Service Month Defined |
A service month is any calendar month,
or any part of a calendar month, that an employee
receives compensation for services performed
for a railroad employer; or a period of lost
time for which an employee receives compensation;
or a period of time credited to an employee
for military service. Service also includes
deemed service months except for the purposes
of qualifying for normal unemployment or sickness
benefits under the RUIA.
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Year of Service Defined |
An individual’s entitlement to benefits
and the amount of such benefits are determined,
in part, on the individual’s years of
service. A year of service is twelve calendar
months, consecutive or otherwise, in each of
which an employee has rendered service, actual
or constructive, to one or more employers for
compensation, or has received pay for time lost.
Fractions of years are taken at their actual
value.
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Service Months Reported by Employers |
Under the Railroad Retirement Act (RRA), there
are two methods for crediting service months
to an employee record: the service is reported
to the RRB by the employer or the service is
deemed by the RRB. A service month is reported
for a calendar month in which an employee actively
or constructively rendered compensated service
or received pay for time lost for an identifiable
period of absence from active service. Constructively
performing service means that the employee is
not actively working, but is being paid under
a plan whose construction or legal interpretation
yields the same result as actively performing
work. A paid vacation period is the primary
example of constructive service.
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Service Month and Earnings Maximum |
A service month should be reported for every
month in which service was performed regardless
of when the maximum creditable compensation
bases are attained. If an employee works in
all twelve months of the year but reaches the
Tier I creditable earnings base in October,
the employer should credit the employee with
twelve months of service, not ten. If applicable,
twelve months of RUIA compensation would also
be credited.
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Deemed Service Months
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The RRB will credit deemed service months directly
to an employee's record. Service months are
deemed when an employee does not have all twelve
months reported in the year, but has sufficient
Tier II compensation and has an employment relationship
in months not reported.To determine the maximum
number of deemed months for an employee for
a year, 1) multiply the number of reported service
months by 1/12 the annual Tier II maximum compensation
for the year; and 2) subtract this product from
the reported Tier II compensation. If the result
is zero or negative, no deemed months are possible.
If the result is a positive amount,3) divide
by 1/12 the Tier II maximum compensation; and
4) round up to a whole number.This is the maximum
or potential number of deemed service months.
The actual number of deemed months depend on
whether the employee has an employment relation
in the months not worked.
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Military Service |
A period of military service, which meets specific
conditions, may also be credited as service
months for railroad retirement purposes. Creditable
military service, however, is outside the scope
of an employer’s reporting responsibilities.
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Employment Relation and Service Months |
Both reported and deemed service may only be
credited for a month in which an employment
relation exists with a railroad employer. In
other words, service can only be reported for
a month in which an individual was an employee.
When a person becomes a former employee, for
whatever reason, the employment relation ends
and service cannot be credited after that month.
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Additional Information |
See Chapter 2 of this Part for information about
how an employee's employment relationship effects
crediting of service months.See Part IV Chapter
1 for information on the options for reporting
creditable compensation, whether on an earned
or paid basis, and how this relates to reporting
service months.See Part IV Chapter 4 for a discussion
on service months and vacation pay in lieu of
vacation taken.
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