File an Application

You must file an application for an employee annuity to receive railroad retirement benefits based on your age and service. When you file an application for an age and service annuity, you may select the day you want your annuity to begin. You have two choices: the earliest date permitted by law, or a later date designated by you.

Earliest Annuity Beginning Date Permitted by Law

General

Most applicants select the earliest date permitted by law. This means the RRB will set your annuity beginning date as the very first day it could legally begin. If you choose to select a beginning date yourself, your annuity will begin on that date. However, the date you choose cannot be before the earliest date permitted by law.

The earliest age and service annuity beginning date permitted by law is the latest of the following:

• the day after the actual day you last worked in the railroad industry;
• the day after the last day of a period of Dismissal Allowance, Pay for Time Lost, or some types of Vacation Pay from the railroad industry;
• the first day of the first full month you meet the age requirement;
• the first day of the month in which your application is filed if your annuity is reduced for early retirement; or,
• the first day of the sixth month before the month in which you file your annuity application if your annuity is not reduced for early retirement.

Advance Filing

If Items 1-3 above apply, you can file your age and service application up to three months before the earliest annuity beginning date permitted by law. This will shorten the processing time of your annuity application.

Delayed Filing

Note that, if you delay filing for benefits, when items 4-5 apply, you may lose benefits for some or all of the period before the month in which you file.

Stop Railroad Work

Your age and service annuity cannot begin until you stop all railroad work for pay. Also note that, after the annuity is awarded, payment cannot be made for any month in which you return to work for a railroad employer.

Under advance filing procedure, you may file for an age and service annuity up to three months before your annuity beginning date. If you are still working in railroad service when you file, this means that the date that you certify on your annuity application as the date you will stop railroad service and relinquish rights is a date in the future. If your plans change, you must promptly report any change in your last day of railroad service to the nearest RRB field office. Otherwise, your annuity beginning date could be incorrect, resulting in erroneous payments.

The RRB will release a Form G-88A.1, "Request for Verification of Date Last Carried on Payroll" to your last railroad employer if your date last worked is within 15 months of the date that you file your employee annuity application. This will notify your employer of your claimed date last worked and relinquishment of rights.

The Effects of Unemployment or Sickness Benefits After Your Date Last Worked

Benefits Under the Railroad Unemployment Insurance Act

Provided you meet the eligibility requirements, you may receive benefits under the Railroad Unemployment Insurance Act (RUIA) after your actual date last worked. These benefits have no effect on your annuity beginning date. Your annuity can begin as early as the day after your actual date last worked. However, any RUIA benefits paid to you after your annuity beginning date will be recovered from your annuity accrual.

Sick Pay Under Certain Wage Continuation Plans

Any railroad sick pay, for months after your actual date last worked, that you received under certain wage continuation plans, other than being carried on the payroll at all or part of your regular pay, can be credited to your Tier 1 component for up to six months after your actual date last worked. But, this type of sick pay is not creditable as railroad service months to your Tier 2 component. The sick pay agreement must be established through a company policy or labor agreement.

Check your pay receipt for the period of sickness to determine if this provision applies to you. If the payment was subject to Tier 1, and not Tier 2 tax, the payment is sick pay and has no effect on your annuity beginning date. Your annuity can begin as early as the day after your actual date last worked. Examples of this type of payment are the Trustmark or Provident sick pay plans provided by some railroads.

The Effects of Dismissal Allowance, Pay For Time Lost and Some Types of Vacation Pay

This section concerns payments that you may receive from your employer after the actual date you last performed service for the railroad, but while you were still carried on their payroll. These payments can have an effect on your annuity beginning date.

Definitions

• Dismissal Allowance - Under the Railroad Retirement Act, a Dismissal Allowance consists of monthly compensation payments for a specific period made to an employee who retains an employment relation. This is also often called Wage Continuation or Guaranty Payments. The following, though not exhaustive, is evidence of an employment relation:

 
• For these payments, your resignation and relinquishment of rights are not effective until the end of the period for which the payments are made.
• You may be recalled during the period of the allowance. This can apply even if the agreement between you and the railroad is silent on the question of recall.
• You remain covered under various employee plans.
• You continue to receive employee benefits.
   
• Pay For Time Lost - Pay for Time Lost includes:

 
• Personal Injury Settlements which allocate a portion of the damages as lost compensation for a specific period following the injury; and
• Short Term Disability for a specific period for which you are carried on the payroll and receive all or part of your regular pay while absent from work due to sickness.
   
• Vacation Pay - Some types of Vacation Pay affect your annuity if you are carried on the payroll after your actual date last worked and retain an employment relation.

Information Needed on Annuity Application

When you file your annuity application, these payments should be entered as Pay For Time Lost to prevent an incorrect annuity beginning date from being established. Your annuity cannot begin until the day after the last day for which the Dismissal Allowance, Pay For Time Lost, or Vacation Pay is paid.

When possible, it is sometimes to your advantage to accept the payments in a lump sum. You will not receive as many railroad service months, but this allows your annuity to begin at an earlier date. If you need help in making this decision, the RRB field office will provide you with the necessary annuity estimates.

If you accept a Dismissal Allowance, Pay For Time Lost, or Vacation Pay, you cannot receive RUIA benefits for the period of time for which you receive these benefits. This is true regardless of whether you leave railroad employment voluntarily or involuntarily.

If you receive an injury settlement or Dismissal Allowance, bring any documentation (i.e., a copy of your settlement) with you when you file your employee annuity application. If your case is still pending at that time, advise the RRB field office that you intend to claim a period of Pay for Time Lost after your actual date last worked. They will indicate the type of payment in "Remarks" of your application so the RRB can correctly determine your annuity beginning date.

The Effects of a Separation Allowance After Your Date Last Worked

This section concerns payments that you may receive from your employer after the actual date you last performed service for the railroad, but after you resigned and relinquished your rights to railroad employment. These payments do not have an effect on your annuity beginning date.

Under the Railroad Retirement Act, a Separation Allowance is compensation paid, from railroad operating funds, to an employee who agrees to relinquish job rights to obtain the payment. The payment can be made in a lump sum or in periodic installment payments.

The entire amount of the Separation Allowance is creditable to your Tier 1 component, as of the date you relinquish your rights, up to the annual Tier 1 maximum for that year. However, only the amount up to the Tier 2 monthly maximum times the number of creditable railroad service months for the year in which you relinquish your rights is creditable to your Tier 2 component. No railroad service months are credited to any month after the month in which you relinquish your rights, even if the Separation Allowance is paid in monthly installments.

However, you may be entitled to a Separation Allowance Lump-Sum Payment (SALSA). This amount is a refund of any Tier 2 taxes withheld from Separation Allowance payments when they do not result in railroad service months or Tier 2 credit.

In cases where an employee, with at least 25 years of railroad service, has no option to remain in the service of the railroad employer, the acceptance of a Separation Allowance does not mean that the termination is voluntary. The employee can still qualify for a Deemed Current Connection.

However, if you are offered a job of equal class and craft, regardless of the distance you would have to travel, and you chose a Separation Allowance instead of keeping your seniority rights to railroad employment, you would be considered to have voluntarily terminated railroad employment and would not be protected by the Deemed Current Connection.

If you accept a Separation Allowance, you cannot receive RUIA benefits for roughly the period of time (called the disqualification period) it would have taken to earn the amount of the Separation Allowance, whether the Separation Allowance is paid in a lump-sum or installments.

If you have not obtained new employment by the end of the disqualification period and are still actively seeking work, you may be eligible for unemployment benefits at that time. You must meet all the usual eligibility requirements, including the availability for work requirement. An employee can establish availability for work by demonstrating a willingness to work and making significant efforts to obtain work. In judging your willingness to work, the RRB considers, among other factors, the reason you accepted the Separation Allowance and the extent of your work-seeking efforts during the disqualification period. Therefore, if you are offered a job of equal class and craft and you chose a Separation Allowance instead of keeping your seniority rights to railroad employment, you would be considered to have voluntarily terminated railroad employment and may not qualify for RUIA benefits.

Example - If your salary was $3,000 a month without overtime pay, and your Separation Allowance was $12,000, you would be disqualified from receiving RUIA benefits for approximately four months. You could receive RUIA benefits for the months after the end of the four month disqualification period only if you meet the availability for work requirement.

Note that lump-sum payments from a pension trust fund are not considered to be Separation Allowances under the RRA, even if the railroad or the RUIA refers to them as Separation Allowances. These payments are not subject to Tier 1 or Tier 2 taxes and do not increase the Tier 1 component. However, they can create a disqualification period for benefits under the RUIA and can cause a reduction to supplemental annuity benefits.