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

Answers are provided by Robert S. Kaufman

Tier 2 Taxes Are Not Refundable

(Posted April 29, 2009)

Question 704: Even though I have 77 months of creditable railroad employment, only 56 months were after 1995, making me ineligible for any Railroad Retirement. My question is what has happened to the $10,000+ I paid in Tier 2 taxes while a railroad employee? No one seems to know at the RRB or at Social Security. I am currently applying for Social Security. retirement benefits.

Answer: Your Tier 2 taxes are not refundable under current law. This is one important area that Railroad Retirement differs from private sector pension plans. Under the Federal ERISA law, private pension plans are required to refund all employee contributions if the worker is not vested for benefits. Railroad Retirement has no similar requirement.

You could bring your situation to the attention to your rail labor organization, or your Congressman or Senator; see if they will support changing the Railroad Retirement System to provide for Tier 2 tax refunds when the employee is not vested at retirement or death.

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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