Western Railroad Discussion > Railroad Retirement Question?

I have a question about who is eligible for Railroad Retirement vs. Social Security.  Do ALL employees of a railroad, say Union Pacific, get Railroad Retirement instead of Social Security?  If some are on Railroad Retirment and some are on Social Security, what decides who is on what program?  Also, do even the smallest, 7-employee short lines have to pay into Railroad Retirement?  If no, what is the deciding factor?  Thanks in advance for any clarification on this.

AFAIK, every employee of a common-carrier railroad, no matter the size, is covered by the Railroad Retirement Board (RRB).

The phrase that pays is "common-carrier". RRB does NOT generally apply (there are some individaul exceptions) to:

• Transit operations.
• Museum and tourist operations that are not part of the general railroad system, i.e., do not operate over common-carrier tracks (Many are volunteer organizations, so there is no payroll to deduct from and it's a moot point). 
• Industrial railroads that exist solely to serve their owner and are not considered part of the general railroad system. Mining roads and in-plant switching operations often (but not always) fall into this category.
• Employees of third-party contractors, even though they may perform work on the property of a common-carrier railroad.

Additionally, employees of a holding company that owns one or more railroads but does not directly operate them are not part of RRB. For example: Back in the 70s the Illinois Central was a subsidiary of IC Industries. If you were employed by the Illinois Central, you were under RRB but if your paycheck came from IC Industries you were not. I suspect the situation is the same for these shortline conglomerates of today like Genesee & Wyoming and OmniTrax.

Open to additions and corrections to the above,

NZ    
 

Yes to all your questions.  All railroad employees of all common carrier railroads, including small shortlines, pay into the railroad retirement system.  I believe you are vested after five years of employment for a railroad, if you do not work that long, your payments into Railroad Retirement Tier 1 (Social Security equivalent) are transferred to Social Security, and you lose anything paid into Railroad Retirement Tier 2 (which provides benefits in excess of what Social Security would pay.  Note I said common carrier railroad.  If you work for a private switching company that is doing switching for a private industry, or for a contract service that does track construction or maintenance for industries, you are not covered under railroad retirement.

The Alaska Railroad pays into a State Retirement instead of Railraod Retirement.  Since I am on Railroad Retirement, the only commor carrier that I can work for is the Alaska Railroad or any railroad in Canada.

Mike Root
Madras, OR

What Mike said. It has something to do with the ARR being a former Federally-owned property. When it was sold to the State of Alaska, the pension went under their control. I don't know the whole story but I definitely don't pay into the RRRB pension there.

Interesting about the Alaska Railroad.  I did not know that, though given their history as a federal property, I can see how that would be the case.  I know several people who have moved back and forth between US Class 1 railroads and the Alaska Railroad, must make for some interesting retirement calculations for these people.

A lot of people do their time in the lower-48, retire, then come to Alaska, where we are vested after 5 years of "subject to retirement hours" so they can double-dip. It works well if you go into management as those are full-time, year-round jobs. But you will only work seasonally in train service for the first 8-10 years so it takes about a year and a half or so to get a year's worth of STR hours in T&E positions. The revolving door of managers though causes some issues for those who are there for the long haul.

Thanks for all the excellent answers.  The question came up because I noticed that Metrolink dispatchers are under Railroad Retirement but all other Metrolink employees are not.



Edited 1 time(s). Last edit at 01/18/16 20:02 by BNSF6400.

Admittedly uninformed here, but if I  work  for x years under social security and then go to work for  the railroad and then later leave to work under social  security again, do all of my contributions to both  systems  get gathered together fir my ultimate retirement?
C

Carol Voss
Bakersfield, CA



Edited 1 time(s). Last edit at 01/18/16 20:36 by CarolVoss.

Actually, you receive both.  For example if you have 30+ years working for the railroad you'd receive full retirement, lets just say $2700 a month. You are also entitled to SS which might pay you $1300 a month. You can get one check from RRB for the $4000 or individual checks from each total amount will still be $4000. I don't know of any of my fellow retirees that opted for separate checks. Each Jan 1st IF SS members get a raise, then RRB members would get the same raise. This year nobody got the COLA raise. 
I hope I explained it alright. 

When I was working, everything went into RRB, but you had to get vested in the system, which at that time meant having 120 months of credited railroad service.  If you left railroading prior to accruing 120 months, your contributions moved into Social Security.  I have been retired for a while now and would defer to the guys now working to advise us how many months are now necessary to be vested in RRB.

You cannot double dip railroad retirement and social security. You can double dip railroad retirement and private and state pensions.


www.rrb.gov

Posted from iPhone



Edited 1 time(s). Last edit at 01/18/16 20:24 by fbe.

One other thing about railroad holding companies - UP Railroad used to have a subsidiary of UP Technologies in St. Louis.  Basically it was formed from the ex-MP I&CS department that wasn't moved to Omaha because the MP programmers were non-union whereas UP's were.  If you worked at UP Tech supporting a railroad application, such as TCS, you paid into RRT.  If you worked in a position supporting a "commercial" app, i.e., things they sold to other railroads and other businesses, you were under SSA.  Jobs were posted with this info noted.  Of course most of this went away a few years back when UPT was finally absorbed after moving to Omaha in 2004.

Okay-- I work 40 quarters  for a non-railroad company and then I go to work fir the railroad until my retirement---- is my SS contribution folded into my RR retirement or do I lose it?
C

 

Carol Voss
Bakersfield, CA

Carol,

Yes, you get a credit for those earnings. They do NOT increase your Railroad Retirement by 10 years since there is no Tier II contribution for any of it.

Things can be pretty complicated but the FAQ at RRB.gov can give lots of answers.

Posted from iPhone

This covers some of the questions which have been asked here.

http://www.rrb.gov/opa/qa/pub_1311.asp

Unless you are affected reading this might put you to sleep.

Posted from iPhone

Fred,
When I retired from UP I was told either I could collect RR Retirement or Social Security but not both. Althought part of railroad retirement comes from Social Security. And Railroad Retirement pays higher than SS if you are fully vested in it.

Bob Krieger
Cheyenne, WY

You can also go through the extensive Q&A at Benefitslink.com

http://benefitslink.com/m/qa.cgi?db=qa_railroad_retirement

Years ago my Grandfather collected both Railroad Retirement and Social Security.  They changed that long ago.  I think if you are vested you end up retiring on Railroad Retirement.  The are other rules governing your "Current Connection".

State pensions are tricky.  Railroad Retirement can be reduced by State pensions if those State jobs are not covered by Social Security.  Railroader with spouses covered by CalPers in California run into that situation.  There is lots of fine print.  

Sphogger

The dual benefit annuity (SS + RRB) was abolished during the Reagan admistration with a grandfather clause attached and I'd be surprised if there were more that just a handful of double dippers still left. Essentially you do collect from both, but the RRB Tier I benefit is reduced by the amount of the SS benefit. In fact, I was collecting my 18 years worth of SS benefit, which is channeled thru the RRB, two years before I retireed from the RR. I now receive the same SS benefit along with a reduced Tier I plus full Tier II.

all employees of a class I are RRB covered ... RRB has increments on vested employees starting i believe at 5 years and then moving in 5 years increments ... each 5 year increment determines the maxamount an employee will receive ... as for SS ... like Chico stated grandfathered employees like myself get whichever vested pension amount is the highest to determine if SS or RRB will be the pension plan ... whichever is the case both sums are combined to determine the max amount when the employee reaches reitrement age ...being i got hired in the mid 70s, i had 38 years of RBB with SS monies i accrued with any non RRB jobs i worked that took out SS that was rolled into the RRB pension plan ... i believe the max pension annuity amount is $4400 but i'm not positive on that ... i hadda a few co-workes who qualified for the max amount ...

also i don't know the exact year but it was somewhere between 1972-1974 where if a married coupled both worked for the railroad and both were vested both could collect each other's spousal pension ... you'd actually get 3 pensions ... each employee would get their whole and each spouse would get the spousal 1/2 but like i said one of the two had to have been hired before the qualifying date ... a funny thing about that was friend i know who worked for NJT said they had a marriage list of RR employees who were availbale and qualified to be married for the double dip ... some would marry just for the financial convenience of collecting ... i had a few co-workers who got hired after their wives had been at Amtrak who qualified for the double dip ... sad story about that ... a friend of mine who got hired the same day i did was married to a wife who qualified ... he was getting close to retirement less than 18 months away and was counting the days and he was rushed to the hospital and died on the table his dreams going with him ...



Edited 3 time(s). Last edit at 01/19/16 12:05 by Out_Of_Service.