UNITED STATES OF AMERICA

RAILROAD RETIREMENT BOARD

844 NORTH RUSH STREET

CHICAGO, ILLINOIS 60611-1275

ERHARD R. CHORLÉ, CHAIRMAN

July 8, 2020

Robert C. O’Brien

National Security Advisor

The White House

1600 Pennsylvania Ave. N.W.

Washington, D.C. 20500

Lawrence Kudlow

Director, National Economic Council

The White House

1600 Pennsylvania Ave. N.W.

Washington, D.C. 20500

Dear Ambassador O’Brien and Director Kudlow,

Thank you for your letter of July 7, 2020. The Railroad Retirement Board (RRB) 

is headed by a three member Board appointed by the President and confirmed by the 

Senate. Two members are nominated based on the recommendations of the Rail Industry

(Thomas Jayne) and Rail Labor (John Bragg) respectively. The third “public” member is 

selected by the President as well and serves as the Chairman of the Board. I am 

responding to your letter on behalf of the Board.

We appreciate the concerns expressed in your letter, and will give them all due 

consideration as they are indeed very serious. We will further address them with the 

Trustees of the National Railroad Retirement Investment Trust (NRRIT) as well.

To be clear, NRRIT is an independent entity, which although created by an Act of 

Congress is not a Government Agency. Its seven Trustees (who are not considered 

officers or employees of the United States) are appointed as follows: three members are 

selected by the joint recommendation of railroad labor organizations, three members are 

selected by the joint recommendation of railroad carriers, and those six members choose

a seventh, independent member. 

Section 15(j)(4) of the Railroad Retirement Act (RRA) establishes the powers of 

the NRRIT Board of Trustees to retain independent advisors to assist it in formulating 

and adopting investment guidelines, invest the Trust’s assets either directly or through 

independent investment managers, and employ professional staff and contract for outside 
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advisors to provide legal, accounting, investment advisory or management services, and 

other necessary services.

The exercise of the NRRIT Board of Trustees investment authority is not subject 

to approval or direct oversight of the RRB. Congress did not give the RRB any express 

authority to direct the NRRIT Trustees to adopt particular investment strategies or take 

particular actions other than those required by the RRA itself. However, the RRB is 

empowered to bring a civil action to enjoin actions of NRRIT which violate the terms of 

the RRA and to remedy such violations.

Regarding the specific companies you cite in your letter, Hikvision and ZTE, 

NRRIT assured us in mid-June that the Trust held no interest in either of those 

companies. There may be confusion as to some of NRRIT’s holdings based on their use 

of the MSCI All Countries World Index (AWCI) as a benchmark to measure the 

performance of their Non-US Equity Investments. The AWCI may include the 

aforementioned companies. NRRIT does not actually invest in that Index however. As to 

future investments or Companies which you may not have mentioned, we will certainly 

be willing to engage in future dialogue in that regard.

As to the risks of investing in PRC Companies which fail to comply with US 

Laws regarding disclosure or US Accounting Standards, that is an issue which NRRIT 

has addressed in the past, but be assured that we will be asking them to revisit and discuss 

with us fully. As to the risk of future sanctions or other actions, we do not know, at 

present whether NRRIT has given specific consideration to those risks or whether they 

have had any discussions in that regard with their outside portfolio managers. We will 

certainly make inquiry.

In summation, please know that we are taking these issues and your concerns 

seriously, but also know that we have limited authority as regards the investment 

decisions made by NRRIT and their advisors/managers. We will forward your letter to 

NRRIT and will follow up with them shortly.

Sincerely, 

Erhard R. Chorlé,

Chairman

cc: Thomas Jayne, Management Member

John Bragg, Labor Member