Railroad Retirement Board Message to the Congress Transmitting a Report.

To the Congress of the United States:

I hereby transmit the Annual Report to the Railroad Retirement Board for fiscal year 1978.

The report summarizes the Board's operations to assist the railroad sector during the year. Under the Railroad Retirement Act, 1,100,000 recipients were paid $4 billion in retirement and survivor benefits, and under the Railroad Unemployment Insurance Act 175,000 beneficiaries were paid almost $200 million in unemployment and sickness benefits.

I note with concern that the Board has advised me that the balance in the Railroad Retirement Account continues to decline as benefit payments exceed income for the eighth consecutive year.

The Board's most recent actuarial valuation indicates a serious and growing actuarial deficit which requires short term remedial action, a judgment also concurred in by the General Accounting Office. This Administration's budget for fiscal year 1980 includes even-handed legislative proposals to restore to solvency the railroad industry pension fund which will assure the interests of current and future railroad retirement beneficiaries. We also invite the view of railroad labor and management on our proposal to provide sound financing of the industry pension component by the railroad industry without added Federal subsidies.

The Board is currently preparing its 14th Triennial Actuarial Valuation of the industry pension, which should provide a more accurate, up-to-date analysis of the financial condition of the fund. The forthcoming actuarial valuation will project the condition of the fund based on strict current law basis as well as under the normal requirements of the Employee Retirement Income Security Act (ERISA). Both estimates will use the economic assumptions in the most recent Social Security Trustee's Report. These additional perspectives will help assure that changes to restore the solvency of the industry pension are based on information under a variety of economic and legislative assumptions.

JIMMY CARTER

The White House,

September 17, 1979.