The U.S. RAILROAD RETIREMENT BOARD (RRB) is an independent agency in the executive branch of the United States government created in 1935 to administer a social insurance program providing retirement benefits to the country's railroad workers.
The RRB serves U.S. railroad workers and their families, and
administers retirement, survivor, unemployment , and sickness
benefits. Consequently, railroad workers do not participate in the
United States Social Security program. The RRB's headquarters are in
In connection with the retirement program, the RRB has administrative responsibilities under the Social Security Act for certain benefit payments and railroad workers' Medicare coverage.
During fiscal year 2009, retirement survivor benefits of some $10.5 billion were paid to about 589,000 beneficiaries, while net unemployment-sickness benefits of $160 million, including over $10 million in temporary extended unemployment benefits under the American Recovery and Reinvestment Act of 2009, were paid to more than 40,000 claimants.
At the end of fiscal year 2010, the average annuity paid to career rail employees was $2,760 a month, compared to $1,170 a month under Social Security.
* 1 History
* 2.1 Provisions * 2.2 Financing
* 3.1 Benefit Year * 3.2 Financing
* 4 Organization and functions
Long Island Rail Road
The assignment, furlough, and recall of most railroad employees was based on seniority . When work became scarce, employees with the least seniority were the first to be laid-off. The majority of railroaders were covered by pension plans, but private pension payments could be reduced if revenues were down, and many had been cut drastically by 1932.
This practice created a conflict between older employees, who preferred the certainty of a paycheck to an unreliable pension, and younger employees, who saw opportunity for increased job security if superannuated workers could be induced to retire by guaranteeing them a decent pension.
The 1934 Act was soon found unconstitutional, but President Roosevelt
intervened to push for a lasting compromise. This pressure resulted in
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 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 pensions paid over and above social security benefits in other industries.
The railroad unemployment insurance system was also established in
the 1930s. The
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 Railroad
RAILROAD RETIREMENT ACT
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 in the same way as social security beneficiaries.
As noted, the RRB pays retirement annuities to employees, as well as their spouses and/or divorced spouses, if the employee had at least 10 years of railroad service, or 5 years if performed after 1995. However, 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 the Social Security Administration, 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-survivor benefit
Revenues in excess of benefit payments are invested to provide
additional trust fund income. The National
Additional trust fund income is derived from the financial interchange 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.
RAILROAD UNEMPLOYMENT INSURANCE ACT
A new unemployment-sickness 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 or sickness benefits are payable to an individual in a benefit year. Additional extended benefits are payable to persons with 10 or more years of service.
The railroad unemployment-sickness benefit program is financed by taxes on railroad employers under an experience-rating system. Each employer's payroll tax rate is determined annually by the RRB on the basis of benefit payments to the railroad's employees.
ORGANIZATION AND FUNCTIONS
The primary function of the RRB is the determination and payment of benefits under the retirement-survivor and unemployment-sickness 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, equipment and programs to maintain earnings records, calculate benefits and process payments.
The RRB also employs actuaries to predict the future income and outlays of the railroad retirement system, statisticians and economists to provide vital data, and attorneys to interpret legislation and represent the RRB in litigation. The Inspector General employs auditors and investigators to detect any waste, fraud, or abuse in the benefit programs.
LONG ISLAND RAIL ROAD DISABILITY CONTROVERSY
In contrast to the single disability program offered by Social
In 2008, more than 90% of
Long Island Rail Road
A report produced in September 2009 by the U. S. Government
Accountability Office disclosed that five federal agencies which
investigated and audited the disability awards found no evidence of
fraud or wrongdoing by either the
In March 2010, the
New York Attorney General
Another series of 11 federal arrests on Oct 27, 2011, included two doctors and a former union official. In September 2012 four retirees pleaded guilty to fraud. In February 2014, physician Peter J. Lesniewski was charged for providing "fraudulent medical narratives in support of the disability applications of at least 230 LIRR employees."
* ^ http://www.rrb.gov/opa/qa/pub_1004.asp
* ^ http://www.rrb.gov/opa/qa/pub_1103.asp
* ^ http://www.rrb.gov/pdf/nrrit/reportFY2009.pdf
* ^ How