May 29, 2020
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The Railroad Retirement Program

The Railroad Retirement Program was established in the 1930s to support former railroad workers in old age. Its aim was to provide retirement, survivor, unemployment and sickness benefits to eligible railroad industry employees and their families.

It is financed by both employers and employees and has a financial interchange with Social Security.

Monthly benefits can be paid to a railroad employee’s widow or widower, children and other dependents if the employee was “insured” under the Railroad Retirement Act at the time of death.

Benefits are calculated as they are for Social Security. Retired employees and spouses who have not attained full Social Security retirement age when they retire may be subject to additional earnings reductions.

There are two tiers of benefits:

Tier I is designed to take the place of Social Security.

Survivor benefits under Tier I require marriage for a minimum of 10 years, at least 10 years of railroad service as well as current affiliation with the railroad upon members’ retirement. If conditions are not met, computation of survivor benefits is transferred to Social Security.

Benefits are based on the deceased employee’s combined railroad retirement and Social Security earnings credits. They are computed using Social Security formulas. The spousal benefit can be reduced if the spouse receives any federal, state or local government pension.

Tier II is the equivalent of a private direct benefit pension. The benefits are calculated using a worker’s average monthly earnings — equal to the benefit the employee would have received at the time the widow or widower starts receiving the survival benefit, minus any applicable age reduction.

Cost-of-living increases are restricted, determined by eligibility.


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