Railroad employees and employers pay employment taxes under the Railroad Retirement Tax Act to fund the annuities. See 26 U.S.C. §§ 3201-3241.
Railroad retirement taxes are not held in individual employee accounts. A railroad employee’s length of service and earnings from covered railroad employment determine the amount of the annuity.
Note: The agency cannot establish a separate account for the share of the employee’s future annuity awarded as property to a separated/former spouse.
Important: A court order that divides an employee's account instead of his or her retirement annuity is not valid under the RRA.