Prepared by Public
Affairs 312-751-4777 Under
the Railroad Retirement Act, a “current connection with the railroad industry” is one of the eligibility requirements
for occupational disability annuities and supplemental annuities, and is one of the criteria for determining whether the Railroad
Retirement Board (RRB) or the Social Security Administration has jurisdiction over the payment of monthly benefits to survivors
of a railroad employee.
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?
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 death will meet the current connection requirement for the purpose of paying survivor benefits.
However, if an employee does not qualify on this basis, but has 12 months’ 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 in the period between the end of the last 30-month period including 12
months of railroad service and the month the annuity begins, or the month of death if earlier.
A current connection
established at the time the railroad retirement annuity begins is permanent. The employee never loses it no matter what kind
of work is performed thereafter.
2. Can nonrailroad work before retirement
break a former railroad employee’s current connection?
Full or part-time work for a nonrailroad employer
in an interim between the end of the last 30-month period including 12 months of railroad service and the beginning date of
an employee’s annuity, or the date of death if earlier, can break a current connection.
Self-employment in
an unincorporated business will not break a current connection. However, if the business is incorporated, compensated service
may break a current connection.
Federal employment with the Department of Transportation, the National Transportation
Safety Board, the Surface Transportation Board (the former Interstate Commerce Commission), the National Mediation Board,
the Railroad Retirement Board, or the 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, non-creditable railroad service in Canada for a Canadian railroad will neither break nor preserve a current connection.
3. Are there any exceptions to these normal procedures for determining a current
connection?
A current connection can be maintained for purposes of supplemental and survivor annuities if
the employee completed 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 to return to work in the same class or craft as his or her
most recent railroad service, regardless of the location of the work offered.
If all of these requirements are
met, an employee’s current connection may not be broken, 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 became
effective October 1, 1981, but only for employees still living on that date who left the rail industry on or after October
1, 1975, or who were on leave of absence, on furlough, or absent due to injury on October 1, 1975.
4.
Would the acceptance of a buy-out have any effect on determining whether an employee could maintain a current connection under
this exception provision?
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 does or
does not receive a buy-out.
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 provision.
5.
An employee with 25 years of service is offered a buy-out with the option of either taking payment in a single lump sum or
of receiving monthly payments until retirement age. Could the method of payment affect the employee’s current connection
under the exception provision?
The employee must always relinquish job rights in order to accept the buy-out,
regardless of whether it is paid in a lump sum or in monthly payments. Neither payment option would extend the 30-month period.
The determining factor for the exception provision to apply when a buy-out is paid is not the payment option. It is whether
or not the employee stopped working involuntarily.
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 the
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
in the calculation of the railroad retirement annuity.
7. Could the exception
provision apply in cases where an employee has 25 years of railroad retirement coverage and a company reorganization results
in the employee’s job being placed under social security coverage?
The exception provision has been
considered applicable by the RRB 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 25-year employees have been deemed to have a current connection for purposes of
supplemental and survivor annuities.
8. Where can a person get more specific
information on the current connection requirement?
Railroaders and former employees can contact the nearest
field office of the RRB for information on how their eligibility
for benefits is affected by this requirement. Most RRB field offices are open to the public from 9:00 a.m. to 3:30 p.m., Monday
through Friday, except on Federal holidays. |
