Keeping the Railroad Retirement Program on Track--Government and Railroads Should Clarify Roles and Responsibilities
HRD-81-27
Published: Mar 09, 1981. Publicly Released: Apr 10, 1981.
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Highlights
The railroad retirement program is the only federally administered pension plan for a private industry. Funds to finance the program consist of taxes paid by railroad workers and employers, transfers from social security trust funds, and general revenue appropriations from the Federal Government. A review was performed of the Federal role in providing financial assistance to the program and the alternatives available for funding and administering the program.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should consider, as part of its evaluation of the financial condition of both funds, the merits of a more current interchange transfer. |
Closed – Implemented
|
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Congress should reevaluate the issue of how to finance windfall benefits and that, as part of an such evaluation, decide to what extent the Federal Government should fund windfall costs. |
Closed – Not Implemented
|
Congress had an opportunity to consider this recommendation in its actions through the 1983 amendments, but it was not adopted. |
| Congress should pass legislation, if it is its intent that all persons who would have been covered under social security, except for the railroad retirement program, receive full social security equivalent under railroad retirement, revising the railroad retirement eligibility criteria and benefit structure to ensure payment of such benefits. |
Closed – Not Implemented
|
Only the category of widows and divorced spouses was changed in the 1981 amendments; other categories that GAO reported were not changed. |
| Congress should enact legislation to (1) establish a separate account for social security equivalent benefits and require that funds from social security transfers and employers' and employees' payroll taxes for social security equivalent benefits be placed in the account and be used only to pay the social security equivalent benefits; and (2) require that railroad employers and employees pay taxes for the social security equivalent benefits based on annual rather than monthly taxable earnings as do employers and employees under social security. |
Closed – Implemented
|
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
Full Report
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Topics
BeneficiariesEmployee retirement plansFederal fundsFinancial managementRailroad employeesRailroad industryRetirement benefitsSocial security benefitsTaxesWidowed persons