Reforming the Railroad Retirement System

Boston College - Center for Retirement Research WP 2013-13

29 Pages Posted: 13 Jun 2013

See all articles by Steven A. Sass

Steven A. Sass

Boston College - Center for Retirement Research

Date Written: June 1, 2013

Abstract

The government’s Railroad Retirement program is a clear anomaly in the U.S. economic landscape. The program taxes employers and workers in a specific private-sector industry to provide pensions to workers in that industry. Like Social Security, Railroad Retirement had been funded on a pay-as-you-go basis, with Trust Fund assets invested in government bonds. In the 1990s, however, the carriers and unions developed a proposal for reforming the program that involved investing Railroad Retirement assets in equities, similar to private-sector pension funds. Despite opposition in Washington from those who feared it would create a precedent for investing Social Security assets in equities, Congress enacted the industry proposal in 2001.

Suggested Citation

Sass, Steven A., Reforming the Railroad Retirement System (June 1, 2013). Boston College - Center for Retirement Research WP 2013-13, Available at SSRN: https://ssrn.com/abstract=2277664 or http://dx.doi.org/10.2139/ssrn.2277664

Steven A. Sass (Contact Author)

Boston College - Center for Retirement Research ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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