The Railroad Retirement Act (RRA) replaces the Social Security Act for the rail industry. It provides monthly annuities to rail employees based on age and service or on disability. The Railroad Retirement Board, an independent federal agency, administers the RRA.
An employee’s railroad retirement annuity is a monthly benefit with several components. There are restrictions on which components are divisible.
Non-divisible Annuity Component
The Tier I component is the same benefit amount that the Social Security Act would provide if the employee’s railroad employment had been covered under that act. The RRA specifically exempts the Tier I component from property division. See 45 U.S.C. § 231m.
Divisible Annuity Components
The RRA does not prohibit division of the following components:
Tier II Component
An employee’s Tier II component is based solely upon rail industry service and earnings.
Supplemental Annuity
An employee who completes 25 years of railroad service and who had railroad service before 1981 may receive a supplemental annuity under section 2(b) of the RRA, which ranges from $23 to a maximum of $43 per month.
Vested Dual Benefit
A vested dual benefit is an additional amount available to railroad employees who meet certain vesting requirements and were fully insured under both the RRA and the Social Security Act prior to 1975.
Overall Minimum Increase
In some cases, an employee’s annuity under the RRA may be less than the amount he or she could receive under the Social Security Act. The annuity may be increased so that the employee receives at least as much as they would have under the Social Security Act. The amount of this increase is divisible.
Note: The Tier II component, supplemental annuity, and vested dual benefit may continue to be paid as part of a partition award after the death of the employee. The overall minimum increase is not payable after the death of the employee as part of a partition award.
Important: The Employee Retirement Income Security Act (ERISA) does not apply to RRA annuities.