{ "id": "RS22782", "type": "CRS Report", "typeId": "RS", "number": "RS22782", "active": true, "source": "CRSReports.Congress.gov, EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source_dir": "crsreports.congress.gov", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "retrieved": "2022-08-31T04:03:21.792942", "id": "RS22782_32_2022-08-01", "formats": [ { "filename": "files/2022-08-01_RS22782_6189b6c646601c110f80a7e1ad9b6b6ad4579ee3.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/RS/RS22782/32", "sha1": "6189b6c646601c110f80a7e1ad9b6b6ad4579ee3" }, { "format": "HTML", "filename": "files/2022-08-01_RS22782_6189b6c646601c110f80a7e1ad9b6b6ad4579ee3.html" } ], "date": "2022-08-01", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "RS", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=RS22782", "type": "CRS Report" }, { "source_dir": "crsreports.congress.gov", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "retrieved": "2022-08-31T04:03:21.791206", "id": "RS22782_29_2021-03-15", "formats": [ { "filename": "files/2021-03-15_RS22782_c0e1580abdc29e28637b8431c71d864e9d28f99b.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/RS/RS22782/29", "sha1": "c0e1580abdc29e28637b8431c71d864e9d28f99b" }, { "format": "HTML", "filename": "files/2021-03-15_RS22782_c0e1580abdc29e28637b8431c71d864e9d28f99b.html" } ], "date": "2021-03-15", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "RS", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=RS22782", "type": "CRS Report" }, { "source": "EveryCRSReport.com", "id": 616438, "date": "2020-02-07", "retrieved": "2020-02-11T23:22:02.172017", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": "The Railroad Retirement Board (RRB), an independent federal agency, administers retirement, survivor, disability, unemployment, and sickness insurance for railroad workers and their families. Railroad retirement payroll taxes include two tiers\u2014Tier I and Tier II taxes. The Tier I tax finances the Tier I railroad retirement benefit that is equivalent to Social Security benefits and the Tier II tax finances the Tier II benefit, Tier I benefits in excess of Social Security benefits, and supplemental annuities.\nSince 2002, Tier II tax revenues in excess of obligatory RRB benefits and associated administrative costs have been invested in private stocks, bonds, and other investments. Prior to the Railroad Retirement and Survivors\u2019 Improvement Act of 2001 (RRSIA; P.L. 107-90), surplus railroad retirement assets could only be invested in U.S. government securities\u2014just as the Social Security trust funds must be invested. The RRSIA established the National Railroad Retirement Investment Trust (NRRIT; hereinafter, the Trust) to manage and invest part of the RRB\u2019s assets in much the same way that the assets of private-sector and most state and local government pension plans are invested. The remainder of RRB\u2019s assets continues to be invested solely in U.S. government securities.\nCongress structured the Trust in an effort to ensure investment independence and limit political interference. It also aimed to increase railroad retirement system funding, add enhanced benefits, potentially reduce taxes, and protect system financing in case of market downturns. The Trust\u2019s assets are invested in a diversified portfolio, both to minimize investment risk and avoid disproportionate influence over an industry or firm. The Trust is a tax-exempt entity independent of the federal government, and it is not subject to the same oversight as federal agencies. However, the RRSIA requires an annual management report to Congress.\nFrom its inception in February 2002 to September 30, 2018, $21.3 billion has been transferred to the Trust from the RRB and $22.9 billion has been transferred from the Trust to pay railroad retirement benefits. At the end of FY2018, the net asset value of the Trust was $26.6 billion. \nThe Trust\u2019s investments have generally followed the markets\u2019 recent performance. From FY2003 to FY2018, the Trust\u2019s annual returns averaged 8.2%, slightly higher than expectations of the bill\u2019s drafters, who assumed nominal annual returns of 8.0%. As the Trust\u2019s investment portfolio diversified over time, its administrative expenses steadily increased, to 36 basis points in FY2011, but fell to 29 basis points in FY2018, and remain low when compared with other mutual funds.\nThe combined fair market value of Tier II taxes and Trust assets is designed to maintain four to six years\u2019 worth of RRB benefits and administrative expenses. To maintain this balance, the Railroad Retirement Tier II tax rates automatically adjust as needed. This tax adjustment does not require congressional action. The Railroad Retirement Tier II tax rates increased in 2013 and most recently in 2015.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/RS22782", "sha1": "32cfe020740d6e634d3611a81e574bbfde4fc5bf", "filename": "files/20200207_RS22782_32cfe020740d6e634d3611a81e574bbfde4fc5bf.html", "images": { "/products/Getimages/?directory=RS/html/RS22782_files&id=/0.png": "files/20200207_RS22782_images_c754cc94b86aba6ab8b231037fcc0da9b4b46feb.png", "/products/Getimages/?directory=RS/html/RS22782_files&id=/1.png": "files/20200207_RS22782_images_8ad55dabb7651075cbe79ddc690810c9d06d74d3.png", "/products/Getimages/?directory=RS/html/RS22782_files&id=/2.png": "files/20200207_RS22782_images_8ae5de38a333ed1e84b6e3b489d2f3cd46d792c6.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/RS22782", "sha1": "0295b171b11fc1e02f11064f644c81f37f47d8b6", "filename": "files/20200207_RS22782_0295b171b11fc1e02f11064f644c81f37f47d8b6.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4869, "name": "Pensions & IRAs" } ] }, { "source": "EveryCRSReport.com", "id": 589716, "date": "2019-01-10", "retrieved": "2019-01-11T14:03:37.894389", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": "The Railroad Retirement Board (RRB), an independent federal agency, administers retirement, survivor, disability, unemployment, and sickness insurance for railroad workers and their families. Railroad retirement payroll taxes include two tiers\u2014Tier I and Tier II taxes. The Tier I tax finances the Tier I railroad retirement benefit that is equivalent to Social Security benefits and the Tier II tax finances the Tier II benefit, Tier I benefits in excess of Social Security benefits, and supplemental annuities.\nSince 2002, Tier II tax revenues in excess of obligatory RRB benefits and associated administrative costs have been invested in private stocks, bonds, and other investments. Prior to the Railroad Retirement and Survivors\u2019 Improvement Act of 2001 (RRSIA; P.L. 107-90), surplus railroad retirement assets could only be invested in U.S. government securities\u2014just as the Social Security trust funds must be invested. The RRSIA established the National Railroad Retirement Investment Trust (NRRIT; hereinafter, the Trust) to manage and invest part of the RRB\u2019s assets in much the same way that the assets of private-sector and most state and local government pension plans are invested. The remainder of RRB\u2019s assets continues to be invested solely in U.S. government securities.\nCongress structured the Trust in an effort to ensure investment independence and limit political interference. It also aimed to increase railroad retirement system funding, add enhanced benefits, potentially reduce taxes, and protect system financing in case of market downturns. The Trust\u2019s assets are invested in a diversified portfolio, both to minimize investment risk and avoid disproportionate influence over an industry or firm. The Trust is a tax-exempt entity independent of the federal government, and it is not subject to the same oversight as federal agencies. However, the RRSIA requires an annual management report to Congress.\nFrom its inception in February 2002 to September 30, 2017, $21.3 billion has been transferred to the Trust from the RRB and $21.1 billion has been transferred from the Trust to pay railroad retirement benefits. At the end of FY2017, the net asset value of the Trust was $26.5 billion. \nThe Trust\u2019s investments have generally followed the markets\u2019 recent performance. From FY2003 to FY2017, the Trust\u2019s annual returns averaged 8.3%, slightly higher than expectations of the bill\u2019s drafters, who assumed nominal annual returns of 8.0%. As the Trust\u2019s investment portfolio diversified over time, its administrative expenses steadily increased, to 36 basis points in FY2011, but fell to 31 basis points in FY2017, and remain low when compared with other mutual funds.\nThe combined fair market value of Tier II taxes and Trust assets is designed to maintain four to six years\u2019 worth of RRB benefits and administrative expenses. To maintain this balance, the Railroad Retirement Tier II tax rates automatically adjust as needed. This tax adjustment does not require congressional action. The Railroad Retirement Tier II tax rates increased in 2013 and most recently in 2015.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/RS22782", "sha1": "81b242fc2541e6c7201dd85f3718fd9a041bb565", "filename": "files/20190110_RS22782_81b242fc2541e6c7201dd85f3718fd9a041bb565.html", "images": { "/products/Getimages/?directory=RS/html/RS22782_files&id=/0.png": "files/20190110_RS22782_images_66f97b69df764a6277e23252fed23002491873c9.png", "/products/Getimages/?directory=RS/html/RS22782_files&id=/1.png": "files/20190110_RS22782_images_018bc1051b1c1642d57fbaa72407aff7d18ff282.png", "/products/Getimages/?directory=RS/html/RS22782_files&id=/2.png": "files/20190110_RS22782_images_a8cb67e863fe8b351b23babc3b4a68991ee51339.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/RS22782", "sha1": "c9dde4193b75529923ace5afd83e7f36b526ef58", "filename": "files/20190110_RS22782_c9dde4193b75529923ace5afd83e7f36b526ef58.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4869, "name": "Pensions & IRAs" } ] }, { "source": "EveryCRSReport.com", "id": 586100, "date": "2017-08-25", "retrieved": "2018-10-08T20:39:32.111890", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": "Beginning in 2002, a significant portion of the assets of the Railroad Retirement Board (RRB) has been invested in private stocks, bonds, and other investments. Prior to the Railroad Retirement and Survivors\u2019 Improvement Act of 2001, P.L. 107-90, surplus railroad retirement assets could only be invested in U.S. government securities\u2014just as the Social Security trust funds must be invested. The 2001 act established the National Railroad Retirement Investment Trust (NRRIT; hereinafter, the Trust) to manage and invest part of the RRB\u2019s assets in the same way that the assets of private-sector and most state and local government pension plans are invested. The remainder of RRB\u2019s assets continues to be invested solely in U.S. government securities.\nCongress structured the Trust to ensure independence of investment decisions and limit political interference. It also aimed to increase railroad retirement system funding, add enhanced benefits, potentially reduce taxes, and protect system financing in case of market downturns. The Trust\u2019s assets are invested in a diversified portfolio, both to minimize investment risk and to avoid disproportionate influence over an industry or firm. Since the Trust is a nongovernmental agency, it is not subject to the same oversight as federal agencies. However, the act requires an annual management report to Congress.\nThe Trust\u2019s investments have generally followed the markets\u2019 recent performance. From FY2003 to FY2016, the Trust\u2019s annual returns averaged 7.9%, nearly matching expectations of the bill\u2019s drafters, who assumed nominal annual returns of 8.0%. The economic downturn did not spare the Trust, which lost 19.1% in FY2008 and 0.7% in FY2009. The Trust rebounded with an 11.2% rate of return in FY2010. This was followed by a slightly negative rate of return of -0.1% in FY2011. However, the Trust exceeded its own strategic policy benchmarks in FY2012, FY2013, and in FY2014 with a FY2014 rate of return of 10.2%. FY2015 once again experienced negative returns for the Trust with a rate of return of -1.5%. In FY2016, the annual return was 8.1%. As the Trust\u2019s investment portfolio diversified over time, its administrative expenses steadily increased, to 36 basis points in FY2011, but fell to 28 basis points in FY2016 and remain low when compared with other mutual funds.\nThe Trust is designed to maintain four to six years\u2019 worth of benefits in case of lower-than-expected returns. To maintain this balance, the variable Railroad Retirement tier II tax rates automatically adjust as needed. This tax adjustment does not require congressional action. The Railroad Retirement tier II tax rates increased in 2013 and most recently in 2014.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/RS22782", "sha1": "7d8f7405adfd51ff28739b1c3189322508e222f6", "filename": "files/20170825_RS22782_7d8f7405adfd51ff28739b1c3189322508e222f6.html", "images": { "/products/Getimages/?directory=RS/html/RS22782_files&id=/0.png": "files/20170825_RS22782_images_98a3e785925f43d0576c61ba368b6753621666dc.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/RS22782", "sha1": "0ecacf9f492af3b64e67876f3d96e798bcf3ccec", "filename": "files/20170825_RS22782_0ecacf9f492af3b64e67876f3d96e798bcf3ccec.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4869, "name": "Pensions & IRAs" } ] }, { "source": "EveryCRSReport.com", "id": 450835, "date": "2016-03-15", "retrieved": "2016-03-24T16:53:27.451492", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": "Beginning in 2002, a significant portion of the assets of the Railroad Retirement Board (RRB) has been invested in private stocks, bonds, and other investments. Prior to the Railroad Retirement and Survivors\u2019 Improvement Act of 2001, P.L. 107-90, surplus railroad retirement assets could only be invested in U.S. government securities\u2014just as the Social Security trust funds must be invested. The 2001 act established the National Railroad Retirement Investment Trust (NRRIT; hereinafter, the Trust) to manage and invest part of the RRB\u2019s assets in the same way that the assets of private-sector and most state and local government pension plans are invested. The remainder of RRB\u2019s assets continues to be invested solely in U.S. government securities.\nCongress structured the Trust to ensure independence of investment decisions and limit political interference. It also aimed to increase railroad retirement system funding, add enhanced benefits, potentially reduce taxes, and protect system financing in case of market downturns. The Trust\u2019s assets are invested in a diversified portfolio, both to minimize investment risk and to avoid disproportionate influence over an industry or firm. Since the Trust is a nongovernmental agency, it is not subject to the same oversight as federal agencies. However, the act requires an annual management report to Congress.\nThe Trust\u2019s investments have generally followed the markets\u2019 recent performance. From FY2003 to FY2015, the Trust\u2019s annual returns averaged 7.9%, nearly matching expectations of the bill\u2019s drafters, who assumed nominal annual returns of 8.0%. The economic downturn did not spare the Trust, which lost 19.1% in FY2008, 0.7% in FY2009, and 0.1% in FY2011. However, the Trust exceeded its own strategic policy benchmarks in FY2012, FY2013, and in FY2014 with a FY2014 rate of return of 10.2%. FY2015 saw negative returns for the Trust with a rate of return of -1.5%. As the Trust\u2019s investment portfolio diversified over time, its administrative expenses steadily increased, to 36 basis points in FY2011, but fell to 27 basis points in FY2015 and remain low when compared with other mutual funds.\nThe Trust is designed to maintain four to six years\u2019 worth of benefits in case of lower-than-expected returns. To maintain this balance, the tier II tax rates are set to automatically adjust as needed. This tax adjustment does not require congressional action. The tier II tax rates increased in 2013 and again in 2014.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/RS22782", "sha1": "ba13704414978ebbdc6a4c4c58f3b82ae608e575", "filename": "files/20160315_RS22782_ba13704414978ebbdc6a4c4c58f3b82ae608e575.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/RS22782", "sha1": "d5eb6bdec5c1238af58708924c4827955811f779", "filename": "files/20160315_RS22782_d5eb6bdec5c1238af58708924c4827955811f779.pdf", "images": null } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc819481/", "id": "RS22782_2015Sep09", "date": "2015-09-09", "retrieved": "2016-03-19T13:57:26", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20150909_RS22782_8291410e571ad2b02c93e90d150b6d207c9cde84.pdf" }, { "format": "HTML", "filename": "files/20150909_RS22782_8291410e571ad2b02c93e90d150b6d207c9cde84.html" } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc820006/", "id": "RS22782_2014Jul01", "date": "2014-07-01", "retrieved": "2016-03-19T13:57:26", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20140701_RS22782_1e5ddd5eded6274d013728ba7a612f006a056029.pdf" }, { "format": "HTML", "filename": "files/20140701_RS22782_1e5ddd5eded6274d013728ba7a612f006a056029.html" } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc815591/", "id": "RS22782_2012May17", "date": "2012-05-17", "retrieved": "2016-03-19T13:57:26", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20120517_RS22782_3f2ab32321b05f88c15eddb0222fef6715d81a7f.pdf" }, { "format": "HTML", "filename": "files/20120517_RS22782_3f2ab32321b05f88c15eddb0222fef6715d81a7f.html" } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc821320/", "id": "RS22782_2011Aug02", "date": "2011-08-02", "retrieved": "2016-03-19T13:57:26", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20110802_RS22782_9d4d516edc8dd736bb77888551ca7be438304670.pdf" }, { "format": "HTML", "filename": "files/20110802_RS22782_9d4d516edc8dd736bb77888551ca7be438304670.html" } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc813089/", "id": "RS22782_2008Jan02", "date": "2008-01-02", "retrieved": "2016-03-19T13:57:26", "title": "Railroad Retirement Board: Trust Fund Investment Practices", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20080102_RS22782_f1dfc9f895024d1e40ea8113c813612635f2a08b.pdf" }, { "format": "HTML", "filename": "files/20080102_RS22782_f1dfc9f895024d1e40ea8113c813612635f2a08b.html" } ], "topics": [] } ], "topics": [ "Domestic Social Policy" ] }