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Railroad Retirement: Size, Nature, and Funding Sources

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Report Type Reports and Testimonies
Report Date March 5, 1986
Report No. HRD-86-73FS
Subject
Summary:

Pursuant to a congressional request, GAO reviewed the federal government's financial involvement in the railroad retirement and unemployment insurance programs.

GAO found that: (1) the federal government provides half of the programs' annual revenues, which help pay for social-security-equivalent benefits; (2) windfall benefits to retirees who are entitled to railroad retirement and social security will cost the federal government an estimated $375 million in 1987; (3) the return of tax revenues to the railroad retirement trust fund, rather than to the general revenue account will result in a $252 million loss to general revenues in 1987 and additional losses in 1990; (4) certain private pension benefits will be taxed at the same rate as social security benefits; (5) the unfunded liability of the railroad retirement trust fund is vulnerable to changes in the long-term health of the industry; and (6) additional federal financial involvement may be required if unemployment in the rail industry remains high.

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