Dual Benefits Payments Account Section 15(d)(1) of the Railroad Retirement Act provides for a Dual Benefits Payments Account which is separate from other railroad retirement accounts. Amounts in this account are for payment of the windfall (vested dual) benefit portions of railroad retirement annuities. Under current law, these benefits are funded by appropriations from general revenues and income taxes on windfall (vested dual) benefits. Under laws in effect prior to 1975, a worker engaging in covered employment under both the Railroad Retirement Act and Social Security Act could, under certain conditions, receive benefits separately under both acts. Because of the weighted nature of the social security benefit formula, such "dual beneficiaries" generally received more in total benefits than if all their work had been covered under either social security or railroad retirement. The dual benefits were a cost to the railroad retirement system because they reduced the system's income from the financial interchange with the social security system. By the mid-1970's, the costs to the railroad retirement system of these benefits exceeded $450 million a year and could have bankrupted the system if allowed to continue. The Railroad Retirement Act of 1974 phased out future dual benefits by revising the benefit formulas and coordinating payments to eliminate duplications. It also authorized general fund appropriations to provide a windfall (vested dual) benefit amount to protect annuitants who were qualified for benefits under both programs before 1975 and met certain other requirements. In 1981, the Congress provided a separate Dual Benefits Payments Account for funding these benefits, and provided further that these benefits in any year could not exceed the funding set aside in the separate account. Federal Payments to the Railroad Retirement Accounts This account was established in conjunction with the implementation of the Railroad Retirement Solvency Act of 1983. Section 417 of the act amended the Railroad Retirement Act to provide for the reimbursement of unnegotiated benefit checks to the extent that such reimbursements are provided for, in advance, in appropriation acts. This account is the vehicle through which such appropriations are made. Beginning in fiscal year 1991, the RRB will no longer receive credits to this account for the principal amount of uncashed railroad retirement checks. Under provisions of the Competitive Equality Banking Act of 1987, funds for uncashed checks will be appropriated to the Department of the Treasury and then transferred directly to the appropriate RRB accounts. As a result, in fiscal year 1991, the RRB will receive credits to this account for only the interest portion of the uncashed railroad retirement check transfers. This account also acts as a conduit for transferring revenues to the other railroad retirement accounts. In addition to the amounts shown, in a separate justification document, the Office of Inspector This amount reflects an appropriation of $63,700,000 (excluding a $200,000 statutory reserve) less an $865,000 sequester of direct administrative expenses in accordance with the Omnibus Budget Reconciliation Act of 1989, Public Law 101-239. The Limitation on Railroad Unemployment Insurance Administration Fund is not subject to a sequester The total amount in fiscal year 1991 reflects the proposed funding of $87,300,000 (excluding a Included in the increase of $11,222,000 are (1) $9,800,000 to acquire a new computer, (2) $200,000 for a system capacity study and requirements analysis that details the RRB's future computer capacity generation, (3) $250,000 to provide contractual assistance in improving the railroad retirement taxation system, (4) $857,000 toward an anticipated pay raise beginning in January 1991, and (5) $115,000 which represents the net effect of increases and decreases in other items and object classes. 2. Process applications (RRA/SSRB/SUP) 338 17,157,000 338 17,385,000 0 228,000 Excludes full-time equivalent employees (46 in 1990 and 56 in 1991) to be reimbursed by the Health Care Financing Administration for Medicare activities. The increase of 10 full-time employees for Medicare in 1991 reflects a reevaluation by the RRB of the number of staff members who will be working reimbursable activities. Totals exclude $2,900,000 in 1990 and $2,500,000 in 1991 estimated to be reimbursed by the Health Care Financing Administration for Medicare activities. CONSOLIDATED SCHEDULE Personnel Summary Full-time Equivalent Employment by Limitation Account a/ a/ Table does not include the Office of Inspector General. b/ Includes full-time equivalent employees reimbursable by the Health Care Financing Administration for Medicare activities, 46 in 1990 and 56 in 1991. |