Administration
The railroad retirement system is based on three Federal laws: the Railroad
Retirement Act, the Railroad Unemployment Insurance Act, and the Railroad
Retirement Tax Act. The first two of these Acts are administered by the Railroad
Retirement Board, and the third, by the Internal Revenue Service of the U.S.
Treasury. The Board also participates in the administration of the Federal
Medicare health insurance program. In past years, the Board assisted in the
administration of certain employee protection provisions of the Regional Rail
Reorganization Act, the Northeast Rail Service Act, the Milwaukee Railroad
Restructuring Act, and the Bankrupt Railroad Service Preservation and Employee
Protection Act.
An independent agency in the executive branch of the Federal Government, the
Board is administered by three members appointed by the President, with the
advice and consent of the Senate. By law, one member is appointed upon
recommendation of railroad labor organizations, one upon recommendation of
railroad employers, and the third member, the Chairman, is, in effect,
independent of employees and employers and represents the public interest. The
terms of office are five years and are arranged so as to expire in different
calendar years. The President also appoints an Inspector General for the Board.
The primary function of the Board is the determination and payment of benefits
under the retirement-survivor and unemployment-sickness programs. To this end,
the Board 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 operate the data processing equipment and
administer the automated programs needed to maintain earnings records, calculate
benefits and process payments.
The Board also employs actuaries to predict the future income and outlays of the
railroad retirement trust funds, statisticians and economists to provide vital
data, and attorneys to interpret legislation and represent the Board in
litigation. Internal administration requires a procurement staff, a budget and
accounting staff, and personnel specialists. The Inspector General employs
auditors and investigators to detect any waste, fraud or abuse in the benefit
programs.
The headquarters of the Board is located at 844 North Rush Street, Chicago,
Illinois 60611-2092 and the Board maintains field offices across the United
States in localities easily accessible to large numbers of railroad workers.
Relations Between the Board and Other Government Agencies
As an independent agency in the executive branch of the Federal Government,
the Board has many dealings with a number of other Federal agencies and with
some State agencies. Its dealings with some of these agencies, such as the
President’s Office of Management and Budget, the Office of Personnel Management,
the Government Accountability Office, and the Department of the Treasury, are
similar to the dealings of other executive branch agencies with these units. The
Board’s relations with certain others—principally, the Social Security
Administration, the Centers for Medicare & Medicaid Services, State employment
security departments and, on a smaller scale, the Department of Labor—are
related directly or indirectly to the various benefit programs.
The Board’s relationship with the Social Security Administration is particularly
extensive because of the coordination between the two systems. Railroad
retirement annuities may be based in part on social security credits and social
security benefit amounts awarded after 1974 to railroad retirement annuitants
are made through the Board as part of combined railroad retirement-social
security monthly benefit payments.
The Board and the Social Security Administration have an interagency agreement
providing for system-to-system access between the two agencies. This allows
Board computer systems to access information as it is needed, thus improving
customer service and reducing errors.
Relations Between the Board and Congress
The Board has numerous contacts with the Congress as a whole and with its
individual members and committees. It sends the President and Congress an annual
report on its operations and, on request, supplies additional information on the
Board’s programs. Officials of the Board testify at congressional hearings on
proposed legislation to amend the Railroad Retirement and Railroad Unemployment
Insurance Acts, and the Board prepares reports on such legislation. Congress has
jurisdiction over the amounts available to the railroad retirement system for
benefit payments and for administration.
Relations Between the Board and Railroads
The administrative organization of the Board fosters close relations with
railroad employers, employees and their representatives. As mentioned earlier,
two of the Board’s three members are appointed on the recommendations of railway
labor and management associations, and labor and management officials have been
active in the development of the railroad retirement and unemployment insurance
programs since their inception.
In addition, the Board relies on labor groups and railroad employers for
assistance in keeping railroad personnel informed about the Board’s benefit
programs. The Board conducts informational programs for railroad labor and
management officials to acquaint them with the details of the benefit programs
and their reporting responsibilities. These officials, in turn, educate railroad
workers as to their benefit rights and responsibilities.
Railroad employers and railway labor groups also cooperate with the Board in a
joint placement program to find jobs for unemployed personnel. These joint
placement efforts help to reduce the costs of the unemployment insurance
program.
The Board has direct contact with railroad employees through its field offices
where its personnel explain benefit rights and responsibilities on an individual
basis, assist employees in applying for benefits, provide related services for
annuitants and answer any questions related to the benefit programs.
Through various publications and press releases, the Board disseminates, as
widely as possible, information on its operations and the provisions of the laws
it administers. Its publications include annual reports, triennial actuarial
valuations, and benefit booklets and leaflets.
Relations Between the Board and the
National Railroad Retirement Investment Trust
The National Railroad Retirement Investment Trust was established by the
Railroad Retirement and Survivors’ Improvement Act of 2001. The sole purpose of
the Trust is to manage and invest railroad retirement assets. The Trust is a
tax-exempt entity independent from the Federal Government.
The Act authorizes the Trust to invest the assets of the Railroad Retirement
Account in a diversified investment portfolio in the same manner as those of
private sector retirement plans. Prior to the Act, investment of Railroad
Retirement Account assets was limited to U.S. government securities.
The Trust has no powers or authority over the administration of benefits under
the Railroad Retirement Act. The Trust is required to act solely in the interest
of the Railroad Retirement Board, and through it, the participants and
beneficiaries of the programs funded under the Railroad Retirement Act. The Act
does not delegate any authority to the Railroad Retirement Board with respect to
day-to-day activities of the Trust, but the Act does provide that the Board may
bring a civil action to enjoin any act or practice of the Trust that violates
the provisions of the Act or to enforce any provision of the Act.
Budget Estimates
Each year, Congress specifies in an appropriation act how much of the money
derived from employer and employee taxes the Board may spend to administer the
benefit programs. The appropriation is based on budget estimates prepared by the
Board. The requested appropriation is sent to the Congress at the same time it
is sent to the President’s Office of Management and Budget. In addition, as
explained in the retirement financing chapter, the level of certain dual benefit
payments for a fiscal year is determined by the Federal budget and
appropriations process.
Relation of Administrative Costs to
Benefit Payments
The Board has always had an exceptionally good record of administrative
economy. Total administrative expenses currently average about one percent of
benefit payments, despite the complexity of the Railroad Retirement Board’s
programs.
Keeping Beneficiaries Informed
The Board conducts informational programs to keep railroad employees informed of
their benefit rights and responsibilities under the Railroad Retirement and
Railroad Unemployment Insurance Acts, with emphasis on the necessity of prompt
application for benefits. Yet cases still occur in which qualified railroad
employees or their family members forfeit benefits either because they do not
know that these benefits are available or because they are unaware of the steps
they themselves must take to claim them.
The Railroad Retirement Act limits the retroactivity of retirement and survivor
annuity applications. Depending on the type of annuity application, the
retroactivity can be as long as one year or there can be no retroactivity at
all. The Board’s regulations do allow the granting of an earlier annuity
beginning date if an annuitant can establish that he or she was deterred from
filing an application at an earlier date by some action or statement of a Board
employee. However, while the Board attempts to keep potential annuitants
informed of their rights under the Railroad Retirement Act through press
releases, informational bulletins and booklets, that information might not reach
everyone. This is especially true when an individual left the railroad industry
well in advance of retirement. Ultimately, the burden falls on the individual to
secure benefit information.
Likewise under the Railroad Unemployment Insurance Act, while the Board may
permit retroactive registration beyond the normal period when it can be shown
that the employee was not at fault and that failure to apply for benefits was
due to circumstances beyond the employee’s control, it cannot approve delayed
claims if the only reason for a delay in filing was lack of knowledge of the
law.
Program Integrity
Railroad employees, by and large, are honest and law-abiding, but any large
group may include a few persons who either deliberately or through lack of
knowledge seek benefits to which they are not entitled. Various procedures for
detecting and discouraging such actions include reviews of employer records for
work on days claimed as days of unemployment or sickness and checks with State
agencies to detect duplication of benefit payments. The Board has wage matching
agreements with all 50 States, the District of Columbia and Puerto Rico,
covering the entire rail population. Electronic data exchange programs with
railroads as well as Federal and State agencies have significantly enhanced the
Board’s capability to detect fraud and abuse of the railroad unemployment and
sickness insurance system. A 75-day disqualification is applied in all cases in
which fraud is discovered. In some cases, prosecution is also recommended.
Other program activities designed to protect the railroad retirement trust funds
include the investigation of uncashed annuity checks, matches with the Social
Security Administration and the Centers for Medicare & Medicaid Services, and
development of an online system to monitor railroad retirement/social security
trust fund transfers. In addition to conducting audits of the Board’s
operations, the Inspector General’s Office identifies and refers cases for
prosecution of individuals who commit fraud against the Board’s benefit
programs.
Administrative Improvements
The Board has implemented a number of other initiatives to improve
operations, make the most of financial resources and provide the best possible
service to the public. These include a toll-free Help Line (800-808-0772), an
Internet Web site (www.rrb.gov), e-mail and voice mail in all field offices, and
other technological improvements for better customer service.
Customer Service Plan
The Board's Customer Service Plan is centered
on the following principles of customer service: standards; openness;
accessibility; and accountability. In arriving at this plan, the Board
considered the findings of a customer satisfaction survey, the results of focus
group research, and responses received on point-of-service evaluation forms.
The plan described here is periodically reviewed and updated to ensure that the
agency is providing realistic service delivery expectations to its customers. (Click
here to access the Customer Service Plan.)
|