service; explaining reductions that would be made in the regular annuity if there is subsequent entitlement to a social security benefit; eliciting information as to whether the employee is also entitled to a pension from his railroad employer and explaining the reduction such entitlement would require in the supplemental annuity otherwise payable; explaining the medicare program for those eligible or about to become eligible for enrollment; and explaining to those already enrolled whose premiums were paid in cash that premiums now will be deducted from their annuities. Work involved in headquarters includes time spent in developing months of creditable service and average creditable compensation, including in some instances service performed prior to 1937; securing information on amounts of social security benefits payable, if any; securing information from railroad employers on amounts of pensions payable by the company; adjudicating the applications and computing the amounts payable after applying reductions to the supplemental annuity for entitlement to a company pension, and reductions to the regular annuity for entitlement to the supplemental annuity and social security benefits; issuing notices of awards; paying the accrual amount; and establishing the person on the monthly payment rolls. In the justifications for the 1973 budget, we showed for fiscal year 1973 a workload estimate of 301,000 claims dispositions. That figure consisted of 35,000 cases of awards initially made on a partial basis, 165,000 cases of awards made on a final basis, and 101,000 cases of awards subsequently reactivated because of the occurrence of events requiring a change in the amount of the monthly annuity. In these justifications, we show the workload in terms of new applications processed to a final award. To facilitate comparisons, the following tabulation includes data from the 1973 budget restated on the new basis: There are several reasons why the man-year requirements for this activity do not decrease in the same proportions as the anticipated decreases in new applications to be processed. New legislation enacted in fiscal year 1973 introduces new complexities into the claims adjudication processes, it creates more inquiries from applicants, and it increases the number of costly disability determinations that will have to be made. Undoubtedly more individuals will attempt to establish disability as the basis for their annuity because of the invaluable Medicare coverage that then can accrue. This activity covers the maintenance of the monthly roll of persons receiving retirement and survivor benefits, the roll of persons receiving supplemental annuities, and the roll of persons eligible for medicare benefits. The work includes handling regular changes in the rolls; handling inquiries from persons on the rolls; making deductions of premiums for medicare; policing to verify that persons continue to be eligible to receive monthly benefits; and making benefitrate changes required by amendments, including handling inquiries relating to the changes. The number of persons on the rolls receiving benefit payments will decrease from 986,000 at the end of 1973 to 982,000 at the end of 1974. However, the number of persons also receiving supplemental annuities will increase from 104,000 at the end of 1973 to 114,000 at the end of 1974. Also, the extension of medicare coverage to disabled persons will add approximately 40,000 persons to the medicare-coverage roll to bring the total enrolled to approximately 886,000. The three laws enacted in fiscal year 1973 created a great amount of work in this activity. Public Law 92-336 required increases in benefit rates for 250,000 beneficiaries, Public Law 92-460 required increases in rates for 740,000 beneficiaries, and Public Law 92-603 required further increases in rates for 185,000 beneficiaries. While most of the increases were processed by the computer, approximately 40,000 cases had to be handled manually. The extension of Medicare coverage to disabled persons under age 65 and various other benefit provisions of Public Law 92-603 created still additional large workloads both on an initial and on a continuing basis, as described previously in these justifications and in the justifications covering the request to amend the 1973 budget. Completion of most of the initial non-recurring work in 1973 that was created by new legislation will enable us to reduce overtime and temporary employment by 55 man years in 1974. This activity embraces the functions of executive direction and general administration, including activities such as personnel, legal, fiscal, property management, budgeting, administrative planning and control, and other similar activities. A moderate allowance is made for a needed strengthening of staffs in legal, fiscal, and auditing activities. 1/ Includes budget amendment providing an increase of $1,558,000. Purpose: The railroad retirement system provides for the payment of retirement and disability annuities to railroad employees, annuities to their spouses, and benefits to their survivors. Explanation: The system is financed by taxes by railroad workers and employers paid into the Railroad retirement accounts. The amounts needed for benefit payments and administrative expenses are derived from these accounts. Accomplishments in 1973: In fiscal year 1973, we will complete most of the work created by the 1972 amendments to the Social Security and Railroad Retirement Acts, service the monthly benefit roll of 990,000 beneficiaries, and process 155,000 new applications for benefits. Benefit payments in 1973 will amount to $2,427,000,000. Objectives for 1974: In fiscal year 1974, we will clear up work created by new legislation that carried over from 1973, service the monthly benefit roll and process 152,000 new applications for benefits. Congress had directed the railroad industry to recommend a plan by which certain recent benefit increases scheduled to expire June 30, 1973, could be financed soundly on a permanent basis. The budget assumes that present benefit rates will continue in 1974 and that adequate financing will be provided. On that assumption, benefit payments will amount to $2,598,000,000. New Positions Requested None |