Service performed for a covered employer or as an employee representative is creditable toward all types of benefits under the Railroad Retirement Act. Covered employers include interstate railroads and their affiliates engaged in railroad-connected operations, as well as employer associations and national railroad labor organizations and their subordinate units. In some cases, military service may be counted as railroad service.
Service for an employer is creditable if it is compensated and the employee is subject to the continuing supervision of the employer. Benefits are based on earnings credits and months of service. Earnings are creditable up to certain annual maximums on the amount of compensation subject to railroad retirement taxes. Credit for a month of railroad service is given for every month in which an employee had some compensated service for an employer covered by the Railroad Retirement Act, even if only one day's service is performed in the month. (However, local lodge compensation earned after 1974 is disregarded for any calendar month in which it is less than $25.) Special rules may apply for crediting of service months resulting from a settlement for an on-the-job injury.
The basic requirement for railroad retirement annuities is 10 years (120 months) of creditable railroad service or 5 years (60 months) of creditable railroad service if such service was performed after 1995. Service months need not be consecutive.
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.
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 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 are:
- August 2, 1990, to a date as yet undetermined.
- December 16, 1950, to September 14, 1978.
- September 8, 1939, to June 14, 1948.
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 in force, 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.
Service and Earnings Records
The RRB 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 RRB.
Each year, employees in the industry receive a Certificate of Service Months and Compensation (Form BA-6) from the RRB. 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 includes the cumulative amounts of railroad retirement payroll taxes paid by the employee over and above social security equivalent payroll taxes, and reflects creditable military service, if the service has previously been reported to the RRB. The BA-6 form should be carefully reviewed to make sure that it is correct.
Employees can view their individual railroad retirement records of service months and compensation via the RRB's website by selecting View Service and Compensation History in Benefit Online Services.To access this feature, employees must establish an RRB online account. Instructions for establishing an online account are available by clicking on the link for requesting a Password Request Code (PRC) in that same section. Though this electronic alternative does not replace Form BA-6, it does make the same information available online.
If an employee disagrees with the information shown on the BA-6 form, he or she should write the RRB as early as possible. The law limits to 4 years the period during which corrections can be made. All letters concerning BA-6 forms must 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 60611-1275