Public Affairs | RRB.Gov

The Railroad Retirement Act of 1974

The Railroad Retirement Act of 1974, reflecting the basic principles of the Commission Report and incorporating the subsequent management-labor agreement, was enacted on October 16, 1974.

Two-Tier Formulas

Read more about The Railroad Retirement Act of 1974

A Review of Operations

At the end of fiscal year 2015, total railroad retirement system assets equaled $26.3 billion. During fiscal year 2015, benefits totaling approximately $12.3 billion were paid under the Railroad Retirement and Railroad Unemployment Insurance Acts. Retirement and survivor benefits accounted for almost all of this amount. Net unemployment and sickness benefits totaled $86.3 million.

Read more about A Review of Operations

Financial Reports

The RRB's 2016 railroad retirement financial report to Congress which addressed the period 2016-2040, was generally favorable, concluding that, barring a sudden, unanticipated, large decrease in railroad employment, or substantial investment losses, the railroad retirement system will experience no cash-flow problems during the 25-year projection period. The long-term stability of the system, however, is not assured.

Read more about Financial Reports

Benefits and Beneficiaries

Benefits paid under the Railroad Retirement and Railroad Unemployment Insurance Acts totaled almost $12.3 billion in the fiscal year ending September 30, 2015. Retirement and survivor benefits were paid by the RRB to about 558,000 beneficiaries during the fiscal year, of whom 525,000 were on the RRB's annuity rolls at the end of the year. Approximately 25,000 railroad employees were paid unemployment and/or sickness insurance benefits. Almost 2,000 beneficiaries received payments under both the Railroad Retirement Act and the Railroad Unemployment Insurance Act.

Read more about Benefits and Beneficiaries

The Report in Brief

Railroad retirement and unemployment insurance benefits totaling almost $12.3 billion were paid by the Railroad Retirement Board (RRB) to about 581,000 beneficiaries in fiscal year 2015. Financial reports issued in 2016 on the solvency of the railroad retirement and railroad unemployment insurance systems were both favorable. Total railroad retirement system assets equaled $26.3 billion as of September 30, 2015.

Read more about The Report in Brief

The Railroad Retirement Act of 1937 and Later Amendments

The 1937 Act set up a staff retirement plan which provided annuities to aged retired employees based on their creditable railroad earnings and service. The amounts of retirement annuities awarded were directly related to the employee's earnings and length of service, with a maximum of $120 a month. Creditable earnings were limited to a maximum of $300 a month, while no more than 30 years of service could be credited when service before 1937 was counted.

Read more about The Railroad Retirement Act of 1937 and Later Amendments

The Railroad Retirement Acts of 1934 and 1935

The Railroad Retirement Act of 1934 set up the first retirement system for nongovernmental workers in this country to be administered by the Federal Government. However, the Act was declared unconstitutional by a Federal district court, and this decision was sustained by the Supreme Court. The Railroad Retirement and Carriers' Taxing Acts of 1935 were enacted to avoid the constitutional difficulties encountered by the 1934 Act.

Read more about The Railroad Retirement Acts of 1934 and 1935

Development of the Railroad Retirement System

Private pension plans originated in the railroad industry in 1874 when the first formal industrial pension plan in North America was established. By 1927, over 80 percent of all railroad employees in the United States worked for employers who had formal plans in operation, but only a small proportion of employees ever received benefits under these plans. The pension plans had a number of serious defects. They generally paid inadequate benefits and had limited provisions for disability retirement.