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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.
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