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Tier 2 Benefits
(Posted January 26, 2913)
Question 950: What determines if an employee has Tier I or Tier II benefits?
Answer: Most rail workers receive an annuity that consists of two components: Tier 1 and Tier 2. Tier 1 is similar to a Social Security benefit; it is based on the combined earnings under railroad service and any non-railroad service that was covered by Social Security. Tier 2 is similar to a private pension; it is based only on railroad service.
If a rail worker has between 5 and 10 years of rail service and is eligible for a Total and Permanent Disability Annuity, only a Tier 1 benefit is paid until the employee reaches retirement age.
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