Managing Independence: The Governance Components of the National Railroad Retirement Investment Trust

Social Security Bulletin, Vol. 71, No. 2, pp. 77-84, 2011

8 Pages Posted: 13 May 2011 Last revised: 25 Apr 2015

Kevin Whitman

U.S. Social Security Administration

Date Written: May 5, 2011

Abstract

Congress created the National Railroad Retirement Investment Trust (NRRIT) in 2001 to invest assets from the federal Railroad Retirement program in equities, expecting to improve returns and help fund expanded benefits. In designing the NRRIT, Congress tried to address concerns raised by policymakers and theorists about potential political influence on investment decisions that could create conflicts, lower the program's performance, and interfere with private markets. Proposals to use centralized investment to improve Social Security's financing have recently raised similar concerns. This article reviews management and governance aspects of the NRRIT as they relate to its political independence by focusing on the Trust's legal status, mandate, governing board characteristics, investment policy, and oversight. If Social Security were to adopt such an investment policy, examining the NRRIT's design and experience in these areas could provide useful guidance.

Keywords: National Railroad Retirement Investment Trust, Railroad Retirement Board, Centralized Investment

JEL Classification: H11, H55

Suggested Citation

Whitman, Kevin, Managing Independence: The Governance Components of the National Railroad Retirement Investment Trust (May 5, 2011). Social Security Bulletin, Vol. 71, No. 2, pp. 77-84, 2011. Available at SSRN: https://ssrn.com/abstract=1831447

Kevin Whitman (Contact Author)

U.S. Social Security Administration ( email )

Washington, DC 20254
United States

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