Subscribe to Free Daily Newsletters
Post a Job

Featured Jobs

Executive Director

Employers Council on Flexible Compensation (ECFC)
(Washington DC / Telecommute)
Defined Contribution Plan Administrator

TRG Administrative Services, LLC
(Dallas TX / Buffalo NY / Telecommute)
Senior Retirement Plan Administrator

Carlson Quinn
(Emeryville CA)
Defined Contribution Plan Administrator

Ingham Retirement Group
(Miami FL / Telecommute)
Actuarial Analyst

Venuti & Associates
(Los Altos CA)
Retirement Plan Administrator

Nicholas Pension Consultants
(Rancho Cordova CA / Corona CA)
Pension Administrator

KB Pension Services
(Bradenton FL)
ERISA Compliance Consultant

Employee Fiduciary, LLC
(Mobile AL / Saint Petersburg FL / Telecommute)
Retirement Plan Consultant

DWC - The 401(k) Experts
(Telecommute)
Account Manager / Client Service - 401k Plans

ABG Retirement Plan Services
(Peoria IL / Telecommute)

Free Daily News and Jobs

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Get the BenefitsLink app LinkedIn
Twitter
Facebook

BenefitsLink > Q&A Columns >

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

Answers are provided by Robert S. Kaufman

Railroad Retirement and Social Security Compared

(Posted September 11, 2000)

Question 62: I just found out that my father receives Railroad Retirement and not Social Security. I'm curious why he chose Railroad Retirement over Social Security. Where can I get more information about Railroad Retirement and how he can get Medicare?

Answer: You've come to the right place!

You father did not have a choice between Railroad Retirement and Social Security. Under Federal law, railroad workers are automatically covered by the Railroad Retirement System in any calendar month they work for any railroad in the United States. When they accumulate 120 months of Railroad service (10 years), they are vested in the Railroad Reirement System. (A proposal is pending that would reduce vesting to 60 months.)

The Railroad Retirement System is financed mainly by payroll taxes paid by railroads and rail workers. Unlike Social Security, the tax rates are not equal; railroads pay a much larger share. The trust fund also receives an annual transfer from Social Security equal to the savings to that program for not having to pay benefits for railroad service. And it receives some general revenue to fund the phase-out of certain dual benefits.

Like Social Security, the fund's assets are invested in United States Treasury securities and enjoy a good rate of return. (There is a proposal pending in Congress which would permit the investment of certain funds in the private sector markets.)

Generally, Railroad Retirement pays high benefits and at earlier ages than Social Security. That's because Railroad Retirement consists of two components, one equal to Social Security, and a second more like a private pension amount.

Like Social Security beneficiaries, people receiving Railroad Retirement are automatically covered by Medicare at 65, or earlier if disabled. And Railroad Retirement recipients can receive Part A Hospital Medicare benefits for certain services received in Canada.

To find out more about the program, read the other Q&As in the column and visit the Railroad Retirement Board's web site at http://www.rrb.gov


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
Related links:

(restricted access)

(restricted access)

© 2019 BenefitsLink.com, Inc.