An Assessment of the 2001 Reform of the Railroad Retirement Program

Publication Date: June 2013

Publisher: Center for Retirement Research at Boston College

Author(s): Steven A. Sass

Research Area: Labor

Keywords: Railroad retirement system; pension reform; Public pension assets

Type: Report

Coverage: United States

Abstract:

The primary concern of Congress in enacting the Railroad Retirement and Survivor’s Improvement Act of 2001 was the risk of political influence on investment decisions. A secondary concern was the financial performance of the redesigned program. The experience to date supports the notion that reforms created an exemplary manager of public pension assets. Of more concern is the financial performance of the redesigned program. The program weathered the challenging financial conditions during the first decade of reform. The experience nevertheless exposed limitations in the ability of its innovative automatic stabilizer to steady the program’s finances.