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BenefitsLink > Q&A Columns >

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

Answers are provided by Robert S. Kaufman

When a Rail Worker is Not Vested

(Posted October 31, 1999(Revised February 6, 2001))

Question 33: I worked for Metro-North for 5 years. If my employment ends (before my Rail retirement benefit is vested at 10 years), what happens to my Tier 1 and Tier 2 contributions to date?

Answer: If you have less than 10 years of Rail Credits when you retire, those credits are sent to Social Security and are counted along with any other work you have performed for employers under the Social Security system. The transfer is made as part of your application process with the Social Security Administration.

Tier 1 contributions are transferred annually to the two Social Security Trust Funds as part of a very complex "Financial Interchange" between the two systems. This applies to both vested & nonvested rail workers.

Tier 2 contributions are retained in the Railroad Retirement Trust Fund even if the worker has less than 10 years of rail work. Transferring these contributions to the Social Security System is not appropriate since Social Security does not pay a "private pension" component.

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
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