B-131204, MAY 17, 1957

B-131204: May 17, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WE ARE ADVISED THAT UNDER SECTION 10 OF THE ACT OF JUNE 25. IT IS STATED THAT THE ACT ALSO PROVIDES THAT THE RAILROAD RETIREMENT BOARD SHALL CERTIFY TO THE SECRETARY OF THE TREASURY THE NAME AND ADDRESS OF EACH PERSON OR COMPANY ENTITLED TO RECEIVE BENEFITS OR REFUNDS UNDER THE ACT. THE ACCOUNT "60X6805 RAILROAD UNEMPLOYMENT BENEFITS AND REFUNDS" WAS ESTABLISHED. SUCH TRANSFERS ARE MADE BY STANDARD FORM 1081. CHECKS ARE THEN DRAWN AND PAID FROM THE LATTER ACCOUNT ON THE BASIS OF VOUCHERS CERTIFIED BY THE RAILROAD RETIREMENT BOARD. FUNDS IN THE BENEFITS AND REFUNDS ACCOUNT ARE NOT AVAILABLE FOR INVESTMENT.'. IT IS STATED THAT UP TO THE PRESENT TIME THE AVERAGE DAILY BALANCE IN THE ACCOUNT "60X6805 RAILROAD UNEMPLOYMENT BENEFITS AND REFUNDS" HAS NOT BEEN CONSIDERED AS PART OF THE UNEMPLOYMENT TRUST FUND IN THE COMPUTATION AND QUARTERLY DISTRIBUTION OF EARNINGS OF THE FUND.

B-131204, MAY 17, 1957

TO THE SECRETARY OF THE TREASURY:

THIS REFERS TO LETTER OF MARCH 20, 1957, FROM THE ACTING SECRETARY OF THE TREASURY CONCERNING THE PAYMENT OF INTEREST ON TRUST FUNDS HELD BY YOUR DEPARTMENT IN THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT.

WE ARE ADVISED THAT UNDER SECTION 10 OF THE ACT OF JUNE 25, 1938, AS AMENDED, 45 U.S.C. 360, YOU MAINTAIN A SEPARATE BOOK ACCOUNT IN THE UNEMPLOYMENT TRUST FUND IN THE NAME OF THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT, AND THAT SUCH ACCOUNT PARTICIPATES IN THE EARNINGS OF THE FUND ON THE BASIS OF THE AVERAGE DAILY BALANCE IN THE ACCOUNT. IT IS STATED THAT THE ACT ALSO PROVIDES THAT THE RAILROAD RETIREMENT BOARD SHALL CERTIFY TO THE SECRETARY OF THE TREASURY THE NAME AND ADDRESS OF EACH PERSON OR COMPANY ENTITLED TO RECEIVE BENEFITS OR REFUNDS UNDER THE ACT, AND THAT PAYMENT SHALL BE MADE THROUGH THE FISCAL SERVICE OF THE TREASURY DEPARTMENT DIRECT TO THE PERSON OR COMPANY OF THE AMOUNT CERTIFIED.

THE LETTER CONTINUED IN PART:

"IN ORDER TO RESERVE FUNDS FOR MAKING SUCH PAYMENTS, THE ACCOUNT "60X6805 RAILROAD UNEMPLOYMENT BENEFITS AND REFUNDS" WAS ESTABLISHED. PERIODICALLY, USUALLY MONTHLY, THE RAILROAD RETIREMENT BOARD REQUESTS THE TREASURY DEPARTMENT TO EFFECT TRANSFERS OF SPECIFIED AMOUNTS FROM ITS BOOK ACCOUNT IN THE UNEMPLOYMENT TRUST FUND TO ACCOUNT "60X6805 RAILROAD UNEMPLOYMENT BENEFITS AND REFUND" COVERING ESTIMATED DISBURSEMENTS. SUCH TRANSFERS ARE MADE BY STANDARD FORM 1081. CHECKS ARE THEN DRAWN AND PAID FROM THE LATTER ACCOUNT ON THE BASIS OF VOUCHERS CERTIFIED BY THE RAILROAD RETIREMENT BOARD. FUNDS IN THE BENEFITS AND REFUNDS ACCOUNT ARE NOT AVAILABLE FOR INVESTMENT.'

IT IS STATED THAT UP TO THE PRESENT TIME THE AVERAGE DAILY BALANCE IN THE ACCOUNT "60X6805 RAILROAD UNEMPLOYMENT BENEFITS AND REFUNDS" HAS NOT BEEN CONSIDERED AS PART OF THE UNEMPLOYMENT TRUST FUND IN THE COMPUTATION AND QUARTERLY DISTRIBUTION OF EARNINGS OF THE FUND.

IN CONNECTION WITH THE FOREGOING THE ACTING SECRETARY REQUESTS OUR DECISION AS TO WHETHER THE AVERAGE DAILY BALANCE IN THE BENEFITS AND REFUNDS ACCOUNT (60X6805) SHOULD BE INCLUDED ALONG WITH THE AVERAGE DAILY BALANCE IN THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT FOR THE PURPOSE OF PARTICIPATING IN THE EARNINGS OF THE UNEMPLOYMENT TRUST FUND.

SECTION 360, TITLE 45, U.S.C. PROVIDES IN PART:

"THE SECRETARY OF THE TREASURY SHALL MAINTAIN IN THE UNEMPLOYMENT TRUST FUND ESTABLISHED PURSUANT TO SECTION 1104 OF TITLE 42 ON ACCOUNT TO BE KNOWN AS THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT. * * *" SECTION 1104, TITLE 42, U.S.C. PROVIDES FOR THE ESTABLISHMENT OF A TRUST FUND TO BE KNOWN AS THE "UNEMPLOYMENT TRUST FUND" FOR DEPOSIT OF MONEYS THEREIN BY A STATE AGENCY FROM A STATE UNEMPLOYMENT FUND, OR BY THE RAILROAD RETIREMENT BOARD TO THE CREDIT OF THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT AND FOR OTHER PURPOSES. THIS SECTION (42 U.S.C. 1104 (B) ( ALSO PROVIDES THAT:

"IT SHALL BE THE DUTY OF THE SECRETARY OF THE TREASURY TO INVEST SUCH PORTION OF THE FUND AS IS NOT, IN HIS JUDGMENT, REQUIRED TO MEET CURRENT WITHDRAWALS. * * *"

IT FURTHER PROVIDES (42 U.S.C. 1104 (E) ( THAT THIS FUND IS TO BE INVESTED AS A SINGLE FUND, AND REQUIRES THE SECRETARY OF THE TREASURY TO MAINTAIN A SEPARATE BOOK ACCOUNT FOR EACH STATE AGENCY, THE FEDERAL UNEMPLOYMENT ACCOUNT, AND THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT. ALSO REQUIRES (42 U.S.C. 1104 (E) ( THE SECRETARY OF THE TREASURY TO CREDIT QUARTERLY TO EACH ACCOUNT ON THE BASIS OF THE AVERAGE DAILY BALANCE OF SUCH ACCOUNT, A PROPORTIONATE PART OF THE EARNINGS OF THE FUND FOR THE QUARTER ENDING ON SUCH DATE.

IT IS CLEAR FROM THE FOREGOING PROVISIONS OF LAW THAT YOU ARE REQUIRED TO INVEST ONLY THAT PORTION OF THE UNEMPLOYMENT TRUST FUND AS IS NOT, IN YOUR JUDGMENT, REQUIRED TO MEET CURRENT WITHDRAWALS. APPARENTLY THE FUNDS TRANSFERRED FROM THE RAILROAD RETIREMENT BOARD'S BOOK ACCOUNT IN THE UNEMPLOYMENT TRUST FUND TO ACCOUNT "60X6805" ARE REQUIRED TO MEET CURRENT WITHDRAWALS AND THAT IS WHY SUCH FUNDS ARE NOT AVAILABLE FOR INVESTMENT. SINCE THE FUNDS IN ACCOUNT "60X6805" ARE NOT INVESTED, THERE ARE NO EARNINGS FROM SUCH FUNDS. HENCE, TO CONSIDER THE AVERAGE DAILY BALANCE IN ACCOUNT "60X6805" FOR THE PURPOSE OF PARTICIPATING IN THE EARNINGS OF THE UNEMPLOYMENT TRUST FUND WOULD BE PREJUDICIAL TO THE OTHER ACCOUNTS IN THAT FUND. THEREFORE, OUR VIEW IS THAT UNDER 42 U.S.C. 1104/E) EARNINGS OF THE UNEMPLOYMENT TRUST FUND SHOULD BE CREDITED TO EACH ACCOUNT IN THE FUND ON THE BASIS OF THE AVERAGE DAILY BALANCE OF THAT PART OF SUCH ACCOUNT WHICH IS INVESTED, RATHER THAN ON THE BASIS OF THE AVERAGE DAILY BALANCE OF BOTH THE INVESTED AND UNINVESTED MONEYS IN THE ACCOUNT. CF. B-126459, FEBRUARY 20, 1956.

IN VIEW OF THE FOREGOING, YOU ARE ADVISED THAT THE AVERAGE DAILY BALANCE IN ACCOUNT "60X6805 RAILROAD UNEMPLOYMENT BENEFITS AND REFUNDS" SHOULD NOT BE INCLUDED WITH THE AVERAGE DAILY BALANCE IN THE "RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT" FOR THE PURPOSE OF PARTICIPATING IN THE EARNINGS OF THE UNEMPLOYMENT TRUST FUND.