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Occupational Disability Claims Reveals Potential Program 
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GAO-09-821R: 

United States Government Accountability Office: 
Washington, DC 20548: 

September 9, 2009: 

The Honorable John L. Mica:
Ranking Member:
Committee on Transportation and Infrastructure: 
House of Representatives: 

The Honorable Bill Shuster:
Ranking Member:
Subcommittee on Railroads, Pipelines, and Hazardous Materials: 
Committee on Transportation and Infrastructure: 

House of Representatives: 

Subject: Railroad Retirement Board: Review of Commuter Railroad 
Occupational Disability Claims Reveals Potential Program 
Vulnerabilities: 

In fall 2008, a series of news reports revealed the relatively high 
number of workers at one commuter railroad--the Long Island Rail Road 
(LIRR)--who have applied for and been approved for occupational 
disability benefits by the U.S. Railroad Retirement Board (RRB). 
According to RRB officials, a number of federal agencies, including the 
Federal Bureau of Investigation, Social Security Administration, and 
the Department of Health and Human Services, have launched 
investigations in response to issues raised. In addition, the New York 
Attorney General's office is conducting a criminal investigation. 

RRB is a federal agency responsible for administering the disability 
and retirement benefit programs for eligible railroad workers and their 
families under the Railroad Retirement Act. This includes providing 
occupational disability annuities for workers who have physical or 
mental impairments that prevent them from performing their specific 
railroad job, regardless of whether they can perform other work. For 
example, a railroad engineer who cannot frequently climb, bend, and 
reach, as required by the job, may be found occupationally disabled. A 
railroad worker is eligible to apply for an occupational disability at 
age 60 if he or she has 10 years of service, or at any age with at 
least 20 years of service.[Footnote 1] In fiscal year 2007, RRB paid 
more than $1.7 billion in occupational disability benefits to 
approximately 64,000 workers. 

In this context, you asked us to study the experiences of LIRR workers 
who submitted applications for RRB occupational disability benefits. 
Specifically, we focused on the following objectives: (1) determine 
what is known about the extent to which LIRR workers have applied for 
and received occupational disability benefits, compared to workers at 
other commuter railroads, and (2) identify the steps RRB has taken to 
ensure that only eligible LIRR workers receive occupational disability 
benefits. 

We limited our review to the LIRR and the seven other commuter 
railroads covered by the Railroad Retirement Act.[Footnote 2] Other 
railroads, such as freight railroads and Amtrak, were outside of our 
scope. We analyzed data from multiple RRB data systems to (1) determine 
the number of occupational disability benefits RRB awarded in calendar 
years 2004 through 2007, relative to employment, for LIRR and the other 
commuter railroads[Footnote 3] and (2) determine application and 
approval rates for occupational disability benefits for workers at 
these railroads, for applications filed in fiscal year 2007.[Footnote 
4] We determined that the data are sufficiently reliable for our 
purposes. We also conducted in-depth interviews with management 
officials and claims examiners from RRB's headquarters in Chicago and 
its Westbury field office in Long Island, New York, as well as 
officials from LIRR, Metro-North Railroad, and the Metropolitan 
Transportation Authority Office of the Inspector General.[Footnote 5] 
We also coordinated with RRB's and the Social Security Administration's 
Offices of the Inspector General. In addition, we reviewed a 
statistically random, projectable sample of occupational disability 
claims files for the LIRR and a similar commuter railroad, Metro-North, 
to provide context for our analyses.[Footnote 6] Finally, we reviewed 
RRB's five-point plan, effective as of October 2008, that was designed 
to ensure that only those LIRR workers who are eligible for 
occupational disability benefits receive them. 

We conducted this performance audit from November 2008 to September 
2009 in accordance with generally accepted government auditing 
standards. These standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe the evidence obtained provides a reasonable basis for our 
findings based on our audit objectives. 

On June 30, 2009, we briefed your staff on the results of our study of 
LIRR workers' claims for RRB occupational disability benefits. This 
report formally conveys the information provided during that briefing. 
In summary, our analysis identified some notable differences between 
claims filed by LIRR workers and those filed by other commuter rail 
workers that reveal potential program vulnerabilities, as illustrated 
by the following examples: 

* LIRR workers applied for occupational disability benefits at a rate 
12 times higher than workers from the other commuter railroads in 
fiscal year 2007. However, RRB approved all commuter rail workers at 
the same rate--nearly 100 percent. 

* Nearly all LIRR worker claims were for musculoskeletal impairments, 
such as lower back problems, compared to about half of workers from the 
other commuter railroads. 

* We observed in our review of claims from LIRR and Metro-North 
Railroad that most LIRR workers who filed claims provided RRB with 
medical evidence from one of three doctors. We did not observe these 
same patterns for Metro-North Railroad. In our prior work, we found 
that numerous claims with evidence from the same doctors can be an 
indicator of potential fraud or abuse.[Footnote 7] In addition, while 
RRB maintains data on claimants' doctors in paper claims files, these 
data are not currently in a format that facilitates analysis or allows 
the agency to detect unusual patterns. 

We found that RRB has not analyzed occupational disability data by 
railroad or performed other analyses that could have enabled the agency 
to identify such unusual patterns in occupational disability 
applications from LIRR workers. RRB implemented a five-point plan, in 
October 2008, to enhance its oversight of LIRR claims, which includes 
ordering its own medical examinations for all LIRR claimants to 
supplement medical evidence provided by the claimants and conducting 
continuing disability reviews for all LIRR annuitants who were age 54.5 
and younger as of October 21, 2008. While RRB officials stated that it 
is too early to assess the effect of the plan on disability decisions, 
the agency has approved nearly all of the occupational disability 
claims decided under the plan as of April 30, 2009. 

Agency Comments and Our Evaluation: 

We provided a copy of this report to the Chairman, Labor Member, and 
Management Member of the Railroad Retirement Board for review and 
comment. We have reproduced the Chairman and the Labor Member's 
comments on our draft report in enclosure II, and the Management 
Member's comments in enclosure III. The board also provided one 
technical comment on our draft report, which we incorporated. 

Two of the board members were of the opinion that the high rate of 
occupational disability applications from workers at the Long Island 
Rail Road (LIRR) was an anomaly, but stated that the agency was taking 
steps to identify any other unusual patterns in occupational disability 
applications. They acknowledged that the agency does not currently have 
some of the data that may be necessary to detect such unusual patterns, 
but noted that a newly created staff position with responsibility for 
quality control oversight will have authority to develop new methods of 
data collection nationwide. 

The third board member expressed concern that there may be inherent 
systemic weaknesses in the occupational disability program that warrant 
further independent review of the agency's program integrity and 
quality assurance controls. Although our work was limited to the 
commuter railroads, a nearly 100-percent approval rate in a federal 
disability program is troubling, and could indicate lax internal 
controls in RRB's decision-making process, weaknesses in program 
design, or both. We have identified these and other areas in the 
occupational disability program that require further evaluation. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Chairman, Labor Member, and Management Member of the Railroad 
Retirement Board, relevant congressional committees, and other 
interested parties. In addition, the report will be available at no 
charge on the GAO Web site at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7215 or bertonid@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in enclosure IV. 

Signed by: 

Daniel Bertoni: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Enclosure I: Railroad Retirement Board Occupational Disability Benefit 
Program Briefing Slides: 

Railroad Retirement Board: Review of Commuter Railroad Occupational 
Disability Claims Reveals Potential Program Vulnerabilities: 

Staff Briefing for the Ranking Members of the Subcommittee on 
Railroads, Pipelines, and Hazardous Materials, and the Committee on 
Transportation and Infrastructure, House of Representatives: 

June 2009: 

Introduction: 

The U.S. Railroad Retirement Board (RRB) provides an occupational 
disability benefit to workers who are unable to perform their specific 
railroad jobs. In fiscal year 2007, RRB paid more than $1.7 billion in 
occupational disability benefits to about 64,000workers.[Footnote 8] 

To be occupationally disabled, a worker must have a permanent physical 
or mental condition that prevents him or her from performing his or her 
railroad job. For example, a railroad engineer who cannot frequently 
climb, bend, and reach, as required by the job, may be found 
occupationally disabled. 

In fall 2008, a series of news reports raised concerns about the large 
number of workers from the Long Island Rail Road (LIRR) who applied and 
were approved for occupational disability benefits by RRB. 

Concerns were also raised that: 

* LIRR workers were claiming the same types of musculoskeletal 
impairments, such as herniated discs. 

* In addition to line workers with more physically demanding jobs,white-
collar LIRR management workers with potentially less physically 
demanding jobs also were accessing the program at high rates. 

According to RRB officials, a number of federal agencies, including the 
Federal Bureau of Investigation, Social Security Administration, and 
the Department of Health and Human Services, have launched 
investigations in response to these concerns. In addition, the New York 
Attorney General’s office is conducting a criminal investigation. 

Objectives: 

For this briefing, we focused on the following objectives: 

1) Determine what is known about the extent to which LIRR workers have 
applied for and received occupational disability benefits, compared to 
workers at other commuter railroads. 

2) Identify the steps RRB has taken to ensure that only eligible LIRR 
workers receive occupational disability benefits. 

Scope and Methodology: 

To answer our questions, we: 

* Limited our review to LIRR and the seven other commuter railroads 
covered by the Railroad Retirement Act: Massachusetts Bay Commuter 
Railroad, Metro-North Railroad, New Jersey Transit, Northeast Illinois 
Commuter Railroad, Northern Indiana Commuter Transportation District, 
Port Authority Trans-Hudson Corporation, and Southeastern Pennsylvania 
Transportation Authority.[Footnote 9] Commuter rail workers made up 
about 10 percent of total rail employment in 2007. 

* Analyzed agency data on the number of workers at LIRR and the seven 
other commuter railroads who met the age and service requirements for 
occupational disability and the number of occupational disability 
awards for calendar years 2004 through 2007 for these railroads.
[Footnote 10] 

* Performed analyses using multiple RRB databases to determine 
application and approval rates for occupational disability benefits for 
workers at LIRR and the seven other commuter railroads, for 
applications filed in fiscal year 2007.[Footnote 11] 

* Assessed the reliability of RRB data and determined that the data are 
sufficiently reliable for our purposes. 

* Conducted in-depth interviews with management officials and claims 
examiners from the RRB’s headquarters in Chicago and its Westbury Field 
Office in Long Island, N.Y., as well as officials from LIRR, Metro-
North Railroad, and the Metropolitan Transportation Authority Office of 
the Inspector General.[Footnote 12] We also coordinated with RRB’sand 
the Social Security Administration’s Offices of the Inspector General. 

* Reviewed a random, projectable sample of LIRR and Metro-North claims 
filed in fiscal year 2007 to provide context for our data analyses. 
However, we did not assess the quality of medical evidence provided by 
doctors and specialists.[Footnote 13] 

* Reviewed RRB’s new five-point plan, designed to ensure that only 
those LIRR workers who are eligible for occupational disability 
benefits receive them. 

* We conducted this performance audit from November 2008 to September 
2009 in accordance with generally accepted government auditing 
standards. These standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe the evidence obtained provides a reasonable basis for our 
findings based on our audit objectives. 

Summary of Results: 

In fiscal year 2007, LIRR workers applied for occupational disability 
benefits at a rate 12 times higher than workers from the other commuter 
railroads. However, RRB approved all commuter rail workers at the same 
rate—nearly 100 percent. 

RRB does not analyze occupational disability data by railroad or 
perform other analyses that could enable them to identify unusual 
patterns in occupational disability applications, such as: 

* inconsistencies in application and approval rates, occupations, and 
types of impairments; and; 

* workers seeing the same doctors. 

RRB has implemented a five-point plan to enhance its oversight of LIRR 
claims. While RRB officials stated that it is too early to assess the 
effect of the plan on disability decisions, the agency has approved 
nearly all of the occupational disability applications decided under 
the plan, as of April 30, 2009. 

Background: RRB Occupational Disability Program: 

RRB is a federal agency responsible for administering the disability, 
retirement, sickness, and unemployment benefit programs for eligible 
railroad workers and their families.[Footnote 14] 

RRB provides occupational disability benefits to workers who it 
determines can no longer perform their specific railroad jobs due to 
their impairments. 

A railroad worker is eligible to apply for an occupational disability 
benefit at age 60 with 10 years of service, or at any age with at least 
20 years of service.[Footnote 15] 

Background: Social Security Disability Criteria: 

If a worker is found unable to perform his or her specific railroad 
job, RRB also determines whether the worker meets the more stringent 
Social Security disability criteria—whether the worker is able to 
perform any work in the national economy. 

Workers found eligible under Social Security criteria may qualify for 
early Medicare and other financial benefits, in addition to their RRB 
occupational disability benefits. 

RRB makes most of these decisions, but the Social Security 
Administration (SSA) provides most of the funding to pay benefits when 
an occupationally disabled rail worker is also found to be disabled 
under SSA disability criteria.[Footnote 16] 

Background: The RRB Occupational Disability Determination Process at a 
Glance: 

Figure 1: The Occupational Disability Determination Process: 

[Refer to PDF for image: illustration] 

Railroad worker files for disability benefits at RRB field office; 

Claim adjudicated at RRB headquarters, Chicago; 

Step 1: Determine eligibility under RRB occupational disability 
criteria: 
* 20 years of railroad work experience at any age or 10 years at age 
60; 
* Permanent physical or mental condition that prevents one from 
performing work in his or her regular railroad job; 

If denied: RRB occupational disability criteria is not met; 

If approved: Benefits funded through RRB. 

Step 2: Determine eligibility under SSA disability criteria: 
* 20 quarters of coverage in the 10 years preceding the disability; 
* Permanent physical or mental condition that prevents one from 
performing any gainful work in the national economy; 

If denied: SSA disability criteria not met. Worker maintains RRB 
occupational disability benefits. 

If approved: Benefits jointly funded by RRB and SSA. 

Source: GAO analysis of RRB procedures manual; images: Art Explosion. 

[End of figure] 

Background: Rail Workers Can Receive Occupational Disability and 
Pension Benefits Concurrently: 

Workers can receive occupational disability benefits from RRB, as well 
as non-RRB retirement benefits, such as pensions and health insurance, 
from their former railroad employer. 

LIRR workers hired before 1988 can retire and receive LIRR pension 
benefits as young as age 50 with 20 years of service (closed plan). 
[Footnote 17] Workers hired after that date can retire and receive LIRR 
pension benefits as young as age 55 with 30 years of service. 

Officials representing rail management and labor told us that while 
other railroads may offer pensions, the LIRR’s closed plan is more 
generous in terms of its age and service requirements. 

Objective One: Determine what is known about the extent to which LIRR 
workers have applied for and received occupational disability benefits, 
compared to workers at other commuter railroads: 

LIRR Workers Applied at a Rate 12 Times Higher Than Workers from the 
Other Commuter Railroads Combined: 

In fiscal year 2007, LIRR workers filed applications at a rate 12 times 
higher than all of the other seven commuter railroads combined, 
relative to the number of workers who met the minimum age and service 
requirements to apply for occupational disability benefits. 

In addition, our review of occupational disability award data from 
calendar years 2004 through 2007 showed that LIRR workers have 
consistently applied at this high rate. 

Figure 2: Occupational Disability Applications Filed in Fiscal Year 
2007 from LIRR and the Other Commuter Railroads, Relative to the Number 
of Eligible Workers: 

[Refer to PDF for image: illustration] 

Long Island Railroad: 
17.0 percent application rate: 
1,398 eligible workers; 
237 applications. 

All other commuter railroads: 
6,945 eligible workers; 
98 applications. 

Source: GAO analysis of RRB data. 

Note: The circles in the graphic were drawn for illustrative purposes. 
As such, the circles do not accurately reflect the magnitude of the 
difference in the eligible populations, which is even greater than the 
graphic implies. In order to determine the rate at which LIRR workers 
applied for occupational disability benefits, compared to the 
application rate for the workers from the other commuter railroads 
combined, we divided the LIRR application rate (17.0%) by the rate for 
all other commuter railroads (1.4%). We found that LIRR workers applied 
at a rate 12.1 times higher than the application rate for workers from 
all other commuter railroads combined. 

[End of figure] 

RRB Approved Nearly All Commuter Rail Claimants for Occupational 
Disability Benefits, but Fewer LIRR Workers Met More Stringent 
Disability Standards: 

RRB approved nearly all commuter rail workers who applied for 
occupational disability in fiscal year 2007, regardless of railroad. 

However, RRB found fewer LIRR workers met the more stringent Social 
Security disability criteria, compared to workers at the other commuter 
railroads.[Footnote 18] 

Figure 3: RRB Approval Rates for Workers from LIRR, Compared to Those 
from the Other Commuter Railroads: 

[Refer to PDF for image: illustration] 

Occupational criteria: 
99.6% of LIRR workers approved; 
100% of workers from other commuter railroads approved. 

Social security disability criteria: 
39.1% of LIRR workers approved; 
79.4% of workers from other commuter railroads approved. 

Source: GAO analysis of RRB data. 

[End of figure] 

Nearly All LIRR Worker Claims Were for Musculoskeletal Impairments: 

Figure 4: Distribution of Impairments Claimed by LIRR Workers in Fiscal 
Year 2007: 

[Refer to PDF for image: pie-chart] 

Diseases of the musculoskeletal system and connective tissue: 94.5%; 
Diseases of the nervous system and sense organs: 3.0%; 
Other: 2.5%. 

Source: GAO analysis of RRB data. 

[End of figure] 

About Half of Worker Claims at the Other Commuter Railroads Were for 
Musculoskeletal Impairments: 

Figure 5: Distribution of Impairments Claimed by Workers from the Other 
Commuter Railroads in Fiscal Year 2007: 

[Refer to PDF for image: pie-chart] 

Diseases of the musculoskeletal system and connective tissue: 45.9%; 
Diseases of the circulatory system: 12.2%; 
Mental disorders: 12.2%; 
Neoplasms (growth of abnormal cells, tumor): 11.2%; 
Diseases of the respiratory system: 6.1%; 
Diseases of the nervous system and sense organs: 5.1%; 
Other: 4.1%; 
Diseases of the endocrine system: 3.1%. 

Source: GAO analysis of RRB data. 

Note: Percentages in the figure do not add up to 100 percent due to 
rounding. 

[End of figure] 

We Did Not Analyze Data on LIRR Claimants’ Jobs Due to Data 
Limitations: 

While RRB collects data on the jobs workers claim on their 
applications, the data are not useful for analysis because job titles 
are not standardized. 

A single type of job can be listed many different ways, such as “ticket 
agent,” “ticket clerk,” and “ticket seller,” that may not be easily 
combined or compared without detailed knowledge of the jobs. 

As a result, neither we nor RRB could perform analyses to detect 
unusual patterns in commuter rail workers’ applications, approval 
rates, and impairments by job. 

LIRR Workers Frequently Saw the Same Doctors: 

We observed in our review of claims from LIRR and Metro-North Railroad 
that most LIRR workers provided RRB with medical evidence from one of 
three doctors. Our prior work has found that numerous claims with 
evidence from the same doctors is an indicator of potential fraud or 
abuse.[Footnote 19] 

We did not observe these same patterns for workers from Metro-North 
Railroad. 

RRB does not maintain data for all railroads on claimants’ doctors in a 
format that would facilitate analysis and allow the agency to analyze 
and detect unusual patterns. Currently, RRB only has information on 
claimants’ doctors in their paper claim files. 

LIRR Workers Applied for Occupational Disability at a Younger Age Than 
Workers From Other Commuter Railroads, and Most Were Receiving 
Pensions: 

LIRR claimants were a median age of 51 in fiscal year 2007, compared to 
54 for the other commuter railroads. 

RRB and rail management and labor officials told us that the LIRR’s 
closed pension plan—which allows workers to retire at age 50 with 20 
years of service—was a factor in workers’ decisions to apply for 
occupational disability benefits because the benefits could supplement 
their retirement income. 

Of those who were asked when they applied for disability benefits, 100 
percent of LIRR workers reported they were receiving a non-RRB pension, 
compared to 64 percent of workers from the other commuter railroads. 
[Footnote 20] 

RRB Has Taken Some Steps to Improve the Use of Its Occupational 
Disability Data, but Weaknesses Remain: 

Until recently, RRB has not regularly analyzed occupational disability 
data by railroad or performed other analyses that could enable it to 
identify unusual patterns, such as inconsistencies in application and 
approval rates, occupations, and types of impairments. 

During the course of our review, RRB officials told us they are hiring 
a new staff member who will be responsible for analyzing data to 
identify trends or anomalies in the occupational disability program. 

However, this effort might be hampered because RRB does not currently 
maintain data, such as data on claimants’ doctors and useful data on 
the types of jobs rail workers held, in a format that can be easily 
analyzed. 

[End of Objective 1] 

Objective 2: Identify the steps RRB has taken to ensure that only 
eligible LIRR workers receive disability benefits: 

RRB Implemented a Five-Point Plan in October 2008 to Enhance Oversight 
of LIRR Claims: 

RRB’s five-point plan for LIRR workers is a departure from how the 
agency handles claims for workers from all other railroads. 

1. RRB is ordering its own medical exams for all LIRR claimants to 
supplement medical evidence provided by claimants. 

* Through the end of April 2009—6 months after the plan was implemented—
RRB had ordered 422 exams or tests for 104 claimants. 

* RRB recently began ordering MRIs and CAT scans—diagnostic tools 
previously not available to claims examiners—for certain LIRR claims, 
where X-rays ordered by RRB conflicted with MRI reports provided by 
workers’ doctors.[Footnote 21] 

2. RRB plans to conduct continuing disability reviews for all 362 LIRR 
occupational disability annuitants who were age 54.5 and younger, as of 
October 21, 2008. 

* As of the end of April 2009, the agency had completed 74 continuing 
disability reviews. Disability benefits were continued in 73 of these 
cases, and in one case, RRB found the worker was deceased. 

3. RRB has increased its oversight of its Westbury field office in Long 
Island through biweekly phone calls and quarterly visits. 

* The district manager has reported that the office is seeing fewer 
occupational disability applications from LIRR workers. 

4. RRB is separately collecting and plans to analyze data only for LIRR 
claims to detect any unusual patterns, such as impairments and treating 
physicians that appear more frequently. 

* RRB is still collecting data, and officials reported that it is too 
early to analyze it. 

* Although they are not currently analyzing these data across the 
program, RRB officials stated that they may expand these analyses to 
other railroads, as necessary. 

5. RRB has begun collecting data on the extent to which LIRR management 
employees are accessing the program.[Footnote 22] 

* RRB officials told us they could not use their existing occupational 
data to determine how many LIRR managers had applied, so they collected 
and analyzed data from LIRR on all managers who retired or left the 
railroad after January 2000. 

* Of the 401 managers who retired or left the railroad during this 
period, 207 were receiving occupational disability benefits, as of the 
end of September 2008. An additional 9 had applications pending. 

Almost All LIRR Occupational Disability Applications Decided under the 
Five-Point Plan Have Been Approved: 

As of the end of April 2009: 

* RRB had decided 66 LIRR workers’ occupational disability claims. 
Sixty-four were approved, and two were denied. Another claim was 
withdrawn by the claimant. 

* RRB reports that implementing the five-point plan has cost about 
$248,000. Most of these costs are related to staff time for claims 
examiners, which have already been budgeted for in RRB’s disability 
program operations. 

RRB Has Taken Additional Steps to Oversee Its Occupational Disability 
Program: 

As mentioned previously, RRB recently approved hiring a new staff 
member, who will report to the Director of Assessment and Training, to 
analyze occupational disability program data. 

RRB also is undergoing a reorganization to separate its sickness and 
unemployment programs from its disability programs, in order to better 
monitor the occupational disability program. 

[End of Objective 2] 

[End of section] 

Enclosure II: Comments from the U.S. Railroad Retirement Board Chairman 
and Labor Member: 

United States Of America: 
Railroad Retirement Board: 
844 North Rush Street: 
Chicago, Illinois 60611-2092: 

July 24, 2009: 

Daniel Bertoni: 
Director: 
Education, Workforce, and Income Security Issues: 
United States Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Bertoni: 

On behalf of the United States Railroad Retirement Board, we are 
submitting the following comments on the proposed report titled 
Railroad Retirement Board: Review of Commuter Railroad Occupational 
Disability Claims Reveals Potential Program Vulnerabilities. 

As you know, the Railroad Retirement Board is responsible for payment 
of benefits to railroad employees and their families under the Railroad 
Retirement Act and the Railroad Unemployment Insurance Act. As reported 
in the Railroad Retirement Board's Annual Report for Fiscal Year 2008, 
the Railroad Retirement Board paid benefits under the Railroad 
Retirement Act to about 615,800 beneficiaries in fiscal year 2007 and 
there were approximately 568,200 beneficiaries on the rolls at the end 
of that fiscal year. During fiscal year 2007, benefits under the 
Railroad Retirement Act totaled approximately $9.8 billion. 

Among the benefits that the Railroad Retirement Board pays under the 
Railroad Retirement Act is an occupational disability annuity. It is 
this benefit that is the subject of your report. Your proposed report 
states that in fiscal year 2007, the Railroad Retirement Board paid 
occupational disability benefits to approximately 64,000 beneficiaries. 
While this is true, a significant percentage of these beneficiaries 
also meet the more rigid standard of total and permanent disability 
under the Social Security Act. In fiscal year 2007, of the 
approximately 64,000 occupational disability annuitants, all but 
approximately 28,600 had been rated as meeting the total and permanent 
disability standard under the Social Security Act. 

Looking at this from a slightly different perspective, of the 568,200 
railroad retirement beneficiaries on the rolls at the end of fiscal 
year 2007, only 28,600 beneficiaries, or about 5 percent, were 
receiving benefits based solely on meeting the occupational disability 
standard. In recent years, approximately 70 percent of the individuals 
awarded occupational disability annuities have also been rated totally 
and permanently disabled. It is also important to note that even though 
a portion of an occupational disability annuity may be funded by monies 
transferred under the financial interchange between the railroad 
retirement and social security systems, funds transferred from the 
social security system under the financial interchange are only used to 
pay benefits equal to what would be paid under the social security 
system if there was no separate railroad retirement system. 

The Railroad Retirement Act requires that the Railroad Retirement Board 
work with railroad labor and railroad management in establishing 
standards for adjudication of occupational disability. Working with 
rail labor and rail management, the Railroad Retirement Board, in 1998, 
adopted regulations and a claims manual that provide the standards. The 
regulations called for creation of an occupational disability advisory 
committee comprised of a physician representing rail labor and a 
physician representing rail management. It is the responsibility of 
this committee to periodically review the standards and claims manual 
and recommend revisions in these documents. 

When the Board became aware of the high incidence of occupational 
disability claims filed by employees of the Long Island Rail Road, the 
Board adopted a five-step plan to address possible issues concerning 
the claims from Long Island Rail Road employees. This plan applies 
additional scrutiny to the adjudication of occupational disability 
annuity applications filed by Long Island Rail Road employees. The plan 
calls for reviewing occupational disability claims to identify other 
situations similar to the Long Island Rail Road and the Board will 
apply additional scrutiny to any such situations that warrant such 
scrutiny. In this same vein, the Board has created a new position to 
provide quality control oversight to the occupational disability 
program nationwide, not just to Long Island Rail Road applications. 
This new position will be responsible for analysis of claims to 
identify anomalies similar to the Long Island Rail Road situation. 
While your report suggests that the Railroad Retirement Board may not 
have sufficient information to detect such possible anomalies, the 
newly created position will be authorized to develop new methods of 
data collection needed to perform data mining and analysis of the 
occupational disability annuity program. 

The Board has taken action to address the anomaly of the high incidence 
of occupational disability claims by employees of the Long Island Rail 
Road. As indicated previously, those receiving benefits based solely on 
meeting the occupational disability standard represent only 5 percent 
of railroad retirement beneficiaries. Nevertheless, the Board takes its 
administrative responsibilities for this program very seriously, and we 
will continue to monitor this program and take corrective action as 
necessary. 

On behalf of the United States Railroad Retirement Board, we appreciate 
the opportunity to comment on your proposed report. 

Sincerely, 

Signed by: 

Michael S. Schwartz: 
Chairman: 

Signed by: 

V.M. Speakman, Jr. 
Labor Member: 

cc: 
Secretary to the Board: 
Inspector General: 
Director of Programs: 

[End of section] 

Enclosure III: Comments from the U.S. Railroad Retirement Board 
Management Member: 

United States Of America: 
Railroad Retirement Board: 
Jerome F. Kever: 	
Management Member: 
844 North Rush Street: 
Chicago, Illinois 60611-2092: 

July 24, 2009: 

Mr. Daniel Burton, Director: 
Education, Workforce, and Income Security Issues: 
United States General Accountability Office: 
Washington, DC 20548: 

Dear Mr. Burton: 

On behalf of rail industry stockholders, I wish to thank you and your 
team for bringing significant resources and expertise to bear in your 
review of the Railroad Retirement Board's occupation disability program 
as it relates to certain employees of commuter rail operations. 

Without such comprehensive and independent reviews, it is possible for 
inherent systemic weaknesses to impact both the occupational disability 
and the disability freeze process as administered by the RIB. Until the 
Board has reviewed the results of further independent inquiry, as a 
fiduciary, I am uncomfortable relying on present outcomes as proof that 
program integrity and quality assurance controls, including the five 
point special review process developed to address the adjudication of 
Long Island Railroad employees' applications, are sufficient to detect 
and prevent program abuse. 

I look forward to your further review, recommendations and findings. 

Sincerely, 

Signed by: 

Jeremy F. Kever: 

cc: 
Secretary to the Board: 
Inspector General: 
Director of Programs: 

[End of section] 

Enclosure IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov: 

Staff Acknowledgments: 

Jeremy Cox (Assistant Director) and Arthur T. Merriam Jr. (Analyst-in- 
Charge) managed all aspects of the assignment. Rachael Valliere, Martin 
Scire, and Jillian Fasching made significant contributions to this 
report, in all aspects of the work. In addition, Gregory Wilmoth, 
Gloria Hernandezsaunders, and Wilfred Holloway provided technical 
support; Jessica Botsford provided legal support; and Susan Aschoff 
assisted with the development of the message and report. 

[End of section] 

Footnotes: 

[1] Workers also must have a "current connection" with the railroad 
industry, which is generally met if the employee worked for a railroad 
in at least 12 of the last 30 consecutive months immediately preceding 
the start date for the disability annuity. 

[2] The other commuter railroads included in this review are: 
Massachusetts Bay Commuter Railroad, Metro-North Railroad, New Jersey 
Transit, Northeast Illinois Commuter Railroad, Northern Indiana 
Commuter Transportation District, Port Authority Trans-Hudson 
Corporation, and Southeastern Pennsylvania Transportation Authority. 

[3] We used calendar years 2004 through 2007 because 2004 was the 
earliest year that RRB had complete data on commuter rail employees' 
ages and years of service. Calendar year 2007 is the most recent year 
for which RRB has complete railroad employment data. 

[4] We chose fiscal year 2007 because it provided the most recent, 
complete data on the final outcomes of occupational disability claims. 

[5] The Metropolitan Transportation Authority is the parent company of 
both the LIRR and Metro-North railroads. 

[6] We selected Metro-North because it operates in a similar geographic 
area and has a similar number of employees to LIRR. 

[7] GAO, Supplemental Security Income: Additional Actions Needed to 
Reduce Program Vulnerability to Fraud and Abuse [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-99-151] (Washington, D.C.: Sept. 
15, 1999). 

[8] The average annual occupational disability benefit was $26,556 in 
fiscal year 2007. 

[9] Amtrak is a commuter railroad, but we excluded it from our analysis 
because of its size (in 2007, it had three times as many employees as 
LIRR). It also operates and has employees across the nation, rather 
than in a specific region like the commuter rail agencies. Further, we 
excluded commuter employees of freight railroads because we had no way 
to differentiate them from freight workers. 

[10] We used calendar years 2004 through 2007 because 2004 was the 
earliest year that RRB had complete data on commuter rail employees’ 
ages and years of service. Calendar year 2007 is the most recent year 
for which the RRB has complete railroad employment data. 

[11] We chose fiscal year 2007 because it provided the most recent, 
complete data on the final outcomes of occupational disability claims. 

[12] The Metropolitan Transportation Authority is the parent company of 
both the LIRR and Metro-North railroads. 

[13] We selected Metro-North because it operates in a similar 
geographic area and has a similar number of employees. 

[14] RRB’s disability programs fall under the Railroad Retirement Act. 

[15] Workers also must have a “current connection” with the railroad 
industry, which is generally met if the employee worked for a railroad 
in at least 12 of the last 30 months immediately preceding the start 
date for the disability annuity. 

[16] RRB and SSA exchange funds to ensure the Social Security Trust 
Funds are in the same position they would be if rail workers were 
covered by Social Security instead of their own system. RRB sends SSA 
tax revenues that SSA would otherwise collect from rail workers, and 
SSA provides RRB the funds that SSA would otherwise pay railroad 
workers in benefits. However, given declining rail employment, in 
fiscal year 2007, RRB received about $1.2 billion more than it sent to 
SSA for employee disability benefits. 

[17] According to LIRR officials, fewer than 1,000 active LIRR 
employees were covered under the closed pension plan, as of January 
2009. 

[18] We calculated approval rates based on those claims where this 
determination had been made, as of May 2009. 

[19] GAO, Supplemental Security Income: Additional Actions Needed to 
Reduce Program Vulnerability to Fraud and Abuse, [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-99-151] (Washington, D.C.: Sept. 
15, 1999). 

[20] When workers apply for occupational disability benefits, RRB does 
not always ask whether they were receiving or expected to receive a 
railroad pension. The agency only asks this of applicants who have at 
least 25 years of service at 65 years old or 30 years of service at age 
60 and may qualify for an RRB supplemental annuity. The supplemental 
annuity currently provides a maximum of $43 a month to career railroad 
workers. 

[21] RRB procedures for occupational disability state that claims 
examiners cannot order these tests. 

[22] While management workers are eligible to apply for occupational 
disability in the same way that other workers are eligible to apply, 
concerns were raised in the news reports about the high rate at which 
LIRR management workers with less physically demanding jobs were 
accessing the occupational disability program, in comparison to line 
workers with more physically demanding jobs. RRB officials told us they 
are collecting these data in response to these concerns. 

[End of section] 

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