The Effects of Dismissal Allowance, Pay For Time Lost and Some Types of Vacation Pay
This section concerns payments that you may receive from your employer after the actual date you last performed service for the railroad, but while you were still carried on their payroll. These payments can have an effect on your annuity beginning date.
- Dismissal Allowance- Under the Railroad Retirement Act, a Dismissal Allowance consists of monthly compensation payments for a specific period made to an employee who retains an employment relation. This is also often called Wage Continuation or Guaranty Payments. The following, though not exhaustive, is evidence of an employment relation:
- For these payments, your resignation and relinquishment of rights are not effective until the end of the period for which the payments are made.
- You may be recalled during the period of the allowance. This can apply even if the agreement between you and the railroad is silent on the question of recall.
- You remain covered under various employee plans.
- You continue to receive employee benefits.
- Pay For Time Lost- Pay for Time Lost includes:
- Personal Injury Settlements which allocate a portion of the damages as lost compensation for a specific period following the injury; and
- Short Term Disability for a specific period for which you are carried on the payroll and receive all or part of your regular pay while absent from work due to sickness.
- Vacation Pay- Some types of Vacation Pay affect your annuity if you are carried on the payroll after your actual date last worked and retain an employment relation.
Information Needed on Annuity Application
When you file your annuity application, these payments should be entered as Pay For Time Lost to prevent an incorrect annuity beginning date from being established. Your annuity cannot begin until the day after the last day for which the Dismissal Allowance, Pay For Time Lost, or Vacation Pay is paid.
When possible, it is sometimes to your advantage to accept the payments in a lump sum. You will not receive as many railroad service months, but this allows your annuity to begin at an earlier date. If you need help in making this decision, the RRB field office will provide you with the necessary annuity estimates.
If you accept a Dismissal Allowance, Pay For Time Lost, or Vacation Pay, you cannot receive RUIA benefits for the period of time for which you receive these benefits. This is true regardless of whether you leave railroad employment voluntarily or involuntarily.
If you receive an injury settlement or Dismissal Allowance, bring any documentation (i.e., a copy of your settlement) with you when you file your employee annuity application. If your case is still pending at that time, advise the RRB field office that you intend to claim a period of Pay for Time Lost after your actual date last worked. They will indicate the type of payment in "Remarks" of your application so the RRB can correctly determine your annuity beginning date.