Railroad Retirement Board
The Importance of a Current
November 2008
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Under the Railroad Retirement Act, a “current connection
with the railroad industry” is one of the eligibility requirements for
occupational disability annuities and supplemental annuities, and is one of the
criteria for determining whether the Railroad Retirement Board (RRB) or the
Social Security Administration has jurisdiction over the payment of monthly
benefits to survivors of a railroad employee.
The following questions and answers describe the current
connection requirement and the ways the requirement can be met.
1. How is a current
connection determined under the Railroad Retirement Act?
To meet the current connection requirement, an employee must
generally have been credited with railroad service in at least 12 months of the
30 months immediately preceding the month his or her railroad retirement
annuity begins. If the employee died
before retirement, railroad service in at least 12 months in the 30 months
before death will meet the current connection requirement for the purpose of paying
survivor benefits.
However, if an employee does not qualify on this basis, but
has 12 months’ service in an earlier 30-month period, he or she may still meet
the current connection requirement. This
alternative generally applies if the employee did not have any regular
employment outside the railroad industry in the period between the end of the
last 30-month period including 12 months of railroad service and the month the
annuity begins, or the month of death if earlier.
A current connection established at the time the railroad
retirement annuity begins is permanent.
The employee never loses it no matter what kind of work is performed
thereafter.
2. Can non-railroad work
before retirement break a former railroad employee’s current connection?
Full or part-time work for a non-railroad employer in an
interim between the end of the last 30-month period including 12 months of
railroad service and the beginning date of an employee’s annuity, or the date
of death if earlier, can break a current connection.
Self-employment in an unincorporated business will not break
a current connection. However, if the
business is incorporated, compensated service may break a current connection.
Federal employment with the Department of Transportation,
the National Transportation Safety Board, the Surface Transportation Board (the
former Interstate Commerce Commission), the National Mediation Board, the
Railroad Retirement Board, or the Transportation Security Administration will
not break a current connection. State
employment with the Alaska Railroad, as long as that railroad remains an entity
of the State of
3. Are there any exceptions
to these normal procedures for determining a current connection?
A current connection can be maintained for purposes of
supplemental and survivor annuities if the employee completed 25 years of
railroad service, was involuntarily terminated without fault from his or her
last job in the railroad industry, and did not thereafter decline an offer to
return to work in the same class or craft as his or her most recent railroad
service, regardless of the location of the work offered.
If all of these requirements are met, an employee’s current
connection may not be broken, even if the employee works in regular nonrailroad
employment after the 30-month period and before retirement or death. This exception to the normal current
connection requirement became effective
4. Would the acceptance of a
buy-out have any effect on determining whether an employee could maintain a
current connection under this exception provision?
In cases where an employee has no option to remain in the
service of his or her railroad employer, the termination of the employment is
considered involuntary, regardless of whether the employee does or does not
receive a buy-out.
However, if an employee has the choice of either accepting a
position in the same class or craft in the railroad industry or termination
with a buy-out, accepting the buy-out is a part of his or her voluntary
termination, and the employee would not maintain a current connection under the
exception provision.
5. An employee with 25 years
of service is offered a buy-out with the option of either taking payment in a
single lump sum or of receiving monthly payments until retirement age. Could the method of payment affect the
employee’s current connection under the exception provision?
The employee must always relinquish job rights in order to
accept the buy-out, regardless of whether it is paid in a lump sum or in
monthly payments. Neither payment option
would extend the 30-month period. The
determining factor for the exception provision to apply when a buy-out is paid
is not the payment option. It is whether
or not the employee stopped working involuntarily.
An employee considering accepting a buy-out should also be
aware that if he or she relinquishes job rights to accept the buy-out, the
compensation cannot be used to credit additional service months beyond the
month in which the employee severed his or her employment relation, regardless
of whether payment is made in a lump sum or on a periodic basis.
6. What if the buy-out
agreement allows the employee to retain job rights and receive monthly payments
until retirement age?
The RRB considers the buy-out to be a dismissal allowance.
When a monthly dismissal allowance is paid the employee retains job rights, at
least until the end of the period covered by the dismissal allowance. If the period covered by the dismissal
allowance continues up to the beginning date of the railroad retirement
annuity, railroad service months would be credited to those months. These
railroad service months would provide at least 12 railroad service months in
the 30 months immediately before the annuity beginning date and maintain a
regular current connection. They will also increase the number of railroad
service months used in the calculation of the railroad retirement annuity.
7. Could the exception
provision apply in cases where an employee has 25 years of railroad retirement
coverage and a company reorganization results in the employee’s job being
placed under social security coverage?
The exception provision has been considered applicable by
the RRB in cases where a 25-year employee’s last job in the railroad industry
changed from railroad retirement coverage to social security coverage and the
employee had, in effect, no choice available to remain in railroad retirement
covered service. Such 25-year employees
have been deemed to have a current connection for purposes of supplemental and
survivor annuities.
8. Where can a person get more
specific information on the current connection requirement?
Railroaders and former employees can contact the nearest
field office of the RRB for information on how their eligibility for benefits
is affected by this requirement. Most
RRB field offices are open to the public from
Persons can find the address and phone number of the RRB
office serving their area by calling the automated toll-free RRB Help Line at
1-800-808-0772 or by checking the RRB’s Web site at www.rrb.gov. Most RRB field offices are open to the public
from
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