Private rail pensions may reduce supplemental annuities
Railroad Retirement beneficiaries are reminded that receipt of a private railroad pension may reduce the amount of a supplemental annuity payable by the Railroad Retirement Board (RRB). The following questions and answers provide information on this subject and how 401(k) plans are affected by the Railroad Retirement Act (RRA).
1. What are the eligibility requirements for a supplemental annuity?
Monthly supplemental annuities are payable to employee annuitants with 25 or more years of rail service, a “current connection” with the railroad industry, and at least one month of creditable rail service before October 1981. Individuals with 30 years or more of rail service may begin receiving a supplemental annuity at age 60, whereas individuals with 25-29 years of service may do so at age 65. (Disabled annuitants under full retirement age, which is gradually rising to age 67 for those born in 1960 or later, must relinquish employment rights in order for a supplemental annuity to be paid by the RRB.) Monthly supplemental annuity rates vary based on an annuitant’s years of rail service. The maximum monthly supplemental annuity rate is $43.
2. How does the receipt of a private railroad pension affect payment of a supplemental annuity?
If a retired employee also receives a private pension funded entirely, or in part, by a railroad employer, the supplemental annuity is permanently reduced by the amount of the monthly pension that is based on the railroad employer’s contributions. However, if the employer reduces the pension for the employee’s entitlement to a supplemental annuity, the amount by which the pension is reduced is restored to the supplemental annuity (but does not raise it over the $43 maximum). There is no reduction for a pension paid by a railroad labor organization.
3. What if an employee elects to receive the pension in a lump-sum payment instead of as a monthly benefit?
If a retired employee elects to receive his or her pension in a lump-sum payment instead of as a monthly benefit, the supplemental annuity is reduced in the same way as it would be if the employee was receiving the monthly benefit. (If the lump sum is paid in installments, the installment payments are not considered monthly benefit payments, but part of the single lump-sum payment.)
4. Does the receipt of a 401(k) plan distribution reduce the amount of a supplemental annuity?
No. In Legal Opinion L-2014-2, issued January 13, 2014, the RRB’s general counsel determined that 401(k) plans should not be considered supplemental pension plans as defined by the Railroad Retirement Act and, therefore, employee supplemental annuities should not be reduced due to the receipt of 401(k) distributions.
5. Are employee contributions to a 401(k) plan subject to Railroad Retirement Tier I and Tier II payroll taxes?
Yes. Federal budget legislation enacted in 1989 and effective January 1, 1990, provided that employee contributions to 401(k) plans are subject to Railroad Retirement payroll taxes and brought the treatment of 401(k) plans under Railroad Retirement law into conformity with the treatment of such plans under Social Security law. Consequently, employee contributions to a 401(k) plan are also treated as creditable compensation for Railroad Retirement benefit purposes. (For example, an employee earning $40,000 a year, but who has 10% of his earnings deferred under a 401(k) plan, would have only $36,000 reported to the IRS as earnings subject to federal income tax. However, the entire $40,000 would be subject to Railroad Retirement payroll taxes and therefore creditable as compensation under the Railroad Retirement Act.)
6. How can a person get more information about how private rail pensions and 401(k) plan payments affect supplemental annuities?
More information is available on RRB.gov or by contacting an RRB field office. It is important to know that while nearly all of the RRB’s 53 field offices are physically closed to the public until further notice because of the COVID-19 outbreak, they remain accessible by email and phone. Customers are encouraged to send a secure email to their local office by accessing the Field Office Locator and clicking on the link at the bottom of their local office’s page. Customers who prefer talking to an RRB employee can call the agency’s toll-free number (1-877-772-5772); however, they may experience lengthy wait times due to increased call volume caused by COVID-19 related issues.
Medicare Part B premiums for 2021
The Centers for Medicare & Medicaid Services (CMS) has announced that the standard monthly Part B premium will be $148.50 in 2021, an increase of $3.90 from $144.60 in 2020. Some Medicare beneficiaries will pay less than this amount because, by law, Part B premiums for current enrollees cannot increase by more than the amount of the cost-of-living adjustment for Social Security (Railroad Retirement Tier I) benefits.
Since the cost-of-living adjustment is 1.3% in 2021, some Medicare beneficiaries will see an increase in their Part B premiums but still pay less than $148.50. The standard premium amount will also apply to new enrollees in the program. However, certain beneficiaries will continue to pay higher premiums based on their modified adjusted gross income.
The monthly Part B premiums that include income-related adjustments for 2021 will range from $207.90 to $504.90, depending on the extent to which an individual beneficiary’s modified adjusted gross income exceeds $88,000 (or $176,000 for a married couple). The highest rate applies to beneficiaries whose incomes exceed $500,000 (or $750,000 for a married couple). CMS estimates that about 7% of Medicare beneficiaries pay the larger income-adjusted premiums.
Beneficiaries in Medicare Part D prescription drug coverage plans pay premiums that vary from plan to plan. Part D beneficiaries whose modified adjusted gross income exceeds the same income thresholds that apply to Part B premiums also pay a monthly adjustment amount. In 2021, the adjustment amount ranges from $12.30 to $77.10.
The Railroad Retirement Board withholds Part B premiums, Part B income-related adjustments and Part D income-related adjustments from benefit payments it processes. The agency can also withhold Part C and D premiums from benefit payments if an individual submits a request to his or her Part C or D insurance plan.
The following tables show the income-related Part B premium adjustments for 2021. The Social Security Administration (SSA) is responsible for all income-related monthly adjustment amount determinations. To make the determinations, SSA uses the most recent tax return information available from the Internal Revenue Service. For 2021, that will usually be the beneficiary’s 2019 tax return information. If that information is not available, SSA will use information from the 2018 tax return.
Railroad Retirement and Social Security Medicare beneficiaries affected by the 2021 Part B and D income-related premiums will receive a notice from SSA by the end of the year. The notice will include an explanation of the circumstances when a beneficiary may request a new determination. Persons who have questions or would like to request a new determination should contact SSA after receiving their notice.
Additional information about Medicare coverage, including specific benefits and deductibles, can be found at www.medicare.gov.
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2021 PART B PREMIUMS
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal to $88,000
Less than or equal to $176,000
Greater than $88,000 and less than or equal to $111,000
Greater than $176,000 and less than or equal to $222,000
Greater than $111,000 and less than or equal to $138,000
Greater than $222,000 and less than or equal to $276,000
Greater than $138,000 and less than or equal to $165,000
Greater than $276,000 and less than or equal to $330,000
Greater than $165,000 and less than or equal to $500,000
Greater than $330,000 and less than or equal to $750,000
$500,000 and above
$750,000 and above
The monthly premium rates paid by beneficiaries who are married, but file a separate return from their spouses and who lived with their spouses at some time during the taxable year, are different. Those rates are as follows:
Beneficiaries who are married, but file a separate tax return, with income:
Income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal to $88,000
Greater than $88,000 and less than or equal to $412,000
The Office of the Labor Member is pleased to announce that our Pre-Retirement Seminar presentation is now available to view online. We designed this program to help educate those nearing retirement about the benefits available to them, and what they can expect during the application process.
This popular program has become a valuable resource to RRB customers and employees alike. It helps promote a better understanding of our benefit programs among the railroad community, and in turn, improves the effectiveness of our benefit program operations.
While we typically conduct several seminars across the country annually, we were forced to cancel all in-person events this year due to the COVID-19 outbreak. This provided us with the unique opportunity to reimagine our platform capabilities and prioritize creating a web version of the seminar.
To access the video online, visit RRB.gov/PRS and click on View Pre-Retirement Seminar Presentation. Because we cover several aspects of railroad retirement benefits in great detail, the entire presentation is over an hour long. View shorter segments of the program by selecting a seminar topic on the same web page. Available topics include: Retired Employee and Spouse Benefits, Spouse Annuities, Working After Retirement, Survivor Benefits, and Items Affecting All Retirement and Survivor Benefits.
At this time, unemployment and sickness benefits are not covered in the program because of the ongoing uncertainty of additional COVID-19 relief legislation. We recommend visiting RRB.gov/coronavirus for the most up-to-date information.
Railroad Unemployment and Sickness Benefits Will See Slight Decrease in New Sequestration Reduction Rate
Under the Budget Control Act of 2011, and a subsequent sequestration order to implement mandated cuts, railroad unemployment and sickness insurance benefits are reduced by a set percentage that is subject to revision at the beginning of each fiscal year.
Starting October 1, 2020, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 5.7%, down from the current 5.9% reduction, as required by law. The adjusted reduction amount is based on revised projections of benefit claims and payments under the Railroad Unemployment Insurance Act and will remain in effect through September 30, 2021, the end of the fiscal year. Reductions in future fiscal years, should they occur, will be calculated based on applicable law.
The current daily benefit rate for both unemployment and sickness is $80.00. Applying the sequestration rate of 5.7%, the maximum amount payable in a two-week period will be reduced from $800.00 to $754.40. Sickness benefits paid to an employee within six months from the date last worked for a reason other than an on-the-job injury are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65%. Applying the 5.7% reduction to these sickness benefits will result in a maximum two-week total of $696.69.
In fiscal year 2019, the RRB paid about $13 billion in retirement and survivor benefits to about 535,000 beneficiaries, and net unemployment-sickness benefits of about $93.4 million to approximately 23,000 claimants.
The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, signed into law March 27, boosts unemployment and sickness benefits for railroad workers impacted by the pandemic.
Under the CARES Act, the 1-week waiting period required before railroad workers can receive unemployment or sickness benefits is temporarily eliminated. This applies to an employee’s first two-week registration period for a period of continuing sickness or unemployment beginning after the effective date of the law and ending on or before December 31, 2020.
In addition, the amount of the unemployment benefit is increased by $1,200 per 2-week period. This is in addition to the current biweekly maximum of $733.98 received by most claimants. This increased amount applies to any two-week registration periods beginning on or after April 1, 2020, through July 31, 2020.
The CARES Act includes a separate appropriation of $425 million to pay for this added “recovery benefit,” with an additional $50 million provided to cover the cost of eliminating the waiting period. If these funds are exhausted, the new provisions will no longer apply.
The CARES Act also authorizes payment of extended unemployment benefits to rail workers who received unemployment benefits from July 1, 2019, to June 30, 2020.
Under the legislation, railroad workers with fewer than 10 years of service may be eligible for up to 65 days of extended benefits within seven consecutive two-week registration periods. Workers with 10 or more years of railroad service who were previously eligible for up to 65 days in extended benefits may now receive benefits for up to 130 days within 13 consecutive two-week registration periods.
Since RRB offices are currently closed to the public due to the COVID-19 pandemic, railroad employees are encouraged to file for unemployment benefits online by establishing an account through myRRB at RRB.gov. Employees are encouraged to use a computer rather than a smartphone or tablet due to RRB IT system limitations. Otherwise, applications and claims for benefits will need to be submitted by regular mail. Applications for sickness benefits must be submitted to the agency by mail, or by fax at 312-751-7185. Subsequent claims may be completed online by those with myRRB accounts.
The RRB will also pay sickness benefits and, in some cases, unemployment benefits, to rail workers who have tested positive for COVID-19 or who are subject to a quarantine order. Further guidance on these types of situations is available at RRB.gov/Benefits/Coronavirus.
The purpose of this notice is to update you on how COVID-19 is impacting operations at the Railroad Retirement Board (RRB). Be assured, while it is not business as usual, the agency remains open for business. Listed below are some of the more notable changes. Last week, my office sent a press release to rail labor on some of these topics. Hopefully this message will include more detailed information for you and your members.
Field Service Operations:
Last week, my office sent a press release to rail labor advising that field offices are closed to the public. Whenever possible, agency personnel, including field personnel, are working from home. Unfortunately, we expect delays with processing incoming work because as you know, much of our work is not automated. We receive applications and claims for both unemployment and sickness by mail and by fax. Because of safety concerns surrounding COVID-19, staff is only going into the office or to the post office on Tuesdays and Thursdays.
Because of our concern regarding the delay in processing paper applications and claims, we are encouraging railroaders to set up myRRB.gov accounts on the RRB.gov website. I have attached information about all the services available through that account. Please feel free to share with your memberships. With that account, an employee can file for and submit claims for unemployment. A railroader can also submit sickness claims, though not the initial application. Usually, an initial sickness application is either mailed or faxed in from the employee’s doctor’s office to the agency at (312) 751-7185. If an employee is unable to do that or if delays persist, please contact my office at (312) 751-4905 and my staff will assist you in any way they can.
We have received questions regarding the continuation of retirement and disability benefits. Fortunately, that is overall an automated process and we do not expect any delays in paying those already established benefits. In addition, our actuary has assured us that the rail trust funds are well-positioned to pay all retirement, survivor, unemployment and sickness benefits. We are actively addressing questions regarding benefits payable under the RUIA and special circumstances raised by COVID-19.
Related to legislative changes, there have been congressional proposals to remove sequestration from unemployment and sickness benefits; waive the statutory 7-day waiting period for unemployment and sickness benefits; increase the amount of unemployment benefits; and extend the duration of unemployment benefits. There have also been proposals to increase the RRB’s administrative budget in order to account for increased costs related to COVID-19. My staff, along with the agency’s Office of Legislative Affairs and other agency subject matter experts, have worked with congressional staffers as well as your unions to convey the information needed in order for the legislation to move forward.
These are trying times and the agency is doing its best to continue to pay the right people, the right benefits, at the right time. Things are changing quickly and I will update you in the future as the RRB makes adjustments. In the meantime, if you have any questions or problems, I and my staff are always available to assist.
The amounts of compensation subject to Railroad Retirement Tier I and Tier II payroll taxes will increase in 2020, while the tax rates on employers and employees will stay the same. In addition, unemployment insurance contribution rates paid by railroad employers will not include a surcharge for the first time in five years.
Tier I and Medicare Tax — The Railroad Retirement Tier I payroll tax rate on covered rail employers and employees for 2020 remains at 7.65 percent. The Railroad Retirement Tier I tax rate is the same as the Social Security tax, and for withholding and reporting purposes is divided into 6.20 percent for retirement and 1.45 percent for Medicare hospital insurance. The maximum amount of an employee’s earnings subject to the 6.20 percent rate increases from $132,900 to $137,700 in 2020, with no maximum on earnings subject to the 1.45 percent Medicare rate.
An additional Medicare payroll tax of 0.9 percent applies to an individual’s income exceeding $200,000, or $250,000 for a married couple filing a joint tax return. While employers will begin withholding the additional Medicare tax as soon as an individual’s wages exceed the $200,000 threshold, the final amount owed or refunded will be calculated as part of the individual’s Federal income tax return.
Tier II Tax — The Railroad Retirement Tier II tax rates in 2020 will remain at 4.9 percent for employees and 13.1 percent for employers. The maximum amount of earnings subject to Railroad Retirement Tier II taxes in 2020 will increase from $98,700 to $102,300. Tier II tax rates are based on an average account benefits ratio reflecting Railroad Retirement fund levels. Depending on this ratio, the Tier II tax rate for employees can be between 0 percent and 4.9 percent, while the Tier II rate for employers can range between 8.2 percent and 22.1 percent.
Unemployment Insurance Contributions — Employers, but not employees, pay railroad unemployment insurance contributions, which are experience-rated by employer. The Railroad Unemployment Insurance Act also provides for a surcharge in the event the Railroad Unemployment Insurance Account balance falls below an indexed threshold amount. The accrual balance of the Railroad Unemployment Insurance Account was $157.5 million on June 30, 2019. Since the balance was more than the indexed threshold of $152.3 million, there will not be a surcharge added to the basic contribution rates for 2020. Previously, the rates have included a 1.5 percent surcharge every year since 2015.
As a result, the unemployment insurance contribution rates on railroad employers in 2020 will range from the minimum rate of 0.65 percent to the maximum of 12 percent on monthly compensation up to $1,655, an increase from $1,605 in 2019.
In 2020, the minimum rate of 0.65 percent will apply to about 84 percent of covered employers, with almost 5 percent paying the maximum rate of 12 percent. New employers will pay an unemployment insurance contribution rate of 3.10 percent, which represents the average rate paid by all employers in the period 2016-2018.
Most Railroad Retirement annuities, like Social Security benefits, will increase in January 2020 due to a rise in the Consumer Price Index (CPI) from the third quarter of 2018 to the corresponding period of the current year.
Cost-of-living increases are calculated in both the Tier I and Tier II benefits included in a Railroad Retirement annuity. Tier I benefits, like Social Security benefits, will increase by 1.6 percent, which is the percentage of the CPI rise. Tier II benefits will go up by 0.5 percent, which is 32.5 percent of the CPI increase. Vested dual benefit payments and supplemental annuities also paid by the Railroad Retirement Board (RRB) are not adjusted for the CPI change.
In January 2020, the average regular Railroad Retirement employee annuity will increase $36 a month to $2,875 and the average of combined benefits for an employee and spouse will increase $50 a month to $4,174. For those aged widow(er)s eligible for an increase, the average annuity will increase $20 a month to $1,428. However, widow(er)s whose annuities are being paid under the Railroad Retirement and Survivors’ Improvement Act of 2001 will not receive annual cost-of-living adjustments until their annuity amount is exceeded by the amount that would have been paid under prior law, counting all interim cost-of-living increases otherwise payable. Almost 52 percent of the widow(er)s on the RRB’s rolls are being paid under the 2001 law.
If a Railroad Retirement or survivor annuitant also receives a Social Security or other government benefit, such as a public service pension, any cost-of-living increase in that benefit will offset the increased Tier I benefit. However, Tier II cost-of-living increases are not reduced by increases in other government benefits. If a widow(er) whose annuity is being paid under the 2001 law is also entitled to an increased government benefit, her or his Railroad Retirement survivor annuity may decrease.
However, the total amount of the combined Railroad Retirement widow(er)’s annuity and other government benefits will not be less than the total payable before the cost-of-living increase and any increase in Medicare premium deductions.
The cost-of-living increase follows a Tier I increase of 2.8 percent in January 2019, which had been the largest in seven years. The Centers for Medicare and Medicaid Services will announce Medicare Part B premiums for 2020 later this year, and this information is available at www.medicare.gov.
In late December the RRB will mail notices to all annuitants providing a breakdown of the annuity rates payable to them in January 2020.
Starting October 1, 2019, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 5.9%, down from the current 6.2% reduction, as required by law.
The adjusted reduction is based on revised projections of benefit claims and payments under the Railroad Unemployment Insurance Act. It will remain in effect through September 30, 2020, the end of the fiscal year. Reductions in future fiscal years, should they occur, will be calculated based on applicable law.
The current daily benefit rate is $78.00, so the 5.9% reduction in railroad unemployment and sickness benefits will reduce the maximum amount payable in a two-week period with 10 days of unemployment from $780.00 to $733.98.
Certain railroad sickness benefits are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65%. Applying the 5.9% reduction to these sickness benefits will result in a maximum two-week total of $677.83.
Under the Budget Control Act of 2011, and a subsequent sequestration order to implement mandated cuts, railroad unemployment and sickness insurance benefits are reduced by a set percentage, which is subject to revision at the beginning of each fiscal year.
When sequestration first took effect in March 2013, railroad unemployment and sickness benefits were subject to a 9.2% reduction. This amount was then adjusted to 7.2% in October 2013, 7.3% in October 2014, 6.8% in October 2015, 6.9% in October 2016, 6.6% in October 2017, and 6.2% in October 2018, as required by law.
In fiscal year 2018, the RRB paid about $12.7 billion in retirement and survivor benefits to about 540,000 beneficiaries, and net unemployment-sickness benefits of about $92.6 million to approximately 24,000 claimants.
Designed for railroad employees and spouses planning to retire within five years, the pre-retirement seminars offered by the Railroad Retirement Board are designed to familiarize attendees with the retirement benefits available to them, and also guide them through the application process. Sponsored by the Office of the Labor Member, seminars are held at a number of locations annually. Registration is required to attend.
RRB field service representatives conduct each pre-retirement seminar using a slide presentation covering the various benefits provided retired rail workers and their families. Attendees receive a program booklet of this presentation with detailed side notes and fact sheets. In addition to the program booklet, seminar attendees receive a retirement kit full of informational handouts and other helpful materials. Online and downloadable versions of items included with seminar kits are available on the RRB’s Educational Materials webpage.
Schedule and registration
Registration is required to ensure accommodations and materials for all attendees.
Unless otherwise noted, pre-retirement seminars begin at 8:30 a.m. and are held over the course of 4 hours. (Doors open for attendees 30 minutes before the seminar start time.)
Security screening is required for seminars hosted inside any Federal buildings. Bring a current, valid photo ID (issued by State/Federal Government); no weapons permitted.
Parking fee for seminars marked with *.
Attendees are encouraged to bring original records (or certified copies) of documents required in order to file a railroad retirement application (such as proof of age, marriage or military service), along with an additional copy of each item to leave with field service staff.
Please let the RRB know if you sign up for a seminar and become unable to attend.
Can’t join the RRB for a seminar, but still interested in learning about the railroad retirement program and application process? Please contact the RRB via Field Office Locatoror by calling toll-free (1-877-772-5772) for pre-retirement information or to schedule an appointment for individual retirement counseling at your local RRB field office.
The U.S. Railroad Retirement Board (RRB) has named Crystal Coleman as its director of programs.
As a result, Ms. Coleman will be responsible for overseeing all operations to process and pay benefits administered by the agency. She will also be a member of the RRB’s executive committee, which is responsible for day-to-day operations of the agency and for making policy recommendations to the three-member board.
At the time of her appointment, Ms. Coleman had served as the RRB’s deputy director of programs since November 2015. In that position, she served as the agency’s second in command on all program-related issues and operations to Dr. Michael A. Tyllas, who retired in December 2018 after more than 37 years of federal service.
Prior to her appointment as deputy director of programs, Ms. Coleman was the deputy regional director of the employee benefits security administration (EBSA) in Dallas. As the number-two official in the regional office, she supervised senior staff and assisted in planning, developing, implementing and evaluating EBSA programs in the region. An agency within the U.S. Department of Labor, the EBSA assures the security of retirement, health and other workplace-related benefits of workers and their families.
An EBSA employee for 24 years, Ms. Coleman previously served as both a supervisory and senior investigator in both Chicago and Los Angeles, as well as the Senior Advisor for Criminal Enforcement in Chicago, before assuming the deputy regional director position in October 2013. Before entering Federal service in 1991, she spent about 18 months as an economic development coordinator for the City of Chicago.
A native and current resident of Chicago, Ms. Coleman attended Illinois State University in Normal, Ill., receiving a bachelor’s degree in communications (1982), and subsequently earned a master’s degree in business administration (1991) from Roosevelt University in Chicago.
The Railroad Retirement Board (RRB) administers the Railroad Unemployment Insurance Act, which provides two kinds of benefits for qualified railroaders: unemployment benefits for those who become unemployed but are ready, willing and able to work; and sickness benefits for those who are unable to work because of sickness or injury. Sickness benefits are also payable to female rail workers for periods of time when they are unable to work because of health conditions related to pregnancy, miscarriage or childbirth. A new benefit year begins each July 1.
The following questions and answers describe these benefits, their eligibility requirements and how to claim them.
1. What are the eligibility requirements for railroad unemployment and sickness benefits in July 2019?
To qualify for normal railroad unemployment or sickness benefits, an employee must have had railroad earnings of at least $3,900 in the calendar year 2018, counting no more than $1,560 for any month. Those who were first employed in the rail industry in 2018 must also have at least five months of creditable railroad service in 2018.
Under certain conditions, employees who do not qualify on the basis of their 2018 earnings may still be able to receive benefits in the new benefit year. Employees with at least 10 years of service (120 or more months of service) who received normal benefits in the benefit year ending June 30, 2019, may be eligible for extended benefits, and employees with at least 10 years of service (120 or more months of service) might qualify for accelerated benefits if they have rail earnings of at least $4,012.50 in 2019, not counting earnings of more than $1,605 a month.
In order to qualify for extended unemployment benefits, a claimant must not have voluntarily quit work without good cause and not have voluntarily retired. To qualify for extended sickness benefits, a claimant must not have voluntarily retired and must be under age 65.
To be eligible for accelerated benefits, a claimant must have 14 or more consecutive days of unemployment or sickness; not have voluntarily retired or, if claiming unemployment benefits, quit work without good cause; and, when claiming sickness benefits, be under age 65.
2. What is the daily benefit rate payable in the new benefit year beginning July 1, 2019?
Almost all employees will qualify for the maximum daily benefit rate of $78. Benefits are generally payable for the number of days of unemployment or sickness over four in 14-day claim periods, which yields $780 for each two full weeks of unemployment or sickness. Sickness benefits payable for the first 6 months after the month the employee last worked are subject to tier I railroad retirement payroll taxes, unless benefits are being paid for an on-the-job injury. (Claimants should be aware that as a result of a sequestration order under the Budget Control Act of 2011, the RRB will reduce unemployment and sickness benefits by 6.2 percent through September 30, 2019. As a result, the total maximum amount payable in a 2-week period covering 10 days of unemployment or sickness will be $731.64. The maximum amount payable for sickness benefits subject to tier I payroll taxes of 7.65 percent will be $675.67 over two weeks. Future reductions, should they occur, will be calculated based on applicable law.)
3. How long are these benefits payable?
Normal unemployment or sickness benefits are each payable for up to 130 days (26 weeks) in a benefit year. The total amount of each kind of benefit which may be paid in the new benefit year cannot exceed the employee’s railroad earnings in calendar year 2018, counting earnings up to $2,015 per month.
If normal benefits are exhausted, extended benefits are payable for up to 65 days (during seven consecutive 14-day claim periods) to employees with at least 10 years of service (120 or more cumulative service months).
4. What is the waiting-period requirement for unemployment and sickness benefits?
Benefits are normally paid for the number of days of unemployment or sickness over four in 14-day registration periods. Initial sickness claims must also begin with four consecutive days of sickness. However, during the first 14-day claim period in a benefit year, benefits are only payable for each day of unemployment or sickness in excess of seven which, in effect, provides a one-week waiting period. (If an employee has at least five days of unemployment or five days of sickness in a 14-day period, he or she should still file for benefits.) Separate waiting periods are required for unemployment and sickness benefits. However, only one seven-day waiting period is generally required during any period of continuing unemployment or sickness, even if that period continues into a subsequent benefit year.
5. Are there special waiting-period requirements if unemployment is due to a strike?
If a worker is unemployed because of a strike conducted in accordance with the Railway Labor Act, benefits are not payable for days of unemployment during the first 14 days of the strike, but benefits are payable during subsequent 14-day periods.
If a strike is in violation of the Railway Labor Act, unemployment benefits are not payable to employees participating in the strike. However, employees not among those participating in such an illegal strike, but who are unemployed on account of the strike, may receive benefits after the first two weeks of the strike.
While a benefit year waiting period cannot count toward a strike waiting period, the 14-day strike waiting period may count as the benefit year waiting period if a worker subsequently becomes unemployed for reasons other than a strike later in the benefit year.
6. Can employees in train and engine service receive unemployment benefits for days when they are standing by or laying over between scheduled runs?
No, not if they are standing by or laying over between regularly assigned trips or they missed a turn in pool service.
7. Can extra-board employees receive unemployment benefits between jobs?
Yes, but only if the miles and/or hours they actually worked were less than the equivalent of normal full-time work in their class of service during the 14-day claim period. Entitlement to benefits would also depend on the employee’s earnings.
8. How would an employee’s earnings in a claim period affect his or her eligibility for unemployment benefits?
If a claimant’s earnings for days worked, and/or days of vacation, paid leave or other leave in a 14-day registration period are more than a certain indexed amount, no benefits are payable for any days of unemployment in that period. That registration period, however, can be used to satisfy the waiting period.
Earnings include pay from railroad and nonrailroad work, as well as part-time work and self-employment. Earnings also include pay that an employee would have earned except for failure to mark up or report for duty on time, or because he or she missed a turn in pool service or was otherwise not ready or willing to work. For the benefit year that begins July 2019, the amount is $1,560, which corresponds to the base year monthly compensation amount used in determining eligibility for benefits in each year. Also, even if an earnings test applies on the first claim in a benefit year, this will not prevent the first claim from satisfying the waiting period in a benefit year.
On the other hand, earnings of no more than $15 a day from work which is substantially less than full-time and not inconsistent with the holding of normal full-time employment may be considered subsidiary remuneration and may not prevent payment of any days in a claim. However, a claimant must be sure to report all full and part-time work on each claim, regardless of the amount of earnings, so the RRB can determine if the work affects benefits.
9. How does a person apply for and claim unemployment benefits?
Employees can apply for and claim unemployment benefits online or by mail.
Individuals who have established an account at RRB.gov can log in to conveniently file their applications and their biweekly claims online. Employees are encouraged to establish their accounts while still working to expedite the filing process for future unemployment benefits, and for access to other online services.
To apply by mail, claimants must obtain an Application for Unemployment Benefits (Form UI-1) from RRB.gov, any RRB field office, their labor organization or employer. The completed application should be mailed to the local RRB office as soon as possible and, in any case, must be filed within 30 days from the date the claimant became unemployed or the first day for which he or she wishes to claim benefits. Benefits may be lost if the application is filed late. Claimants who know in advance that they will be filing an unemployment application or claim late should include a signed statement explaining why they are unable to meet the required time frame.
The local RRB field office reviews the completed application, whether it was submitted online or by mail, and notifies the claimant’s current railroad employer, and base-year employer, if different. The employer has the right to provide information about the benefit application.
After processing the application, biweekly claim forms are made available on the RRB’s website and are mailed to the claimant, as long as he or she remains unemployed and eligible for benefits. Claim forms should be signed and sent on or after the last day of the claim. This can be done online or by mail. The completed claim must be received by the RRB within 15 days of the end of the claim period, or within 15 days of the date the claim form was made available online or mailed to the claimant, whichever is later. Claimants must not file both an online and a paper claim form for the same period(s). Once an individual submits a claim online, all subsequent claim forms will be made available online only, and will no longer be mailed.
Only one application needs to be filed during a benefit year, even if a claimant becomes unemployed more than once. However, a claimant must, in such a case, request a claim form from the RRB within 30 days of the first day for which he or she wants to resume claiming benefits. These claims may then be filed online or by mail.
10. How does a person apply for and claim sickness benefits?
An Application for Sickness Benefits (SI-1a) can be obtained from RRB.gov, any RRB field office, railroad labor organizations or railroad employers. An application including a doctor’s statement of sickness is required at the beginning of each period of continuing sickness for which benefits are claimed. Claimants should make a special effort to have the doctor’s statement of sickness completed promptly since claims cannot be paid without it.
The RRB suggests that employees keep an application for sickness benefits on hand, and that family members know where the form is kept and how to use it. If an employee becomes unable to work because of sickness or injury, the employee should complete the application and then have his or her doctor complete the Statement of Sickness (SI-1b). If a claimant receives sickness benefits for an injury or illness for which he or she is paid damages, it is important to be aware that the RRB is entitled to reimbursement of either the amount of the benefits paid for the injury or illness, or the net amount of the settlement, after deducting the claimant’s gross medical, hospital and legal expenses, whichever is less.
If the employee is too sick to complete the application, someone else may do so. In such cases, a family member should also complete a Statement of Authority to Act for Employee (Form SI-10), which accompanies the statement of sickness.
After completion, the forms should be mailed to the RRB’s headquarters in Chicago within 10 days from when the employee became sick or injured. However, applications received after 10 days but within 30 days of the first day for which an employee wishes to claim benefits are generally considered timely filed if there is a good reason for the delay. Upon receipt, the RRB will process the application and determine if the employee is eligible for sickness benefits.
After processing the application, the RRB provides biweekly claims to the qualified employee as long as he or she is eligible for benefits and remains unable to work due to illness or injury. Biweekly claims are made available for completion online (by those with anaccount at RRB.gov) and mailed to the claimant. Completed claim forms must be received at the RRB within 30 days of the last day of the claim period, or within 30 days of the date the claim form was made available online or mailed to the claimant, whichever is later. Benefits may be lost if an application or claim is filed late. Claimants who know in advance that they will be filing a sickness application or claim late should include a signed statement explaining why they are unable to meet the required time frame.
As with claims for unemployment benefits, once a claim for sickness benefits is submitted online, all subsequent claims will be made available online only, and will no longer be mailed.
Claimants are reminded that while claim forms for sickness benefits can be submitted online, applicationsmust bemailed to the RRB. Statements of sickness may be mailed with the sickness application or faxed directly from the doctor’s office to the RRB at 312-751-7185. Faxes must include a cover sheet from the doctor’s office.
11. Is a claimant’s employer notified each time a biweekly claim for unemployment or sickness benefits is filed?
The Railroad Unemployment Insurance Act requires the RRB to notify the claimant’s base-year employer each time a claim for benefits is filed. That employer has the right to submit information relevant to the claim before the RRB makes an initial determination on the claim. In addition, if a claimant’s base-year employer is not his or her current employer, the claimant’s current employer is also notified. The RRB must also notify the claimant’s base-year employer each time benefits are paid to a claimant. The base-year employer may protest the decision to pay benefits. Such a protest does not prevent the timely payment of benefits. However, a claimant may be required to repay benefits if the employer’s protest is ultimately successful. The employer also has the right to appeal an unfavorable decision to the RRB’s Bureau of Hearings and Appeals.
The RRB also conducts checks with other Federal agencies and all 50 states, as well as the District of Columbia and Puerto Rico, to detect fraudulent benefit claims, and it checks with physicians to verify the accuracy of medical statements supporting sickness benefit claims.
12. How long does it take to receive payment?
Under the RRB’s Customer Service Plan, if a claimant files an application for unemployment or sickness benefits, the RRB will release a claim form or a denial letter within 10 days of receiving his or her application. If a claim for subsequent biweekly unemployment or sickness benefits is filed, the RRB will certify a payment or release a denial letter within 10 days of the date the RRB receives the claim form. If the claimant is entitled to benefits, his or her benefits will generally be paid within one week of that decision.
However, some claims for benefits may take longer to handle than others if they are more complex, or if an RRB office has to get information from other people or organizations. If a claimant does not receive a decision notice or payment within the specified time period, he or she may expect an explanation for the delay and an estimate of the time required to make a decision.
Claimants who think an RRB office made the wrong decision about their benefits have the right to ask for a review and to appeal. They will be notified of these rights each time an unfavorable decision is made on their claims.
13. How are payments made?
Railroad unemployment and sickness insurance benefits are paid by direct deposit. With direct deposit, benefit payments are made electronically to an employee’s bank, savings and loan, credit union or other financial institution. New applicants for unemployment and sickness benefits will be asked to provide information needed for direct deposit enrollment.
14. How can claimants get more information on their railroad unemployment or sickness claims?
Claimants with online accounts at RRB.gov can log in to view their individual railroad unemployment insurance account statement. This statement displays the type and amount of the claimant’s last five benefit payments, the claim period for which the payments were made, and the dates that the payments were approved. Individuals can also confirm the RRB’s receipt of applications and claims.
In addition, claimants can call the agency toll-free at 1-877-772-5772 to access the RRB’s automated HelpLine service which provides information about the status of unemployment and sickness claims or payments 24 hours a day, 7 days a week. Individuals with questions about unemployment or sickness benefits, or who need information about their specific claims and benefit payments, can also contact an RRB office by calling the toll-free number.
Persons can find the address of the RRB office serving their area by visiting RRB.gov and clicking on Field Office Locator, or by calling the RRB’s HelpLine service and selecting the appropriate option from the automated menu. Most RRB offices are open to the public on weekdays from 9:00 a.m. to 3:30 p.m., except on Wednesdays when offices are open from 9:00 a.m. to 12:00 p.m. All RRB offices are closed on Federal holidays.
Each year, the U.S. Railroad Retirement Board (RRB) prepares a “Certificate of Service Months and Compensation” (Form BA-6) for every railroad employee with creditable railroad compensation in the previous calendar year. The RRB will mail the forms to employees during the first half of June. While every effort has been made to maintain current addresses for all active railroad employees, anyone with compensation reported in 2018 who has not received Form BA-6 by July 1, or needs a replacement, should contact an RRB field office by calling the agency toll-free at 1-877-772-5772.
Form BA-6 provides employees with a record of their Railroad Retirement service and compensation, and the information shown is used to determine whether an employee qualifies for benefits and the amount of those benefits. It is important that employees review their Form BA-6 to see whether their own records of service months and creditable compensation agree with the figures shown on the form.
In checking the 2018 compensation total, employees should be aware that only annual earnings up to $128,400 were creditable for Railroad Retirement purposes in that year, and that $128,400 is the maximum amount shown on the form. To assist employees in reviewing their service credits, the form also shows service credited on a month-by-month basis for 2017, 2016, and 2015, when the creditable compensation maximum was $127,200 for 2017 and $118,500 for both 2016 and 2015. The form also identifies the employer(s) reporting the employee’s 2018 service and compensation.
Besides the months of service reported by employers, Form BA-6 shows the number of any additional service months deemed by the RRB. Deemed service months may be credited under certain conditions for an employee who did not work in all 12 months of the year, but had creditable Tier II earnings exceeding monthly prorations of the creditable Tier II earnings maximum for the year. However, the total of reported and deemed service months may never exceed 12 in a calendar year, and no service months, reported or deemed, can be credited after retirement, severance, resignation, discharge or death.
The form also indicates the number of months of verified military service creditable as service under the Railroad Retirement Act, if the service was previously reported to the RRB. Employees are encouraged to submit proofs of age and/or military service in advance of their actual retirement. Filing these proofs with the RRB in advance will streamline the benefit application process and prevent payment delays.
For employees who received separation or severance payments, the section of the form designated “Taxable Amount” shows the amounts reported by employers of any separation allowance or severance payments that were subject to Railroad Retirement Tier II taxes. This information is shown on the form because a lump sum, approximating part or all of the Tier II taxes deducted from such payments made after 1984 which did not provide additional Tier II credits, may be payable by the RRB upon retirement to qualified employees or to survivors if the employee dies before retirement. The amount of an allowance included in an employee’s regular compensation is shown under “Compensation Amount.”
Form BA-6 also shows, in the section designated “Employee Contributions,” the cumulative amount of Tier II Railroad Retirement payroll taxes paid by the employee over and above Tier I Social Security equivalent payroll taxes. While the RRB does not collect or maintain payroll tax information, the agency computes this amount from its compensation records in order to advise retired employees of their payroll tax contributions for federal income tax purposes.
Employees should check their name, address, birth date and sex shown at the top of the form. If the form shows the birth date as 99-9999 and the gender code is “U” (for unknown), it means the RRB is verifying his or her Social Security number with the Social Security Administration. Otherwise, if the personal identifying information is incorrect or incomplete (generally a case where the employee’s surname has more than 10 letters and the form shows only the first 10 letters) or the address is not correct, the employee should contact an RRB field office. The field office can then correct the RRB’s records.
Any other discrepancies in Form BA-6 should be reported promptly in writing to:
Protest Unit-CESC U.S. Railroad Retirement Board 844 North Rush Street Chicago, Illinois 60611-1275
The employee must include his or her Social Security number in the letter. Form BA-6 also explains what other documentation and information should be provided. The law limits to four years the period during which corrections to service and compensation amounts can be made.
For most employees, the address of the RRB office serving their area is provided on the form along with the RRB’s nationwide toll-free number (1-877-772-5772). RRB field offices are open to the public on weekdays from 9:00 a.m. to 3:30 p.m., except on Wednesdays when offices are open from 9:00 a.m. to 12:00 p.m. RRB offices are closed on Federal holidays.