Subscribe to Free Daily Newsletters
Post a Job

Featured Jobs

Assistant Team Leader

Nova 401(k) Associates
(Houston TX / Austin TX / Dallas TX / Scottsdale AZ / Telecommute)
Senior Actuarial Administrator

Group RHI
(TX / Telecommute)
Plan Document Support Specialist

Actuarial Systems Corporation
(Sylmar CA / Telecommute)
Plan Document ERISA Attorney

Actuarial Systems Corporation
(Sylmar CA / Telecommute)
Client Relationship Manager

Loren D. Stark Company
(Houston TX / Telecommute)
Retirement Plan Sales Territory Manager

Loren D. Stark Company
(Irving TX / Telecommute)
Defined Benefits Combo Cash Balance Consultant

Loren D. Stark Company
(Houston TX / Telecommute)
DC Plan Administrator

San Diego Pension Consultants
(San Diego CA)
Compliance Analyst (QKA)

Newport Group
(Folsom CA / Dallas TX / Walnut Creek CA / Annapolis MD / Burlington VT / Charlotte NC / Chicago IL / Fresno CA / Moline IL / Lake Mary FL / Saint Petersburg FL / Saint Louis MO / AL / IA / MN / PA / VA / WI)
Apprentice - Financial Services and Employee Benefits

Columbia Benefits, LLC
(Englewood CO)
Retirement Plan Relationship Advisor

Prosperity Advisors, LLC and SS&G Wealth Management
(Akron OH)

Free Daily News and Jobs

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Get the BenefitsLink app LinkedIn
Twitter
Facebook

BenefitsLink > Q&A Columns >

Stop, Look & Listen: Railroad Retirement Benefits Q&A

Answers are provided by Robert S. Kaufman

Does 5-Year Vesting Apply?

(Posted April 14, 2003)

Question 244: I have worked for the railroad for 6 years. The railroad closed my division before I could meet the 10 year vesting requirement. What happens to the Tier 2 taxes that I paid for 6 years?

Answer: The Railroad Retirement Act was amended recently to reduce the vesting requirement to 5 years, if the worker has earned
at least 5 years of service after 1995.

If you meet the new 5-year requirement, you can receive an annuity as early as 62. If you don't, the Tier 2 taxes you and your employer have paid remain in the Railroad Retirement trust fund. Unlike a pension plan in the private sector, there is no provision for refunding Tier 2 taxes to nonvested workers.


Important notice:

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
Related links:

(restricted access)

(restricted access)

© 2020 BenefitsLink.com, Inc.