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

Answers are provided by Robert S. Kaufman

Dual Benefit Reduction Unfair

(Posted July 8, 2004)

Question 478: I'm a veteran worker who is vested for Railroad Retirement, Social Security and a state pension. I started working for the railroad before the current two tier formula was introduced in 1974. When I started, a worker could earn full Railroad Retirement and Social Security benefits. The 1974 changes took away full dual benefits but didn't protect those rail workers like myself who had become vested under both systems. Why weren't we "grandfathered"?

Answer: There was an agreement between rail labor and management, which preceded the 1974 legislation. The agreement took many months of negotiation; all 17 rail unions signed off. Extensive hearings were then held by Congressional committees before the legislation reached the House and Senate floors. Hearings were held by 2 sets of committees because amendments to the Social Security Act were included.

The legislation passed both houses by overwhelming majorities with very little opposition. After an initial veto by President Ford was overridden, the changes took effect on January 1, 1975.

Unlike private sector pension plans, which are protected by extensive legislation, public retirement systems like Railroad Retirement and Social Security can be changed. If the changes involve benefit reductions, usually there is some type of grandfather clause to protect already earned benefits.

You say you were vested for both Railroad Retirement and Social Security before 1975; the "Dual Benefits" earned before 1975 are in fact protected ("grandfathered," to use your term). You should receive a vested dual Benefit from Railroad Retirement in addition to the normal Tier 1 and Tier 2 benefits.

The 1974 RRA changes did not apply to workers such as yourself who were vested under both systems at the changeover date. But the protection was limited to benefits earned before 1975. I am supposing that your point is that it should have protected benefits earned after the changeover as well. As an RRB staffer at that time, I can tell you that Congress was clearly advised of the impact of the 2-tier system on both current and former rail 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
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