How is the financing of the railroad retirement system changed by the new law?
The new law allows greater latitude in the investment of railroad retirement assets. Under prior law, the investment of funds not needed immediately for benefit payments or administrative expenses had been limited to interest-bearing securities restricted to obligations of the U.S. Government, obligations guaranteed as to principal and interest by the U.S. Government, or other obligations that are lawful investments for trust funds. The new law provides for the transfer of railroad retirement funds from the Railroad Retirement Account and the Social Security Equivalent Benefit Account to a new National Railroad Retirement Investment Trust, whose Board of Trustees is empowered to invest Trust assets, other than assets transferred from the Social Security Equivalent Benefit Account, in non-governmental assets, such as equities and debt, as well as in governmental securities.
