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

Answers are provided by Robert S. Kaufman

Will Proposed Changes to Social Security Affect Railroad Retirement?

(Posted February 21, 2005)

Question 540: Would the proposed Social Security "private investment accounts" also apply to Tier 1 taxes paid by rail workers?

Answer: Much has been discussed about President Bush's proposals to change Social Security. But not many of the details have been published to date.

As a rule, Tier 1 follows the general outline of the current Social Security program in both financing and benefits. So it's reasonable to presume at this point that the same changes would be made in Railroad Retirement Tier 1.

In 2002, the majority of the Railroad Retirement trust funds-- those that specifically finance Tier 2-- were tranferred to a new nongovernmental trust, which has been permitted to invest prudently in the equity and bond markets.

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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