matters 

are discussed further in the Financial Statement Audit portion of this section.

Original signed by:

Erhard R. Chorlé, Chairman

John Bragg, Labor Member

Thomas Jayne, Management Member
- 33 -

Management Control Review Program 

Internal control is a process effected by an entity’s oversight body, management, and other 

personnel that provides reasonable assurance that the objectives of the entity will be met. We 

have a well-established agency-wide management control program as required by the Federal 

Managers’ Financial Integrity Act of 1982 (FMFIA). To achieve the goals of the FMFIA, RRB 

program and administrative activities incorporate internal controls that ensure 1) accountability 

for mission accomplishment, 2) continual monitoring and periodic control testing, 3) weaknesses 

are identified and corrected, and 4) appropriate levels of management are informed and 

positioned to act timely to prevent or correct problems and initiate improvements.

Our managers are responsible for ensuring effective internal control in their areas of operation. 

Those managers provide annual certifications that attest to the effectiveness of their controls and 

operations. Organizational heads also submit annual certifications to the Board providing 

reasonable assurance that 1) obligations and costs are in compliance with applicable law; 

2) funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or 

misappropriation; 3) revenues and expenditures applicable to agency operations are properly 

recorded and accounted for to permit the preparation of accounts and reliable financial and 

statistical reports and to maintain accountability over the assets; and 4) programs are efficiently 

and effectively carried out in accordance with applicable laws and management policies. Our 

Management Control Review Committee ensures our compliance with FMFIA and other related 

legislative and regulatory requirements.

Financial Statement Audit 

For fiscal year 2019, the Office of Inspector General (OIG) will again render a disclaimer of 

opinion on the RRB’s financial statements, as has been done since fiscal year 2013. As a basis 

for the disclaimer of opinion, the OIG contends that they require access to the National Railroad 

Retirement Investment Trust’s auditor in order to comply with American Institute of Certified Public 

Accountants (AICPA) group financial statement auditing standards.

The Agency will continue to cooperate with the OIG and provide all NRRIT related information 

within its possession which the OIG requests. The Agency does not have the authority to compel 

the NRRIT auditors to provide their work papers to, or speak with the OIG. Additionally, the 

NRRIT and the United States Government Accountability Office (GAO) entered into an MOU 

giving GAO access to information and including NRRIT’s financial information in the governmentwide financial statements.

1

 Therefore, the RRB disagrees with the OIG’s inclusion of this matter 

as both a basis for a disclaimer of opinion and as a component of the financial reporting material 

weakness.

The OIG asserts that two material weaknesses exist; the first, which was cited in prior years,

relates to financial reporting and has two components (1) ineffective internal controls and (2) lack 

of access to the NRRIT’s auditor. The OIG will again report a second material weakness related 

to deficient internal controls at the agency wide level. In FY 2018, the OIG asserted this material 

weakness existed because four of the five components of internal control were not assessed by 

the RRB in conformance with GAO and OMB requirements at the agency wide level. In FY 2019, 

the OIG expanded this material weakness to include information technology security and financial 

 1 MOU for the NRRIT Inclusion in Government-Wide financial Statements and GAO Access to Information, entered into 

by the National Railroad Retirement Investment Trust (NRRIT) and the U.S. Government Accountability Office (GAO), 

dated October 31, 2018 (on file at RRB).
- 34 -

reporting controls; compliance with indirect laws, regulations, contracts, treaties, and international 

agreements; compliance with railroad retirement act; and controls over railroad service 

compensation.2

We continue to make improvements to internal controls through policy, procedure revisions,

emphasis on employee development and organizational realignment. With respect to financial 

reporting, in addition to the NRRIT item discussed above, the OIG’s major concern has related to 

processing of journal or standard vouchers used to record transactions in the financial system. 

Along with significantly strengthening internal controls over voucher processing, we enhanced 

our quality assurance (QA) activities. For the third quarter of fiscal year 2019, the QA review, 

which covered 100% of journal vouchers and one-third of standard vouchers processed with 

individual amounts ranging from $5 million to $5 billion, found no procedural or substantive 

errors. As such, the error rate for third quarter of fiscal year 2019 was 0% compared to 10.7% 

for the same period in the prior year. These actions have improved the accuracy and 

completeness of recorded amounts and the overall effectiveness of financial reporting internal 

controls. While the OIG has identified some internal control errors, the OIG has not questioned 

the validity, accuracy, or completeness of the transactions reflected in the financial statements. 

Therefore, we disagree with the OIG characterization that this rises to the level of a material 

weakness.

Further, the agency has made great strides in implementing Enterprise Risk Management (ERM) 

at the RRB by leveraging the Management Control Review (MCR) infrastructure already in place. 

In fiscal year 2019, we incorporated critical changes to the MCR guide to reflect core ERM 

principles, conducted training to responsible officials and agency leadership, as well as updated 

the agency’s risk profile. We are committed to strong internal controls and will move forward with 

the next phase of ERM implementation.

Federal Information Security Modernization Act

The Federal Information Security Management Act of 2002 (FISMA), as amended by the Federal 

Information Security Modernization Act of 2014, requires agencies to ensure adequate security 

protections for Federal information systems and information. Preliminary audit results for the FY 

2019 FISMA audit indicate that Kearney & Company will assess our overall maturity at Level 2 –

Defined and will recognize significant improvements in the domains Configuration Management, 

Identity and Access Management, Security Training, and Incident Response that matured from 

Level 1 – Ad-Hoc to Level 2 – Defined. 

The preliminary FY 2019 audit results demonstrate progress in improving our information 

security program and practices across the agency as required by FISMA, OMB policy and 

guidelines, and National Institute of Science and Technology standards and guidelines, making 

incremental steps to reach the goal of Level 4 – Managed and Measurable. 

 2 Memorandum from Debra Stringfellow-Wheat, Deputy Assistant Inspector General for Audit, OIG to Shawna 

Weekley, Chief Financial Officer, RRB, October 22, 2019 (on file at the RRB).
- 35 -

Financial Management Systems Strategy

The RRB is committed to an integrated and automated financial management system that 

focuses on the agency’s mission and accountability. Our goals are to (1) achieve compliance 

with applicable laws, regulations, standards and requirements; (2) identify requirements for 

financial systems support; (3) improve and facilitate user access to financial information; 

(4) reduce redundant data entry, storage and processing; and (5) improve security, control and 

disaster recovery capability for information processed and stored on remote servers, mainframe, 

local area network and personal computer systems.

The RRB’s financial management system is a comprehensive proprietary software application 

from CGI Federal – Momentum Enterprise Solution – that resides on a cloud hosting service. 

The RRB’s system is referred to as the Financial Management Integrated System (FMIS). 

Momentum meets the core financial system requirements set by the Financial Systems 

Integration Office (FSIO) and is Federal Enterprise Architecture compliant. The hosting service 

is also provided by CGI Federal which is a commercial shared service provider for financial 

system services. Its cloud system has achieved compliance with the General Services

Administration’s (GSA) FedRAMP security requirements and is an authorized cloud service 

provider. As such, FMIS is separate and distinct from RRB’s internally managed Agency 

Enterprise General Information Systems (AEGIS), Benefit Payment Operations (BPO) and 

Financial Interchange (FI) system. 

FMIS supports the RRB’s budget formulation and execution, general ledger and trust fund 

accounting, procurement, contract management, fixed assets, accounts payable and both

administrative and program accounts receivable requirements. The RRB is currently upgrading 

FMIS from version 7.03 to version 7.6 with an anticipated go live date of March 2020. The project 

is a major component of the RRB’s systems modernization initiative. 

The RRB currently utilizes both commercial and Federal shared service providers for other EGovernment functions, including payroll, travel (CWTSatoTravel) and employee relocation 

services (Bureau of the Fiscal Service). In 2018, the human resources shared service was 

transferred by the RRB’s previous provider (GSA) to IBM. The payroll and travel functions are 

integrated with FMIS through electronic interfaces. 

Forward-Looking Information

Information Technology Modernization

Our mission essential programs are straining under the burden of being maintained by legacy 

computer systems built 40 years ago. To continue providing the excellent service to our 

beneficiaries, our IT modernization efforts are being leveraged to transform these legacy 

systems and build modern digital services while safeguarding information anywhere, anytime, in 

all ways throughout the information life cycle. As part of modernization, we have the opportunity 

to leverage more efficient and effective technologies that will positively impact our infrastructure 

and use of software applications and data to provide timely and accurate services to our 

customers. The modernization will require an updated architecture to directly address our 

service delivery from a managed cloud services perspective. With ever increasing IT security 

and privacy risks, we aim to make our systems and processes more robust with advanced 

privacy and security controls. This IT modernization is an iterative and incremental approach to 

confirm program integrity and meet operational performance standards, all while improving our 

customer’s experiences with our services. 
- 36 -

The RRB is currently contracting re-platform services and software to transition mission essential 

programs from the end-of-life mainframe hardware. In fiscal year 2020, we will complete the replatform of legacy mainframe applications currently developed using COBOL/CICS/DB2. 

Additionally, the contract is complete which assessed RRB’s core current businesses and 

developed a To-Be Blueprint for modernization. The contractor also delivered a proposed 

transition plan towards the To-Be State. In fiscal year 2020, we will tailor our next steps towards 

modernization based on these results, as well as agency priorities and available resources. In 

fiscal year 2021, we plan to continue IT Modernization efforts executing the tailored blueprint, 

outsourcing non-core services, and re-engineering the agency’s core benefit processing and 

payment systems.

Human Capital Management

The agency’s dedicated and experienced employees have been the foundation for our

outstanding track record in customer service and satisfaction. However, we recognize that there is 

an ongoing need and responsibility to effectively manage our human capital resources. This is 

particularly important given the number of RRB employees who have recently retired and those 

who are eligible for retirement over the next four years. We have been working closely with OPM, 

as well as OMB, to develop long-range plans that will position the agency for continued success in 

administering our programs. 

In particular, the RRB has been focusing on strategic management of human capital. The RRB 

has developed a comprehensive plan which outlines the agency’s human capital policies, 

programs and practices as they support this Strategic Plan. This includes a detailed analysis of 

the demographic features of the RRB workforce and the skills needed to fulfill our mission. It also 

establishes a framework of actions over the planning period that will assist the RRB in recruiting, 

retaining and developing talented employees. Key challenges facing the agency include an aging 

workforce, employee attrition and the increasing complexity of information technology needs.

Summary of Actuarial Forecast 

The Statement of Social Insurance (SOSI) presents an actuarial analysis of the financial position 

of the railroad retirement system as of October 1, 2019, under our intermediate employment 

assumption. The Required Supplementary Information presents sensitivity analyses showing the 

impact of changes in employment and investment return assumptions. Although under our 

intermediate assumption no cash flow problems arise during fiscal years 2019-2093, the 

sensitivity analyses show that, under the current financing structure, actual levels of railroad 

employment and investment return over the coming years will determine whether additional 

corrective action is necessary.

Section 7105 of the Technical and Miscellaneous Revenue Act of 1988 requires the RRB to 

submit an annual report to Congress on the financial status of the railroad unemployment 

insurance system. Projections were made for the various components of income and outgo 

under each of three employment assumptions for the 11 fiscal years 2019-2029. The results 

indicate that the Railroad Unemployment Insurance (RUI) Account will remain solvent during the 

11-year projection period.
- 37 -

Limitations of the Financial Statements

The limitations of the principal financial statements are as follows:

The principal financial statements are prepared to report the financial position and results of 

operations of the reporting entity, pursuant to the requirements of 31 U.S.C. § 3515(b). The 

statements are prepared from the books and records of the entity in accordance with Federal 

Generally Accepted Accounting Principles and the formats prescribed by OMB. Reports used to 

monitor and control budgetary resources are prepared from the same books and records. The 

financial statements should be read with the realization that they are for a component of the U.S. 

Government.
PAGE INTENTIONALLY LEFT BLANK
PERFORMANCE SECTION
PAGE INTENTIONALLY LEFT BLANK
- 41 -

PERFORMANCE SECTION

Government Performance and Results Act Report

The following performance report is based on the major goals and objectives for fiscal year 

2019 from the RRB’s Annual Performance Plan. The indicators we developed support our 

mission and communicate our intentions to meet challenges and seek opportunities for greater 

efficiency, effectiveness and economy. 

To achieve our performance goals, the RRB holds managers accountable for achieving program 

results and improving program effectiveness by focusing on results, service quality and 

customer satisfaction. In addition, the annual performance plan is used to help managers 

improve service delivery by requiring that they plan for meeting program objectives and by 

providing them with information about program results and service quality. To provide 

reasonable assurance that the reported performance information is relevant and reliable, 

performance goals are incorporated into performance standards for managers and supervisors 

and monitored on an agency-wide basis.

The following is a consolidated presentation of our actual performance for fiscal years 2016 

through March 31, 2019 (except as noted), followed by a discussion of our unmet performance 

goals and objectives for fiscal year 2018. At the time this report was prepared, actual fiscal year 

2019 information was unavailable. Unmet fiscal year 2019 goals and indicators will be 

presented in next year’s report. This performance report was prepared by RRB employees.

Railroad Retirement Board

Fiscal Year 2019 Performance Plan

2016 Actual

(At $111.225m)

2017 Actual

(At $113.5m)

2018 Actual

(At $123.5m2/

)

2019 Planned 1/

(At $123.5m 3/)

2019 Actual 1/

(At $123.5m 3/)

STRATEGIC GOAL I: Modernize Information Technology (IT) Operations to Sustain Mission Essential Services

Strategic Objective: Legacy Systems Modernization

Goal leader: Terryne F. Murphy, Chief Information Officer

I-A-1. Transform Tax and EDM systems 

(3 million lines of legacy COBOL) from 

the mainframe to distributed architecture.

New Goal 

for 

FY 2018

Tax: 100%

EDM: new 

strategic 

direction,

See I-A-4

I-A-2. Deliver online retirement forms (AA1, AA-3) as citizen-centric digital 

solutions.

New Goal 

for 

FY 2018

AA-1: 100%

AA-3: 80% AA-3: 100%

I-A-3. Transition Mission Essential 

Programs from the End-of-Life Mainframe 

hardware.

New Goal 

for 

FY 2019

50% 0%

I-A-4. Complete the assessment for reengineering Mission Essential Programs.

New Goal 

for 

FY 2019

50% 0%

I-A-5. Complete the migration of agency 

network and telecommunication services 

to new services in EIS.

New Goal 

for 

FY 2019

0% 0%
- 42 -

Railroad Retirement Board

Fiscal Year 2019 Performance Plan

2016 Actual

(At $111.225m)

2017 Actual

(At $113.5m)

2018 Actual

(At $123.5m2/)

2019 Planned 1/

(At $123.5m 3/)

2019 Actual 1/

(At $123.5m 3/)

STRATEGIC GOAL II: Provide Excellent Customer Service

Strategic Objective: Pay benefits timely.

Goal leader for objectives II-A-1 through II-A-5; II-A-7 and II-A-8: Crystal Coleman, Director of Programs

Goal leader for objective II-A-6: Daniel Fadden, Director of Field Service/Senior Executive Officer

Goal leader for objective II-A-9: Rachel L. Simmons, Director of Hearings and Appeals

II-A-1. RRB makes a decision to pay

or deny a railroad retirement

employee or spouse initial annuity

application within 35 days of the

annuity beginning date, if advanced

filed.

(Measure: % ≤ 35 days)

94.0% 95.0% 94.9% 94.0% 95.1%

II-A-2. RRB makes a decision to pay

or deny a railroad retirement

employee or spouse initial annuity

application within 60 days of the date

the application was filed.

(Measure: % ≤ 60 days)

96.3% 95.5% 96.5% 94.0% 95.3%

II-A-3. RRB makes a decision to pay,

deny or transfer to SSA an initial annuity

application for a railroad retirement

survivor not already receiving a benefit

within 60 days of the annuity beginning

date, or date filed (whichever is later).

(Measure: % ≤ 60 days)

96.0% 96.9% 96.2% 94.0% 95.7%

II-A-4. RRB makes a decision to pay,

deny or transfer to SSA an initial annuity

application for a railroad retirement

survivor already receiving benefits as a

spouse within 30 days of the RRB’s

receipt of first notice of the employee’s

death.

(Measure: % ≤ 30 days)

95.1% 96.1% 96.5% 94.0% 96.1%

II-A-5. RRB makes a decision to pay or

deny a lump sum death benefit within

60 days of the date the application was

filed.

(Measure: % ≤ 60 days)

98.0% 97.5% 98.2% 97.0% 97.1%
- 43 -

Railroad Retirement Board

Fiscal Year 2019 Performance Plan

2016 Actual

(At $111.225m)

2017 Actual

(At $113.5m)

2018 Actual

(At $123.5m2/)

2019 Planned 1/

(At $123.5m 3/)

2019 Actual 1/

(At $123.5m 3/)

II-A-6. RRB certifies a payment or

releases a letter of denial of UI or SI

benefits within 10 days of the date RRB

receives the claim.

(Measure: % < 10 days)

99.9% 99.9% 99.9% 98.0% 99.9%

II-A-7. RRB makes a decision to pay or

deny a benefit for a disabled applicant or

family member within 100 days of the

date the application is filed.

(Measure: % ≤ 100 days)

17.4% 14.7% 11.3% 70.0% 11.0%

II-A-8. RRB makes a payment to a

disabled applicant within 25 days of the

date of decision or earliest payment

date, whichever is later.

(Measure: % < 25 days)

92.6% 92.5% 91.5% 94.0% 84.6%

II-A-9. Reduce the number of days

elapsed between the date the appeal is

filed and a decision is rendered.

(Measure: average elapsed days)

239 217 217 230 200

Strategic Objective: Provide a range of choices in service delivery methods.

Goal leader: Crystal Coleman, Director of Programs

II-B-1. Offer electronic options to our

customers, allowing them alternative

ways to perform primary services via the

Internet or interactive voice response

systems.

(Measure: Number of services

available through electronic media)

19 services

available

19 services

available

20 services

available

22 services

available 

20 services 

available

II-B-2. Enable employers 

to use the Internet to 

conduct business with the 

RRB, in support of the 

Government Paperwork 

Elimination Act.

(Measures: percentage of 

employers who use the 

on-line ERS; number of 

services available through 

electronic media)

a) Employers 

using ERS:

b) Internet 

services:

99.0% 99.0% 99.3% 99.0% 99.7%

27 Internet

services

available

29 Internet

services

available

30 Internet

services

available

30 Internet

services

available 

30 Internet

services

available
- 44 -

Railroad Retirement Board

Fiscal Year 2019 Performance Plan

2016 Actual

(At $111.225m)

2017 Actual

(At $113.5m)

2018 Actual

(At $123.5m2/)

2019 Planned 1/

(At $123.5m 3/)

2019 Actual 1/

(At $123.5m 3/)

STRATEGIC GOAL III: Serve as Responsible Stewards for Our Customers’ Trust Funds and Agency Resources

Strategic Objective: Ensure that trust fund assets are protected, collected, recorded, and reported

appropriately.

Goal leader: Shawna R. Weekley, Chief Financial Officer

III-A-1. Debts will be collected through

billing, offset, reclamation, referral to

outside collection programs, and a variety

of other collection efforts.

(Measure: total overpayments recovered

in the fiscal year / total overpayments

established in the fiscal year.)

90.73% 92.14%4/ 91.70% 85.00%

91.70%

Through 

7/31/2019 

Strategic Objective: Ensure the accuracy and integrity of benefit programs.

Goal leader III-B-1(a)(b) and III-B-3, 4, and 5: Crystal Coleman, Director of Programs

Goal leader III-B-2a: Daniel Fadden, Director of Field Service

Goal leader III-B-2b: Micheal Pawlak, Director of Unemployment Payment Support Division

III-B-1. Achieve a 

railroad retirement 

benefit payment 

accuracy rate 5/ of at 

least 99%.

(Measure: percent 

accuracy rate)

a) Initial

payment

b) Sample 

post

recurring

payments

99.69% 98.89% 99.87% 99.60% 99.99%

99.70% 99.94% 99.56% 99.60% 99.94%

III-B-2. Achieve a 

railroad 

unemployment/sickness 

insurance benefit 

payment accuracy rate 5/ 

of at least 99%.

(Measure: percent 

accuracy rate)

a) Unemployment

b) Sickness

99.36% 97.24% 96.09% 97.00% 96.09%

99.94% 99.08% 100.00% 97.50% 96.68%

III-B-3. Overall Initial Disability

Determination Accuracy.

(Measure: % of Case Accuracy)

94.40% 94.40% 94.40% 95.00% Not 

Available

III-B-4. Maintain the level of RRA

improper payments below the OMB

threshold.

(Measure: prior to fiscal year 2014,

below 2.5%; beginning fiscal year 2014,

below 1.5%)

0.60%

Reporting 

relief 

granted by 

OMB

Reporting 

relief 

granted by 

OMB

Reporting 

relief 

granted by 

OMB

Reporting 

relief 

granted by 

OMB
- 45 -

Railroad Retirement Board

Fiscal Year 2019 Performance Plan

2016 Actual

(At $111.225m)

2017 Actual

(At $113.5m)

2018 Actual

(At $123.5m2/)

2019 Planned 1/

(At $123.5m 3/)

2019 Actual 1/

(At $123.5m 3/)

III-B-5. Achieve a return of at least

$3.60 for each dollar spent on

program integrity activities.

(Measure for fiscal year 2011: recoveries

and savings per dollar spent. Measure

for fiscal years 2012 and following:

recoverables and savings per dollar

spent)

$4.18: $1.00 $3.70:$1.00 $3.44: $1.00 $3.85: $1.00 Not

Available

Strategic Objective: Ensure effectiveness, efficiency, and security of operations.

Goal leader: Terryne F. Murphy, Chief Information Officer

III-C-1. Complete modernization of 

RRB processing systems in 

accordance with long-range planning 

goals.

(Measure: Meet target dates for the 

project. Yes/No)

No. The 

modernization 

of the Tax 

Database will

now be 

incorporated in 

the multi-year 

Mainframe 

Applications 

Re-engineering 

project

Complete Complete Complete Complete

III-C-2. Deliver – Deliver on Budget. 

Percent of IT Projects costs within 

10% of budgeted costs.

100% 100% 85% 85% 100%

III-C-3. Deliver – Meet 

Customer 

Expectations.

RRB.gov online 

services, continuous 

availability 

experienced by end 

users.

a. Continuous 

availability 

target

b. Hours of 

outage 

allowed per 

month

98.72% 99.20% 98.92% 99.00% 97.64%

9.38 hours 6.52 hours 7.77 hours 7 hours 6.42 hours

III-C-4. Innovate – Design for Modularity.

Strategy for Continuity of Operations

Improvements.

New Goal 

for FY 2016 No

Yes. 

Completed 

applying 

HTTPS-only 

standard to 

www.rrb.gov.

Implement 

cloud-based 

enterprise 

test lab.

Implement 

cloudbased 

enterprise 

test lab -

No

III-C-5. Innovate – Adopt New

Technologies. Percentage of

investments that evaluated cloud

alternatives.

New Goal 

for FY 2016 50% 99.93% 91.67% 89.5%
- 46 -

Railroad Retirement Board

Fiscal Year 2019 Performance Plan

2016 Actual

(At $111.225m)

2017 Actual

(At $113.5m)

2018 Actual

(At $123.5m2/)

2019 Planned 1/

(At $123.5m 3/)

2019 Actual 1/

(At $123.5m 3/)

III-C-6. Protect – Email Data Loss

Prevention. Percentage of

externally bound emails and their

attachments automatically

encrypted that contain personally

identifiable or credit card

information.

New Goal 

for FY 2016 99.82% 99.93% 99% 99.84%

III-C-7. Protect – Percentage of agency

employees required to use a Personal

Identity Verification card to

authenticate.

New Goal 

for FY 2016 74% 77%

Unprivileged 

Network 

Users > 85% 

Privileged 

Network 

Users 100%

83%

Strategic Objective: Effectively carry out responsibilities with respect to the National Railroad Retirement 

Investment Trust.

Goal leader: Ana M. Kocur, General Counsel

III-D-1. Timely review information

reported by the National Railroad

Retirement Investment Trust to carry out

RRB’s oversight responsibility under

section 15(j) (5) (F) of the Railroad

Retirement Act. Reports are to be

reviewed within 30 days of receipt.

(Measure: Yes/No)

Yes Yes Yes Yes Yes

Footnotes:

1/ Planned amounts reflect the fiscal year 2019 performance targets shown in the RRB’s

Congressional Justification of Budget Estimates, released on March 18, 2019. Unless otherwise 

noted, actual results represent status as of March 31, 2019, and as reported in the RRB’s FY 2021 

Budget Submission, dated September 23, 2019.

2/ Public Law 115-141, Consolidated Appropriations Act, 2018, provided $123,500,000 in funding and 

includes $10,000,000 devoted specifically to RRB information technology investment initiatives. The 

$10,000,000 will remain available until expended.

3/ Public Law 115-245, Department of Defense and Labor, Health and Human Services, and 

Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019, provided 

$123,500,000 in funding and includes $10,000,000 devoted specifically to RRB information 

technology investment initiatives. The $10,000,000 will remain available until expended.

4/ The percentages under the 2017 Planned and Actual columns for III-A-1 were incorrectly reported in 

the fiscal year 2017 Performance and Accountability Report. The correct fiscal year 2017 goal was 

85.00%. The actual figure for 2017 has been updated to reflect the correct year-end percentage 

(92.14%). This goal was met.

5/ The payment accuracy rate is the percentage of dollars paid correctly as a result of adjudication

actions performed.
- 47 -

Discussion of Unmet Performance Goals and Indicators for Fiscal Year 2018

INDICATOR DISCUSSION OF VARIANCE

Performance Indicator II-A-7. The RRB makes a decision

to pay or deny a benefit for a disabled applicant or family

member within 100 days of the date the application is

filed. (Measure: % ≤ 100 days)

Our fiscal year 2018 goal was 70.0%, and the actual was

11.3%.

DBD continues to balance applications with older filing 

dates and more current filings. The re-adjudication of 

prior filings in earlier fiscal years continues to impact the 

overall time of cases adjudicated to date as the older 

cases were previously not prioritized due to the readjudication. At the start of fiscal year 2017, 3.4% of 

DBD’s pending cases were more than 20 months old. 

Throughout the fiscal year, the cases pending from 2014 

were eliminated and the cases from 2015 minimized. 

Adjudicating cases already 600+ days old impacted the 

overall performance. As these cases decrease, the 

number of cases pending with more recent filing dates 

increases. 

Performance Indicator II-A-8. RRB makes a payment to 

a disabled applicant within 25 days of the date of 

decision or earliest payment date, whichever is later. 

(Measure: % ≤ 25 days)

Our fiscal year 2018 goal was 93.50%, and the actual 

was 91.50%.

This payment goal is shared by both RBD and SBD 

initial staff. RSBD worked to meet our performance 

goal in this category for year-end reporting in fiscal 

year 2018. Although we have staff to adjudicate and 

authorize the initial retirement applications, we still 

need assistance with initial disability applications 

involving Legal Partition and securing direct deposit 

information timely. RBD initiated new processes to 

ensure we met the customer service payment goal for 

initial disability cases involving Legal Partition and to 

secure direct deposit information timely. This process 

was initiated in the third quarter of customer service 

reporting for fiscal year 2018. Using the newly initiated 

process, RBD decreased the volume of missed initial 

disability payments within 25 days in the third and 

fourth quarters of processing to 5%. During the first 

quarter of fiscal year 2018, RBD did not process 

approximately 9% of initial disability payments within 25 

days. RBD also did not process 11% of initial disability 

payments within 25 days during the second quarter of 

fiscal year 2018. Discussion continued on next page.

The survivor disability initial application volume 

represents on average approximately 10% of the 

retirement initial disability applications received 

annually. Because the volume is small, one missed 

payment can lower the overall payment percentage. 

SBD was making this goal through third quarter 

processing at 94.8%, which did not have a significant 

impact on the overall goal. SBD missed several 

payments in the fourth quarter which significantly 

lowered the percentage. The missed payments were 

due to a combination of notification and examiner 

handling issues. RSBD is diligently working to create 

new processes that will improve both RBD and SBD 

performance processing within 25 days for our initial 

disability payment goal, which we plan on initiating in 

fiscal year 2019.
- 48 -

INDICATOR DISCUSSION OF VARIANCE

Performance Indicator III-B-2a. Achieve a railroad 

unemployment insurance benefit payment accuracy rate 

of at least 99%. (Measure: percent accuracy rate)

Our fiscal year 2018 goal was 97.00%, and the actual

was 96.09%.

Field Service has been experiencing high attrition rates 

over the last few years. Until recently, we have been 

able to hire new Claim Representatives to replace staff 

who retired or accepted other Federal jobs. Although 

we were able to hire 12 new Claims Representatives 

late in FY 2018, who are still in training, we have lost an 

additional 41 FTEs in Field Service in the interim. The 

ongoing loss of experienced Field Service employees, in 

addition to very limited hiring over the past three fiscal 

years (FY 2017 to FY 2019), are both directly 

attributable to the decrease (Goal: 97.00% / Achieved: 

96.09%) seen in the unemployment payment accuracy 

rate in fiscal year 2018.

Performance Indicator III-B-3. Overall Initial Disability 

Determination Accuracy. (Measure: % of Case 

Accuracy)

Our fiscal year 2018 goal was 96.00%, and the actual

was 94.40%.

The fiscal year 2019 quality review is based on cases 

completed in FY 2018. In FY 2018, DBD lost 

experienced disability examiners to promotions and 

reassignments to other types of work. Consequently, 

DBD hired additional examiners, as well as a 

supervisor to assist in the managing of the increased 

workloads. However, it takes 2-3 years to acquire the 

knowledge and skills necessary to complete disability 

adjudication proficiently. At the end of the fiscal year, 

more than half of all the initial examiners had less than 

one year of experience. As workloads decrease and 

become manageable, staff becomes more 

experienced, and we continue planned ongoing training 

and procedural reminders, we expect to meet our 

accuracy goal in the future.

Performance Indicator III-B-5. Achieve a return of at 

least $3.60 for each dollar spent on program integrity 

activities. (Measure for fiscal years 2008 - 2011: 

recoveries and savings per dollar spent. Measure for 

fiscal years 2012 and following: recoverables and 

savings per dollar spent.)

Our fiscal year 2018 goal was $3.85: $1.00, and the

actual was $3.44: $1.00

The agency did not meet its goal of $3.85: $1 for each 

dollar spent on program integrity activities. In February 

2016, the CMS death match process was reviewed, 

resulting in the screening process being changed and also 

closing out any duplicate cases where a second death 

match investigation already existed. Although these 

changes to the CMS process had an impact on lowering 

the program integrity ratio, they improved the overall 

quality and integrity of the CMS process, and also helped 

reduce the possibility of overstating any dispositions. In 

addition, due to a sharp decline in the number of 

unemployment claims being filed since FY 2016, there has 

been almost a 50% reduction in benefit savings, which has 

further impacted the overall PI ratio.

Performance Indicator III-C-3. Deliver – Meet Customer 

Expectations. RRB.gov on line services, continuous 

availability experienced by end users.

Our fiscal year 2018 goal was 99% for continuous 

availability target (the actual was 98.20%), and 7 hours 

of outage allowed per month (actual was 7.77 hours)

The variance of .77 hours was attributed to an increase in 

the quantity and time needed to patch critical server 

security vulnerabilities. 
- 49 -

INDICATOR DISCUSSION OF VARIANCE

Performance Indicator III-C-7. Protect – Percentage of 

agency employees required to use a Personal Identity 

Verification (PIV) card to authenticate.

Our fiscal year 2018 goal was Unprivileged Network 

Users > 85% and Privileged Network Users 100% and 

the actual was Unprivileged Network Users 77% 

Privileged Network Users 0%.

Variance due to delays in staff receiving the replacement 

for expiring PIV cards from GSA. In addition, the agency’s 

approach to use temporary smart cards cannot work for 

those individuals who also telework. These challenges 

caused some of our users to be un-enforced, which 

dropped the unprivileged network users to 77%. 

The original solution for privileged users to use agency 

generated smart cards failed. We are now working to 

implement a different solution using CyberArk. We 

anticipate to be on track for the next reporting period

Program Evaluations

PROGRAM EVALUATION RESULTS IN FISCAL YEAR 2019

Federal Managers’ Financial 

Integrity Act Reports

See “Analysis of Systems, Controls and Legal Compliance” in the 

“Management’s Discussion and Analysis” section.

Annual actuarial report 

required by the Railroad 

Retirement Act of 1974 and 

the Railroad Retirement 

Solvency Act of 1983

The report, which was completed in June 2019, concludes that, barring a 

sudden, unanticipated, large drop in railroad employment or substantial 

investment losses, the railroad retirement system will experience no cash flow 

problems during the next 25 years under any of the three employment 

assumptions. The report did not include any recommendations for financing 

changes.

Railroad Unemployment 

Insurance System, annual 

report required by section 

7105 of the Technical and 

Miscellaneous Revenue Act of 

1988

The report, which was released in June 2019, addresses the 11 fiscal year period 

2019 through 2029. The report indicated that even as maximum benefits are 

expected to increase 44 percent from 2019 to 2029, experience-based 

contribution rates are expected to keep the unemployment insurance system 

solvent. The report did not include any recommendations for financing changes 

at this time.

Customer service 

performance reports

The RRB continuously monitors the timeliness and accuracy of our performance 

in managing program workloads. These results are reflected in the performance 

objectives shown in the chart on the following pages, and published on our 

website at www.RRB.gov.

Program integrity report Our most recent program integrity report was for fiscal year 2018. It showed that 

program integrity activities resulted in the establishment of about $8.7 million in 

recoverables, benefit savings of $814,162, and 32 cases referred to the Office 

of Inspector General.

Quality assurance reviews 

and special studies

RRA and RUIA adjudicative and payment accuracy is measured in regular 

diagnostic reviews conducted by quality assurance staff within the RRB’s 

Program Evaluation and Management Services (PEMS) component. Initial 

disability determination accuracy is evaluated by quality assurance staff within 

PEMS and by an external contractor (Juncture). PEMS also evaluates policies 

and processes through special studies, as needed. PEMS reports to the Director 

of Programs.
- 50 -

PROGRAM EVALUATION RESULTS IN FISCAL YEAR 2019

Occupational disability 

reviews

Advisory doctors, representing the rail industry (labor and management), are 

authorized by law to review agency medical decisions. Case review audits were 

completed in 2000, 2008, and 2018. 

Performance budget 

monitoring

Results of performance budget monitoring are shown in the chart of performance 

objectives on the following pages. Actual performance data are reviewed, 

validated and certified prior to inclusion in this report. Validation and certification 

processes are documented as part of the RRB’s management control review 

process.

Computer security and privacy 

assessment

RRB continues to make noteworthy progress toward achieving full certification and 

compliance with the Federal Information Security Management Act (FISMA), Office 

of Management and Budget directives and National Institute of Standards and 

Technology guidance for its information systems as evidenced in the documented 

improvements in FISMA metrics for FY2019.

Electronic government 

(e-Gov) activities

See pages 51 through 52 of this section.

Payment integrity evaluation See “Payment Integrity” in the “Other Information” section.

RRB Office of Inspector 

General audits

See “Inspector General’s Statement on Management and Performance 

Challenges” and “Management’s Comments” in the “Other Information” section.
- 51 -

Automation, e-Government and Customer Service Initiatives

The RRB is continuing with long-term plans to implement significant automation initiatives and 

other improvements. These changes have enabled the agency to operate with reduced 

resources in recent years and continue to streamline our operations. We believe that significant 

new investments in information technology and further management improvements will help us 

to meet or exceed our customer service goals efficiently.

To date, 30 automated ERSNet services exist for employers to notify, request or provide a 

means for correcting and transmitting data electronically to and from the RRB. This year no 

additional services will be added to the ERSNet system. We will instead focus on improvements 

and enhancements to the 30 services that are currently available. 

The RRB will continue to pursue enhancements in fiscal year 2020 with the development and 

implementation of Form G-117a, Designation of Contact Officials. Use of this form will allow 

employers to quickly provide updated information on changes to the responsible officials in their 

organizations. This will add one more service to the system.

In fiscal year 2021, RRB staff will develop on-line ERSNet processes Form RL-13g, Notice to 

Employer of Relinquishment of Rights of Disability Annuitant Who Attained Age 65, and the 

AESOP, Employee Retirement Estimate File. 

Our Citizen Services Improvements initiative was started in 2016 to provide RRB customers 

with additional online services, including the ability to securely file for retirement benefits. In FY 

2019, we added the employee application to our online services. This digital service enables 

railroad workers to submit their application for an employee retirement annuity to the RRB 

through an online application. In FY 2020, we will add spouse/divorced spouse retirement 

applications as well as direct deposit requests to our online services. These online services will 

utilize the U.S. General Services Administration (GSA) Login.gov solution for identity proofing 

and multi-factor authentication services. The Login.gov service will identity proof individuals 

who seek benefits or services from Federal agencies. Rather than requiring individuals to have 

a separate login to access each Federal agency’s electronic system, GSA is creating a process 

that allows individuals to access information or request services from any Federal agency that

has opted to use Login.gov with a single sign-on. 

Work continued on SPEED, an automation initiative designed to process post-entitlement 

annuity adjustments in both retirement and survivor cases that result from excess earnings and 

work deductions. SPEED allows the RRB to adjust annuity payments for earnings on a timely 

basis, which minimizes any underpayments or overpayments that may result from changes in 

earnings. SPEED is being built in a multi-phase approach. During fiscal year 2017, we worked 

with the contractor to automate the last pre-retirement non-railroad employer and regular 

permanent work deductions, which was the most complex phase of the SPEED project to-date. 

In fiscal year 2019, we completed and placed into production nine enhancements relating to the 

processing of cases. These include enhancements to public service pension referrals, work 

deductions referrals, supplemental annuity transactions, vested dual benefit referrals, partial 

withholding and multiple reports in SPEED and SURPASS. We also implemented measures to 

handle missing USTAR records sent to SPEED, removed erroneous duplicate cases stored in 

SPEED, and migrated SPEED to a new server. 

The agency’s re-platforming and engineering projects starting in fiscal year 2019 have an 

impact on the SPEED project. In consideration of those two higher priorities, in May 2019, we 
- 52 -

determined a tentative priority ranking of deliverables for SPEED after the projects are 

completed. As such, we have deferred any additional SPEED enhancements until completion 

of those higher priority projects. We will continue to work on SPEED, to process awards for the 

most difficult category involving earnings in response to any retirement final work report for an

employee and his or her associated spouse or divorced spouse.

Work continued during fiscal years 2017, 2018, and 2019 on an enhanced automated retirement 

payment system which will replace the current Legacy System that processes retirement 

applications (commonly referred to as Retirement Adjudication System Initial to Application 

Express [RASI to APPLE] Conversion). The enhanced process will improve the accuracy and 

efficiency of initial retirement claims. The new system will also allow for the payment of such 

application types as divorced spouse annuitants, which previously could not be processed 

automatically. On June 29, 2018 (fiscal year 2018), we completed and implemented the 

enhanced system. The new system now processes all Retirement Initial applications for 

recurring annuities and Retirement Initial Medicare applications. The new system allows us to 

automatically process certain cases that used to require manual handling, such as Railroad 

Retirement and Survivors’ Improvement Act (RRSIA) cases, employee cases involving legal 

process, divorced spouse cases, and automatically adjusted cases with an accrual greater than 

$25,000. We are now working on additional enhancements to the system as well as addressing 

any production problems that arise.

Sequestration of RUIA Benefits

Under provisions of the Budget Control Act of 2011 (BCA), across-the-board cuts in Federal 

spending took effect March 1, 2013. While railroad retirement, survivor and disability payments 

are not affected by this measure, unemployment and sickness insurance benefits payable under 

the RUIA are impacted. Benefits payable October 1, 2018, through September 30, 2019, are 

being reduced by 6.2 percent. The reduction is required by the sequestration order issued by 

the President in accordance with the BCA. For fiscal year 2020, a sequestration reduction of 

5.9 percent will be applied starting on October 1, 2019.

Succession Planning and Training

Strategic Management of Human Capital – Like many agencies, the RRB has an aging 

workforce. Nearly 44 percent of our employees have 20 or more years of service and 32 percent 

of the current workforce will be eligible for retirement by fiscal year 2022. To prepare for the 

expected turnover, the agency is placing increased emphasis on strategic management of 

human capital. We have a succession plan in place which includes a workforce analysis that 

identifies historical data, trends and projected attrition to evaluate and prioritize future needs 

and vacancies in our workforce. The results from the workforce analysis form the basis for 

formulating specific strategies, hiring plans and initiatives that support the agency’s succession 

plan. A methodology for measuring skill gaps continues to be developed. Once final, we will 

utilize our Learning Management System (LMS) to implement the methodology. We have 

developed a job analysis procedure and outputs to identify critical competencies for every 

agency position. Competencies will be organized using a newly developed competency model 

framework that identifies RRB core, technical/position, supervisor/leadership, and executive 

competencies, and proficiency levels for incumbent job performer success. Job analysis and 

competency model development for individual positions will begin this year with skill gap 

analysis to commence once complete. This process will allow the RRB to continuously and 

accurately identify skill gaps at the individual level, and take the necessary training and 

development steps to address skill deficiencies. 
- 53 -

The Training and Development Section within the Bureau of Human Resources continues to 

utilize the results from training needs assessments and surveys to assist in prioritizing the 

RRB’s training needs. We are also making use of technology in this area, utilizing the LMS, an 

internet-based program which effectively formalizes many aspects of training for all agency 

employees, while also providing self-assessments to the student and feedback to supervisors 

on their progress. In addition, our Field Service supervisors/managers have access to the latest 

webinar technology to facilitate the remote training of new employees, as well as the ongoing 

training of experienced field staff.

The Workforce Organization Management Section (WOMS) identifies appropriate target 

markets for our recruitment efforts, to ensure we receive applications from a talented and 

diverse pool of applicants. Through USAJOBS, we have been able to reach candidates from 

many sectors. In FY2019, we received nearly 5000 applications from external candidates. We 

also utilize different recruitment strategies, like resume mining and targeted advertising, to 

ensure we are attracting quality candidates. 

Systems Security

We continue to make progress towards a compliant Information Security program to improve the 

RRB's security posture. RRB has implemented an Information Security Continuous Monitoring 

(ISCM) Strategy as outlined in OMB Memorandum 19-02, Fiscal Year 2018-2019 Guidance on 

Federal Information Security and Privacy Management Requirements. This strategy addressed 

the gaps in the Information Security program. We partnered with the Department of Homeland 

Security (DHS) in the Continuous Diagnostic and Mitigation (CDM) program. This partnership 

with DHS will further improve our Information Security continuous monitoring compliance 

towards vulnerability assessment, hardware and software management, configuration 

management, and privileged account management. The RRB continues to employ the DHS 

EINSTEIN-3 Accelerated (E3A) toolset that ensures all of the Domain Name System (DNS) and 

Simple Mail Transfer Protocol (SMTP) are monitored by these services.

We continue to manage the risk of the critical infrastructure considering asset management, 

remote access, identity management, and network protection. Specifically:

• Assessment Management – we have enrolled in the DHS CDM Continuous Monitoring 

as a Service (CMaaS) to provide better visibility of current hardware and software and to 

automatically detect unauthorized hardware and software.

• Identity Management – The RRB enforces multi-factor authentication for general users 

and have installed a privileged access management system for system administrators.

• Remote Access – we deployed managed services for hardware encryption and have 

upgraded our firewalls to strengthen information security controls for remote access.

Note: enforcement of PIV is instrumental for remote access.

• Network Protection – as part of CMaaS, we will further improve the Defense in Depth 

configuration in place, namely the Intrusion Prevention System (IPS), Network Access 

Control (NAC), and the Security Information and Event Management (SIEM). 
PAGE INTENTIONALLY LEFT BLANK
FINANCIAL SECTION
PAGE INTENTIONALLY LEFT BLANK
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RAILROAD RETIREMENT BOARD

CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2019 AND 2018

(in dollars)

FY 2019 FY 2018

ASSETS

Intragovernmental:

Fund Balance with Treasury (Note 3) $321,397,023 $332,487,241

Investments (Note 4) 1,792,524,204 1,671,257,222

Accounts Receivable (Note 6) 5,172,102,127 4,840,828,997

Other 911,977 1,136,474

Total Intragovernmental 7,286,935,331 6,845,709,934

NRRIT Net Assets (Note 5) 25,415,964,974 26,596,540,632

Accounts Receivable, Net (Note 6) 55,916,918 46,187,778

General Property, Plant and Equipment, Net (Note 7) 2,984,518 4,391,760

Other 543,960 543,846

TOTAL ASSETS $32,762,345,701 $33,493,373,950

LIABILITIES (Note 8)

Intragovernmental:

Accounts Payable $589,296,929 $609,853,949

Debt 3,982,221,827 3,769,557,030

Other 1,591,358 2,174,201

Total Intragovernmental 4,573,110,114 4,381,585,180

Accounts Payable 29,925,329 604,297

Benefits Due and Payable 1,147,844,783 1,101,027,480

Other 416,662,924 383,996,104

TOTAL LIABILITIES $6,167,543,150 $5,867,213,061

COMMITMENTS AND CONTINGENCIES (Note 9)

NET POSITION

Unexpended Appropriations - Funds from Dedicated Collections (Note 16) $895,391 $874,327

Unexpended Appropriations - All Other Funds 147,544,183 147,617,040

Cumulative Results of Operations - Funds from Dedicated Collections (Note 16) 26,442,457,823 27,475,062,169

Cumulative Results of Operations - All Other Funds 3,905,154 2,607,353

Total Net Position - Funds from Dedicated Collections (Note 16) 26,443,353,214 27,475,936,496

Total Net Position - All Other Funds 151,449,337 150,224,393

TOTAL NET POSITION 26,594,802,551 27,626,160,889

TOTAL LIABILITIES AND NET POSITION $32,762,345,701 $33,493,373,950

The accompanying notes are an integral part of these statements.
- 58 -

RAILROAD RETIREMENT BOARD

CONSOLIDATED STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018

(in dollars)

FY 2019 FY 2018

Gross Program Costs:

Railroad Retirement Program

Gross Costs $13,305,212,735 $12,970,946,882

Less: Earned Revenue 16,361,177 31,357,989

Net Program Costs 13,288,851,558 12,939,588,893

Railroad Unemployment and Sickness Insurance Program

Gross Costs 124,220,514 122,826,652

Less: Earned Revenue 14,677,697 11,185,196

Net Program Costs 109,542,817 111,641,456

Costs Not Assigned to Programs - -

Less: Earned Revenues Not Attributed to Programs 29,687 163,129

NET COST OF OPERATIONS $13,398,364,688 $13,051,067,220

The accompanying notes are an integral part of these statements.
- 59 -

RAILROAD RETIREMENT BOARD

FOR THE YEAR ENDED SEPTEMBER 30, 2019

(in dollars)

Funds from

Dedicated All Other Consolidated

Collections Funds Eliminations Total

Unexpended Appropriations:

Beginning Balance $874,327 $147,617,040 $148,491,367

Budgetary Financing Sources:

Appropriations received 736,323,332 19,000,000 755,323,332

Appropriations transferred in/out

Other Adjustments (120,621) (1,808,831) (1,929,452)

Appropriations used (736,181,647) (17,264,026) (753,445,673)

Total Budgetary Financing Sources 21,064 (72,857) (51,793)

Total Unexpended Appropriations $895,391 $147,544,183 $148,439,574

Cumulative Results from Operations:

Beginning Balances $27,471,402,692 $2,607,353 $27,474,010,045

Adjustments:

Corrections of errors 3,659,477 3,659,477

Beginning Balance, as adjusted $27,475,062,169 $2,607,353 $27,477,669,522

Budgetary Financing Sources:

Appropriations used 736,181,647 17,264,026 753,445,673

Nonexchange revenue 6,271,495,064 362,394 (8,315) 6,271,849,143

Transfers in from NRRIT (Note 10) 1,794,000,000 1,794,000,000

Transfers in/out without reimbursement 4,709,792,735 4,709,792,735

Other Financing Sources (Nonexchange):

Imputed financing 8,439,390 8,439,390

Change in NRRIT assets (1,180,575,658) (1,180,575,658)

Gain/(Loss) contingency 10,106,860 10,106,860

Total Financing Sources 12,349,440,038 17,626,420 (8,315) 12,367,058,143

Net Cost of Operations 13,382,044,384 16,328,619 (8,315) 13,398,364,688

Net Change (1,032,604,346) 1,297,801 0 (1,031,306,545)

Cumulative Results of Operations 26,442,457,823 3,905,154 26,446,362,977

Net Position $26,443,353,214 $151,449,337 26,594,802,551

The accompanying notes are an integral part of these statements. 

CONSOLIDATED STATEMENT OF CHANGES IN NET POSITION

FY 2019
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RAILROAD RETIREMENT BOARD

FOR THE YEAR ENDED SEPTEMBER 30, 2018

(in dollars)

Funds from

Dedicated All Other Consolidated

Collections Funds Eliminations Total

Unexpended Appropriations:

Beginning Balance $15,505,338 $148,170,964 $163,676,302

Budgetary Financing Sources:

Appropriations received 774,906,126 22,000,000 796,906,126

Appropriations transferred in/out

Other Adjustments (14,775,011) (2,281,675) (17,056,686)

Appropriations used (774,762,126) (20,272,249) (795,034,375)

Total Budgetary Financing Sources (14,631,011) (553,924) (15,184,935)

Total Unexpended Appropriations $874,327 $147,617,040 $148,491,367

Cumulative Results from Operations:

Beginning Balances $27,215,393,767 $2,784,554 $27,218,178,321

Budgetary Financing Sources:

Appropriations used 774,762,126 20,272,250 795,034,376

Nonexchange revenue 6,492,788,988 (62,447) (6,000) 6,492,720,541

Transfers in from NRRIT (Note 10) 1,809,000,000 1,809,000,000

Transfers in/out without reimbursement 4,285,278,000 4,285,278,000

Other Financing Sources (Nonexchange):

Imputed financing 7,213,652 7,213,652

Change in NRRIT assets 101,875,379 101,875,379

Gain/(Loss) contingency (180,563,527) (180,563,527)

Total Financing Sources 13,290,354,618 20,209,803 (6,000) 13,310,558,421

Net Cost of Operations 13,030,686,216 20,387,004 (6,000) 13,051,067,220

Net Change 259,668,402 (177,201) 0 259,491,201

Cumulative Results of Operations 27,475,062,169 2,607,353 27,477,669,522

Net Position $27,475,936,496 $150,224,393 $27,626,160,889

The accompanying notes are an integral part of these statements. 

CONSOLIDATED STATEMENT OF CHANGES IN NET POSITION

FY 2018
- 61 -

RAILROAD RETIREMENT BOARD

COMBINED STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018

(in dollars)

FY 2019 FY 2018

Budgetary Resources

Unobligated balance from prior year budget authority, net (discretionary

and mandatory) $180,713,821 $167,762,457

Appropriations (discretionary and mandatory) 9,856,490,162 9,638,125,618

Borrowing authority (discretionary and mandatory) Note 18 4,241,400,000 4,194,529,480

Spending authority from offsetting collections (discretionary and 

mandatory 185,474,554 178,982,598

Total budgetary resources $14,464,078,537 $14,179,400,153

Status of budgetary resources

New obligations and upward adjustments (total) $14,288,093,497 $14,010,349,155

Unobligated balance, end of year

 Apportioned, unexpired accounts 14,647,257 13,138,714

 Unapportioned, unexpired accounts 145,954,920 145,112,860

 Unexpired unobligated balance, end of year 160,602,177 158,251,574

 Expired, unobligated balance, end of year 15,382,863 10,799,424

Unobligated balance, end of year (total) 175,985,040 169,050,998

Total budgetary resources $14,464,078,537 $14,179,400,153

Outlays, net

Outlays, net (total) (discretionary and mandatory) $14,030,518,167 $13,786,256,511

Distributed offsetting receipts (-) (5,430,917,332) (5,060,034,126)

Agency outlays, net (discretionary and mandatory) $8,599,600,835 $8,726,222,385

The accompanying notes are an integral part of these statements.
- 62 

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Notes to the Financial Statements: Fiscal Years Ended September 30, 2019 and 2018

1. Summary of Significant Accounting Policies

A. Basis of Presentation

Public Law 107-289, the Accountability of Tax Dollars Act of 2002, added the RRB as an 

agency required to prepare audited financial statements for fiscal year 2003, and subsequent 

years. OMB guidance requires that Performance and Accountability Reports for fiscal year 

2019 are to be submitted to the President, the Congress, and the Director of OMB by November 

15, 2019. As required by law, OMB has also prescribed the form and content of financial 

statements under OMB Circular A-136. The RRB’s financial statements were prepared in 

accordance with the form and content prescribed by OMB and with generally accepted 

accounting principles and standards prescribed by the Federal Accounting Standards Advisory 

Board (FASAB).

The principal statements (prepared on a consolidated basis, except for the Statement of 

Budgetary Resources which was prepared on a combined basis, and eliminating all significant 

inter-fund balances and transactions) are comprised of the Balance Sheet and Statements of 

Net Cost, Changes in Net Position, Budgetary Resources, Social Insurance, and Changes in 

Social Insurance Amounts. These statements are different from the financial reports, also 

prepared by the RRB pursuant to OMB directives, used to monitor and control the RRB's use of 

budgetary resources.

The current and prior year balance sheet net asset amounts for the NRRIT are unaudited 

figures that are within acceptable materiality amounts. The audited net asset NRRIT amount 

used in the computations for the SOSI is from the prior fiscal year. The balance sheet NRRIT 

amount is reasonable, not restated and was used to meet the goal of November 15 for the 

release of RRB’s financial statements.

Accounting standards require all reporting entities to disclose that accounting standards allow 

certain presentations and disclosures to be modified, if needed, to prevent the disclosure of 

classified information. 

B. Reporting Entity

The railroad retirement and the railroad unemployment and sickness insurance programs are 

financed through the following accounts:

● Railroad Retirement Account, 60X8011, funds retirement, survivor, and disability 

benefits in excess of social security equivalent benefits from payroll taxes on employers 

and employees and other income sources. Account 60X8011 is considered a fund from 

dedicated collections. Our authority to use these collections is 45 U.S.C. § 231f(c) (1).

● Social Security Equivalent Benefit Account, 60X8010, funds the portion of railroad 

retirement benefits equivalent to a social security benefit from various income sources 

related to these benefits. Account 60X8010 is considered a fund from dedicated 

collections. Our authority to use these collections is 45 U.S.C. § 231n-1(c) (1).

● Dual Benefits Payments Account, 60 0111, funds the phase-out costs of certain vested 

dual benefits from general appropriations. Account 60 0111 is considered a general 

fund. Our authority to use these collections is 45 U.S.C. § 231n (d).

● Federal Payments to the Railroad Retirement Accounts, 60X0113, was established by 
- 65 -

OMB, not by legislation, and is used as a conduit for transferring certain income taxes on 

benefits; receiving credit for the interest portion of uncashed check transfers; and funds 

provided by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation 

Act of 2010. Account 60X0113 is considered a fund from dedicated collections. This 

account has no basis in law.

● Limitation on Administration Account, 60 8237, pays salaries and expenses to 

administer the railroad retirement program and the railroad unemployment and 

sickness insurance program. This account is financed by the RR Account, the SSEB 

Account, and the Railroad Unemployment Insurance Trust Fund, Administrative 

Expenses. Account 60 8237 is considered a fund from dedicated collections. Our 

authority to use these collections is 45 U.S.C. § 231n-1(c) and 45 U.S.C. § 231n (h).

● Limitation on Administration Account, 60X8237, Public Law 107-217, Sec. 121(d)(3), 

authorizes Federal agencies to retain indefinitely as “no-year money” any unexpended 

portion of the fiscal year appropriated funds, up to the estimated cost of the operation 

and maintenance of the delegated properties. Funds carried over may only be 

expended for operation and maintenance and repair of the facility. In addition, this 

fund contains the Limitation on Administration funds for extended unemployment 

benefits provided under Public Laws 111-92, 112-96, and 112-240. Account 60X8237 

is considered a fund from dedicated collections.

● Railroad Unemployment Insurance Trust Fund, Benefit Payments, 60X8051.001, funds 

railroad unemployment and sickness insurance benefits from contributions by railroad 

employers. Account 60X8051.001 is considered a fund from dedicated collections. Our 

authority to use these collections is 45 U.S.C. § 360.

● Railroad Unemployment Insurance Trust Fund, Administrative Expenses, 

60X8051.002, was established to pay salaries and expenses to administer the 

program. Account 60X8051.002 is considered a fund from dedicated collections. This

fund is financed by contributions from railroad employers. Monies are transferred from 

this fund, based on cost accounting estimates and records, to the Limitation on 

Administration Account (60 8237) from which salaries and expenses are paid for both 

the railroad retirement program and the railroad unemployment and sickness insurance 

program. Our authority to use these collections is 45 U.S.C. § 361.

● Limitation on the Office of Inspector General, 60 8018, was established to fund the 

administration of the Inspector General's Office. Account 60 8018 is considered a fund 

from dedicated collections. Our authority to use these collections is Public Law 115-

245.

● Railroad Unemployment Insurance Extended Benefit Payments – Recovery Act, 

60X0114: Funds provided under Public Law 111-5, American Recovery and 

Reinvestment Act of 2009.

● Railroad Unemployment Insurance Extended Benefit Payments, for Limitation Account –

60X0118: Funds provided under Public Law 111-92, Worker, Homeownership, and 

Business Assistance Act of 2009, and Public Law 112-96, Middle Class Tax Relief and 

Job Creation Act of 2012, and Public Law 112-240, American Taxpayer Relief Act of 

2012.
- 66 -

● Railroad Unemployment Insurance Extended Benefit Payments – 60X0117: Funds 

provided under Public Law 111-92, Worker, Homeownership, and Business Assistance 

Act of 2009.

C. Budgets and Budgetary Accounting

Budget requests are prepared and submitted by the RRB in accordance with OMB Circular 

A-11 and other specific guidance issued by OMB. The RRB prepares and submits to OMB 

Apportionment and Reapportionment Requests (SF-132) in accordance with OMB Circular 

A-11 for all funds appropriated by the Congress or permanently appropriated. Although OMB 

may apportion funds by category, time period, or object class of expense, the RRB controls 

and allocates all apportioned funds by three-digit object class codes of expense. For 

budgetary accounting, all receipts are recorded on a cash basis of accounting and 

obligations are recorded against the object class codes when they are incurred, regardless of 

when the resources acquired are to be consumed. Obligations are amounts of orders 

placed, contracts awarded, services received, and similar transactions during a given period 

that will require payments during the same or a future period. The RRB prepares and 

submits Reports on Budget Execution (SF-133) to OMB, reporting all obligations incurred 

against the amounts apportioned.

D. Basis of Accounting

As required by law, the Dual Benefits Payment Account is on a cash basis of accounting. 

Payroll taxes and unemployment contributions are recorded on a modified cash basis in 

accordance with Statement of Federal Financial Accounting Standards (SFFAS) No. 7. All other 

transactions are recorded on an accrual basis of accounting and a budgetary basis. Under the 

accrual method, revenues (except payroll taxes and unemployment contributions which are on a 

modified cash basis) are recognized when earned and expenses are recognized when a liability 

is incurred.

For budgetary accounting, financial transactions are recorded when obligations are incurred, 

regardless of when the resources acquired are to be consumed.

The accompanying consolidated financial statements of the RRB include all funds maintained 

by the RRB, after elimination of all significant inter-fund balances and transactions.

E. Concepts

The Fund Balance with Treasury (FBWT) is the aggregate amount of funds on deposit with the 

Department of the Treasury, excluding seized cash deposited. The FBWT is increased by (1) 

receiving appropriations, reappropriations, continuing resolutions, appropriation restorations, 

and allocations; and (2) receiving transfers and reimbursements from other agencies. It also is 

increased by amounts borrowed from the Bureau of the Fiscal Service, the Federal Financing 

Bank, or other entities, and amounts collected and credited to appropriation or fund accounts. 

The FBWT is reduced by (1) disbursements made to pay liabilities or to purchase assets, 

goods, and services; (2) investments in U.S. securities (securities issued by the Bureau of the 

Fiscal Service or other Federal Government agencies); (3) cancellation of expired 

appropriations; (4) transfers and reimbursements to other entities or to the General Fund of the 

Treasury; and, (5) sequestration or rescission of appropriations.

F. Funds from Dedicated Collections

SFFAS No. 43, Funds from Dedicated Collections, amends SFFAS No. 27, Identifying and 

Reporting Earmarked Funds. Generally, funds from dedicated collections are financed by 

specifically identified revenues, provided to the government by non-Federal sources, often 

supplemented by other financing sources, which remain available over time. These specifically 
- 67 -

identified revenues and other financing sources are required by statute to be used for 

designated activities, benefits, or purposes, and must be accounted for separately from the 

government’s general revenues. Funds from Dedicated Collections should be shown as a 

separate presentation and disclosure in the financial statements. The three required criteria for 

funds from dedicated collections are:

• A statute committing the Federal Government to use specifically identified revenues 

and/or other financing sources that are originally provided to the Federal Government by 

a non-Federal source only for designated activities, benefits, or purposes;

• Explicit authority for the fund to retain revenues and/or other financing sources not 

used in the current period for future use to finance the designated activities, benefits, or 

purposes; and

• A requirement to account for and report on the receipt, use, and retention of the 

revenues and/or other financing sources that distinguish the fund from the Federal 

Government’s general revenues.

Refer to Note 16, Funds from Dedicated Collections.

G. Application of Critical Accounting Estimates

The financial statements are based on the selection of accounting policies and the application of 

significant accounting estimates, some of which require management to make significant 

assumptions. Further, the estimates are based on conditions that may change in the future. 

Actual results could differ materially from the estimated amounts. The financial statements 

include information to assist in understanding the effect of changes in assumptions to the 

related information.

2. Related Parties 

The RRB has significant transactions with the following governmental and non-governmental 

entities:

• Treasury collects payroll taxes from the railroads on behalf of the RRB. The taxes 

collected are credited by Treasury to the RRB’s trust fund account via an 

appropriation warrant. In fiscal years 2019 and 2018, net payroll taxes transferred to 

the RRB by Treasury were $6.2 billion and $6.5 billion, respectively.

Treasury provides payment services to Federal agencies and operates collections and 

deposit systems. The RRB invests in government account securities through the Bureau 

of the Fiscal Service. In fiscal years 2019 and 2018, investments, including accrued 

interest, totaled $1.8 billion and $1.7 billion, respectively. In addition, Treasury advances 

funds to the RRB for the financial interchange which are repaid annually. The amount 

paid by the RRB to Treasury in fiscal year 2019 due to the financial interchange 

advances during fiscal year 2018 included principal of $4.1 billion and interest of 

$109.9 million. The amount paid by the RRB to Treasury in fiscal year 2018 due to the 

financial interchange advances during fiscal year 2017 included principal of $4.1 billion 

and interest of $103.5 million.
- 68 -

• SSA and RRB participate in an annual financial interchange. The financial interchange 

is intended to place the social security trust funds in the same position in which they 

would have been had railroad employment been covered by the Social Security Act and 

Federal Insurance Contributions Act. In fiscal year 2019, the RRB trust funds realized 

$4.9 billion through the financial interchange.

Under Section 7(b) (2) of the Railroad Retirement Act of 1974, the RRB is required to 

pay certain individuals, described in this section, monthly social security benefits on 

behalf of SSA. SSA reimburses the RRB for benefits paid on behalf of SSA. The 

amounts reimbursed were $1.9 billion for fiscal year 2019 and $1.8 billion for fiscal year 

2018.

• CMS participates in the annual financial interchange in the same manner as described 

for SSA. The RRB transferred $570 million and $597 million to CMS in fiscal years 2019 

and 2018, respectively. 

In addition to the financial interchange transactions, CMS reimburses the RRB for 

certain expenses it incurs associated with administering the Medicare program. The 

amounts reimbursed in fiscal years 2019 and 2018 were $13.6 million and $31.4 million, 

respectively. The fiscal year 2019 amount does not include the funds received for 

purposes of the SMAC contract which are recorded as a transfer and is described 

below. 

Finally, CMS funds are transferred to the RRB for the Specialty Medicare Administrative 

Contractor (SMAC) contract that provides specified health insurance benefit 

administration services. In fiscal year 2018, the transfer was recorded as a 

reimbursement. Effective for fiscal year 2019, amount transferred to fund the SMAC 

contract was recorded as a transfer and totaled $18.3 million. This change was agreed 

to by CMS for proper intragovernmental reporting. This change affected the 

presentation between the RRB’s fiscal year 2018 and fiscal year 2019 Statements of Net 

Cost and Statements of Changes in Net Position. On the fiscal year 2019 Statement of 

Net Cost, the Earned Revenue line was reduced and on the Statements of Changes in 

Net Position, the Transfers In/Out without Reimbursement line was increased by the 

amount transferred for the SMAC contract during fiscal year 2019. 

• GSA provides payroll processing and human resources services to the RRB. In 

addition, the RRB paid rent to GSA in the amount of $3.4 million for fiscal year 2019

and $3.1 million for fiscal year 2018.

• The Department of Labor invests RUIA contributions. Accounts receivable with the 

Department of Labor amounted to $120.4 million and $87.2 million for fiscal years 

2019 and 2018, respectively.

• NRRIT transfers funds to the RRB for payment of railroad retirement benefits. During 

fiscal years 2019 and 2018, the NRRIT transferred $1,794 million and $1,809 million, 

respectively, to the RR Account. The NRRIT holds and invests funds not immediately 

needed to pay benefits under the RRA. The net assets of the NRRIT are reported on 

the RRB’s balance sheet as a non-governmental investment. The RRB reports this 

information based on information provided by the NRRIT for that purpose.
- 69 -

3. Fund Balances with Treasury 

Fund balances with Treasury at September 30 consisted of:

2019 2018

1. Status of Fund Balance with Treasury

(1) Unobligated Balance

(a) Available $14,647,257 $13,138,714

(b) Unavailable 145,954,920 145,112,860

(2) Obligated Balance not yet Disbursed 160,794,846 174,235,667

(3) Non-Budgetary FBWT - -

Total $321,397,023 $332,487,241

2. Other Information: The above represents cash held in Treasury. Unobligated and obligated funds not held

in cash are invested in Treasury securities.

4. Investments

The investments in Treasury securities represent the investments of two of the RRB’s funds 

from dedicated collections, the RR and the SSEB Accounts.

Amounts for Balance Sheet Reporting

Cost Interest Receivable Investments Net

Intragovernmental Securities:

Non Marketable Par Value 2019 $1,789,771,000 $2,753,204 $1,792,524,204

Non Marketable Par Value 2018 $1,668,621,000 $2,636,222 $1,671,257,222

The balance on September 30, 2019, consisted of investments in 3.000 percent par value 

specials (with market value equal to face value) maturing on October 1, 2019. The balance on 

September 30, 2018, consisted of investments in 3.000 percent par value specials (with market 

value equal to face value) maturing on October 1, 2018. Par value specials mature on the first 

working day of the month following the month of issue and have a yield based on the average 

yield of marketable Treasury notes with maturity dates at least 3 years away.

The Federal Government does not set aside assets to pay future benefits or other expenditures 

associated with the RR and SSEB Accounts. The cash receipts from the railroads for the RR 

and SSEB Accounts are deposited in the Treasury, which uses the cash for general government 

purposes. Treasury securities are issued to the RRB as evidence of its receipts. Treasury 

securities are an asset to the RRB and a liability to the Treasury. Because the RRB and the 

Treasury are both parts of the Federal Government, these assets and liabilities offset each other 

from the standpoint of the government as a whole. For this reason, they do not represent an 

asset or a liability in the U.S. government-wide financial statements.

Treasury securities provide the RRB with authority to draw upon the Treasury to make future 

benefit payments or other expenditures. When the RRB requires redemption of these securities 

to make expenditures, the government finances those expenditures out of accumulated cash 

balances, by raising taxes or other receipts, by borrowing from the public or repaying less debt, 
- 70 -

or by curtailing other expenditures. This is the same way that the Federal Government finances 

all other expenditures.

5. NRRIT Net Assets

The balance sheet amounts represent the net asset value of NRRIT assets, at fair value, as of 

September 30, 2019 and 2018. These figures were provided to the RRB by the NRRIT for the 

fiscal years ended September 30, 2019 and 2018.

Readers of these financial statements should be aware that the Railroad Retirement and 

Survivors’ Improvement Act of 2001 authorizes the NRRIT to invest railroad retirement assets in 

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

plans.

6. Accounts Receivable 

• Intragovernmental

Accounts receivable - Intragovernmental at September 30 consisted of:

2019 2018

Financial Interchange – Principal $4,961,300,00000 $4,689,600,000

Financial Interchange – Interest 90,400,000 64,000,000

Department of Labor 120,402,127 87,228,997

Total $5,172,102,127 $4,840,828,997

• Accounts Receivable, Net

Accounts receivable, net at September 30 consisted of:

2019 2018

Accounts receivable – Benefit overpayments $47,335,742 $37,053,261

Accounts receivable – Past due RUI contributions and taxes 186,163 178,324

Accounts receivable – Interest, penalty & administrative costs 6,536,286 499,270

Accounts receivable ‐ Criminal Restitution 15,941,273 20,653,452

 Sub-Total $69,999,464 $58,384,307

Accounts receivable ‐ Criminal Restitution ‐

 Long Island Railroad 297,760,745 295,353,960

Total Gross Receivables $367,760,209 $353,738,267

Less: Allowances for doubtful accounts 12,346,291 8,907,271

Less: Allowances for doubtful accounts-Criminal Restitution 4,833,995 6,242,797

Less: Allowances for doubtful accounts‐Criminal Restitution ‐

Long Island Railroad 294,663,005 292,400,420

Total Net Receivables $55,916,918 $46,187,778
- 71 -

The allowance for doubtful accounts for the railroad retirement program was calculated, 

including debts classified as currently not collectible and excluding the criminal restitution

receivables, by averaging the percentages determined from the past five fiscal years of amounts 

due the RRB that would probably not be collected, and applying those percentages against 

accounts receivable.

The allowance for doubtful accounts for the criminal restitution is estimated at 30%. The

allowance for doubtful accounts for the criminal restitution – Long Island is estimated at 99% as 

the probability of collecting full restitution is unlikely, given that the large Long Island restitution 

amount due is from four individuals. The percentage is applied against the accounts receivable. 

7. General Property, Plant and Equipment

These assets are stated at cost less accumulated depreciation/amortization. Beginning with 

fiscal year 2014, acquisitions are capitalized if the cost is $50,000 or more and the service life is 

2 years or greater. Depreciation/amortization is computed on the straight-line method. These 

assets consisted of:

At September 30, 2019

Classes of Fixed Assets

Service

Lives Cost

Accumulated 

Depreciation

Net

Book Value

Structures, facilities and leasehold 

improvements 15 years $2,723,731 $2,723,731 $0

IT software 5 years 28,854,099 26,586,238 2,267,861

Equipment 5-10 years 7,042,610 6,944,430 98,180

Internal-Use Software in Development 618,477 - 618,477

Total $39,238,917 $36,254,399 $2,984,518

At September 30, 2018

Classes of Fixed Assets

Service

Lives Cost

Accumulated 

Depreciation

Net

Book Value

Structures, facilities and leasehold 

improvements 15 years $2,723,731 $2,723,731 $0

IT software 5 years 26,692,215 25,557,321 1,134,894

Equipment 5-10 years 7,042,673 6,901,801 140,872

Internal-Use Software in Development 3,115,994 - 3,115,994

Total $39,574,613 $35,182,853 $4,391,760
- 72 -

8. Liabilities 

Liabilities at September 30 consisted of:

2019 2018

A. Intragovernmental:

(1) Other – Unfunded Federal Employees

Compensation Act (FECA) Liability $226,560 $339,677

B. Public:

(1) Other – Accrued Unfunded Leave 6,909,971 6,929,759

Total Liabilities Not Covered by Budgetary Resources $7,136,531 $7,269,436

Total Liabilities Covered by Budgetary Resources 6,158,843,995 5,858,391,476

Total Liabilities Not Requiring Budgetary Resources 1,562,624 1,552,149

Total Liabilities $6,167,543,150 $5,867,213,061

• Debt

Intragovernmental debt results from borrowing from Treasury to fund benefit payments from the

SSEB Account.

2019 2018

Beginning Balance, Principal $3,725,200,000 $3,711,700,000

New Borrowing 4,301,200,000 4,104,300,000

Repayments (4,092,500,000) (4,090,800,000)

Ending Balance, Principal $3,933,900,000 $3,725,200,000

Accrued Interest 48,321,827 44,357,030

Total $3,982,221,827 $3,769,557,030

• Benefits Due and Payable

Benefits due and payable are accrued for all benefits to which recipients are entitled for the 

month of September, which, by statute, are not paid until October. Also, liabilities are accrued 

on benefits for past periods that have not completed processing, such as benefit payments due 

but not paid. The amounts include uncashed checks of $15,365,285 and $14,873,336, at 

September 30, 2019 and 2018, respectively. Under Public Law 100-86, the amount of RRB 

benefits represented by checks which remain uncashed for 12 months after the check issue 

date are credited (including interest thereon) to the accounts from which the checks were 

drawn. The principal amount of uncashed checks must remain in a liability account until the 

RRB determines that entitlement no longer exists or another check is issued to the beneficiary.

A special workload of approximately 10,696 benefit cases, estimated at $5.3 million, has been 

identified and will be processed over the next few years.
- 73 -

• Other Liabilities

Other liabilities at September 30 consisted of:

Non-Current Current

2019

Total

Intragovernmental:

Employer Contributions & Payroll Taxes Payable $1,364,768 $1,364,768

Unfunded FECA Liability 226,560 226,560

Other Liabilities With Related Budgetary Obligations - -

Total Intragovernmental 1,591,358 1,591,358

Accrued Unfunded Liabilities 6,909,971 6,909,971

Accrued Payroll 3,327,844 3,327,844

Accrued RRB Contributions – Thrift Savings Plan (782,301) (782,301)

Other Unfunded Employment – Related Liability 755,565 755,565

Contingent Liability (see Note 9 for details) $351,056,667 351,056,667

Other 55,395,178 55,395,178

Total Other Liabilities $351,056,667 $67,197,615 $418,254,282

Non-Current Current

2018

Total

Intragovernmental:

Employer Contributions & Payroll Taxes Payable $1,834,524 $1,834,524

Unfunded FECA Liability 339,677 339,677

Other Liabilities With Related Budgetary Obligations

Total Intragovernmental 2,174,201 2,174,201

Accrued Unfunded Liabilities 6,929,760 6,929,760

Accrued Payroll 2,974,273 2,974,273

Accrued RRB Contributions – Thrift Savings Plan (841,741) (841,741)

Other Unfunded Employment – Related Liability 531,018 531,018

Contingent Liability (see Note 9 for details) $361,163,527 361,163,527

Other 13,239,267 13,239,267

Total Other Liabilities $361,163,527 $25,006,778 $386,170,305
- 74 -

9. Commitments and Contingencies

The RRB is involved in the following actions: 

Legal Contingencies:

• Several Class I railroads have filed claims for refund of taxes with the Internal Revenue 

Service (IRS). Of the $166.7 million in claims, the RRB’s legal counsel has determined 

that it is probable that the RR and SSEB Accounts are contingently liable for $159.3 

million, and the remaining $7.3 million is reasonably possible. Under the anti-disclosure 

provision of the IRS code, we are not permitted to disclose any details related to these 

claims. No provision has been made in the accompanying financial statements 

regarding the reasonably possible claims other than this disclosure. Details may not add 

to totals due to rounding.

• One railroad filed suit requesting a refund of $12.0 million for tax on stock transferred to 

its employees upon the exercise of non-qualified stock options and the vesting of 

performance stock or restricted stock units. The refund request also includes tax on 

relocation benefits for the railroad employees and their families. The RRB’s general 

counsel has determined that the likelihood of loss is probable.

Other Contingencies: We also recorded a contingent liability in the amount of $179.7 million, for 

forthcoming adjustments to the financial interchange for military service credits due SSA.

Commitments: As of September 30, 2019, the RRB had contractual arrangements which may 

result in future financial obligations of $54.1 million.

Contingent Loss Table

Accrued Liabilities

Estimated Range of Loss

FY 2019 Lower End Upper End

Legal Contingencies:

 Probable $171,356,667 $171,356,667 $171,356,667

 Reasonably Possible 7,336,520 $7,336,520 $7,336,520

Other Contingencies:

 Probable $179,700,000 $179,700,000 $179,700,000

 Reasonably Possible $0 $0 $0 

Accrued Liabilities

Estimated Range of Loss

FY 2018 Lower End Upper End

Legal Contingencies:

 Probable $180,963,527 $180,963,527 $180,963,527

 Reasonably Possible $21,500,000 $21,500,000 $21,500,000

Other Contingencies:

 Probable $180,200,000 $180,200,000 $180,200,000

 Reasonably Possible $0 $0 $0
- 75 -

10. Transfers To/From NRRIT

The RRB received a total of $1,794 million and $1,809 million from the NRRIT during fiscal 

years 2019 and 2018, respectively. These funds were received into the RR Account. Transfers 

were to fund the payment of benefits.

11. Undelivered Orders at the End of the Period

2019 2018

Federal Undelivered Orders $0 $0

Non-Federal Undelivered Orders 31,714,188 28,309,759

Total Federal/Non-Federal Undelivered Orders $31,714,188 $28,309,759

Paid Undelivered Orders $0 $0

Unpaid Undelivered Orders 31,714,188 28,309,759

Total Paid/Unpaid Undelivered Orders $31,714,188 $28,309,759

 

Total Undelivered Orders $31,714,188 $28,309,759
- 76 -

12. Explanation of Differences Between the Combined Statement of Budgetary 

Resources and the Budget of the United States Government

A reconciliation was completed of budgetary resources, obligations incurred, distributed 

offsetting receipts, and outlays, as presented in the Statement of Budgetary Resources for the 

year ended September 30, 2018, to amounts included in the Budget of the United States 

Government. A reconciliation was not performed for the period ended September 30, 2019, 

since the RRB’s Performance and Accountability Report is published in November 2019, and 

OMB’s MAX system will not have actual budget data available until after the RRB’s P&AR is

published.

The Budget of the United States Government and the RRB’s Statement of Budgetary 

Resources differ because of the following transaction types:

Fiscal Year 2018 (in millions) Budgetary 

Resources

New 

Obligations & 

Upward 

Adjustments 

(Total)

Distributed 

Offsetting 

Receipts

Net Outlays

1. Combined Statement of Budgetary Resources –

September 30, 2018 $14,179 $14,010 $5,060 $8,726

2. Expenditure Transfers from Trust Funds (125)

3. Unobligated Balance, Brought Forward

October 1, 2017 as adjusted (175)

4. Recoveries of Prior Year Unpaid Obligations (1)

5. Sickness Insurance Benefit Recoveries (11)

6. Administrative Expense Reimbursement (32)

7. Interfund Transfers: Federal Payment

 Obligations – Income Taxes Collected

 on Benefits (0113)

(775)

8. Intrafund Transfers: Receipts from the Old-Age and 

Survivors Insurance (OASI) Trust Fund (4,769)

9. Intrafund Transfers: Receipts from the Disability 

Insurance (DI) Trust Fund (174)

FINANCIAL INTERCHANGE

10. Accrued Receipts from the OASI and DI Trust Funds 35 (35)

11. Accrued Transfers to the Federal Hospital Insurance 

Trust Fund 623 (623)

NRRIT

12. NRRIT Obligations / Outlays 1,887 1,887 1,887

13. Intrafund Transfers: NRRIT Transfer to RRA (1,809) 1,809 (1,809)

14. Proprietary Receipts: NRRIT – Gains and Losses (1,578) 1,578 (1,578)

15. Proprietary Receipts: NRRIT – Interest and 

Dividends (406) 406 (406)

16. Rounding (2) 2

17. Budget of the United States Government FY 2018 

Actuals $6,209 $15,897 $9,511 $6,164
- 77 -

13. Social Insurance 

• Surplus/ (unfunded obligation) represents combined values for the RR Account, SSEB

Account, and NRRIT.

• Estimated future revenue includes tier I taxes, tier II taxes, income taxes on benefits, and

financial interchange income, where financial interchange income consists of financial

interchange transfers plus financial interchange advances from general revenues less

repayment of financial interchange advances from general revenues.

• Estimated future expenditures include benefit and administrative costs.

• Detail may not add to totals due to rounding. Employee and beneficiary status are 

determined as of 1/1/2019, whereas present values are as of 10/1/2019.

• Beginning with the fiscal year 2016 reporting period, the valuation period of the SOSI 

was changed from calendar year to fiscal year. The valuation date for the SOSI was set 

back three months, from January 1, 2016, to October 1, 2015. Although the SOSI

shows present values for the current year and four previous years, the present values for 

the previous calendar year 2015 are not being restated but will remain on a calendar 

year basis. This change was made because of a request from the NRRIT to adjust the 

valuation period for the SOSI from calendar year to fiscal year for financial and 

administrative purposes. Financially, the NRRIT saves $200,000 per year in contract 

services required to prepare a second financial statement audit covering a three-month 

period (October 1 to December 31) after the first audit is achieved on a fiscal year basis.

• Due to the use of the Account Benefits Ratios to determine tier II tax rates, higher 

Treasury security and asset balances result in lower tax rates and consequently lower 

future tax income whereas lower Treasury security and asset balances result in higher 

rates and income.

• Statement of Changes in Social Insurance Amounts:

• Changes in valuation period:

• Between 10/1/2016 and 10/1/2017: Changes in the valuation period from 

fiscal years 2017-2091 to fiscal years 2018-2092 had a change of about 

$0.6 billion on the open group measure between 10/1/2016 and 10/1/2017.

• Between 10/1/2017 and 10/1/2018: Changes in the valuation period from 

fiscal years 2018-2092 to fiscal years 2019-2093 had a change of about 

$(0.5) billion on the open group measure between 10/1/2017 and 

10/1/2018.

• Changes in demographic data, assumptions, and methods:

• Between 10/1/2016 and 10/1/2017: Some demographic assumptions, such 

as the Annuitants Mortality Table, the Disabled Mortality Table for 

Annuitants with Disability Freeze, the Disabled Mortality Table for 

Annuitants without Disability Freeze, the Active Service Mortality Table, the 

Spouse Total Termination Table, the probability of a spouse, the rates of 

immediate age retirement, the rates of immediate disability retirement, the 
- 78 -

rates of eligibility for disability freeze, service months, salary scales, and 

family characteristics, were changed between the Statement of Social 

Insurance as of 10/1/2016 and the Statement of Social Insurance as of 

10/1/2017. Changes in demographic data and assumptions had a change 

of about ($0.3) billion on the open group measure between 10/1/2016 and 

10/1/2017.

• Between 10/1/2017 and 10/1/2018: Demographic assumptions were not 

changed between the Statement of Social Insurance as of 10/1/2017 and 

the Statement of Social Insurance as of 10/1/2018. Changes in 

demographic data resulted in a minimal change in the in the open group 

measure between 10/1/2017 and 10/1/2018.

• Changes in economic data, assumptions, and methods:

• Between 10/1/2016 and 10/1/2017: Ultimate economic assumptions were 

changed between the Statement of Social Insurance as of 10/1/2016 and 

the Statement of Social Insurance as of 10/1/2017, as were select economic 

assumptions. The actual COLA of 2.0% was used for 2018 in place of the 

1.9% COLA assumed for 2018 in the prior year’s report. A 2.6% COLA was 

used for 2019 instead of a 2.3% COLA, and a 2.6% COLA was assumed for 

2020 and later years instead of a 2.7% COLA. A wage increase 

assumption of 3.6% was used for 2017 and later years instead of a 3.7% 

wage increase assumption. Changes in economic data, assumptions, and 

methods resulted in a change of about ($2.0) billion from 10/1/2016 to 

10/1/2017.

• Between 10/1/2017 and 10/1/2018: Ultimate economic assumptions were 

not changed between the Statement of Social Insurance as of 10/1/2017 

and the Statement of Social Insurance as of 10/1/2018, but there were 

changes in select economic assumptions. The actual COLA of 2.8% was 

used for 2019 in place of the 2.6% COLA assumed for 2019 in the prior 

year’s report. A 1.4% COLA was assumed for 2020 instead of a 2.6% 

COLA, and a 2.0% COLA was assumed for 2021 instead of a 2.6% COLA. 

Changes in economic data, assumptions, and methods resulted in a change 

of about $0.2 billion in the open group measure from 10/1/2017 to 

10/1/2014. There were no changes in law or policy.

• There were no changes in law or policy. 

• There were no changes in methodology and programmatic data.

• Medicare healthcare and other healthcare assumptions are not applicable to the

Railroad Retirement program.
- 79 -

14. Sustainability Financial Statements Disclosure

The sustainability financial statements are based on management’s assumptions. These 

sustainability financial statements present the actuarial present value of the RRB’s estimated 

future income to be received and future expenditures to be paid using a projection period 

sufficient to illustrate long-term sustainability. The sustainability financial statements are 

intended to aid users in assessing whether future resources will likely be sufficient to sustain 

public services and to meet obligations as they come due. The Statements of Social Insurance 

and Changes in Social Insurance Amounts are based on income and benefit formulas in current 

law and assume that scheduled benefits will continue after any related trust funds are 

exhausted. The statements of long-term fiscal projections are based on the continuation of 

current policy. The sustainability financial statements are not forecasts or predictions. The 

sustainability financial statements are not intended to imply that current policy or law is 

sustainable. In preparing the sustainability financial statements, management considers and 

selects assumptions and data that it believes provide a reasonable basis to illustrate whether 

current policy or law is sustainable. Assumptions underlying such sustainability information do 

not consider changes in policy or all potential future events that could affect future income, 

future expenditures, and sustainability, for example, implementation of policy changes to avoid 

trust fund exhaustion or unsustainable debt levels. Because of the large number of factors that 

affect the sustainability financial statements and the fact that future events and circumstances 

cannot be estimated with certainty, even if current policy is continued, there will be differences 

between the estimates in the sustainability financial statements and the actual results, and 

those differences may be material.

15. Significant Assumptions

The estimated future revenue and expenditures in the SOSI and Required Supplementary 

Information are based on the assumption that the program will continue as presently 

constructed. The calculations assume that all future transfers required by current law under the 

financial interchange will be made. 

The estimated future revenue and expenditures are also based on various economic, 

employment, and other actuarial assumptions. The ultimate economic assumptions are a 7.0 

percent investment return, a 2.6 percent annual increase in the cost of living, and a 3.6 percent 

annual wage increase.

The employment assumption for the SOSI is employment assumption II, the intermediate 

employment assumption, as used in the 2019 Section 502 Report. Under employment 

assumption II, starting with an average 2018 employment of 223,000, (1) railroad passenger 

employment is assumed to remain level at 48,000, and (2) the employment base, excluding 

passenger employment, is assumed to decline at a constant annual rate of 2.0 percent for 25 

years, at a reducing rate over the next 25 years, and remain level thereafter.

Actuarial assumptions are those published in the Technical Supplement to the “Twenty-Seventh 

Actuarial Valuation of the Assets and Liabilities Under the Railroad Retirement Acts as of 

December 31, 2016.” This may be found on the RRB’s website, www.RRB.gov.
- 80 -

Actuarial assumptions published in the Twenty-Seventh Actuarial Valuation include:

Table S-1. 2013 Base Year RRB Annuitants Mortality Table

Table S-2. 2013 Base Year RRB Disabled Mortality Table for Annuitants with Disability 

Freeze

Table S-3. 2013 Base Year RRB Disabled Mortality Table for Annuitants without Disability 

Freeze

Table S-4. 2012 RRB Active Service Mortality Table

Table S-5. 2013 Base Year RRB Spouse Total Termination Table

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

benefits

Table S-7. 2013 RRB Mortality Table for Widow

Table S-8. 1997 RRB Remarriage Table

Table S-9. 2004 RRB Total Termination Table for Disabled Children

Table S-10. 2013 RRB Mortality Improvement Scale

Table S-11. Calendar year rates of immediate age retirement

Table S-12. Rates of immediate disability retirement and of eligibility for disability freeze

Table S-13. Calendar year rates of final withdrawal

Table S-14. Service months and salary scales

Table S-15. Family characteristics of railroad employees assumed for the valuation of

survivor benefits
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17. Terms of Borrowing Authority Used

The RRB, Social Security Administration and Centers for Medicare and Medicaid Services are 

parties to a financing arrangement described as the “financial interchange”.

The financial interchange between the railroad retirement and social security systems is 

intended to put the Social Security Old-Age, Survivors, and Disability Insurance and Hospital 

Insurance trust funds in the same position they would have been had railroad employment been 

covered under the Social Security and Federal Insurance Contributions Acts.

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

following the close of a fiscal year. The Railroad Retirement Solvency Act of 1983, as 

amended, provided for monthly advances of the financial interchange from the U.S. Treasury 

general fund to be repaid when the financial interchange is settled each June. Each 

advance/loan is equal to an estimate of the transfer the RRB would have received in the 

preceding month if the financial interchange with social security were on an up-to-date basis, 

with interest adjustments. The RRB must repay these advances/loans when it receives the 

transfer from social security against which the money was advanced.

Section 7(c)(4) of the 1974 RRA, as amended, provides the rules for repayment of the financial 

interchange advances and references Section 7(c)(3) for the interest rate to be used.

The interest rate on the repayment of the advances is the same as that used in the actual 

financial interchange determination from the close of the prior fiscal year until the date of the 

transfer.

18. Available Borrowing Authority, End of the Period 

The amount of RRB available borrowing authority at the end of the period associated with 

financial interchange advances is $4,241,400,000.

19. Legal Arrangements Affecting Use of Unobligated Balances

The portion of RRB trust fund receipts collected in the current fiscal year that exceed the 

amount needed to pay benefits or other valid obligations remain in the RRB trust funds as 

unobligated balances. These receipts can become available in the current year if needed for

valid obligations. RRB receipts are assets of the trust fund and available for obligation as 

needed in the future.

20. Subsequent Events 

There was a decrease of $1,180.6 million in NRRIT net assets from the SOSI, October 1, 2018, 

valuation date and the September 30, 2019, balance sheet date. Other than this event, no 

other material events or transactions have occurred subsequent to September 30, 2019 of 

which we are aware. We have evaluated subsequent events through November 15, 2019, the 

date the financial statements were released.
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21. Permanent Indefinite Appropriations 

In fiscal year 2019, the Railroad Retirement Board had the following permanent indefinite 

appropriations that were available until expended:

a. 60X0113 – Federal Payments to the Railroad Retirement Accounts, 60X0113, was 

established by OMB, not by legislation, and is used as a conduit for transferring certain 

income taxes on benefits; receiving credit for the interest portion of uncashed check 

transfers; and funds provided by the Tax Relief, Unemployment Insurance Reauthorization, 

and Job Creation Act of 2010. Account 60X0113 is considered a fund from dedicated 

collections. This account has no basis in law.

b. 60X8010 – Social Security Equivalent Benefit Account, 60X8010, funds the portion of 

railroad retirement benefits equivalent to a social security benefit from various income 

sources related to these benefits. Account 60X8010 is considered a fund from dedicated 

collections. Our authority to use these collections is 45 U.S.C. § 231n-1(c) (1).

c. 60X8011 – Railroad Retirement Account, 60X8011, funds retirement, survivor, and disability 

benefits in excess of social security equivalent benefits from payroll taxes on employers and 

employees and other income sources. Account 60X8011 is considered a fund from 

dedicated collections. Our authority to use these collections is 45 U.S.C. § 231f(c) (1).

d. 60X8051.001 – Railroad Unemployment Insurance Trust Fund, Benefit Payments, 

60X8051.001, funds railroad unemployment and sickness insurance benefits from 

contributions by railroad employers. Account 60X8051.001 is considered a fund from 

dedicated collections. Our authority to use these collections is 45 U.S.C. § 360.

e. 60X8051.002 – Railroad Unemployment Insurance Trust Fund, Administrative Expenses, 

60X8051.002, was established to pay salaries and expenses to administer the program. 

Account 60X8051.002 is considered a fund from dedicated collections. This fund is 

financed by contributions from railroad employers. Monies are transferred from this fund, 

based on cost accounting estimates and records, to the Limitation on Administration 

Account (60 8237) from which salaries and expenses are paid for both the railroad 

retirement program and the railroad unemployment and sickness insurance program. Our 

authority to use these collections is 45 U.S.C. § 361.

22. Budget and Accrual Reconciliation

Budgetary and financial accounting information differ. Budgetary accounting is used for 

planning and control purposes and relates to both the receipt and use of cash, as well as 

reporting the federal deficit. Financial accounting is intended to provide a picture of the 

government's financial operations and financial position so it presents information on an accrual 

basis. The accrual basis includes information about costs arising from the consumption of 

assets and the incurrence of liabilities. The reconciliation of net outlays, presented on a 

budgetary basis, and the net cost, presented on an accrual basis, provides an explanation of 

the relationship between budgetary and financial accounting information. The reconciliation 

serves not only to identify costs paid for in the past and those that will be paid in the future, but 

also to assure integrity between budgetary and financial accounting. The analysis below 

illustrates this reconciliation by listing the key differences between net cost and net outlays.
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The increase in net cost over the previous year is due to higher benefit payments in Fiscal Year 

2019. The year over year difference in accounts receivable is due to an increase in the annual 

Financial Interchange (FI) settlement from Social Security Administration (SSA). The large 

increase of accounts payable compared to last year is due to annual settlement of FI loan 

interest. The decrease in other liabilities is due to less payables owed to Centers for Medicare 

and Medicaid services (CMS). The decrease in other is due to the net effect of higher warrants 

received in Fiscal Year 2019 offset by higher delivered orders unpaid in Fiscal Year 2019. The 

other temporary timing difference is mainly due to the prior year adjustment as a result of 

transfer of fixed assets from canceled fund to current fund family.
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Budget and Accrual Reconciliation for

For the year ended of September 30, 2019

Intra- governmental With the public Total FY 2019

NET COST $121,333,613 $13,277,031,074 $13,398,364,688

Components of Net Cost That Are Not Part of Net Outlays:

Other - - -

Increase/(decrease) in assets:

Accounts receivable (5,379,028,997) 9,000,028 (5,370,028,969)

Investments - - -

Other assets 911,976 2,808,311 3,720,288

(Increase)/decrease in liabilities:

Accounts payable (113,772,840) (77,268,069) (191,040,910)

Salaries and benefits - (479,415) (479,415)

Insurance and guarantee program liabilities - - -

Environmental and disposal liabilities - - -

Other liabilities 684,922,386 (746,147) 684,176,240

Other financing sources:

Federal employee retirement benefit costs paid by OPM and imputed 

to the agency (8,439,391) - (8,439,391)

Transfers out (in) without reimbursement 719,020,216 - 719,020,216

Total Components of Net Cost That Are Not Part of Net Outlays (4,096,386,649) (66,685,291) (4,163,071,941)

Components of Net Outlays That Are Not Part of Net Cost:

Effect of prior year agencies credit reform subsidy re-estimates - - -

Acquisition of capital assets - - -

Acquisition of inventory - - -

Acquisition of other assets Debt and equity securities - - -

Other - (632,032,435) (632,032,435)

Total Components of Net Outlays That Are Not Part of Net Cost - (632,032,435) (632,032,435)

Other Temporary Timing Differences - (3,659,476) (3,659,476)

NET OUTLAYS ($3,975,053,037) $12,574,653,872 $8,599,600,835
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Budget and Accrual Reconciliation for

For the year ended September 30, 2018

Intra- governmental With the public Total FY 2018

NET COST $99,991,118 $12,951,082,102 $13,051,073,220 

Components of Net Cost That Are Not Part of Net Outlays:

Other - - -

Increase/(decrease) in assets:

Accounts receivable (5,042,425,000) 4,085,246 (5,038,339,754)

Investments - - -

Other assets (525,272) (440,166) (965,438)

(Increase)/decrease in liabilities:

Accounts payable (106,657,663) (29,330,707) (135,988,370)

Salaries and benefits 41,167 (156,676) (115,509)

Insurance and guarantee program liabilities - - -

Environmental and disposal liabilities - - -

Other liabilities 756,888,680 (251,767) 756,636,913 

Other financing sources:

Federal employee retirement benefit costs paid by OPM and 

imputed to the agency (7,213,652) - (7,213,652)

Transfers out (in) without reimbursement 775,575,865 - 775,575,865 

Total Components of Net Cost That Are Not Part of Net Outlays (3,624,315,875) (26,094,070) (3,650,409,945)

Components of Net Outlays That Are Not Part of Net Cost:

Effect of prior year agencies credit reform subsidy re-estimates - - -

Acquisition of capital assets - - -

Acquisition of inventory - - -

Acquisition of other assets Debt and equity securities - - -

Other (7,328) (674,433,562) (674,440,890)

Total Components of Net Outlays That Are Not Part of Net Cost (7,328) (674,433,562) (674,440,890)

Other Temporary Timing Differences - - -

NET OUTLAYS ($3,524,332,085) $12,250,554,470 $8,726,222,385 
- 88 -

23. Reclassification of Balance Sheet, Statement of Net Cost, and

 Statement of Changes in Net Position for FR Compilation Process

To prepare the Financial Report of the U.S. Government (FR), the Department of the Treasury 

requires agencies to submit an adjusted trial balance, which is a listing of amounts by U.S. Standard 

General Ledger account that appear in the financial statements. Treasury uses the trial balance 

information reported in the Governmentwide Treasury Account Symbol Adjusted Trial Balance 

System (GTAS) to develop a Reclassified Balance Sheet, Reclassified Statement of Net Cost, and a 

Reclassified Statement of Changes in Net Position for each agency, which are accessed using 

GTAS. Treasury eliminates all intragovernmental balances from the reclassified statements and

aggregates lines with the same title to develop the FR statements. This note shows the RRB’s 

financial statements and the RRB’s reclassified statements prior to elimination of intragovernmental 

balances and prior to aggregation of repeated FR line items. A copy of the 2019 FR can be found 

here: https://www.fiscal.treasury.gov/reports-statements/ and a copy of the 2019 FR will be posted to 

this site as soon as it is released.

The term “non-Federal” is used in this note to refer to Federal Government amounts that result 

from transactions with non-Federal entities. These include transactions with the term “nonFederal” is used in this note to refer to Federal Government amounts that
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Reclassification of Balance Sheet to Line Items Used for the Government-wide

Balance Sheet as of September 30, 2019
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Reclassification of Statement of Net Cost to Line Items Used for the Government-wide 

Statement of Net Cost for the Year Ended September 30, 2019
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Reclassification of Statement of Changes in Net Position to Line Items Used for

Government-wide Statement of Operations and Changes in Net Position 

for the Year Ended September 30, 2019
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Required Supplementary Information

Social Insurance

Program Financing

Payroll taxes paid by railroad employers and their employees are the primary source of funding for 

the railroad retirement-survivor benefit programs. Railroad retirement taxes, which have 

historically been higher than social security taxes, are calculated, like benefit payments, on a twotier basis. Railroad retirement tier I payroll taxes are coordinated with social security taxes so that 

employees and employers pay tier I taxes at the same rate as social security taxes. In addition, 

both employees and employers pay tier II taxes that are used to finance railroad retirement benefit 

payments over and above social security levels. The tier II tax rate is based on the ratio of certain 

asset balances to the sum of benefit payments and administrative expenses.

Revenues in excess of benefit payments are invested to provide additional trust fund income. The 

NRRIT oversees most investments, including all investments in non-governmental assets. 

Additional trust fund income is derived from the financial interchange (FI) with the social security 

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

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

certain vested dual benefits.

The financial interchange between the railroad retirement and social security systems is intended 

to put the Social Security Administration (SSA) Federal Old-Age, Survivors, and Disability 

Insurance (FOASI/DI) trust funds and the Centers for Medicare and Medicaid Services (CMS) 

Federal Hospital Insurance (FHI) trust fund in the same position they would have been had railroad 

employment been covered under the Social Security and Federal Insurance Contributions Acts. It 

follows that all computations under the FI are performed according to social security law.

Placing the social security trust funds in the same position they would have been had railroad 

employment been covered under social security since its inception involves computing the 

additional amount of social security payroll and income taxes which social security would have 

received and computing the amount of additional benefits which social security would have paid to 

railroad retirement beneficiaries during the same fiscal year. In the computation of the latter 

amount, credit is given for any social security benefits actually paid to railroad retirement 

beneficiaries. When benefit reimbursements exceed payroll and income taxes, the difference, with 

an allowance for interest and administrative expenses, is transferred from the social security trust 

funds to the SSEB Account. If taxes exceed benefit reimbursements, a transfer would be made in 

favor of the social security trust funds. 

On a present value basis, funds provided through the FI are expected to equal $90.8 billion, or 

34.7% of the estimated future revenue of $261.9 billion. Although the contributions and 

expenditures related to the FI have historically been included in the SOSI they are in effect 

primarily contributions and expenditures of SSA that are administered by the RRB.

Benefits

Full age annuities are payable at age 60 to workers with 30 years of service. For those with less 

than 30 years of service, reduced annuities are payable at age 62 and unreduced annuities are 

payable at full retirement age, which is gradually rising from 65 to 67, depending on year of birth. 

Disability annuities can be paid on the basis of total or occupational disability. Annuities are also 
- 93 -

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

spouses, partitioned surviving spouses, partitioned surviving divorced spouses, remarried 

widow(er)s, children, and parents of deceased railroad workers. Qualified railroad retirement 

beneficiaries are covered by Medicare in the same way as social security beneficiaries.

Jurisdiction over the payment of retirement and survivor benefits is shared by the RRB and SSA. 

The RRB has jurisdiction over the payment of retirement benefits if the employee had at least 10 

years of railroad service, or five years if performed after 1995; for survivor benefits, there is an 

additional requirement that the employee’s last regular employment before retirement or death was 

in the railroad industry. If a railroad employee or his or her survivors do not qualify for railroad 

retirement benefits, the RRB transfers the employee’s railroad retirement credits to SSA, where 

they are treated as social security credits.

Program Finances and Sustainability

The RRB must submit to the President and the Congress a report on the actuarial status of the 

railroad retirement system. Projections are made of the various components of income and outgo 

under three employment assumptions.

The SOSI presents an actuarial analysis of the financial position of the railroad retirement system 

as of October 1, 2018. The figures in the table are based on the 2019 Section 502 Report 

extended through fiscal year 2093. The present values of estimated future revenue and 

expenditures in the table are based on estimates of revenue and expenditures through the fiscal 

year 2093. The estimates include revenue and expenditures related to future participants as well 

as to former and present railroad employees. The present values are computed on the basis of 

economic and demographic assumptions and employment assumption II, the intermediate 

employment assumption, as used in the 2019 Section 502 Report. Under employment assumption 

II, starting with an average 2018 employment of 223,000, (1) railroad passenger employment is 

assumed to remain level at 48,000, and (2) the employment base, excluding passenger 

employment, is assumed to decline at a constant annual rate of 2.0 percent for 25 years, at a 

reducing rate over the next 25 years, and remain level thereafter.

Actuarial Estimates: Actuarial estimates of the long-range financial condition of the railroad 

retirement program are presented here. Throughout this section, the following terms will generally 

be used as indicated:

• Revenue: sources of revenue are payroll taxes, income taxes, investment income, and 

financial interchange transfers.

• Revenue excluding interesta

: revenue, as defined above, excluding the investment income 

from assets of the trust fund.

• Expenditures: benefit payments and administrative expenses.

• Cashflow: either (1) revenue excluding interest or (2) expenditures, depending on the 

context, expressed in nominal dollars.

• Net Cashflow: revenue excluding interest less expenditures, expressed in nominal dollars.

The SOSI and the required supplementary information are based on actuarial and economic 

assumptions used in the 2019 Section 502 Report extended through fiscal year 2093, the RRA, 
- 94 -

and the Railroad Retirement Tax Act and, for the Financial Interchange, the Social Security and 

Federal Insurance Contributions Acts. The charts in the required supplementary information are on 

a calendar year basis. This information includes:

(1) actuarial present values of future estimated expenditures for and estimated revenue from, 

or on behalf of, current and future program participants; 

(2) estimated annual revenue excluding interest and expenditures in nominal dollars and as a 

percentage of taxable payroll;

(3) the ratio of estimated annuitants to estimated full-time employees, showing the relationship 

between the program’s benefit recipients and taxpayers; and

(4) an analysis of the sensitivity of the projections to changes in selected assumptions, which 

is included in recognition of the inherent uncertainty of those assumptions.

Estimated future revenue and expenditures are generally based on a 75-year projection period. 

Estimated future revenue and expenditures extending far into the future are inherently uncertain, 

with uncertainty increasing with time.

Cashflow Projections – Chart 1 shows actuarial estimates of railroad retirement annual revenue, 

revenue excluding interest, and expenditures for 2019-2093 in nominal dollars. The estimates are 

for the open-group population, which includes all persons projected to participate in the railroad 

retirement program as workers or beneficiaries during the period. Thus, the estimates include 
- 95 -

payments from, and on behalf of, those who will be employed by the railroads during the period as 

well as those who already have been employed at the beginning of the period. They also include 

expenditures made to, and on behalf of, such workers during that period. 

As Chart 1 shows, annual revenue exceeds annual expenditures in the years 2026 through 2041 

and 2050 through 2093. Without investment income, however, annual expenditures are greater 

than annual revenue throughout most of the period, except in 2055 through 2061. Reasons for 

this pattern include participant demographics, the assumed drop in railroad employment, and the 

automatic tier II tax rate adjustment mechanism. The combined balance of the NRRIT, RR 

Account, and SSEB Account never becomes negative largely because (i) a sufficient balance 

exists at the beginning of the projection period and (ii) tier II tax rates respond automatically to 

changing account balances. 

Percentage of Taxable Payroll – Chart 2 shows estimated annual revenue excluding interest and 

expenditures for the railroad retirement program expressed as percentages of taxable payroll. 

Expenditures as a percentage of payroll range between 68% and 72% through 2060, after which 

the percentage decreases until reaching 52% in 2093. This is largely due to the projected decline 

in the number of annuitants per full-time employee. Except for the revenue from tier I payroll 

taxes, the sources of revenue vary as a percentage of payroll. 

Sensitivity Analysis: The projections of the future financial status of the railroad retirement program 

depend on many economic and demographic assumptions including rail employment, inflation, 

wage increase, investment return, age retirement, disability retirement, withdrawal, active service 
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mortality, beneficiary mortality, spouse total termination, probability of spouse, remarriage, family 

composition, disability freeze, service patterns, and salary scales. Because perfect long-range 

projections are impossible, this section is included to illustrate the sensitivity of the long-range 

projections to changes in certain key assumptions that have the greatest impact on the results. All 

present values are calculated as of October 1, 2018, and are based on estimates of revenue and 

expenditures during the fiscal years 2019-2093 projection period. 

Employment: Average employment in the railroad industry has generally been in decline for some 

years. Although employment has increased in recent years, it began to decrease again in 2015 

and is generally expected to continue declining in future years. Since employment is a key 

consideration, projections of revenue and expenditures using three different employment 

assumptions have been made. The SOSI uses employment assumption II, the intermediate 

assumption, but this section compares results under the three assumptions. For all three cases, 

the average employment for the calendar year 2018 is equal to 223,000. 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 48,000 and (2) the employment 

base, excluding passenger employment, will decline at a constant annual rate (0.5 percent for 

assumption I and 2.0 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 40,000 is reached and then remain level, and (2) the employment base, excluding 

passenger employment, will decline at a constant annual rate of 3.5 percent for 25 years, at a 

reducing rate over the next 25 years, and remain level thereafter. Employment assumptions I, II, 

and III are intended to provide an optimistic, moderate, and pessimistic outlook, respectively.

Table 1 shows the excess of assets and the estimated present value of revenue over the 

estimated present value of expenditures for the three employment assumptions. 

Table 1

Excess of Assets and Estimated Present Value of Revenue over Estimated Present Value of 

Expenditures for Three Employment Assumptions, 2019-2093

(in billions)

Employment Assumption I II III

Present Value $2.6 $1.4 $(1.4)

Average Tier II tax ratea 17.1% 19.2% 21.3%

aAverage combined employer/employee tier II tax rate is calculated by dividing the present value of tier II 

taxes by the present value of tier II payroll. 
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Chart 3a shows the combined balance of the accounts under each of the three 

employment assumptions. Note that the combined account balance is positive throughout 

the entire period for assumptions I and II but becomes negative in 2049 for assumption III 

and remains so throughout the remainder of the period. Negative after-transfer balances 

under employment assumption III indicate the amount that would be owed, including 

interest, if unreduced benefits were paid by borrowing.
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Chart 3b shows the tier II tax rate under these employment assumptions. The tax rate reaches 12 

percent in 2091 under employment assumption I but then increases to 14 percent in 2092 and 

2093. Under employment assumption II, the tax rate first increases to 27 percent in 2055 through 

2061 and then decreases until it reaches 18 percent in 2073, remaining at that level through the 

end of the projection period. Under employment assumption III, the tax rate reaches the maximum 

of 27 percent in 2040, remaining at that level through the rest of the 75-year period.

The tier II tax rate for each year is determined by the average account benefits ratio, which is the 

average for the ten most recent fiscal years of the ratio of fair market value of assets in the RR 

Account and NRRIT to the total benefits and administrative expenses paid from the RR Account 

and the NRRIT. Therefore, the tier II tax rate will be affected by employment assumption. The tier 

II tax rate adjustment mechanism reduces but does not eliminate the risk of insolvency. The tier I 

tax rate does not vary by employment assumption.

Investment return: Since investments may include non-governmental assets such as equity and 

debt securities as well as governmental securities, it is worthwhile to examine the effects of future 

rates of investment return. In addition to the investment return of 7 percent used for our 

projections, we show the effect on the combined accounts of an investment return of 4 percent and 

an investment return of 10 percent. Table 2 shows the excess of assets and the estimated present

value of revenue over the estimated present value of expenditures for the three investment return 

assumptions. If the tier II tax rate were fixed, the actuarial surplus would increase with increasing 

investment return. However, the tier II tax rate adjusts to changing account balances, resulting in 

the highest average tax rate under the 4 percent scenario and the lowest average tax rate under 

the 10 percent scenario. 
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Table 2

Excess of Assets and Estimated Present Value of Revenue over Estimated Present Value of 

Expenditures for Three Investment Return Assumptions, 2019-2093

(in billions)

Investment Return 

Assumption

4% 7% 10%

Present Value $6.9 $1.4 $0.7

Average Tier II tax rate 21.9% 19.2% 16.1%

Chart 4a shows the combined account balance under the three investment return assumptions for 

the projection period. At a 4 percent investment return, the account balance remains positive, 

reaching its lowest value in 2031, and then increases until 2044, decreases through 2052, and 

then increases again through the remainder of the projection period. With a 7 percent investment 

return, the account balance remains fairly level through 2054, after which it increases again 

through the remainder of the projection period. A 10 percent investment return results in a 

combined balance that increases throughout the projection period. Although the 4 percent 

scenario shows the lowest account balance at the end of the projection period, the concurrent use 

of a 4 percent discount rate results in the highest surplus on January 1, 2019.
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Chart 4b shows the tier II tax rate under the same three investment return assumptions. With a 4 

percent investment return, the maximum tier II tax rate of 27 percent applies in 2037 through 2041 

and 2053 through 2065. With the 7 percent investment return, the maximum tax rate applies 

between 2055 and 2061. With a 10 percent investment return, the maximum tax rate is never 

applicable, and the minimum tax rate of 8.2 percent is paid beginning in 2048. As mentioned 

above, the tier II tax rate is determined based on the ratios of asset values to benefits and 

administrative expenses, so it will be affected by investment return, but tier I tax rates will not.
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Ratio of Beneficiaries to Workers: Chart 5 shows the estimated number of annuitants per full-time 

employee under all three employment assumptions. The average number of annuitants per 

employee for employment assumption I is highest in 2019. For assumption II, the ratio is fairly 

level between 2019 and 2041, increasing slightly to its highest value in 2052 before decreasing. 

For assumption III, the ratio increases until it is highest in 2051 before decreasing. For all three 

employment assumptions, the average number of annuitants per employee declines to between 

1.7 and 1.8 at the end of the projection period. The convergence in number of annuitants per 

employee at the end of the projection period results primarily from level employment projected in 

the latter years under all three employment assumptions.
- 102 -

RAILROAD RETIREMENT BOARD

COMBINING STATEMENT OF BUDGETARY RESOURCES

FOR THE YEAR ENDED SEPTEMBER 30, 2019

(in dollars)

COMBINED

RAILROAD

RETIREMENT

PROGRAM

COMBINED 

RAILROAD

UNEMPLOYMENT

AND 

SICKNESS

INSURANCE

PROGRAM

LIMITATION ON

THE OFFICE OF

INSPECTOR

GENERAL

COMBINED

TOTALS

Budgetary Resources

Unobligated balance from prior year budget authority, 

net (discretionary and mandatory) $33,826,617 $144,171,956 $2,715,248 $180,713,821 

Appropriations (discretionary and mandatory) 9,747,703,526 108,786,636 - 9,856,490,162 

Borrowing authority (discretionary and mandatory) 

Note 18 4,241,400,000 - - 4,241,400,000 

Spending authority from offsetting collections 

(discretionary and mandatory) 156,496,244 15,806,041 13,172,269 185,474,554 

Total budgetary resources $14,179,426,387 $268,764,633 $15,887,517 $14,464,078,537 

Status of budgetary resources

New obligations and upward adjustments (total) $14,149,829,835 $126,734,483 $11,529,179 $14,288,093,497 

Unobligated balance, end of year

 Apportioned, unexpired accounts 14,647,257 - - 14,647,257 

 Unapportioned, unexpired accounts 2,317,130 142,030,150 1,607,640 145,954,920 

 Unexpired unobligated balance, end of year 16,964,387 142,030,150 1,607,640 160,602,177 

 Expired unobligated balance, end of year 12,632,165 - 2,750,698 15,382,863 

Unobligated balance, end of year (total) 29,596,552 142,030,150 4,358,338 175,985,040 

Total budgetary resources $14,179,426,387 $268,764,633 $15,887,517 $14,464,078,537 

Outlays, net 

Outlays, net (total) (discretionary and mandatory) $13,927,414,005 $105,953,032 ($2,848,870) $14,030,518,167 

Distributed offsetting receipts (-) (5,430,917,332) - - (5,430,917,332)

Agency outlays, net (discretionary and mandatory) $8,496,496,673 $105,953,032 ($2,848,870) $8,599,600,835 
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Management’s Comments

These are Management’s Comments on the Management and Performance Challenges 

identified by the Railroad Retirement Board (RRB) Inspector General (IG).

Challenge 1 – Improve Agency Disability Program Integrity

The RRB recognizes the importance of identifying and mitigating fraud risk throughout the 

programs it administers. In this regard, the Board has established the Fraud Risk Assessment 

Committee (Committee). The members of the Committee include: (1) the Director of Programs; 

(2) the Chief Risk Officer; (3) the General Counsel; (4) the Chief Actuary; (5) the Director of 

Field Services; and (6) the Chief Information Officer. The purpose of the Committee is to 

assess, and offer solutions to mitigate fraud risk in the administration of all of the Agency’s 

programs, including the disability program. 

The Committee, will undertake a number of initiatives, including, but not limited to, (1) 

conducting a review and assessment of any change or proposed change in the policies or 

procedures through which the RRB administers its programs that either the Committee or the 

Board deems necessary; (2) reviewing the data and other tools currently available to the RRB 

and determining the best ways in which to use those tools to assess and mitigate any fraud risk; 

(3) suggesting any new tools which the RRB may develop or acquire to improve its 

understanding or awareness of fraud risk to the RRB’s programs or better address the 

mitigation of such risk; (4) reviewing the RRB’s current internal processes and controls and their 

effectiveness as well as determining any modifications or updates which could be made to 

improve program integrity and/or mitigate risk; and (5) considering any other initiatives that the 

Committee determines appropriate or which it is directed to undertake by the Board. 

 

Challenge 2 – Improve Information Technology Security and System Modernization

The RRB acknowledges the OIG’s concern with its ability to establish and maintain a secure 

and reliable information technology environment for its data, applications, and systems. We 

understand and take very seriously the mandate of the Federal Information Security 

Management Act of 2002 (FISMA), as amended by the Federal Information Security 

Modernization Act of 2014, to ensure adequate security protections for Federal information 

systems and information. As the RRB continues the development and implementation of its IT 

modernization initiatives, we anticipate the cybersecurity posture of the Agency will improve and 

sustain at acceptable levels.

Preliminary audit results for the FY 2019 FISMA audit indicate that Kearney & Company will 

assess our overall maturity at Level 2 – Defined and will recognize significant improvements in 

the Configuration Management, Identity and Access Management, Security Training, and 

Incident Response domains that matured from Level 1 – Ad-Hoc to Level 2 – Defined. The 

preliminary FY 2019 audit results demonstrate progress in improving our information security 

program and practices across the Agency as required by FISMA, OMB policy and guidelines, 

and National Institute of Science and Technology standards and guidelines. The RRB will 

continue to make incremental steps to reach the overall maturity goal of Level 4 – Managed and 

Measurable. 
- 148 -

Challenge 3 – Improve Management of Railroad Medicare

The RRB has never denied responsibility for those portions of the Railroad Medicare program 

over which it has authority. The RRB acknowledges its responsibilities under the Social 

Security Act to administer certain provisions of the Medicare program for the railroad, which 

includes the administration of the Specialty Medicare Administrative Contractor (SMAC) 

contract, with Palmetto GBA, LLC. In contrast to the OIG’s statement, the RRB does not 

have authority to pay Medicare beneficiaries or providers directly. Notwithstanding the 

Agency’s specified Medicare responsibilities for railroad annuitants, the Centers for Medicare 

& Medicaid Services (CMS), a component of the Department of Health and Human Services 

(HHS), administers the Medicare program as a whole.

The Memorandum of Understanding between the HHS, CMS, and the RRB (MOU13-61)1

defines the scope of the relationship for both CMS and RRB regarding roles and 

responsibilities under the SMAC contract to provide specified health insurance benefit 

administration. MOU13-61 addresses the responsibilities of CMS and RRB relating to 

Medicare Part B claims processing and payment services, in support of the Medicare fee-forservice (FFS) program for a nationwide jurisdiction. MOU13-61 states the RRB and CMS 

shall work in partnership and cooperate with each other throughout the duration of the RRB 

SMAC contract. Further, MOU13-61 dictates that while the RRB will assess the SMAC 

performance, CMS provides overall program guidance. The RRB confirmed with CMS that

CMS is responsible for the Medicare program as a whole, including CMS’ responsibility to 

report on Medicare improper payments in the HHS annual Agency Financial Report (AFR). 

1. Evaluation and Management (E/M) Services Audit: The RRB takes seriously its 

Medicare responsibilities and SMAC contract administration duties in accordance with 

CMS Medicare program guidance. It should be noted that prior to the end of audit 

fieldwork, the SMAC implemented certain detective or preventive edits that the OIG 

identified during the course of the audit. Further, the SMAC received the OIG’s 

estimated improper payment information for E/M services in August 2019. CMS 

prescribes Medicare program guidance for re-evaluating claim determinations as they 

relate to all Medicare Administrative Contractors to include the RRB SMAC. In 

accordance with CMS guidance and the terms and conditions of the contract, the SMAC 

is currently reviewing the OIG’s improper payment audit results. The RRB is committed 

to continued dialogue, partnership, and cooperation with CMS to ensure that the SMAC 

meets the terms and conditions under the contract.

2. Improper Payments Audit: The RRB disagrees with the OIG’s representation that the 

RRB is not correctly reporting improper payments. The OIG’s assertion relates in part to 

CMS’ Comprehensive Error Rate Testing (CERT) program. Pursuant to an OIG 

recommendation, the RRB reported its SMAC CERT results in its fiscal year (FY) 2018 

Performance and Accountability Report (P&AR). However, since CMS also reported 

these results in HHS’ FY 2018 Agency Financial Report (“AFR”), CMS reached out to 

RRB for further information. Through dialogue with CMS, RRB learned that its reporting 

of its SMAC FY 2018 CERT results was duplicative and resulted in an overstatement of 

the Medicare improper payment reporting by the Federal Government as a whole. CMS 

reports a combined overall error rate, which includes all MACs and the RRB SMAC. As 

such, CMS and RRB agreed that RRB would no longer separately report CERT 

information. RRB shared this decision with OMB. This is in no way an attempt to mask 

 1 Memorandum of Understanding, MOU13-61, entered into by the Department of Health and Human Services, Centers for Medicare 

& Medicaid Services and the Railroad Retirement Board, April 12, 2013 (on file at RRB).
- 149 -

any significant improper payment rates, but rather to ensure correct improper payment 

reporting consistent with CMS’ administration of its Medicare program. 

3. Cost Allocation Plan: Five of the six recommendations discussed herein related to an 

audit from 2016. Since then, through ongoing dialogue with the CMS, the Agency has 

clarified its calculation methodology and streamlined the CAP report format to the 

acceptance of CMS. Additionally, during fiscal year 2019 the Agency submitted closure 

requests for all six recommendations as all corrective actions have been completed. 

Management does not believe that further corrective action is necessary for these 

recommendations; as such, we disagree that this matter contributes to a serious 

management concern or challenge. 

Challenge 4 – Improve Payment Accuracy and Transparency 

The RRB fully supports the Data, Accountability, and Transparency Cross-Agency Priority 

(CAP) goal as outlined in the President’s Management Agenda. The RRB takes very seriously 

its responsibility for payment accuracy and transparency to ensure delivery of high quality data 

for internal and external customers. We disagree that the elements discussed, individually or 

collectively, rise to the level of a serious management concern or challenge. 

1. Payment Accuracy for Railroad Medicare: CMS prescribes Medicare guidance to the 

MACs and the RRB SMAC, which includes improper payments. Though the OIG 

asserts that the SMAC made improper payments and failed to take action to collect 

payments that the OIG deemed improper, the OIG did not provide the data file to the 

SMAC to verify these payments for the period covering 2013 to 2016 until August 2019. 

The SMAC is currently reviewing the file it received from the OIG. The SMAC will take 

appropriate action in accordance with CMS guidance. 

2. Transparency: The OIG states that OMB guidance instructs that agencies should not 

put programs or activities into groupings that may mask significant improper payment 

rates by the large size or scope of a grouping. Medicare is the responsibility of CMS as 

a whole. Although Section 1842(g) of the Social Security Act provides the RRB with the 

authority to contract with a carrier to perform Medicare Part B functions, CMS and RRB 

agree that Medicare FFS is one program for improper payment purposes. 

For purposes of calculating and reporting improper payments, OMB Circular A-123, 

Appendix C, Part I(A)(4) authorizes each Federal agency to determine the definition of a 

“program” that most clearly identifies and reports improper payments. Circular A-123, 

Appendix C further instructs that agencies should not report subcomponents of a large 

program in an effort to reduce the size and fall below the statutory thresholds, and 

advises that agencies may consider using the groupings of programs listed in the 

Catalog of Federal Domestic Assistance (CFDA) when defining a program. The October 

2018 CFDA lists all Medicare Part B programs as one program under CMS, and does 

not list any Medicare programs under the Railroad Retirement Board. CMS reported the 

combined improper payment results in the HHS’ AFR.

3. DATA Act: We continue to make great strides in ensuring that the Agency’s DATA Act 

submissions are complete, accurate and agree to applicable source systems. The OIG’s 

fiscal year 2019 audit results demonstrate that the RRB has achieved the “higher” quality 

level validated by an extremely low error rate of 0.43%; as such, we disagree that this 

matter contributes to a serious management concern or challenge.
- 150 -

4. Acquisition Management: We continue to report high quality information into the Federal 

Procurement Data System (FPDS). The OIG’s fiscal year 2019 audit report cited 12 

erroneous FPDS entries out of the total population entries spanning from fiscal year 

2013 through 2018 or 3,264 entries. The OIG’s audit results indicate that the RRB has 

an extremely low error rate of 0.37%. As such, we disagree that this matter contributes 

to a serious management concern or challenge. 

Challenge 5 – Financial Management and Reporting Issues

The OIG has identified a new management challenge, which asserts the need for improvements 

related to two material weaknesses identified in the financial statement audit as well as results 

of performance audits covering the topics of 1) unapplied cash, 2) waivers and write-off 

processes, and 3) cash statements. We continue to design and implement cost effective 

internal controls striving toward optimal operational efficiency. Though more improvements will 

come, we disagree with the OIG’s characterization and consolidation of these matters into a 

serious management challenge. Specific comments are included below: 

1. Disclaimer Audit Opinion: The Agency will continue to cooperate with the OIG and 

provide all NRRIT related information within its possession which the OIG requests. The 

Agency does not have the authority to compel the NRRIT auditors to provide their work 

papers to, or speak with the OIG. Additionally, the NRRIT and the United States 

Government Accountability Office (GAO) entered into an MOU giving GAO access to 

information and including NRRIT’s financial information in the government-wide financial 

statements.

2

 Therefore, the RRB disagrees with the OIG’s inclusion of this matter as 

both a basis for a disclaimer of opinion and as a component of the financial reporting 

material weakness.

2. Material weaknesses:

a. Financial reporting: The OIG bases this discussion of the financial reporting 

material weakness upon fiscal year 2018 audit results. In fiscal year 2019, we 

expanded our quality assurance sampling plan for journal and standard 

vouchers. The quality assurance review covered 100% of journal vouchers and 

one-third of standard vouchers processed during the 3rd quarter, April 2019 

through June 2019, where voucher amounts ranged from $5 million to $5 billion. 

Of the 32 vouchers reviewed, the review did not disclose any procedural or 

substantive errors. The error rate for the 3rd quarter of fiscal year 2019 was 0%, 

whereas the error rate for the same time period in fiscal year 2018 was 10.7%. 

We will continue to review and strengthen our voucher processing internal 

controls as necessary; however, we disagree that this matter rises to the level of 

material weakness or serious management concern. 

b. Deficient internal controls at the agency-wide level: We acknowledge the OIG’s 

concern and continue to make strides implementing Enterprise Risk 

Management (ERM) at the RRB by leveraging the Management Control Review 

(MCR) infrastructure already in place. In fiscal year 2019, we incorporated 

critical changes to the MCR guide to reflect core ERM principles, conducted 

training for responsible officials and Agency leadership, as well as updated the 

 2 MOU for the NRRIT Inclusion in Government-Wide financial Statements and GAO Access to Information, entered into by the 

National Railroad Retirement Investment Trust (NRRIT) and the U.S. Government Accountability Office (GAO), dated October 31, 

2018 (on file at RRB).
- 151 -

Agency’s risk profile. We are committed to strong internal controls and will move 

forward with the next phase of ERM implementation. 

3. Unapplied cash: We concurred with the audit recommendations to update internal 

control documentation and perform the necessary test of controls. During fiscal year 

2019, we submitted to the OIG corrective actions and closure requests for three of the 

five recommendations for which the Agency concurred. We will continue to implement 

corrective actions to close the remaining recommendations. It should be noted that the 

OIG stated in the audit report that unapplied cash is not material to the Agency’s 

financial statements; as such, we disagree that this matter rises to the level of a serious 

management concern. 

4. Waivers and write-off processes: We concurred with three of the four recommendations 

and partially concurred with one. We will continue to implement corrective actions to 

meet the intent of the recommendations, which focused on updating the policies, 

procedures, and internal control documentation as well as conducting training, as 

appropriate. The audit results did not take exception to the actual waivers or write-offs 

sampled during their audit fieldwork. As such, we disagree that this matter rises to the 

level of a serious management concern.

5. Cash statements: The Statement of Changes in Cash and Investment Balances (SCCIB) 

were produced and distributed internally to RRB for awareness purposes and were not 

required by any authoritative source. Therefore, in the interest of effective and efficient 

operations as well as economical utilization of government resources, we have 

discontinued the publication and distribution of the SCCIB. As such, we disagree that 

this matter rises to the level of a serious management concern.

Challenge 6 – Compliance Concerns Identified

The OIG has identified a management challenge that asserts that the RRB has been

noncompliant with various guidance, which could influence the protection of federal trust funds, 

assets, government wide improper payments, and effectiveness of Agency operations. We are 

committed to serving as responsible stewards for our customer’s trust funds and agency 

resources. We disagree with the OIG’s characterization and consolidation of the following 

topics into a serious management challenge. 

1. Improper Payment Reporting: As discussed above, CMS is responsible for the Medicare 

program as a whole. Although Section 1842(g) of the Social Security Act provides the 

RRB with the authority to contract with a carrier to perform Medicare Part B functions, 

CMS and RRB agree that Medicare FFS is one program for improper payment 

purposes. As such, CMS and RRB agreed that RRB would no longer separately report 

CERT information inasmuch as the RRB SMAC is included in the full CERT report 

issued by HHS. RRB shared this decision with OMB. This is in no way an attempt to 

mask any significant improper payment rates, but rather to ensure correct improper 

payment reporting consistent with CMS’ administration of its Medicare program. The 

RRB will continue to work in partnership with CMS and carry out our responsibility for 

proper administration of the SMAC contract with Palmetto. 

2. Enterprise Risk Management: See Challenge 5, Material Weaknesses discussion at 2.b, 

Deficient internal controls at the agency-wide level.
- 152 -

3. Federal Travel Regulations: We concurred with 12 of the 19 recommendations and 

partially concurred with one. The Agency has adopted a new circular, which it believes 

covers the items raised by the OIG. As such, we disagree that this matter rises to the 

level of a serious management concern.

4. Acquisition Management: The referenced audit results have indicated that, while 

revisions to policies and procedures concerning de-obligation of funds may be 

necessary, large stale obligations do not exist after contract/order closeout. The 

auditors reviewed all contracts closed out spanning fiscal year 2013 through 2018 and 

identified $66,857.18 that needed to be de-obligated. Upon notification, the RRB 

immediately de-obligated these funds prior to the conclusion of audit fieldwork and is in 

the process of updating its policies and procedures related to this process. It should be 

noted that while stale obligations should be de-obligated timely the OIG’s finding of 

$66,857.18 does not materially impact the solvency of the Railroad Retirement Trust 

Fund System which as of September 30, 2019 totaled $27.5 billion. As such, we 

disagree that this matter rises to the level of a serious management concern. See also 

Challenge 4, Acquisition Management for details concerning FPDS reporting accuracy. 
- 153 -

Payment Integrity

Introduction

The Improper Payments Information Act of 2002 (IPIA) (Pub. L. 107-300), as amended by the 

Improper Payments Elimination and Recovery Act of 2010 (IPERA) (Pub. L. 111-204), requires 

agencies to annually report information on improper payments to the President and Congress 

through their annual Performance and Accountability Reports. A more recent law, the Improper 

Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) (Pub. L. 112-248), 

amended the IPIA.

The enactment of the IPERIA provided an opportunity for OMB to re-examine existing guidance 

to ensure agencies are able to more efficiently reduce their improper payment rates, while also 

complying with multiple legislative and administrative requirements. The goal of the June 26, 

2018, revised version of Appendix C to OMB Circular No. A-123, OMB M-18-20, is to transform 

the improper payment compliance framework to create a more unified, comprehensive, and less 

burdensome set of requirements. The RRB has benefit paying and non-benefit paying 

programs. The benefit paying programs are: railroad retirement and survivor benefit payments, 

railroad unemployment and sickness insurance benefit payments, and the RRB’s Specialty 

Medicare Administrator Contractor paid Part B Medicare benefits. Non-benefit paying programs 

include vendor payments and employee payments (payroll, travel, and other reimbursable 

expenses).

In fiscal year 2017, the RRB’s estimated improper payment rate for the RRA and RUIA 

programs was below the statutory threshold for the sixth consecutive year. The RRB requested 

reporting relief for these two programs following the guidance in Circular A-123, Appendix C, 

and Part II.A.3. The OMB granted us reporting relief for these two programs in July 2018. 

In fiscal year 2018, the RRB reported the results of the Centers for Medicare & Medicaid 

Services (CMS) Comprehensive Error Rate Testing (CERT) program as it pertained to the 

RRB’s Specialty Medicare Administrative Contractor (RRB SMAC). The CERT program is 

administered by CMS and includes testing for all Medicare Administrative Contractors, including 

the RRB SMAC. Fiscal year 2018 was the first year that the SMAC was included in the testing 

program. As a result, the RRB reported the findings in the 2018 P&AR. It was subsequently 

learned that these same testing results were captured by the Department of Health and Human 

Services in their 2018 Agency Financial Report, resulting in duplicative reporting. After 

consultation with the RRB Office of General Counsel (OGC) and Centers for Medicare and 

Medicaid Services (CMS), it was decided that the RRB would no longer report the results of this 

testing in the P&AR. This decision was shared with OMB with no objections. As such, the RRB 

will cease reporting Railroad Medicare improper payment data beginning with the fiscal year 

2019 Payment Integrity Report. 

Additional information on RRB improper payments reporting can be found at 

www.paymentaccuracy.gov.
- 154 -

I. Payment Reporting

In July 2018, OMB granted the RRB reporting relief for the RRA and RUIA programs.

II. Recapture of Improper Payments Reporting.

We have a robust, multi-faceted review process in place that is an effective approach for 

evaluating payment accuracy in the RRA and RUIA programs and identifying and preventing 

improper payments. The RRB notified OMB of our approach in August 2011. Taken as a 

whole, our full range of current activities constitutes an effective alternative to a formal payment 

recapture program. However, despite the agency’s best efforts to prevent improper payments, 

some will always occur, due to lack of timely information, etc. The agency is diligent in its 

recovery efforts for overpayments.

The RRB collected $57,784,635 under the RRA’s program with an overpayment balance of 

$55,247,733 at the end of fiscal year 2018. For the period of fiscal years 2009 through 2018, 

the RRB recovered $500,956,757 in RRA overpayments.

The RRB collected $25,493,055 under the RUIA program with an overpayment balance of 

$8,918,223 at the end of fiscal year 2018. For the period of fiscal years 2009 through 2018, the

RRB recovered $264,679,150 in RUIA overpayments.

During fiscal year 2018 the RRB waived $813,502.66 ($803,918.63 RRA and $9,584.03 RUIA) 

of benefit overpayments based on criteria established in the Code of Federal Regulations. The 

amounts determined to be uncollectable in fiscal year 2018 were $341,516.67 ($305,786.94 

RRA and $35,729.73 RUIA). The RRB utilizes the criteria contained in Part 31 of the Code of 

Federal Regulations (CFR), Chapter IX - Federal Claims Collection Standards which prescribes 

standards for Federal agency use in the administrative collection, offset, compromise, and 

suspension or termination of collection activity for civil claims. The RRB will determine some 

overpayments to be uncollectible based upon the results of comprehensive collection efforts (to 

include administrative collection, offset, and transfer to the Department of the Treasury’s crossservicing program or Department of Justice). When comprehensive collection activities have 

failed, an uncollectable determination can be made and the debt will be closed as uncollectable.

In addition to the RRB’s benefit payment programs the RRB’s vendor and employee payment 

programs expend more than $1 million annually. Therefore, we are describing actions we have 

taken to detect and quantify potential improper payments in those programs. Quantifying 

potential improper payments will enable the RRB to determine if a payment recapture audit 

program is cost-effective. The following paragraphs describe on-going quality assurance (QA) 

reviews that are used to identify improper payments. 

The Bureau of Fiscal Operations Financial Compliance Section (FCS) conducts numerous QA 

reviews focused on detecting improper payments in the vendor payments program. Specifically, 

the FCS conducts QA reviews of 1) payment vouchers, 2) potential duplicate invoice payments, 

3) vendors subject to the Prompt Payment Act, 4) compliance with the Prompt Payment Act, 

and 5) open obligations review for current and prior fiscal years, among others. The payment 

voucher review is intended to determine if payments issued through the RRB’s financial 

management system are supported by billing documents. The potential duplicate invoice review 

determines if duplicate payments were issued. The FCS’ QA reviews constitute a robust 

monitoring program for improper vendor payments. The most recent vendor payment QA 

reviews conducted during quarter two of fiscal year 2019 concluded that there were no improper 

vendor payments.
- 155 -

Further, the FCS initiated an employee payment QA review to identify potential improper 

employee payments and to quantify the impact of those payments. The most recent employee 

payment QA review conducted in June/July 2019 concluded that there were no improper 

employee payments.

These QA review results confirm risk assessment estimates that indicate non-benefit paying 

programs are not susceptible to significant improper payments. The FCS will continue 

monitoring efforts for vendor and employee payments to detect improper payments. The QA 

results demonstrate that an improper payment recapture program for vendor and employee 

payments is not necessary, or cost effective, at this time.

The RRB’s collection program is in full compliance with the Debt Collection Improvement Act of 

1996 and the Digital Transparency Act of 2014. Recoveries are made through offset of benefits, 

reclamation, and return of erroneous benefit payments, and direct payment from debtors. 

Fraudulent payments are referred to the OIG for prosecution through the Department of Justice. 

Delinquent accounts are referred to Treasury for cross-servicing and offset of Federal 

payments.

* Amounts limited to established overpayments for fiscal year(s) identified.

** Recoveries include debts established prior to fiscal year(s) identified.

III. Agency Improvement of Payment Accuracy with the Do Not Pay Initiative.

We have determined that our current business processes, data sources, and the Do Not Pay 

Initiative are effective in detecting and preventing both benefit and non-benefit overpayments. 

As a benefit paying agency, the RRB receives pre-payment information regarding benefit 

entitlement at other agencies and wage information. We have ongoing data sources 

established and in use for this information, which includes benefit entitlement and wages from 

SSA, employers, and our application process. We also receive post-payment wage information 

through established sources such as wage matching programs with the fifty states. In addition, 

Overpayments Recaptured Outside of Payment Recapture Audits

($ in millions)

Agency Source Program

Amount

Identified

FY 18

Amount

Recaptured

FY 18

Amount

Identified

FY 17

Amount

Recaptured

FY 17

Cumulative

Amount

Identified

FY 09 - FY 18

Cumulative

Amount

Recaptured

FY 09 – FY 18

Various,

including post

payment quality

reviews, special

evaluations, OIG

reviews/audits,

reports from the

public, monitoring

programs, and

agencyidentified errors.

No breakdown

between these

sources is

available.

RRA $50.35* $72.00** $45.09* $70.22** $488.00 $501.00

RUIA $24.55* $25.49** $26.00* $25.95** $277.60 $264.68
- 156 -

we receive death data directly from SSA and CMS, which provides us with detailed death 

information. 

We continue to look forward to utilizing SSA’s Prisoner Update System when it becomes 

available in the DNP portal. We are also interested in receiving data from the National New Hire 

Directory should it become available through the DNP Initiative.

In addition to controls to establish vendor and employee payment eligibility, as described in the 

risk assessments, RRB vendor payment files are screened by the Treasury’s Bureau of the 

Fiscal Service for matches. Results are returned to the agency daily using the Payment 

Application Modernization (PAM) system. No matches were returned in fiscal year 2018. 

IV. Barriers.

RRA and RUIA programs – not applicable. In July 2018, OMB granted the RRB reporting relief 

for the RRA and RUIA programs.

V. Accountability.

RRA and RUIA programs – not applicable. In July 2018, OMB granted the RRB reporting relief 

for the RRA and RUIA programs.

VI. Agency Information Systems and Other Infrastructure.

RRA and RUIA programs – not applicable. In July 2018, OMB granted the RRB reporting relief 

for the RRA and RUIA programs.

VII. Sampling and Estimation.

RRA and RUIA programs – not applicable. In July 2018, OMB granted the RRB reporting relief 

for the RRA and RUIA programs.

VIII. Risk Assessment.

Risk Assessments are prepared in response to IPERA and OMB guidance to evaluate all of our 

payment outlays susceptible to improper payments. We conduct these evaluations in order to 

maintain Improper Payment Governance aligned to our strategic goal to serve as responsible 

stewards for our customers’ trust funds and agency resources. The RRB’s Risk Assessment 

Plans for the RRA, RUIA, and Railroad Medicare programs were included in the FY 2016 

Performance and Accountability Report. 

In July 2018, OMB granted the RRB reporting relief for the RRA and RUIA programs. If any of 

these programs undergo significant legislative or programmatic changes, significant funding 

increases, and/or changes that would result in a substantial impact, we will perform a risk 

assessment of the impacted program, per OMB guidance. 

Risk Assessments for non-benefit paying programs (vendor and employee payments) were 

included in the FY 2017 Performance and Accountability Report for audit resolution purposes. 

We have determined that the RRB’s non-benefit paying programs are not susceptible to 

significant improper payments based on these risk assessments. The risk assessments for 

non-benefit paying programs will be conducted again and presented in the RRB’s FY 2020 

Performance and Accountability Report.
- 157 -

Summaries of Financial Statement Audit and Management Assurances

SUMMARY OF FINANCIAL STATEMENT AUDIT

Audit Opinion Disclaimer

Restatement No

Material/Weaknesses1 Beginning

Balance New Resolved Consolidated Ending

Balance

Financial Reporting 1 1

Deficient Internal Controls at 

the Agency Wide Level 1 1

Total Material Weaknesses 2 2

SUMMARY OF MANAGEMENT ASSURANCES

Effectiveness of Internal Control over Operations (FMFIA §2)

Statement of Assurance Modified

Material/Weaknesses1 Beginning

Balance New Resolved Consolidated Reassessed Ending

Balance

Financial Reporting 1 1

Deficient Internal Controls 

at the Agency Wide Level 1 1

Total Material Weaknesses 2 2

Conformance with Financial Management System Requirements (FMFIA §4)

Statement of Assurance Systems conform

1 As asserted by the Office of Inspector General (OIG); the RRB disagrees with both the material 

weaknesses and the disclaimer audit opinion. See the Analysis of Systems, Controls and Legal 

Compliance subsection within the Management’s Discussion and Analysis Section.

Civil Monetary Penalty Adjustment for Inflation 

The RRB published its 2019 civil monetary penalty inflation adjustment on February 1, 2019

(84 Fed. Reg. 1251). The maximum civil penalty under the Program Fraud Civil Remedies Act 

was increased to $11,463, and the penalty range under the False Claims Act was increased to a 

minimum penalty of $11,463 and a maximum penalty of $22,927.
PAGE INTENTIONALLY LEFT BLANK
APPENDICES
PAGE INTENTIONALLY LEFT BLANK
- 161 -

Appendices

Glossary of Acronyms and Abbreviations

A

APG Accounting Procedures Guide

B

BCA Budget Control Act of 2011

BFO Bureau of Fiscal Operations

C

CDM Continuous Diagnostics and Mitigation

CERT Comprehensive Error Rate Testing

CMS Centers for Medicare & Medicaid Services

COLA Cost-of-Living Adjustment

COR Contracting Officer’s Representative

D

DBD Disability Benefits Division (RRB)

DHS Department of Homeland Security

DNP Do Not Pay

E

EDMA Employment Data Maintenance

EFT Electronic Fund Transfer

ERS Employer Reporting System

F

FAR Federal Acquisition Regulations

FBWT Fund Balance With Treasury

FECA Federal Employees’ Compensation Act

FFS Fee-for-Service (Medicare)

FMFIA Federal Managers’ Financial Integrity Act

FI Financial Interchange

FMIS Financial Management Integrated System

FSIO Financial Systems Integration Office

FTR Federal Travel Regulations

FY Fiscal Year

G

GAO Government Accountability Office

GSA General Services Administration
- 162 -

HCME Human Capital Management Evaluation

I

IT Information Technology

IPERA Improper Payments Elimination and Recovery Act

IPERIA Improper Payments Elimination and Recovery Improvement 

 Act of 2012

IPIA Improper Payments Information Act

IRS Internal Revenue Service

L

LIRR Long Island Rail Road

LMS Learning Management System

M

MCOS Medicare Contract Operations Specialist

MCR Management Control Review

MCRC Management Control Review Committee

MIRTEL Medicare Information Recorded, Transmitted, Edited and Logged

N

NRRIT National Railroad Retirement Investment Trust

O

OGC Office of General Counsel (RRB)

OIG Office of Inspector General

OMB Office of Management and Budget

OPM Office of Personnel Management

R

RBD Retirement Benefits Division (RRB)

RESCUE Recalculate for Service and Compensation Updated to EDM

ROC Retirement On-Line Calculations

RR Railroad Retirement

RRA Railroad Retirement Act

RR Account Railroad Retirement Account

RRB Railroad Retirement Board

RRSIA Railroad Retirement and Survivors’ Improvement Act of 2001

RUI Railroad Unemployment Insurance

RUIA Railroad Unemployment Insurance Act

RUI Account Railroad Unemployment Insurance Account
- 163 -

S

SFFAS Statement of Federal Financial Accounting Standards

SI Sickness Insurance

SMAC Specialty Medicare Administrative Contractor

SOSI Statement of Social Insurance

SPEED System Processing Excess Earnings Data

SPS Secure Payment System

SSA Social Security Administration

SSEB Social Security Equivalent Benefit

SSN Social Security Number

T

Treasury Department of the Treasury

U

UI Unemployment Insurance

USC United States Code
- 164 -

Railroad Retirement Board

Board Members, Inspector General, and Executive Committee

Board Members

Chairman Erhard R. Chorlé

Labor Member John Bragg

Management Member Thomas Jayne

Office of Inspector General

Inspector General Martin J. Dickman

Executive Committee

Director of Field Service/

Senior Executive Officer

Daniel J. Fadden

Chief Actuary Frank J. Buzzi

Chief Financial Officer Shawna R. Weekley

Chief Information Officer Terryne F. Murphy 

Director of Administration Keith B. Earley

Director of Programs Crystal Coleman 

General Counsel Ana M. Kocur
For additional copies of this report, please contact:

Railroad Retirement Board

Bureau of Fiscal Operations 

844 North Rush Street, 5th Floor 

Chicago, Illinois 60611-1275

Telephone: (312) 751-4789

Available online at: www.RRB.gov