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Answers are provided by Robert S. Kaufman
Looking For Gold In Old Railroad Pension Plans!
(Posted June 4, 2004)
Question 459: My father worked for the New York Central Railroad. He had a pension (before Railroad Retirement started) from the railroad and the Vanderbilt Pension Plan. How do we find out if there is anything in the old pension plan for his children?
Answer: I don't have any specific information about the Vanderbilt Pension for NYC employees. But I can tell you it is highly unlikely that your family would be entitled to anything at this late date.
Railroads were among the earliest U.S. industries to set up pension plans for their workers. Some of the plans were started in the 1890s. But the concepts of vesting and trust funding did not exist then. Pensions usually were paid from the Railroad's operating funds. And when the railroad ran into hard financial times, pensions were either reduced or eliminated. Bankruptcy happened a lot to railroads; any claims from current and future pensioners were wiped out when a railroad went into bankruptcy.
Most railroad pensions ran out of funds and stopped paying benefits during the depression of the 1930s. That was the major reason that the Railroad Retirment system was created in 1934. It was intended to protect earned pension benefits and to allow rail workers to preserve their credits when they changed railroads.
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