On October 30, 2002,
the Office of Inspector General of the Railroad
Retirement Board (OIG) referred to the Retirement
Benefits Division, for the assessment of
overpayments, the cases of 31 retirees who
were receiving annuities while performing
work under contract with Transportation Certification
Services (TCS). Transportation Certification
Services was previously found not to be an
employer under the Railroad Retirement and
Railroad Unemployment Insurance Acts in B.C.D.
95-40.
The information provided by the annuitants
was in many cases inconsistent with the information
provided by the OIG. The information contained
in the files provided by the OIG is not original
information from employers covered under
the Acts, but was compiled from information
provided by TCS. The General Counsel requested
the Audit and Compliance Division to seek
additional information from the affected
annuitants so that the Board could make employee
coverage determinations prior to assessment
of any overpayments.
The referral of the 31 cases is, in effect,
a request to re-open both the decision in
B.C.D. 95-40 and the compensation and service
record of each of the 31 annuitants. B.C.D.
95-40 was issued on March 20, 1995, and became
a final agency decision when the period for
requesting reconsideration passed one year
later. See 20 CFR 259.3. With respect to
the service and compensation records of the
31 annuitants, the years involved range from
1994 through 1998. The reports of service
and compensation for most of these years
were also final at the time of the referral
to the Retirement Benefits Division. See
45 U.S.C. §231h and 20 CFR 211.16. One
employer covered under the Railroad Retirement
and Railroad Unemployment Insurance Acts
did submit amended reports to provide compensation
and service credits for annuitants who had
worked in train and engine service on that
employer’s property.
The Board is thus presented with the dual
question of whether to re-open its decision
in B.C.D. No. 95-40 and whether to re-open
the service and compensation records of the
31 annuitants. In reviewing the prior coverage
determination concerning TCS, the Board held
that training service provided by TCS to
carriers would not be covered service. However,
the OIG discovered that some of the individuals
under contract with TCS were also providing
locomotive engineering services for TCS’s
clients. The Board has previously held that
an individual that is operating a train as
an engineer or conductor will be held to
be an employee of the carrier. Therefore,
any service in this regard would be covered
service even if the individual claimed to
be an
Employees of Transportation Certification
Services
independent contractor. B.C.D. No. 95-40
is modified to conclude that any work
performed through TCS as a locomotive engineer
or
as a conductor for a covered rail carrier
employer is employee service for the
rail carrier employer.
However, the greater difficulty the Board
faces in this case concerns the individual
records of service and compensation involved.
Specifically, the evidence as to the types
and amount of service provided by the annuitants
in this matter is inconsistent and meager.
Certainly, the passage of time has not made
the Board’s job any easier in resolving
these issues. Additionally, the Board must
consider the effects of its prior decision
concerning TCS and the misinformation that
has been provided to the annuitants regarding
their status under the Acts. For these reasons,
except in the limited circumstances described
below, the Board will not re-open the compensation
and service records of the 31 annuitants.
See 20 CFR 261.11.
The Board finds that any service that has
been reported by an employer under the Acts
for a contractor of TCS as of the date of
this decision shall be credited to the individual
as employee service pursuant to the Board’s
regulations and, if applicable, shall cause
an adjustment in the annuity of that employee.
If the crediting of such service shall cause
an overpayment in annuities under the Railroad
Retirement Act, an overpayment shall be assessed,
but the conditions for waiver set out in
section 10 (c) of the Railroad Retirement
Act shall be deemed to be satisfied as explained
below.
First, it shall generally be considered
that the employee was without fault in causing
the overpayment due to the confusion and
misinformation concerning the employee’s
status as an employee while under the contract
with TCS. Further, the Board finds that recovery
of the overpayment would be against equity
or good conscience, since the employee accepted
the annuity payment(s) in question in the
belief based on B.C.D. No. 95-40 that the
service being provided through TCS was not
covered rail service that would interrupt
the employee’s annuity entitlement.
In view of the length of time that has elapsed
since the service was rendered, as well as
the misinformation and confusion mentioned
earlier, and the advanced age of the annuitants
at the present time, the Board finds that
equity demands that recovery of the overpayments
be waived.
In summary, the Board reopens and modifies
its decision in B.C.D. No. 95-40 to conclude
that work performed through TCS as a locomotive
engineer or as a conductor for a covered
rail carrier employer is employee service
for the rail
Employees of Transportation Certification
Services
carrier employer. The Board will reopen the
service and compensation records only for
those annuitants for whom service performed
under contract with TCS was reported by
a covered employer on or before the date
of this decision. The Board in all other
cases will not reopen its record of service
and compensation and holds that any service
of any individual under contract with TCS,
which has not been reported prior to the
date of this decision by an employer under
the Acts, shall not be considered creditable
service by virtue of section 9 of the Railroad
Retirement Act.
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