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entitled 'Use of the Railroad Retirement Board Occupational Disability 
Program across the Rail Industry' which was released on March 8, 2010. 

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United States Government Accountability Office: 
Washington, DC 20548: 

February 4, 2010: 

The Honorable John L. Mica:
Ranking Republican Member:
Committee on Transportation and Infrastructure: 
House of Representatives: 

The Honorable Bill Shuster:
Ranking Republican Member:
Subcommittee on Railroads, Pipelines, and Hazardous Materials: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

Subject: Use of the Railroad Retirement Board Occupational Disability 
Program across the Rail Industry: 

We recently reported that Long Island Rail Road (LIRR) workers applied 
for U.S. Railroad Retirement Board (RRB) occupational disability 
benefits at a rate 12 times higher than workers from the other 
commuter railroads covered under the Railroad Retirement Act.[Footnote 
1] RRB provides an occupational disability benefit to eligible workers 
whose physical or mental impairments prevent them from performing 
their specific railroad jobs. For example, a railroad engineer who 
cannot frequently climb, bend, or reach, as required by the job, may 
be found occupationally disabled. 

On March 18, 2009, you asked us to conduct a systematic review of 
RRB's occupational disability program. Per our discussions following 
the release of our September 2009 report on LIRR and commuter rail 
workers' experience with the program, you refined your request. You 
told us that your primary interest was quickly determining whether 
unusual patterns in claims like those exhibited at LIRR exist 
elsewhere across the rail industry, including class I, II, and III 
railroads.[Footnote 2] This letter formally conveys the information we 
provided during a briefing with you and your staff on December 2, 
2009. In summary, we found that no other rail employers in our 
analysis had the consistently high rates of occupational disability 
awards that existed at LIRR from calendar years 2004 to 2007, the most 
current data available at the time of our review. 

To perform this work we calculated occupational disability rates using 
RRB occupational disability award and rail employment data. 
Specifically, for each rail employer we analyzed RRB awards to rail 
workers relative to the total number of eligible workers--those who 
satisfied RRB occupational disability age and service requirements--
for calendar years 2004 to 2007.[Footnote 3] We also reviewed 
occupational disability award data for calendar year 2008, but 
employment data for this year were not available from RRB at the time 
we performed our work. We assessed the reliability of RRB's data by 
interviewing knowledgeable agency officials and electronically testing 
the data to identify obvious problems with completeness or accuracy. 
While we determined that the data were sufficiently reliable for the 
purposes of this briefing, our data analysis had one key limitation. 
RRB does not have data readily available on the number of applications 
it denied by railroad, so our analysis assumed that approval rates 
were consistent across railroads. We believe this is a reasonable 
assumption given the consistently high approval rates--on average 
about 98 percent--reported by the RRB.[Footnote 4] In addition, our 
prior analyses of claims from the commuter rail industry showed that 
while LIRR workers in fiscal year 2007 applied for occupational 
disability benefits at a rate 12 times higher than the other commuter 
rail workers, all commuter rail workers were approved at the same rate 
of nearly 100 percent. 

We conducted this performance audit from August 2009 to February 2010 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

In our analysis, we found that no other rail employers had the 
consistently high rates of occupational disability awards, relative to 
the number of eligible workers, that existed at LIRR. A small number 
of employers exhibited high rates in one or more years, but LIRR was 
the only consistent outlier across the rail industry for each year 
from 2004 to 2007 in terms of workers' use of RRB's occupational 
disability program.[Footnote 5] For example, in 2006, LIRR had an 
occupational disability rate of 17.1 percent compared to the industry-
wide average of 3.7 percent. While LIRR workers did receive fewer 
occupational disability awards in calendar year 2008 than 2007, they 
still received twice as many awards as workers from the other seven 
commuter railroads combined. 

As we previously reported, RRB did not detect the unusual patterns in 
LIRR workers' occupational disability claims. The data we used for our 
analyses are readily available to RRB. The agency could have used 
these data to identify such patterns as part of its routine monitoring 
and oversight of the occupational disability program. Recently, RRB 
initiated efforts to create a new position responsible for collecting, 
developing, and analyzing relevant data to assist in the management 
and oversight of the occupational disability program. As a result of 
these actions, we are making no recommendations at this time. 

We provided a copy of this report to the Chairman, Labor Member, and 
Management Member of the Railroad Retirement Board for review and 
comment. The agency had no comments on our report. 

We understand that the briefing on December 2, 2009, and this letter 
complete our review in response to your request. As agreed with your 
offices, unless you publicly announce the contents of this report 
earlier, we plan no further distribution until 30 days from the report 
date. At that time, we will send copies to the Chairman, Labor Member, 
and Management Member of the Railroad Retirement Board; relevant 
congressional committees; and other interested parties. In addition, 
the report will be available at no charge on the GAO Web site at 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7215 or Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. Key contributors to this report 
include Jeremy Cox, Arthur Merriam, Rachael Valliere, Jacob Beier, 
Carl Barden, James Bennett, Nora Boretti, Jessica Botsford, Joanna 
Chan, Virginia Chanley, Gloria Hernandezsaunders, Jessica Orr, Linda 
Siegel, and Gregory Wilmoth. 

Signed by: 

Daniel Bertoni:
Director, Education, Workforce, and Income Security Issues: 

[End of section] 


[1] GAO, Railroad Retirement Board: Review of Commuter Railroad 
Occupational Disability Claims Reveals Potential Program 
Vulnerabilities, GAO-09-821R (Washington, D.C.: Sept. 9, 2009). 

[2] We classified railroads in accordance with RRB's 2007 Actuary 
Consolidations, which RRB officials report is generally based on 
Surface Transportation Board (STB) classifications. The STB classifies 
railroads as class I, II, and III based on operating revenues. Most of 
the eligible rail workers were employed by class I railroads in the 
years we reviewed. LIRR and the other seven commuter railroads are 
included in class III. We also analyzed other employers--such as car 
loan companies and rail labor unions--covered under the Railroad 
Retirement Act. 

[3] Railroad workers are eligible to apply for occupational disability 
at age 60 if they have 10 years of service, or at any age if they have 
at least 20 years of service. We analyzed data for calendar years 2004 
through 2007, because 2004 was the earliest year that RRB had complete 
data on rail employees' ages and years of service. Further, our 
analysis only included employers with at least one occupational 
disability annuitant and 50 or more eligible workers during the time 
period we analyzed. 

[4] RRB produces a monthly report showing the percentage of all claims 
decided that month that were approved and denied, but this report does 
not disaggregate claims by railroad. For calendar years 2007 and 2008, 
we found that the average approval rate was 98.4 percent. 

[5] We defined a high occupational disability rate as two standard 
deviations or more above the average. We considered employers with 
occupational disability rates three or more standard deviations above 
average as outliers. From calendar years 2004 to 2007, only one 
employer other than LIRR qualified as a statistical outlier in one 
year only (2006). LIRR was the only employer that qualified as a 
statistical outlier each year of our analysis. Beyond identifying 
these patterns in occupational disability awards, we did not conduct 
additional audit work to determine why certain employers' occupational 
disability rates exceeded the industry-wide average during our period 
of analysis. 

[End of section] 

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