This web site was copied prior to January 20, 2005. It is now a Federal record managed by the National Archives and Records Administration. External links, forms, and search boxes may not function within this collection. Learn more.   [hide]
Skip past top Navigation Bar Go to RRB Home Page What's New at the RRB About the RRB Links to other sites that may interest you How to contact the RRB Search www.rrb.gov Special On-Line Services
Railroad Retirement Board Logo
STANDARDS - OPENNESS - ACCESSIBILITY - ACCOUNTABILITY

RRB Form IB-2 (3-04):  Railroad Retirement and Survivor Benefits
Retirement and Survivor Information

Skip past left side navigation menu

Overview

RRB Mission

Introduction

Employee and Spouse Annuities

Survivor Benefits

Retirement and Survivor Information
  Applying for an Annuity
  Monitoring Benefit Payments
  Right of Appeal
  Garnishment/Property Settlements
  If Requirements Are not Met
  Railroad Retirement Taxes
  Dual Tax Payments
  Federal Income Tax
  Service & Earnings

Railroad Retirement Annuity Formula Components

IB-2 Facts and Figures

U.S. Railroad Retirement Board Offices

Nondiscrimination on the
Basis of Disability

Comments?

Fraud and Abuse Hotline

More...

Glossary

Frequently Asked Questions

Applying for an Annuity

Applications for railroad retirement or survivor benefits are generally filed at one of the Board's field offices, or with a traveling Board representative at a customer outreach program service location, or by telephone and mail. The Board accepts applications up to three months in advance of an annuity beginning date. However, applications for employee disability annuities may not be filed until an employee is no longer in compensated service. Compensated service includes the receipt of pay for time lost, some wage continuation payments, or any other employer compensation preventing the payment of railroad retirement benefits.

Persons applying for railroad retirement benefits will be automatically enrolled in the U.S. Treasury’s Direct Deposit Program, which electronically transfers Federal payments into individuals’ checking or savings accounts. However, Direct Deposit waivers are available to individuals who state that Direct Deposit would cause a hardship, and to individuals without bank accounts.

Under the Board’s Customer Service Plan, employees and spouses who file for their annuity in advance will receive their first payment, or a decision, within 35 days of the beginning date of their annuity. If they did not file in advance, they will receive their first payment, or a decision, within 65 days of the date the application was filed. Applicants for disability annuities will receive a decision within 105 days of the date they filed their application; if they are entitled to disability benefits, they will receive their first payment within 25 days of the date of the decision or the earliest payment date, whichever is later. Those filing for a railroad retirement survivor annuity or lump-sum benefit will receive the first payment, or a decision, within 65 days of the date the application was filed, or entitlement to benefits began, if later. Those already receiving a spouse annuity will receive the first payment, or a decision, within 35 days of the date the Board receives notice of the employee’s death.

To expedite filing, applicants should telephone their local Board office for assistance. Certain documents are required when filing a railroad retirement annuity application, such as:

For Employees and Spouses:

  • Proof of an employee’s age.
  • Proof of any military service.
  • Proof of marriage if the spouse is eligible or will shortly become eligible for a spouse annuity. A divorced spouse must also furnish proof of divorce from the employee.
  • Proof of the spouse’s or divorced spouse’s age.
  • Proof of a child’s relationship and age, if the spouse is applying for an annuity based on caring for the employee's child.
  • Notice of any social security benefit award or other social security claim determination.

The best proof of age is a certified copy of a civil or church document recorded at or close to the time of birth. The best proof of marriage is a certified copy of the public or church record or the original marriage certificate. A divorced spouse would be expected to furnish a copy of the final divorce decree. Proof of military service may be a certificate of discharge, or any official military record that shows the dates of service.

Employees are encouraged to file proofs of age, and especially of any military service, well in advance of retirement in order to expedite the annuity application process and avoid delays resulting from inadequate proofs.

Applicants for disability annuities are required to submit supporting medical information. They are sometimes asked to take a special medical examination given by a doctor designated by the Board.

An annuity is payable as of the first full month throughout which the employee and/or spouse is age 60, or age 62 in the case of reduced annuities.  An annuity is payable the first day of the month full retirement age is attained in the case of unreduced annuities with less than 30 years of service.

The retroactivity of a retirement annuity application is limited to one year for disability annuities and six months for full age annuities. There is generally no retroactivity for reduced age annuities.

Any social security benefits due the retired employee or family member which begin after 1974 are paid through the Railroad Retirement Board. Even though the Board processes payment, the Social Security Administration is responsible for all adjudication.

For Survivors:

  • A widow(er) must furnish proof of age, proof of marriage and proof of the employee's death. A surviving divorced spouse must furnish proof of divorce from the employee. If applying for a disability annuity, the widow(er) must also provide supporting medical evidence. A parent must furnish proof of relationship to the employee and proof of support from the employee.
  • If children are eligible for benefits, proof of the relationship and age of each child is needed. If a child is over age 18 and disabled, supporting medical evidence is required. Eighteen-year old students must provide proof of full-time elementary or high school attendance. A stepchild of the employee must furnish proof of dependency on the employee.

Retroactivity of a survivor annuity application is one year for disabled widow(er)s and six months for full retirement age widow(er)s, mothers (fathers), children and parents. Retroactivity for widow(er)s ages 60-61 is six months if it does not increase the age reduction (this does not apply to surviving divorced spouses or remarried widow(er)s). Otherwise, there is generally no retroactivity for reduced age widow(er)s’ annuities. Lump-sum death benefit applications must be filed within two years after the death of the employee. There is no time limit on filing for a residual payment.

Monitoring Retirement and Survivor Benefit Payments

Under several monitoring programs now in effect, the Board maintains contact with retirement and survivor beneficiaries in order to ensure the reporting of events which would require suspension or termination of monthly benefits. The records of beneficiaries are also checked with the Social Security Administration because annuities may be affected by nonrailroad earnings and because entitlement to social security benefits affects the amount of all annuities.

Right of Appeal

Persons who believe that their claims have not been adjudicated correctly may ask for reconsideration from the Board unit that denied the claim.  If not satisfied with that review, the applicant may appeal to the Board’s Bureau of Hearings and Appeals.

Further appeals can be carried to the three-member Board itself, and beyond the Board to Federal courts. The Board’s field office personnel will explain these appeals procedures and the time limits on filing appeals to those seeking reconsideration of their claims.

Garnishment/Property Settlements

Garnishment

Certain percentages of an employee, spouse or survivor annuity may be subject to legal process (i.e., garnishment) to enforce an obligation for child support and/or alimony payments.

Property Settlements

Employee tier II benefits, vested dual benefits and supplemental annuities are subject to court-ordered property settlements in proceedings related to divorce, annulment or legal separation. Tier I benefits are not subject to property settlements.

If Requirements for Benefits Are not Met

Retirement annuities are not payable by the Board unless the employee has 60 months of creditable service after 1995 or 120 months of service at any time. Service includes any creditable military service.

Survivor annuities are not payable unless the employee had a current connection with the railroad industry and either 60 months of creditable service after 1995 or 120 months of service at any time.

In either of the above circumstances, if the requirements are not met, the employee's railroad retirement credits are transferred to the Social Security Administration and treated as social security credits. Benefits paid by that agency would accordingly take into account both railroad and social security covered earnings.

The Railroad Retirement Act does not allow a former railroad employee to withdraw his or her retirement taxes. Like social security taxes, railroad retirement taxes are not refundable unless retirement tax withholding has exceeded annual maximums.

Railroad Retirement Taxes

By law, railroad retirement tier I payroll taxes are coordinated with social security taxes and increase automatically when social security taxes rise. Employees and employers pay tier I taxes which are the same as social security taxes. In addition, both employees and employers pay tier II taxes to finance railroad retirement benefit payments over and above social security levels.

The tier I tax on rail employers and employees is 7.65% in 2004.  The tier II tax on employees is 4.90%.  The tier II tax rate on rail employers, rail labor organizations and rail employee representatives is 13.10% in 2004.  An employee representative is a labor official of a non-covered labor organization who represents employees covered under the Acts administered by the Railroad Retirement Board.

Beginning with the taxes payable for calendar year 2004,  tier II taxes on both employers and employees are based on the ratio of certain asset balances to the sum of benefits and administrative expenses (the average account benefits ratio). Depending on the average account benefits ratio, tier II taxes for employers range between 8.20% and 22.10%, while the tier II tax rate for employees is between 0% and 4.90%.

Railroad retirement taxes apply to earnings on an annual basis. The amounts of earnings subject to these taxes are determined annually on the basis of national wage levels.

(See Table 3 in IB-2 Facts for more information)

Dual Tax Payments

Since 1975, railroad employees who also worked for a social security covered employer in the same year may, under certain circumstances, receive a tax credit equivalent to any excess social security taxes withheld.

Employees who worked for two or more railroads in a year, or who had tier I taxes withheld from their Railroad Retirement Board sickness insurance benefits in addition to their railroad earnings, may be eligible for a tax credit of any excess tier I or tier II railroad retirement taxes withheld. Employees who had tier I taxes withheld from their supplemental sickness benefits may also be eligible for a tax credit of any excess tier I tax. Such tax credits may be claimed on an employee's Federal income tax return.

Employees who worked for two or more railroads, or had both railroad retirement and social security taxes withheld from their earnings, should see Internal Revenue Service publication 505, Tax Withholding and Estimated Tax, for information on how to figure any excess railroad retirement or social security tax withheld.

Dual Railroad Retirement-Social Security Taxes Paid, 1951-74

An employee with 10 or more years of railroad service who is not entitled to a vested dual benefit payment may be entitled to a refund of excess social security taxes if his or her combined taxable earnings from the railroad retirement and social security systems in any year in the period 1951-1974 exceeded a maximum annual amount creditable under the Railroad Retirement Act. Eligible employees will receive their refunds from the Board at retirement without applying for them. In the event an employee should die before receiving the refund, payment will be made to the employee's survivors.

Separation or Severance Payments

A lump sum, approximating railroad retirement tier II payroll taxes deducted from separation or severance payments, may be paid upon retirement to employees meeting minimum service requirements or their survivors to the extent the separation or severance payments did not yield additional railroad retirement service or earnings credits. The lump-sum provision applies to separation and severance payments made after 1984.

Federal Income Tax on Railroad Retirement Benefits

The tier I portion of a railroad retirement annuity that is actually equivalent to a social security benefit is treated as a social security benefit for Federal income tax purposes. Depending on the amount of other income received in the taxable year, a portion of these benefit payments may be subject to Federal income tax.

Tier I benefits exceeding social security benefits, such as retirement benefits payable between ages 60 and 62, and many occupational disability annuities, plus the tier II portions of railroad retirement annuities, vested dual benefits, and supplemental annuities paid by the Board are treated like private and public service pensions for Federal income tax purposes. The Railroad Retirement Act specifically exempts benefits paid by the Board from State and local income tax.

The Railroad Retirement Board and the Social Security Administration issue tax information statements to annuitants each January. In the absence of a request not to withhold, taxes are withheld from U.S. citizens or residents whose railroad retirement benefits in excess of the social security equivalent level total more than certain annual threshold amounts. Any amounts withheld during the taxable year are reflected on the annual statements.

Service and Earnings Records

The Railroad Retirement Board maintains a record of all covered railroad service and creditable earnings after 1936. The information is recorded under the employee's social security account number used by the employer to report service and compensation to the Board.

Additional service months may be deemed in some cases where an employee does not actually work in every month of the year. For additional service months to be deemed, the employee's compensation for the year, up to the tier II maximum, must exceed an amount equal to 1/12 of the tier II maximum multiplied by the number of service months actually worked. The excess amount is then divided by 1/12 of the tier II maximum; the result, rounded up to a whole number, yields the number of deemed service months. The employee must be in an employment relation (on an approved leave of absence) with a covered railroad employer, or be an employee representative, during a deemed service month. An employee may never be credited with more than 12 service months in any calendar year.

Except for benefits paid for on-the-job injuries, sickness benefits are subject to tier I railroad retirement taxes if paid within 6 months after the month in which the employee last worked. They are credited as compensation for tier I benefits, but are not credited as service months.

Military Service

Military service may be credited towards retirement benefits under certain conditions. To be creditable as compensation under the Railroad Retirement Act, service in the U.S. Armed Forces must be preceded by railroad service in the same or preceding calendar year. With the exceptions noted, the employee must also have entered active military service when the United States was at war or in a state of national emergency or have served in the Armed Forces involuntarily.

The war and national emergency periods that affect current entitlements are:

  • September 8, 1939, to June 14, 1948.
  • December 16, 1950, to September 14, 1978.
  • August 2, 1990, to date as yet undetermined.

If military service began during a war or national emergency period, any active duty service the employee was required to continue in beyond the end of the war or national emergency is creditable, except that voluntary service extending beyond September 14, 1978, is not creditable.  Railroad workers who voluntarily served in the Armed Forces between June 15, 1948, and December 15, 1950, when there was no declared national state of emergency, can be given railroad retirement credit for their military service if they performed railroad service in the year they entered or the year before they entered military service, and if they returned to rail service in the year their military service ended or in the following year and had no intervening nonrailroad employment.

Employees with military service are encouraged to contact the Board well in advance of retirement regarding required proof of military service.

Form BA-6

Each year, employees in the industry receive a Certificate of Service Months and Compensation (Form BA-6) from the Board. This statement is important because it provides both a current and cumulative record of an employee's railroad service and compensation. It includes deemed service months, separation allowances and severance payments as well as miscellaneous compensation, such as taxable sickness payments. It also reflects creditable military service if the service has previously been reported to the Board.  The BA-6 form should be carefully reviewed to make sure that it is correct.

If an employee disagrees with the information shown on the BA-6 form, he or she should write to the Board as early as possible. The law limits the period during which corrections can be made. All letters concerning BA-6 forms should show the employee's social security number and should be addressed to:

Protest Unit - CESC
U.S. Railroad Retirement Board
844 North Rush Street
Chicago, Illinois 60611-2092

 

Go To Beginning Go to Previous Go to Next Go to Last
First Back Next Last

Skip past bottom navigationHome | What's New | About Us | Links | Contact Us | Search | MainLine Services | Privacy Policy | Site Map | Mission

Last Modified 6-24-2003 -- This is an official United States Government website
RRB Seal