This section explains what the Railroad Retirement Board (RRB) does after you file your annuity application. Included is important information about how soon you can expect a decision on your application.

Notice of Decision About Your Age and Service Application

When you are ready to retire, contact your RRB field office to file your employee annuity application.  Our goal is to process your application as quickly as possible.  Claims for some benefits may take longer to handle than others if they are more complex, or if we have to get information from other people or organizations. If this happens, we will give you an explanation and an estimate of the time required to make a decision.

Sometimes we will not be able to make a decision on your application for benefits without some additional information from you. If so, we will contact you by telephone or mail and ask you to send us the required forms, proofs, or statements.

If you do not receive a notice that additional information is needed, you should receive the decision on your annuity application as follows:

Advanced Filing Cases

When you file up to three months before the earliest date your annuity can begin, you should receive your annuity award letter and first payment within 35 days of the date your annuity can begin. However, note that no payment is due until the first day of the month after the first month of annuity entitlement.

Other Than Advance Filing Cases

If you do not file your annuity application in advance of the earliest date in which your annuity can begin, you should receive your annuity award letter and first payment within 65 days from the date you file your annuity application.

Annuity Denial

If you cannot be paid an annuity, the RRB will send you a decision:

• within 35 days of the beginning date that you requested, if you filed in advance or
• within 65 days of the date you filed, if you did not file in advance.

The letter will explain why you cannot be paid and what you can do if you disagree with the reason you cannot be paid.

If you think we made the wrong decision about your benefits, you have the right to ask for a review and to appeal within the required time limit shown in the denial letter.

How Payments Are Made

The first payment you receive from the RRB will be separate from your annuity award letter. Annuities are payable at the beginning of the month following the month for which the annuity accrued. The payment that you receive at the beginning of the month actually represents the annuity that accrued for the previous month.

Advance Filing Cases

When you file up to three months before the earliest date your annuity can begin, no payment is due until the first day of the month after the first month of annuity entitlement.

Other Than Advance Filing Cases

If you are not filing in advance of your annuity beginning date, the initial payment may be a partial payment, with an estimated monthly rate, representing payment due through the end of the preceding month. You will continue to receive this partial amount until your final rate can be determined and awarded. Once your final rate has been certified, you will receive any increase due from your annuity beginning date. You may receive this payment at any time during the month.

Remember: The payment that you receive after your initial payment will be made once a month on the first day of the month. If the first day of the month falls on a Sunday or a holiday, you will receive the payment on the next business day. The payment that you receive at the beginning of each month actually represents the annuity that accrued for the previous month.

Direct Deposit to a Financial Organization

The Federal Government now requires that most government payments be sent directly to a savings or checking account at a financial institution instead of being sent to the recipient's home. Under the RRB’s Direct Deposit program, your monthly annuity payment will be made directly to your savings or checking account at the financial institution that you indicate on your annuity application. You will find that this is both safe and convenient.

If you decline direct deposit based on hardship, you can still change your mind at a later date. Telephone or visit your RRB field office. Have one of your personal checks handy because it contains the information needed to start direct deposit. The field office personnel will enter the information into our payment system and tell you when the direct deposit will take effect.

You may also take one of your annuity checks to your financial institution and ask them to complete an automated Quick$tart enrollment or a Form SF-1199A Authorization for Deposit of Federal Recurring Benefits. Your financial institution will have this form on hand.   Your financial institution will submit your enrollment to the RRB. Shortly after the RRB receives your direct deposit information, your monthly annuity payment will start going directly to your savings or checking account.

If you later change your account or financial institution, follow the steps indicated above for direct deposit to your new account. Keep your old account open until the direct deposit of payments to your new account begins.

Even though your payments are on direct deposit, be sure to keep your home address on our records current as explained below.

Change of Address

Notify the nearest RRB office immediately if you change your address, even when your monthly annuity payments are going directly to your savings or checking account. All correspondence from the RRB is sent to your home mailing address on record. This mailing address is used to send any material other than your payments to you (such as notices of cost-of-living increases, Medicare information, new Annual Earnings Exempt Amounts, and tax statements). If you do not report your change of address, the RRB cannot be responsible for any important information that you do not receive.

A notice of change of address must always include:

• your RRB claim number;
• your name;
• your new address;
• your old address;
• the date you will start receiving mail at the new address; and,
• if your spouse also receives an RRA annuity, a statement that your notice of change of address applies for both you and your spouse or applies to you alone.

Receiving a Tax Refund of Excess Social Security Tax

If, in any year before you retired, you worked for more than one railroad employer or worked in both railroad employment and social security-covered employment, your combined gross earnings from employment or net earnings from self-employment may have exceeded the Tier 1 yearly earnings maximum for that year. You may qualify for a refund of any excess taxes that were withheld from your earnings under the Federal Insurance Contributions Act (FICA) or the Railroad Retirement Tax Act (RRTA) or that you paid under the Self-Employment Contributions Act (SECA).

Earnings After Year 1974

Your combined railroad and social security covered earnings may exceed the Tier 1 yearly earnings maximum in any year after 1974, if you either:

• work in both railroad employment (RRTA) and social security-covered employment (FICA); or,
• work for two railroad employers (RRTA).

You can obtain a refund of the FICA or RRTA tax for the earnings in excess of the Tier 1 yearly earnings maximum. Claim the amount of the excess FICA or RRTA tax on your income tax return (U.S. Individual Income Tax Form 1040 or Form 1040A, under Excess FICA or RRTA Tax Withheld). This is how people who have never worked in the railroad industry get refunds for their excess social security taxes. There is a three-year statute of limitations on such claims.

Earnings 1951 through 1974

If your combined railroad and social security- covered earnings exceeded the yearly earnings maximum in any year from 1951 through 1974, you qualify for the refund of excess tax if you have at least 120 months (10 years) of railroad service and are not entitled to a Vested Dual Benefit. The refund is the amount of the RRTA, FICA or SECA tax based on the amount of your yearly earnings that exceeded the yearly earnings maximum for that year. If you qualify for this refund, you do not have to apply for it. The RRB will automatically pay it to you when you retire. If you die before receiving this refund, it will be paid to your survivors.

Receiving a Railroad Separation Allowance Payment

You may be entitled to an additional lump-sum payment if you received a Separation Allowance after 1984 and such payment did not provide additional railroad retirement service credits.

Computation of Lump-Sum

The Separation Allowance lump-sum payment for the year(s) the Separation Allowance was paid is computed as follows.

Step 1 - Subtract the amount of the Separation Allowance used in the total railroad service credits from the total amount of the Separation Allowance subject to Tier 2 taxation.

Step 2 -If the result of Step 1 is greater than zero, multiply the result of step 1 by the amount of employee Tier 2 contribution rate(s) under the Railroad Retirement Tax Act (RRTA) for the year(s) the Separation Allowance was paid.

Eligibility Requirements

To be eligible for a Separation Allowance lump-sum payment, you must have completed at least 120 months of railroad service, or 60-119 months of railroad service with at least 60 months of railroad service after 1995. If you qualify for the payment, you do not have to apply for it. The RRB will automatically pay it to you when you retire. If you die before receiving this payment, it will be paid to your survivors.

Records That You Should Keep

We recommend that you keep the RB-1 booklet, even after you file your annuity application. It contains important information concerning your entitlement to railroad retirement benefits.

You should also keep your:

• annuity award notice or denial notice;
• notes from the RRB representatives who helped you file your annuity application. The notes should detail any special aspects of your claim (such as why a certain employer was or was not your LPE);
• copy of the AA-1, Receipt For Your Claim;
• copy of your Federal Income Tax Form W-4P Withholding Election Form; and,
• booklet RB-9, "Employee and Spouse Annuities - Events That Must Be Reported" to help you comply with RRB’s reporting requirements.