Railroad Retirement Benefits and Your Military Service Time
Can that military service time count towards my Railroad Retirement service time?
By Jenn King
The history of Railroad Benefits dates back to the 1930’s, with the National Railroad Retirement program being established by the 1937 Railroad Retirement and Carriers’ Taxing Act. Our country soon after entered WWII which was followed by the Korean War, then the Vietnam War, and so on. Many Railroaders were drafted or volunteered for service during these wars… would their Railroad Retirement be negatively impacted by that pause in their time working for the Railroad?
The quick answer is NO. But first, let’s dive into who qualifies for that coordination of benefits.
FIRST, you must have been working in Railroad service in the same or preceding year that you are called to service.
SECOND, you must be called to Active Duty when the United States was at war or in a state of national emergency or have served in the Armed Forces involuntarily. The war or national emergency periods are:
August 2, 1990, to date as yet undetermined.
December 16, 1950, through September 14, 1978.
September 8, 1939, through June 14, 1948.
THIRD, only ACTIVE Duty service is considered creditable. You are active duty if you are:
A member of the Armed Forces of the United States (including the U.S. Coast Guard).
Ordered to Federal active duty from any RESERVE component of the uniformed Armed Forces. A reservist’s required annual training is also considered Active Duty time.
State National Guard or State Air National Guard and you are called to FEDERAL active duty by the President or Congress.
Let’s take Tom as an example. Tom is a Locomotive Engineer and was employed with CSX in December 2011. At the time, he was also a member of the National Guard. He and his Guard unit were called in to deploy with another 250,000 National Guard members to support the final crossing of the U.S. troops from Iraq into Kuwait. He was deployed for 24 months overseas. Tom is now retiring from the Railroad. Are those 24 months in Kuwait considered “creditable” service?
YES, Tom’s two years deployed CAN be used to meet his 25-year requirement for a supplemental annuity.
The other benefits that count creditable military service:
Basic 10-year or 5-year service requirement for a regular annuity.
20-year requirement for an occupational disability annuity before age 60.
30-year requirement for early retirement benefits.
Tom will also have completed enough years of qualifying service to be eligible for a military pension as a soldier in the National Guard. He wonders if there is any offset to his Railroad retirement benefits because of his military pension. Tom had heard about other CSX retired employees whose railroad retirement benefits were reduced for a dual entitlement with a government pension and he is hoping that is not the case.
GOOD NEWS for Tom - Railroad retirement employee annuities are always exempt from reduction for military service pensions or payments by the Department of Veterans Affairs.
If you have military service that should be counted as “creditable” service in the calculation of your Railroad Retirement benefits, it is recommended by the Railroad Retirement Board that you file your proof of service in the military well in advance of your retirement date. The information will be stored until you do retire, and you can avoid any unnecessary delays when you are ready to claim those hard-earned Retirement benefits.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Paragon Wealth Strategies, LLC [“Paragon”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Paragon. Please remember that if you are a Paragon client, it remains your responsibility to advise Paragon, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Paragon is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Paragon’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.wealthguards.com. Please Note: Paragon does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Paragon’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Also Note: IF you are a Paragon client, Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.