A current connection with the railroad industry is one of the eligibility requirements under the Railroad Retirement Act (RRA) for both the occupational disability and supplemental annuities payable by the Railroad Retirement Board (RRB). (A railroad employee does not need a current connection to be eligible for any other type of railroad retirement benefit or for purposes of Medicare coverage.) A current connection is also a factor in determining whether the RRB or the Social Security Administration will pay monthly survivor benefits, which are generally larger when paid by the RRB.
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?
A current connection determination is made when an employee files for a railroad retirement annuity. (If an employee dies before applying for an annuity, it is made when an applicant files for a survivor annuity.) Once a current connection is established at the time the railroad retirement annuity begins, an employee never loses it, no matter what kind of work is performed thereafter.
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 the month of death will meet the current connection requirement for the purpose of paying survivor benefits.
However, if an employee does not qualify on the basis above, but has 12 months of railroad 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 after the end of the last 30-month period which included 12 months of railroad service, and before the month the annuity begins or the month of death if earlier.
2. Can nonrailroad work before retirement break a former railroad employee's current connection?
Yes. Full or part-time work for a nonrailroad employer in the interval between the end of the last 30-month period including 12 months of railroad service and the month an employee’s annuity begins, or the month of death if earlier, can break a current connection, even with minimal earnings.
Self-employment in an unincorporated business will not break a current connection. However, if the business is incorporated the individual is considered an employee of the corporation, and such self-employment can break a current connection. All self-employment will be reviewed to determine if it meets the RRA’s standards for maintaining a current connection.
Federal employment with the Department of Transportation, National Transportation Safety Board, Surface Transportation Board, National Mediation Board, Railroad Retirement Board, U.S. Coast Guard, or 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 Alaska, will not break a current connection. Also, railroad service in Canada for a Canadian railroad will neither break nor preserve a current connection.
3. Is there an exception to these normal procedures for determining a current connection?
Yes. A current connection can also be “deemed” for purposes of a survivor or supplemental annuity, but not for an occupational disability annuity, if the employee completed at least 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 of employment in the same class or craft in the railroad industry regardless of the distance to the new position.
If all the requirements above are met, an employee may be considered to have a “deemed” current connection, 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 was established by amendments to the RRA and became effective October 1, 1981. It only covers employees alive on that date who left the rail industry on or after October 1, 1975.
4. Does accepting a buy-out affect whether an employee can maintain a current connection under the deemed current connection exception?
Generally, 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 receives a buy-out, and would not prevent the maintenance of a current connection.
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.
5. Can the payment method of a buy-out affect whether an employee can maintain a current connection under the deemed current connection exception?
No. The determining factor for whether the exception applies when a buy-out is paid is whether the employee stopped working involuntarily - not the payment option. The employee must always relinquish job rights to accept the buy-out, regardless of whether it is paid in a lump sum or in monthly payments. Neither payment option extends the 30-month period.
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 this type of 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 to calculate the railroad retirement annuity.
7. Could the deemed current connection exception apply in cases where an employee has at least 25 years of railroad retirement coverage and a company reorganization results in the employee’s job being placed under social security coverage?
Yes. The RRB has considered the deemed current connection exception applicable 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 employees have been “deemed” to have a current connection for purposes of receiving supplemental and survivor annuities.
8. Where can individuals get help determining whether they have a current connection?
Persons who need help in determining whether they have a current connection can call an RRB office toll-free at 1-877-772-5772. They can also find the address of the RRB office serving their area by clicking on Field Office Locator or by calling the agency’s toll-free number. RRB field offices currently offer in-person service by appointment. To schedule an appointment, call 1-877-772-5772. Individuals should bring a photo ID when visiting a field office.