A Non-Covered Service Pension (NCSP) is any payment based on earnings for services performed after 1956 that are not covered as employment under the Social Security (SS) Act or the Railroad Retirement Act (RRA). This payment may either be a monthly check or a lump-sum payment. This information is important because it may reduce the amount of your Tier 1 component.
Exceptions for Non-Covered Service Pension Reduction
You are not subject to the non-covered service pension reduction if your date of birth is before January 2, 1924, or if you have at least 30 Years of Coverage. Approximately one Year of Coverage is credited for each year in which you have wages, compensation, or self-employment earnings equal to or more than the following: 25% of the SSA maximum creditable earnings for years before 1979, 25% of the Tier 2 maximum creditable earnings for years 1979 – 1990, and 15% of the Tier 2 maximum creditable earnings for years after 1990. Ask your RRB representative if this exception applies to you.
Also note that the following monthly benefits are not considered to be non-covered service pensions:
- A private pension from your railroad employer.
- Payment from the Department of Veterans Affairs.
- Pensions based on military service active duty.
When Non-Covered Service Pension Reduction May Apply
If none of the exceptions above apply, your date of birth is January 2, 1924, or later, and you are receiving or expect to receive a pension or annuity (or a lump-sum payment in excess of your own contributions to the pension plan) that is based on any work performed after 1956 not covered by the SS Act or the RRA, the RRB will use Form G-209 Employee Non-Covered Service Pension Questionnaire to obtain the information necessary to compute any offset for your non-covered service pension.