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Impact of Federal Retirement on Railroad Retirement
(Posted February 25, 2002)
Question 161: My husband left railroad employment with 11 years of service to go to work for the Federal government. He's covered by the newer Federal Employee Retirement System (FERS) and by Social Security. He expects to have at least 30 years of Federal service when he retires. I am a Federal employee also but I am covered by the original Civil Service Retirment System (CSRS). I also expect to have 30 years at retirement. I have the following questions about the interplay between Railroad Retirement, FERS & CSRS: (1) Will my husband receive anything from Railroad Retirement? (2) Will I be eligible for a spouse benefit from Railroad Retirement even though I will receive a substantial "Public Pension" from CSRS?
Answer: There are special provisions of law that come into play when people are eligible for Social Security or Railroad Retirement AND a "public pension" like FERS and CSRS.
One is called the "Windfall Provision," which requires that Social Security and Tier 1 Railroad Retirement benefit be computed under a lower formula unless the worker has 35 or more years of credits. In your husband's case, the provision is waived because he is covered by the FERS retirement program. So he will qualify for FERS, Social Security & Railroad Retirement. Of course, his Tier 1 will be reduced by the amount of his Social Security but he will receive a full Tier 2.
The other provision is called the "Public Pension Offset," which applies to wives, husbands, widows and widowers who are entitled to a public pension. Their Social Security and Tier 1 Railroad Retirement benefits are reduced by 2/3 of their monthly public pension. The Public Pension Offset will apply to your spouse benefit but only to the Tier 1 portion. You will receive a full Tier 2 as a spouse.
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