BenefitsLink > Q&A Columns >
Answers are provided by Robert S. Kaufman
Severance Pay and Railroad Retirement
(Posted January 27, 1999)
Question 14: The Canadian National downsized my husband in 1994 after 25 years of service in the United States. He received severance pay and had to leave the railroad industry early. He will now only get half of what he should be entitled to when he retires under Railroad Retirement. Is this true?
Answer: Your husband involuntarly left the railroad industry earlier than he would have if his job hadn't been eliminated. While there is no "legal" penality under Railroad Retirement in this circumstance, as a practical matter your husband has less service credits and probably lower career earnings than he would have received if he had remained with the Canadian National until age 60, or age 65. The practical effect is that his Railroad Retirement benefits are going to be less than they could have been. I cannot calculate the actual amount he lost without knowing how much longer he planned to work and how much his future earnings would have increased if he was able to keep his railroad job until he reached retirement.
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice
to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the
law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness
or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.)
that occur after the date on which a particular Q&A is posted.
Copyright 1997-2017 Robert S. Kaufman