Time Limitations Under the RRA
Section 9 of the Railroad Retirement Act (RRA) provides that the RRB's records of service and compensation are conclusive as to the amount of compensation paid during the period covered by the report, unless an error is called to the RRB's attention within four years of the day on which the report was required to be made. Employers are required to file with the RRB, on or before the last day of February, an annual report of service and compensation for employees who performed compensated service in the preceding calendar year.
Likewise, the fact that no report of compensation was made is taken as conclusive information that no compensation was paid, unless the failure to make a report of the compensation is called to the RRB's attention within four years of the day on which the report was required to be made.
Example of Time Limitation Under the RRA
Reports of compensation and service for the year 2006 were due at the RRB on the last day of February 2007. The last day to submit a corrected report of service and compensation for the year 2006 would be the last day of February 2011. After February 28, 2011, the time limit for adjustments to Tier compensation earned in 2006 will have expired.
Time Limitations Under the RUIA
Section 6 of the Railroad Unemployment Insurance Act (RUIA) provides that the RRB's records of compensation are conclusive unless an error is called to the attention of the RRB within eighteen months of the date on which the return was required to be filed. The last day to submit a corrected report of RUIA compensation for the year 2006 would be August 31, 2008.
Exceptions to the Four Year Adjustment Limitation
Part 211.16 of the Railroad Retirement Board's Regulations allow corrections beyond the four-year adjustment period in the following circumstances:
- the compensation was posted or not posted as the result of fraud on the part of the employer;
- the compensation was posted for the wrong person or wrong period;
- the earnings were erroneously reported to the Social Security Administration in the good faith belief by the employer or employee that such earnings were not covered under the Railroad Retirement Act;
- a determination pertaining to the coverage under the Railroad Retirement Act of an individual, partnership, or company as an employer, is retroactive;
- in the judgment of the three-member Board, failure to make a correction would be inequitable.
Error Discovered After the Allowed Adjustment period
An employer who discovers an error in a compensation report beyond the four-year period should submit Form BA-4, Report of Creditable Compensation Adjustments, accompanied by an explanation of the delay and a statement regarding the payment of applicable taxes. An employee will not be credited with service months or Tier II compensation beyond the four-year period unless the employer establishes to the satisfaction of the Board that all employment taxes imposed by Sections 3201, 3211, and 3221 of title 26 of the Internal Revenue Code have been paid with respect to the compensation and service.
Determining the Period for Retroactive Payments
Reports adjusting prior-year service and compensation are due at the RRB by the end of the month following the calendar quarter in which the payment was made or the error or omission was determined. For example, if payment was made in July 2007 for a period of lost earnings in 2002 and 2003, the report would be due by October 31, 2007. If an employer is filing an adjustment that appears to be beyond the four-year period, such as in the above example, the employer should complete item 16 on the adjustment report. This item allows an employer to identify current payments that are allocated more than four years prior to the current year. If the adjustment report is filed on magnetic media, the employer can put this information in the “Remarks” section of Form G440, Report Specification Sheet.