Railroad Retirement Board (RRB) Labor Member John Bragg announced June 17 that Assistant to the Labor Member Geraldine “Geri” Clark will be retiring July 2 after 51 years with the agency.
“Geri’s retirement is a great loss to my office and the RRB. Her 51 years of dedication to the RRB, rail labor, and to both active and retired rail workers is unmatched. Her self-motivation, commitment to improving customer service and willingness to always go the extra mile when called upon will be greatly missed,” Bragg wrote in a letter announcing Clark’s retirement. “I wish Geri the best as she begins this new chapter in life, but most importantly I want to thank her for her service. She has truly been a pleasure to work with.”
Clark began working at RRB in 1970 and was appointed to her current position in 1985 by former Labor Member of the Board C. J. Chamberlain, becoming the first woman to be named a board assistant in the agency’s history. Geri also served as an assistant to succeeding Labor Members V.M. “Butch” Speakman, Jr. and W.A. “Walt” Barrows.
“Geri’s leaving will mark the end of an era for the Railroad Retirement Board, and I am indebted to her dedication and commitment to the men and women of the rail industry who keep this country moving,” Bragg wrote. “Her work over the last 51 years has helped assure that railroad workers always receive the benefits they need and deserve.”
During her time in the Office of the Labor Member, Clark was the driving force behind the Informational Conference program. The conferences were introduced by the Labor Member to help educate local rail labor representatives about the benefits available to members and their families under the Railroad Retirement and Railroad Unemployment Insurance Acts. Thousands of representatives attended conferences over the years and achieved a better understanding of the provisions and financing of the Railroad Retirement and unemployment insurance systems, and of the administrative organization of the RRB. In turn, they helped improve the effectiveness of the agency’s benefit program operations by passing on to their fellow railroad employees the information they acquired at the conferences.
She was a frequent guest at numerous UTU/SMART-TD Regional Meetings, sharing her knowledge of the RRB to members on the cusp of retirement or who were just planning ahead.
More recently Clark spearheaded RRB’s Pre-Retirement Seminar program for workers. The seminars have proven to be a popular successor to the informational conferences, offering similar content, but open to rail labor representatives and also railroad employees and their spouses nearing retirement.
The leadership and the whole of SMART Transportation Division thank Geri Clark for her many decades of excellent service in helping to ensure that union members understand and get the RRB benefits to which they are entitled. We wish her a long, happy and healthy retirement!
Tag: Railroad Retirement Board
The 2022 fiscal year budget proposed by the Biden administration May 28 offers a net increase in funding to the Railroad Retirement Board (RRB) to cover accumulating administrative costs and to improve customer service.
The White House’s budget request of a little over $125 million for RRB, if approved by Congress, would result in a gain of $11 million for RRB to cover staffing needs to better serve railroad workers nearing retirement, retirees and their survivors.
In its budget request to U.S. House leadership and to Vice President Kamala Harris, RRB reported that it has a staffing deficit of 12% from its minimum levels and that the RRB’s programs office has been operating at a reduced capacity because funding for the agency has been nearly flat for five years. Its workforce also is aging, with nearly a quarter of its workers now eligible to retire and 231 employees eligible to retire in the next year.
The added funding will allow RRB to increase its ranks to 801 full-time employees at a time when it needs workers to take care of retirement, survivor claims and numerous other customer-facing duties that had been hampered by the COVID-19 pandemic and chronic understaffing. In its budget request, RRB reported that just 35% of the 1.2 to 1.3 million calls its Bureau of Field Services received were answered in FY2020.
“We are operating in a transitional state that requires a sufficient investment in staffing to sustain benefit determination and payment operations, which still rely heavily on manual processing, while ensuring that the agency retains the knowledge of our laws and systems critical to modernizing benefit payment systems,” the agency stated. “The RRB believes that an increase in staffing is critical to the success of the agency over the next few years.”
The budget request is not the only way the current administration is working to improve RRB.
The agency’s years-long project to upgrade its IT infrastructure finally received full funding through Biden and Congress’s American Rescue Plan. The agency said that the modernization of RRB’s systems should also help to open the door to better service and more efficiency once fully implemented.
“We are grateful to the Congress for providing annual and supplemental appropriations that have fully funded RRB’s IT Modernization program,” RRB stated.
Read the RRB’s budget request and its 2022 Fiscal Year performance plan.
Monthly benefits may be payable under the Railroad Retirement Act to the surviving widow(er), children, and certain other dependents of a railroad employee if the employee was “insured” under that Act at the time of death. Lump-sum death benefits may also be payable to qualified survivors in some cases.
The following questions and answers describe the survivor benefits payable by the Railroad Retirement Board (RRB) and the eligibility requirements for these benefits.
- What are the general service requirements for Railroad Retirement survivor benefits?
With the exception of one type of lump-sum death benefit, eligibility for survivor benefits depends on whether or not a deceased employee was “insured” under the Railroad Retirement Act. An employee is insured if he or she has at least 120 months (10 years) of railroad service, or 60 months (5 years) performed after 1995, and a “current connection” with the railroad industry as of the month the annuity begins or the month of death, whichever occurs first.
- How is a “current connection” determined under the Railroad Retirement Act?
Generally, an employee who worked for a railroad in at least 12 months in the 30 months immediately preceding the month his or her Railroad Retirement annuity begins will meet the current connection requirement. If an employee dies before retirement, railroad service in at least 12 months in the 30 months before the month of death will meet the current connection requirement for the purpose of paying survivor benefits.
If an employee does not qualify on this basis, but has 12 months of service in an earlier 30-month period, he or she may still meet the current connection requirement. This alternative generally applies if the employee did not have any regular employment outside the railroad industry after the end of the last 30-month period which included 12 months of railroad service and before the month the annuity begins or the month of death, if earlier.
Full- or part-time work for a nonrailroad employer in the interval between the end of the last 30-month period including 12 months of railroad service and the beginning date of an employee’s annuity or the month of death, if earlier, can break a current connection.
Self-employment in an unincorporated business will not break a current connection; however, self-employment can break a current connection if the business is incorporated. All self-employment will be reviewed to determine if it meets the RRA’s standards for maintaining a current connection.
Working for certain U.S. government agencies — Department of Transportation, National Transportation Safety Board, Surface Transportation Board, Transportation Security Administration, National Mediation Board or the Railroad Retirement Board — will not break a current connection. State employment with the Alaska Railroad, so long as that railroad remains an entity of the State of Alaska, will not break a current connection. Also, railroad service in Canada for a Canadian railroad will neither break nor preserve a current connection.
A current connection can also be maintained, for purposes of survivor annuities, if the employee completed 25 years of railroad service, was involuntarily terminated without fault from his or her last job in the rail industry, and did not thereafter decline an offer of employment in the same class or craft in the rail industry, regardless of the distance to the new position.
A current connection determination is made when an employee files for a Railroad Retirement annuity. If an employee dies before applying for an annuity, it is made when an applicant files for a survivor annuity. Once a current connection is established at the time the Railroad Retirement annuity begins, an employee never loses it no matter what kind of work is performed thereafter.
- What if these service requirements are not met?
If a deceased employee did not have an insured status, jurisdiction of any survivor benefits payable is transferred to the Social Security Administration and survivor benefits are paid by that agency instead of the RRB. Regardless of which agency has jurisdiction, the deceased employee’s Railroad Retirement and Social Security credits will be combined for benefit computation purposes.
- What are the age and other eligibility requirements for widow(er)s who haven’t remarried?
Widow(er)s’ benefits are payable at age 60 or over. They are also payable at any age if the widow(er) is caring for an unmarried child of the deceased employee under age 18 or a disabled child of any age who became permanently disabled before age 22. Widow(er)s’ benefits are also payable at ages 50-59 if the widow(er) is totally disabled and unable to work in any regular employment. The disability must have begun within seven years after the employee’s death or within seven years after the termination of an annuity based on caring for a child of the deceased employee. In most cases, a five-month waiting period is required after the onset of disability before disability payments can begin.
Generally, the widow(er) must have been married to the employee for at least nine months prior to death, unless she or he was the natural or adoptive parent of their child, the employee’s death was accidental or while on active duty in the U.S. Armed Forces, the widow(er) was potentially entitled to certain Railroad Retirement or Social Security benefits in the month before the month of marriage, or the marriage was postponed due to state restrictions on the employee’s prior marriage and divorce due to mental incompetence or similar incapacity.
- Can surviving divorced spouses and remarried widow(er)s also qualify for benefits?
Survivor benefits may be payable to a surviving divorced spouse or remarried widow(er). Benefits are limited to the amount Social Security would pay (Tier I only) and therefore are less than the amount of the survivor annuity otherwise payable (Tier I and Tier II) by the RRB. A Tier II benefit is not provided for a surviving divorced spouse or a remarried widow(er).
A surviving divorced spouse may qualify if she or he was married to the employee for at least 10 years immediately before the date the divorce became final, and is age 60 or older (age 50 or older if disabled). A surviving divorced spouse who is unmarried can qualify at any age if caring for the employee’s child and the child is under age 16 or disabled, in which case the 10-year marriage requirement does not apply.
A widow(er) or surviving divorced spouse who remarries after age 60, or a disabled widow(er) or disabled surviving divorced spouse who remarries after age 50 may also receive the portion of a survivor annuity equivalent to a Social Security benefit (Tier I); however, remarriage prior to age 60 (or age 50 if disabled) would not prevent eligibility if that remarriage ended. Such Social Security level benefits may also be paid to a younger widow(er) or surviving divorced spouse caring for the employee’s child who is under age 16 or disabled, if the remarriage is to a person entitled to Railroad Retirement or Social Security benefits, or the remarriage ends.
- When are survivor benefits payable to children and other dependents?
Monthly survivor benefits are payable to an unmarried child under age 18, and to an unmarried child age 18 in full-time attendance at an elementary or secondary school, or in approved homeschooling, until the student attains age 19 or the end of the school term in progress when the student attains age 19. In most cases where a student attains age 19 during the school term, benefits are limited to the two months following the month age 19 is attained. These benefits will be terminated earlier if the student marries, graduates or ceases full-time attendance. An unmarried disabled child over age 18 may qualify if the child became totally disabled before age 22. An unmarried dependent grandchild meeting any of the requirements described above for a child may also qualify if both the grandchild’s parents are deceased or found disabled by the Social Security Administration.
Monthly survivor benefits are also payable to a parent at age 60 who was dependent on the employee for at least half of the parent’s support. If the employee was also survived by a widow(er), surviving divorced spouse or child who could ever qualify for an annuity, the parent’s annuity is limited to the amount that Social Security would pay (Tier I).
- How are Railroad Retirement widow(er)s’ benefits computed?
The Tier I amount of a two-tier survivor benefit is based on the deceased employee’s combined Railroad Retirement and Social Security earnings credits, and is computed using Social Security formulas. In general, the survivor Tier I amount is equal to the amount of survivor benefits that would have been payable under Social Security.
In December 2001, legislation established an “initial minimum amount” which yields, in effect, a widow(er)’s Tier II benefit equal to the Tier II benefit the employee would have received at the time of the award of the widow(er)’s annuity, minus any applicable age reduction.
However, such a Tier II benefit will not receive annual cost-of-living increases until such time as the widow(er)’s annuity, as computed under prior law with all interim cost-of-living increases otherwise payable, exceeds the widow(er)’s annuity as computed under the initial minimum amount formula.
A widow(er) who received a spouse annuity from the RRB is guaranteed that the amount of any widow(er)’s benefit payable will never be less than the annuity she or he was receiving as a spouse in the month before the employee died.
The average annuity awarded to widow(er)s in fiscal year 2020, excluding remarried widow(er)s and surviving divorced spouses, was $2,333 a month. Children received $1,549 a month, on average. Total family benefits for widow(er)s with children averaged $4,395 a month. The average annuity awarded to remarried widow(er)s or surviving divorced spouses in fiscal year 2020 was $1,301 a month.
- Are survivor benefits subject to any reduction for early retirement or disability retirement?
A widow(er), surviving divorced spouse or remarried widow(er) whose annuity begins at full retirement age or later receives the full Tier I amount unless the deceased employee received an annuity that was reduced for early retirement. The eligibility age for a full widow(er)’s annuity is gradually rising to age 67 for those born in 1962 or later, the same as under Social Security. The maximum age reduction is also rising to 20.36%, depending on the widow(er)’s date of birth. For a surviving divorced spouse or remarried widow(er), the maximum age reduction is 28.5%. For a disabled widow(er), disabled surviving divorced spouse or disabled remarried widow(er), the maximum reduction is also 28.5%, even if the annuity begins at age 50.
- Are these benefits subject to offset for the receipt of other benefits?
Under the Railroad Retirement Act, the Tier I portion of a survivor annuity is subject to reduction if any Social Security benefits are also payable, even if the Social Security benefit is based on the survivor’s own earnings. This reduction follows the principles of Social Security law which, in effect, limit payment to the highest of any two or more benefits payable to an individual at one time.
The Tier I portion of a widow(er)’s annuity may also be reduced for the receipt of certain federal, state or local government pension based on the widow(er)’s own earnings. The reduction generally does not apply if the employment on which the public pension is based was covered under the Social Security Act throughout the last 60 months of public employment. However, most military service pensions and payments from the Department of Veterans Affairs will not cause a reduction. Pensions paid by a foreign government or interstate instrumentality will also not cause a reduction.
For those subject to the public pension reduction, the Tier I reduction is equal to 2/3 of the amount of the public pension.
A survivor annuitant should notify the RRB promptly if she or he becomes entitled to any such benefits.
- What if a widow(er) was also a railroad employee and is eligible for a Railroad Retirement employee annuity as well as monthly survivor benefits?
If the widow(er) is entitled to a Railroad Retirement employee annuity and neither the widow(er) nor the deceased employee had any railroad service before 1975, the survivor annuity (Tier I and Tier II) payable to the widow(er) is reduced by the total amount of the widow(er)’s own employee annuity.
If a widow or dependent widower is also a railroad employee annuitant, and either the widow(er) or the deceased employee had at least 120 months of railroad service before 1975, the Tier I reduction may, under certain circumstances, be partially restored in the survivor Tier II amount.
If either the deceased employee or the widow(er) had some railroad service before 1975 but less than 120 months of service, the widow(er)’s own employee annuity and the Tier II portion of the survivor annuity would be payable to the widow(er). The Tier I portion of the survivor annuity would be payable only to the extent that it exceeds the Tier I portion of the widow(er)’s own employee annuity.
- What types of lump-sum death benefits are payable under the Railroad Retirement Act?
A lump-sum death benefit is payable to certain survivors of an employee with 10 or more years of railroad service, or less than 10 years if at least five years were after 1995, and had a current connection with the railroad industry if there is no survivor immediately eligible for a monthly annuity upon the employee’s death.
If the employee did not have 10 years of service before 1975, the lump sum is limited to $255 and is payable only to the widow(er) living in the same household as the employee at the time of the employee’s death.
If the employee had less than 10 years of service but had five years after 1995, he or she must have met Social Security’s insured status requirements for the lump sum to be payable.
If the employee had 10 years of service before 1975, the lump sum is payable to the living-with widow(er). If there is no such widow(er), the lump sum may be paid to the funeral home or the payer of the funeral expenses. These lump sums averaged $1,030 in fiscal year 2020.
If a widow(er) is eligible for monthly benefits at the time of the employee’s death, but the widow(er) had excess earnings deductions which prevented annuity payments or for any other reason did not receive monthly benefits in the 12-month period beginning with the month of the employee’s death totaling at least as much as the lump sum, the difference between the lump-sum benefit and monthly benefits actually paid, if any, is payable in the form of a deferred lump-sum benefit.
The average for all types of lump sums was $933 in fiscal year 2020.
The Railroad Retirement system also provides, under certain conditions, a residual lump-sum death benefit which ensures that a railroad family receives at least as much in benefits as the employee paid in Railroad Retirement taxes before 1975. This benefit is, in effect, a refund of an employee’s pre-1975 Railroad Retirement taxes, after subtraction of any benefits previously paid on the basis of the employee’s service. This benefit is seldom payable.
- How does a person get an estimate of, or apply for, survivor benefits?
As all of the RRB’s 53 field offices are physically closed to the public until further notice because of the COVID-19 pandemic, the best way to obtain a survivor’s annuity estimate is to call the agency’s toll-free number (1-877-772-5772).
Under normal circumstances, applications for survivor benefits are generally filed at one of the RRB’s field offices, with an RRB representative at one of the office’s Customer OutReach Program (CORP) service locations, or by telephone and mail; however, while RRB field offices remain physically closed, applications can be filed solely by telephone and mail by first calling 1-877-772-5772. It is important to note that callers may experience lengthy wait times due to increased call volume caused by COVID-19-related issues.
Notice from John Bragg, the RRB labor member
Brothers and Sisters,
John Bragg
It is hard to believe that 2020 is in the rearview mirror and we are already approaching the mid-point of 2021. The Railroad Retirement Board (RRB) is still operating in a remote capacity with field offices closed to the public. Hopefully, in the not too distant future, I will be writing to advise you of plans for getting back to normal operations. Today, however, I am writing to share a friendly reminder with you about action which every active employee should take on an annual basis – and may be of particular importance this year to some, in light of the unique work circumstances many encountered.
Each year, on or before the last day of February, employers must report service and compensation for each employee who performed compensated service in the preceding calendar year. The RRB, in turn, credits the service and compensation records of individual employees based upon these reports and in June of every year, the RRB releases Form BA-6 to each employee for which compensated service for the preceding year was reported. The Form BA-6 contains the information recently reported for the preceding year, as well as the information reported for three preceding years. For example, the Forms BA-6 which will be released by the RRB in mid-June of 2021 will contain service and compensation reported for the years 2017 through 2020. Regardless of the amount earned, the amount of compensation shown on the Form BA-6 will always be limited by the maximum creditable Tier I compensation amount for the calendar year. For calendar years 2017 through 2020, the maximum amounts creditable are $127,200, $128,400, $132,900 and $137,700, respectively. In addition to showing the creditable compensation for the years 2017 through 2020, the Form BA-6 issued in mid-June of 2021 will show the months for which the employer reported railroad service for the employee during the years 2017-2020.
It is critical that individual employees review their annual Forms BA-6 to make sure that all the information contained on the form is accurate. For example, in addition to validating the creditable compensation, it is important to check to see if the employer properly reported the months for which credit was given by the employer for a month of railroad service. Every month for which you believe you should have credit for railroad service should be coded with a “1”. If the code is “0”, you will not receive credit for any railroad service for that month. If the code is “D” then you will receive credit for railroad service pursuant to the rules governing the deeming of service months.
Employees who received pay for time lost, especially as a result of arbitration proceedings, during the years 2017 through 2020 are reminded of the importance of checking their Forms BA-6. RRB regulations at 20 C.F.R. § 209.15(b) provide that compensation which is pay for time lost must be reported with respect to the year in which the time and compensation were lost. However, it is not uncommon for the individuals responsible for completing reports of service and compensation to be unfamiliar with how to report pay for time lost, or to lack awareness that the compensation they are reporting reflects pay for time lost. As a result, the compensation is mistakenly reported for the year paid AND the service months for which the time and compensation were lost are not credited as railroad service months. Situations where this is most likely to occur are arbitration decisions resulting in the employee being reinstated with all rights and benefits unimpaired and receiving compensation for lost time.
REMEMBER: The law limits the period during which corrections to service and compensation records may be filed to four years from the date the report was due at the RRB, so it is very important for employees to request a correction within that period of time. Any railroad employee who thinks that the Form BA-6 contains an error should be certain to follow the directions on how to file with the RRB a protest of the information contained on the Form BA-6.
RRB Labor Member Press Release:
John Bragg
The Office of the Labor Member is pleased to announce that our 2021 pre-retirement seminar presentation is now available to view online. We designed this program to help educate those nearing retirement about the benefits available to them, and what they can expect during the application process.
This popular program has become a critical resource to RRB customers and employees alike. It helps promote a better understanding of our benefit programs among the railroad community, and in turn, improves the effectiveness of our benefit program operations.
While we typically conduct several seminars across the country annually, we are currently unable to hold in-person events because of COVID-19.
To access the video online, visit RRB.gov/PRS and click on View Pre-Retirement Seminar Presentation. Because we cover several aspects of Railroad Retirement benefits in great detail, the entire presentation is over an hour long. View shorter segments of the program by selecting a seminar topic on the same web page. Available topics include: Retired Employee and Spouse Benefits, Spouse Annuities, Working After Retirement, Survivor Benefits, and Items Affecting All Retirement and Survivor Benefits.
The payment of a Railroad Retirement annuity can be affected by entitlement to Social Security benefits, as well as certain other government benefits. Such dual entitlement, if not reported to the Railroad Retirement Board (RRB), can result in benefit overpayments that have to be repaid, sometimes with interest and penalties. The following questions and answers describe how the RRB adjusts Railroad Retirement benefits for annuitants who are also eligible for Social Security benefits and/or other benefit payments.
1. How are dual benefits paid to persons entitled to both Railroad Retirement and Social Security benefits?
If a Railroad Retirement annuitant is also awarded a Social Security benefit, the Social Security Administration determines the amount of the Social Security benefit due, but a combined monthly dual benefit payment should, in most cases, be issued by the RRB after the Railroad Retirement annuity has been reduced by the amount of the Social Security benefit.
2. Why is a Railroad Retirement annuity reduced when a Social Security benefit is also payable?
The Tier I portion of a Railroad Retirement annuity is based on both the Railroad Retirement and Social Security earnings credits acquired by an employee and computed under Social Security formulas. It approximates what Social Security would pay if railroad work were covered by Social Security. Tier I benefits are, therefore, reduced by the amount of any actual Social Security benefit paid on the basis of nonrailroad employment, in order to prevent a duplication of benefits based on Social Security-covered earnings.
In addition, following principles of Social Security law which limit payment to the higher of any two or more benefits payable to an individual at one time, the Tier I dual benefit reduction applies to an annuity even if the Social Security benefit is based on the earnings record of someone other than the railroad employee, such as a spouse or former spouse. An annuitant is required to advise the RRB if any benefits are received directly from the Social Security Administration or if those benefits increase (other than for a cost-of-living increase) to avoid a Railroad Retirement benefit overpayment.
The Tier II portion of a Railroad Retirement annuity is based on the railroad employee’s railroad service and earnings alone and is computed under a separate formula. It is not reduced for entitlement to a Social Security benefit.
3. Are there any exceptions to the Railroad Retirement annuity reduction for Social Security benefits?
No. There are no exceptions to the Railroad Retirement annuity reduction for Social Security benefits.
4. Can federal, state or local government pensions also result in dual benefit reductions in an employee’s Railroad Retirement annuity?
Yes. Tier I benefits for employees first eligible for a Railroad Retirement annuity and a federal, state or local government pension after 1985 may be reduced for receipt of a public pension based, in part or in whole, on employment not covered by Social Security or Railroad Retirement after 1956. This may also apply to certain other payments not covered by Railroad Retirement or Social Security, such as payments from a non-profit organization or a foreign government or a foreign employer. Usually, an employee’s Tier I benefit will not be reduced by more than 1/2 of his or her pension from noncovered employment. However, if the employee is under age 65 and receiving a disability annuity, the Tier I benefit may be reduced by an added amount if the pension from noncovered employment is a public disability benefit.
Military service pensions, payments by the Department of Veterans Affairs, or certain benefits payable by a foreign government as a result of a totalization agreement between that government and the United States will not cause a reduction.
5. Can the public service pension reduction apply to spouse or widow(er)s’ benefits?
Yes. The Tier I portion of a spouse’s or widow(er)’s annuity may be reduced for receipt of any federal, state or local government pension separately payable to the spouse or widow(er) based on her or his own earnings. For spouses and widow(er)s subject to a public service pension reduction, the Tier I reduction is equal to 2/3 of the amount of the public service pension.
The reduction generally does not apply if the employment on which the public service pension is based was covered under the Social Security Act throughout the last 60 months of public employment. Most military service pensions and payments from the Department of Veterans Affairs will not cause a reduction. Pensions paid by a foreign government or interstate instrumentality will also not cause a reduction.
6. What dual benefit restrictions apply when both persons in a marriage are railroad employees entitled to Railroad Retirement annuities?
If both parties started railroad employment after 1974, the amount of any spouse or divorced spouse annuity is reduced by the amount of the employee annuity to which the spouse or divorced spouse is also entitled.
If either party had some railroad service before 1975, the spouse or divorced spouse Tier I amount is reduced by the amount of the railroad employee Tier I to which the spouse or divorced spouse is entitled. The spouse or divorced spouse Tier I amount cannot be reduced below zero. The initial reduction is restored in the spouse Tier II amount. Divorced spouses are not entitled to a Tier II component and are not eligible to have the reduction restored.
In survivor cases, if the widow(er) is entitled to a Railroad Retirement employee annuity and neither the widow(er) nor the deceased employee had any railroad service before 1975, the survivor annuity (Tier I and Tier II) payable to the widow(er) is reduced by the total amount of the widow(er)’s own employee annuity.
If a widow or dependent widower is also a railroad employee annuitant, and either the widow(er) or the deceased employee had 120 months of railroad service before 1975, the Tier I reduction may be partially restored in the survivor Tier II amount.
If either the deceased employee or the widow(er) had some railroad service before 1975 but less than 120 months of service, the widow(er)’s own employee annuity and the Tier II portion of the survivor annuity would be payable to the widow(er). The Tier I portion of the survivor annuity would be payable only to the extent that it exceeds the Tier I portion of the widow(er)’s own employee annuity.
7. Can workers’ compensation or public disability benefits affect Railroad Retirement benefits?
If an employee is receiving a Railroad Retirement disability annuity, Tier I benefits for the employee and spouse may, under certain circumstances, be reduced for receipt of workers’ compensation or public disability benefits.
8. How can an annuitant find out if the receipt of any dual benefits affects his or her Railroad Retirement annuity?
If an annuitant becomes entitled to any of the dual benefit payments discussed above, or if there is any question as to whether a dual benefit payment requires a reduction in an annuity, he or she should contact an RRB field office online or by phone. As all of the RRB’s 53 field offices are physically closed to the public until further notice because of the COVID-19 pandemic, customers are encouraged to contact their local office by accessing Field Office Locator at RRB.gov and clicking on Send a Secure Message at the bottom of their local office’s page. Customers who prefer talking to an RRB employee can call the agency’s toll-free number (1-877-772-5772); however, they may experience lengthy wait times due to increased call volume caused by COVID-19-related issues.
Employers and employees covered by the Railroad Retirement Act pay higher retirement taxes than those covered by the Social Security Act. As a result, Railroad Retirement benefits are higher than Social Security benefits, especially for “career” employees (those employees who have 30 or more years of service).
The following questions and answers show the differences in Railroad Retirement and Social Security benefits payable at the close of the fiscal year ending Sept. 30, 2020. They also show the differences in age requirements and payroll taxes under the two systems.
1. How do the average monthly Railroad Retirement and Social Security benefits paid to retired employees and spouses compare?
The average age annuity being paid by the Railroad Retirement Board (RRB) at the end of fiscal year 2020 to career rail employees was $3,735 a month, and for all retired rail employees the average was $2,985. The average age retirement benefit being paid under Social Security was approximately $1,505 a month. Spouse benefits averaged $1,090 a month under Railroad Retirement compared to $765 under Social Security.
The Railroad Retirement Act also provides supplemental Railroad Retirement annuities of between $23 and $43 a month, which are payable to employees with railroad service prior to October 1981 who retire directly from the rail industry with 25 or more years of service.
2. Are the benefits awarded to recent retirees generally greater than the benefits payable to those who retired years ago?
Yes, because recent awards are based on higher average earnings. Age annuities awarded to career railroad employees retiring in fiscal year 2020 averaged about $4,370 a month while monthly benefits awarded to workers retiring at full retirement age under Social Security averaged nearly $2,070. If spouse benefits are added, the combined benefits for the employee and spouse would total $6,115 under Railroad Retirement coverage, compared to $3,105 under Social Security. Adding a supplemental annuity to the railroad family’s benefit increases average total benefits for current career rail retirees to about $6,135 a month.
3. How much are the disability benefits currently awarded?
Disabled railroad workers retiring directly from the railroad industry in fiscal year 2020 were awarded $3,160 a month on average while awards for disabled workers under Social Security averaged $1,415.
While both the Railroad Retirement and Social Security Acts provide benefits to workers who are totally disabled for any regular work, the Railroad Retirement Act also provides disability benefits specifically for employees who are disabled for work in their regular railroad occupation. Employees may be eligible for such an occupational disability annuity at age 60 with 10 years of service, or at any age with 20 years of service.
4. Can railroaders receive benefits at earlier ages than workers under Social Security?
Railroad employees with 30 or more years of creditable service are eligible for regular annuities based on age and service the first full month they are age 60, and rail employees with less than 30 years of creditable service are eligible for regular annuities based on age and service the first full month they are age 62.
No early retirement reduction applies if a rail employee retires at age 60 or older with 30 years of service and his or her retirement is after 2001, or if the employee retired before 2002 at age 62 or older with 30 years of service.
Early retirement reductions are otherwise applied to annuities awarded before full retirement age (the age at which an employee can receive full benefits with no reduction for early retirement). Full retirement age is age 66 for those born 1943 through 1954 and is gradually rising to age 67 for those born in 1960 or later, the same as under Social Security.
Under Social Security, a worker cannot begin receiving retirement benefits based on age until age 62, regardless of how long he or she worked, and Social Security retirement benefits are reduced for retirement prior to full retirement age regardless of years of coverage.
5. Can the spouse of a railroader receive a benefit at an earlier age than the spouse of a worker under Social Security?
If a retired railroad employee with 30 or more years of service is age 60, the employee’s spouse is also eligible for an annuity the first full month the spouse is age 60. The spouse of a worker under Social Security is not eligible for a spouse benefit based on age until both the worker and the spouse are at least age 62. Regardless of age, the spouses of workers under both retirement systems are eligible if the worker is retired and the spouse is caring for a qualifying child.
6. Does Social Security offer any benefits that are not available under Railroad Retirement?
Social Security does pay certain types of benefits that are not available under Railroad Retirement. For example, Social Security provides children’s benefits when an employee is disabled, retired or deceased, whereas the RRB only pays children’s benefits if the employee is deceased.
However, the Railroad Retirement Act includes a special minimum guaranty provision, which ensures that railroad families will not receive less in monthly benefits than they would have if railroad earnings were covered by Social Security rather than Railroad Retirement laws. This guaranty is intended to cover situations in which one or more members of a family would otherwise be eligible for a type of Social Security benefit that is not provided under the Railroad Retirement Act. Therefore, if a retired rail employee has children who would otherwise be eligible for a benefit under Social Security, the employee’s annuity can be increased to reflect what Social Security would pay the family.
7. How much are monthly benefits for survivors under Railroad Retirement and Social Security?
Survivor benefits are generally higher if payable by the RRB rather than Social Security. At the end of fiscal year 2020, the average annuity being paid to all aged and disabled widow(er)s was $1,825 a month, compared to $1,380 under Social Security.
Benefits awarded by the RRB in fiscal year 2020 to aged and disabled widow(er)s of railroaders averaged about $2,340 a month, compared to approximately $1,355 under Social Security.
The annuities being paid at the end of fiscal year 2020 to widowed mothers/fathers averaged $1,990 a month and children’s annuities averaged $1,195, compared to $1,030 and $900 a month for widowed mothers/fathers and children, respectively, under Social Security.
Those awarded in fiscal year 2020 averaged $1,780 a month for widowed mothers/fathers and $1,545 a month for children under Railroad Retirement, compared to $1,015 and $905 for widowed mothers/fathers and children, respectively, under Social Security.
8. How do Railroad Retirement and Social Security lump-sum death benefit provisions differ?
Both the Railroad Retirement and Social Security systems provide a lump-sum death benefit. The Railroad Retirement lump-sum benefit is generally payable only if survivor annuities are not immediately due upon an employee’s death. The Social Security lump-sum benefit may be payable regardless of whether monthly benefits are also due. Both Railroad Retirement and Social Security provide a lump-sum benefit of $255. However, if a railroad employee completed 10 years of creditable railroad service before 1975, the average Railroad Retirement lump-sum benefit payable is $1,030. Also, if an employee had less than 10 years of service, but had at least 5 years of such service after 1995, he or she would have to have had an insured status under Social Security law (counting both Railroad Retirement and Social Security credits) in order for the $255 lump-sum benefit to be payable.
The Social Security lump sum is generally only payable to the widow(er) living with the employee at the time of death. Under Railroad Retirement, if the employee had 10 years of service before 1975, and was not survived by a living-with widow(er), the lump sum may be paid to the funeral home or the payer of the funeral expenses.
9. How do Railroad Retirement and Social Security payroll taxes compare?
Railroad Retirement payroll taxes, like Railroad Retirement benefits, are calculated on a two-tier basis. Rail employees and employers pay Tier I taxes at the same rate as Social Security taxes, 7.65%, consisting of 6.20% for retirement on earnings up to $142,800 in 2021, and 1.45% for Medicare hospital insurance on all earnings. An additional 0.9% in Medicare taxes (2.35% in total) will be withheld from employees on earnings above $200,000.
In addition, rail employees and employers both pay Tier II taxes, which are used to finance Railroad Retirement benefit payments over and above Social Security levels. In 2021, the Tier II tax rate on earnings up to $106,200 is 4.9% for employees and 13.1% for employers.
10. How much are regular Railroad Retirement taxes for an employee earning $142,800 in 2021 compared to Social Security taxes?
The maximum amount of regular Railroad Retirement taxes that an employee earning $142,800 can pay in 2021 is $16,128, compared to $10,924.20 under Social Security. For railroad employers, the maximum annual regular retirement taxes on an employee earning $142,800 are $24,836.40, compared to $10,924.20 under Social Security. Employees earning over $142,800 and their employers will pay more in retirement taxes than the above amounts because the Medicare hospital insurance tax is applied to all earnings.
Brothers and Sisters,
As you may have heard, Congress recently enacted legislation to provide some financial relief to railroaders. In the legislation entitled the American Rescue Plan Act of 2021 (ARPA), Congress essentially extended the benefits originally created by the CARES Act. This legislation provides for the following benefits:
- A recovery benefit of $600 per two-week unemployment registration period. This extends the benefit that was established through legislation at the end of December and was due to expire March 14, 2021. As a result, employees receiving unemployment benefits will continue to receive an additional $600 per registration period. This benefit ends with registration periods that begin after September 6, 2021.
- Extended unemployment benefits for employees who have otherwise exhausted benefits. Now, in combination with previous legislation, an additional 200 days within 20 additional consecutive two-week registration periods are payable. These extended benefits are available for days of unemployment on or after December 28, 2020. No additional days are available for registration periods beginning after September 6, 2021.
- Waiver of the seven-day waiting period for unemployment and sickness benefits. This was also extended to September 6, 2021.
In addition, ARPA provides that up to $10,200 in unemployment benefits may be exempt from income tax. This provision is administered by the IRS and they have more information here: New exclusion of up to $10,200 for unemployment benefits.
Finally, as you know, the Railroad Retirement Board’s (RRB)’s budget has remained flat for several years now and as a result, agency resources have been limited. ARPA provided a much-needed supplemental appropriation for the agency’s administrative budget. ARPA appropriated the remaining amount needed for the RRB’s multi-year IT modernization plan which will eventually provide more online services to railroaders and their families. In addition, it appropriated $6.8M for agency hiring related to the pandemic for the next two years. The RRB intends to hire staff in field service as well as in the unit at headquarters that handles sickness and unemployment applications. We hope that these additional hires will improve customer service.
As with previous legislation, the RRB has updated the information on its website with the details regarding these benefits. You can find the FAQs here: Coronavirus FAQs. Also, with most RRB field offices still closed to the public because of the pandemic, the agency is again reminding customers of the self-service options available to them to help avoid lengthy wait times. I encourage all railroaders to set up a myRRB.gov account on the RRB.gov website to help avoid any possible delays. To establish an account, employees should go to RRB.gov/myRRB and click on the button labeled SIGN IN WITH LOGIN.GOV at the top of the page. This directs them to login.gov where they will be guided through the process of creating an account and verifying their identity — which takes about 20 minutes to complete. Once an employee’s identity is verified, they will be prompted to sign in to their account and then return to myRRB.
The Railroad Retirement Board’s Customer Service Plan promotes the following principles of quality public service: openness, accessibility, accountability, feedback and timeliness standards. An important part of the Customer Service Plan is its pledge to inform beneficiaries about how well the RRB meets those timeliness standards, which detail the number of calendar days within which the agency must decide to pay or deny an application for benefits.
The following questions and answers provide information about the RRB’s performance in meeting its standards in the key areas of retirement applications, survivor applications, disability applications and payments, and railroad unemployment and sickness benefit applications and claims during fiscal year 2020 (October 1, 2019 – September 30, 2020). Information on the agency’s overall performance, as measured by the timeliness index developed by the agency, and the RRB’s customer service timeliness goals for fiscal year 2020 are also provided. These goals may be revised annually based on such factors as projected workloads and available resources.
1. How does the RRB measure overall timeliness for customer service?
The RRB developed an index to measure the overall timeliness of its customer service in the following benefit areas: retirement applications, survivor applications, disability applications and payments, and railroad unemployment and sickness benefit applications and claims. This composite indicator, based on a weighted average, allows for a more concise and meaningful presentation of the RRB’s customer service efforts in these benefit areas.
2. What was the overall timeliness of the RRB’s customer service in fiscal year 2020?
During fiscal year 2020, the overall benefit timeliness index was 99%. This means that the RRB provided benefit services within the Customer Service Plan’s standards 99% of the time. The timeliness index for retirement applications, survivor applications, and disability applications and payments, the processing of which includes considerable manual intervention, was 90.9%. The timeliness index for railroad unemployment and sickness benefit applications and claims, a highly automated process, was 99.7%.
3. What standards did the RRB use in fiscal year 2020 for processing applications for Railroad Retirement annuities, and how well did it meet those standards?
In fiscal year 2020, the RRB had two timeliness standards for processing Railroad Retirement annuities. For Railroad Retirement annuity applications filed in advance of an applicant’s eligibility date, the RRB’s standard was that it would make a decision to pay or deny the application within 35 days of the requested annuity beginning date. For applications filed after the eligibility date, the RRB’s standard was that it would make a decision within 60 days of the filing date. The RRB’s timeliness goals in fiscal year 2020 were 94% for both advance filing and non-advance filing applications.
Of the cases processed during fiscal year 2020, the RRB made a decision within 35 days of the annuity beginning dates on 96.4% of applicants who filed in advance, with an average processing time for these cases of 13.4 days. Of the cases processed during fiscal year 2020, the RRB made a decision within 60 days of the filing dates on 97.5% of applicants who had not filed in advance, with an average processing time of 17 days.
4. What standards did the RRB use for processing applications for survivor benefits in fiscal year 2020, and how well did it meet those standards?
The timeliness standard in fiscal year 2020 within which the RRB would make a decision to pay, deny or transfer the application to the Social Security Administration for a Railroad Retirement survivor annuity applicant not already receiving benefits as a spouse, was within 60 days of the applicant’s annuity beginning date, or the date the application was filed, whichever was later. For an applicant that was already receiving a spouse annuity, the RRB’s standard in fiscal year 2020 was within 30 days of the first notice of the employee’s death. For an applicant who filed for a lump-sum death benefit, the RRB’s standard in fiscal year 2020 was to make a decision to pay or deny the application within 60 days of the date the application was filed. The timeliness goal for fiscal year 2020 was 94% for processing both initial survivor applications and spouse-to-survivor conversions. For processing applications for lump-sum death benefits, the goal was 97%.
Of the cases processed during fiscal year 2020, the RRB made a decision within 60 days of the later of the annuity beginning date or the date the application was filed in 95% of the applications for an initial survivor annuity. In cases where the survivor was already receiving a spouse annuity, a decision was made within 30 days of the first notice of the employee’s death in 95.2% of the cases. In addition, a decision was made within 60 days of the date the application was filed in 97.3% of the applications for a lump-sum death benefit. The combined average processing time for all initial survivor applications and spouse-to-survivor conversions was 15.95 days. The average processing time for lump-sum death benefit applications was 11.1 days.
5. What standards did the RRB use for processing applications for disability annuities in fiscal year 2020, and how well did it meet those standards?
For applications filed for a disability annuity in fiscal year 2020, the RRB’s standard was to make a decision to pay or deny a benefit within 100 days of the date the application was filed. If it was determined that the applicant was entitled to disability benefits, the applicant would receive his or her first payment within 25 days of the date of the RRB’s decision, or the earliest payment date, whichever was later. The agency’s timeliness goals were 70% and 94%, respectively, for disability decisions and disability payments.
During fiscal year 2020, the RRB made a decision on 13.5% of those filing for a disability annuity within 100 days of the date the application was filed. The average processing time was 330.8 days. Of those whose applications for a disability annuity were approved, 88.5% received their first payment within the Customer Service Plan’s time standard. The average processing time was 15.3 days.
6. What were the standards in fiscal year 2020 for the handling of applications and claims for railroad unemployment and sickness benefits, and how well did the RRB meet these standards?
For fiscal year 2020, the RRB’s standard for processing an application for unemployment or sickness benefits was that the RRB would release a claim form or a denial letter within 10 days of receiving an application. If an applicant filed a claim for subsequent biweekly unemployment or sickness benefits, the RRB’s standard was to certify a payment or release a denial letter within 10 days of the date the RRB received the claim form. The agency’s goals for processing unemployment and sickness applications in fiscal year 2020 were, respectively, 99.5% and 99.3%. The payment or decision goal for subsequent claims was 98.5%.
During fiscal year 2020, 99.3% of unemployment benefit applications and 97.4% of sickness benefit applications processed met the RRB’s standard. Average processing times for unemployment and sickness benefit applications were 1.2 and 3.1 days, respectively. In addition, in fiscal year 2020, 99.9% of subsequent claims processed for unemployment and sickness benefits met the RRB’s standard. The average processing time for claims was 4.5 days.
7. How well did the RRB meet its standards in fiscal year 2020 compared to fiscal year 2019?
Fiscal year 2020 performance met or exceeded fiscal year 2019 performance in the areas of retirement benefits, whether filed in advance or not, disability decisions and payments, lump-sum death benefits, and unemployment and sickness benefit claims.
Average processing times in fiscal year 2020 equaled or improved fiscal year 2019 processing times in the areas of Railroad Retirement applications, whether filed in advance or not, disability decisions and payments, and sickness applications. For fiscal year 2020, the agency met or exceeded all of the customer service performance goals it had set for the year, except in the areas of unemployment and sickness applications and disability decisions and payments.
Under the Railroad Retirement Act (RRA), a “current connection with the railroad industry” is one of the eligibility requirements for both the occupational disability and supplemental annuities payable by the Railroad Retirement Board (RRB). It is also a factor in determining whether the RRB or the Social Security Administration pays monthly benefits to survivors of a railroad employee.
The following questions and answers describe the current connection requirement and the ways the requirement can be met.
1. How is a current connection determined under the RRA?
To meet the current connection requirement, an employee must generally have been credited with railroad service in at least 12 months of the 30 months immediately preceding the month his or her Railroad Retirement annuity begins. If the employee died before retirement, railroad service in at least 12 months in the 30 months before the month of death will meet the current connection requirement for the purpose of paying survivor benefits.
However, if an employee does not qualify on this basis, but has 12 months of railroad service in an earlier 30-month period, he or she may still meet the current connection requirement. This alternative generally applies if the employee did not have any regular employment outside the railroad industry after the end of the last 30-month period which included 12 months of railroad service, and before the month the annuity begins or the month of death if earlier.
Once a current connection is established at the time the Railroad Retirement annuity begins, an employee never loses it, no matter what kind of work is performed thereafter.
2. Can non-railroad work before retirement break a former railroad employee’s current connection?
Yes. Full or part-time work for a non-railroad employer in the interval between the end of the last 30-month period including 12 months of railroad service and the month an employee’s annuity begins, or the month of death if earlier, can break a current connection, even with minimal earnings.
Self-employment in an unincorporated business will not break a current connection. However, if the business is incorporated the individual is considered to be an employee of the corporation, and such self-employment can break a current connection. All self-employment will be reviewed to determine if it meets the RRA’s standards for maintaining a current connection.
Federal employment with the Department of Transportation, National Transportation Safety Board, Surface Transportation Board, National Mediation Board, Railroad Retirement Board or Transportation Security Administration will not break a current connection. State employment with the Alaska Railroad, as long as that railroad remains an entity of the State of Alaska, will not break a current connection. Also, railroad service in Canada for a Canadian railroad will neither break nor preserve a current connection.
3. Is there an exception to these normal procedures for determining a current connection?
Yes. A current connection can also be “deemed” for purposes of a survivor or supplemental annuity if the employee completed 25 years of railroad service, was involuntarily terminated without fault from his or her last job in the railroad industry, and did not thereafter decline an offer of employment in the same class or craft in the railroad industry regardless of the distance to the new position. (A “deemed” current connection does not satisfy the current connection requirement for an occupational disability.)
If all of these requirements are met, an employee may be considered to have a “deemed” current connection, even if the employee works in regular non-railroad employment after the 30-month period and before retirement or death. This exception to the normal current connection requirement was established by amendments to the RRA and became effective October 1, 1981. It only covers employees still living on that date who left the rail industry on or after October 1, 1975, or who were on leave of absence, on furlough or absent due to injury on October 1, 1975.
4. Would accepting a buy-out affect whether an employee could maintain a current connection under this exception?
Generally, in cases where an employee has no option to remain in the service of his or her railroad employer, the termination of the employment is considered involuntary, regardless of whether or not the employee receives a buy-out.
However, if an employee has the choice of either accepting a position in the same class or craft in the railroad industry or termination with a buy-out, accepting the buy-out is a part of his or her voluntary termination, and the employee would not maintain a current connection under the exception.
5. An employee with 25 years of service is offered a buy-out with the option of either taking payment in a lump sum or of receiving monthly payments until retirement age. Could the method of payment affect the employee’s current connection under the exception?
No. The determining factor for whether the exception applies when a buy-out is paid is whether or not the employee stopped working involuntarily – not the payment option. The employee must always relinquish job rights to accept the buy-out, regardless of whether it is paid in a lump sum or in monthly payments. Neither payment option extends the 30-month period.
An employee considering accepting a buy-out should also be aware that if he or she relinquishes job rights to accept the buy-out, the compensation cannot be used to credit additional service months beyond the month in which the employee severed his or her employment relation, regardless of whether payment is made in a lump sum or on a periodic basis.
6. What if the buy-out agreement allows the employee to retain job rights and receive monthly payments until retirement age?
The RRB considers this type of buy-out to be a dismissal allowance. When a monthly dismissal allowance is paid, the employee retains job rights, at least until the end of the period covered by the dismissal allowance. If the period covered by the dismissal allowance continues up to the beginning date of the railroad retirement annuity, railroad service months would be credited to those months. These railroad service months would provide at least 12 railroad service months in the 30 months immediately before the annuity beginning date and maintain a regular current connection. They will also increase the number of railroad service months used to calculate the Railroad Retirement annuity.
7. Could the exception apply in cases where an employee has 25 years of railroad retirement coverage and a company reorganization results in the employee’s job being placed under social security coverage?
Yes. The RRB has considered the exception applicable in cases where a 25-year employee’s last job in the railroad industry changed from Railroad Retirement coverage to Social Security coverage and the employee had, in effect, no choice available to remain in Railroad-Retirement-covered service. Such 25-year employees have been “deemed” to have a current connection for purposes of receiving supplemental and survivor annuities.
8. Where can a person get more specific information on the current connection requirement?
More information is available on RRB.gov or by contacting an RRB field office. It is important to know that while nearly all of the RRB’s 53 field offices are physically closed to the public until further notice because of the COVID-19 virus outbreak, they remain accessible online and by phone. Customers are encouraged to contact their local office by accessing Field Office Locator at RRB.gov and clicking on Send a Secure Message at the bottom of their local office’s page. Customers who prefer talking to an RRB employee can call the agency’s toll-free number (1-877-772-5772); however, they may experience lengthy wait times due to increased call volume caused by COVID-19-related issues.