General Discussions

Missing Railroad Retirement Credits

In June of each year, the Railroad Retirement Board sends out a form that shows all of your retirement credits. The form is a BA-6 and mine was in the mail today. Railroad Employees need to look the form over and check to see if any months are missing in the past 4 years.

If you make over $25, in any month, from either the Railroad or the Union, you are entitled to a Railroad Retirement credit. The UP has been recording what you make on the last half of one month and the first half of the next month and reporting it as one month. What that means is, that if you work the last half of July and the first half of August, the UP is recording that you had income in the month of August. Result, you lose a monthly RRB credit for July that YOU deserve!!

I first noticed this several years ago, when I had a new hire class that started class in the last week of August. I told the group of fifteen, that they would be the last new hire class, of that year, that could qualify for Railroad Unemployment for the next year. One of the qualifications for RR Unemployment and sickness benefits is to have 5 months of compensation, in your first year working on the Railroad, to qualify for the next year.

That new hire class was furloughed the next July 1st, so I reminded the group to start applying for their Unemployment. The RRB declined all of their claims. The RRB has a form that can be sent in to recover any missing months with documentation, such as a work history/or and pay stub. In these new hires situation, it meant the difference between getting 6 months of Unemployment at $400 per week or receiving nothing.

Many who are off work with a sickness or are furloughed can miss months as well. It a person comes back to work the 2nd half of the month, they may miss a credit!!!

Fill out the RRB Form G-70 (Protest of Record of Service Months and Compensation). You can print out a form from www.rrb.gov/pdf/g70.pdf. The form is very simple and self explanatory. Add your pay stub / work history and send to the nearest RRB office, or the Western Region RRB Office:

RRB

Wallace F. Bennett Federal Office Building

125 South State Street, Suite 1205

Salt Lake City, UT 84138-1137

-----------------------------------

It takes 60 Months of Monthly credits to be vested in the Railroad Retirement system. It takes 240 months to be able to get a Job Specific Disability. It takes 360 Months to qualify for a full retirement at age 60 with no age reduction.

What is a Railroad Retirement Credit worth?

Tier 1 is figured the same as Social Security. It is based on your best 35 years of your earnings. It does not matter where the income comes from, Railroad, delivering papers etc. All money earned in your best 35 years is indexed to todays income, then divided by 420 to give an average monthly income. All calculations come from this number. If you have 35 maximum compensation years, then the monthly benefit would be $3,113 this year. Any years you make less than the maximum compensation will reduce this number.

Tier 2 is based on the amount of Months of service you have. Your best 5 years of RR earnings is used to find an amount that each monthly credit is worth. There is a formula to figure this amount, but I like simple. I recently received an estimate of benefits from the RRB. I took how much my estimated Tier 2 was to be and divided it by the amount of monthly credits that I had and came out with $4.50 per Credit month. EX: 400 Months X $4.30 = $1800. Again, any years that you make less than the maximum compensation will make this monthly multiplier smaller.

If a credit is paid at a maximum of $4.50 per credit, actuarial tables tell us that if a person retires at 60, the average amount of time receiving a Retirement is over 20 years. So say 240 months X $4.50 = $1,080 paid for each credit!!!

Your Spouse gets 45% of your tier 2 Benefit. So $1080 X .45 = $486.

1 Railroad Retirement monthly credit is worth $1,500 over your retired lifetime. This is in today's dollars. As time goes on, this amount will increase as our RRB cost of living increases. If the UP misses 7 of your credits during your RR career, that would be a loss of over $10,000 of Retirement!!!

Please check your BA-6 and make sure you are getting all the credit you deserve. IT IS YOUR MONEY!!!

Fraternally Yours,

.

Larry J. Romine

Reliable Retirement Solutions

541-910-4568