Railroad Retirement “Current Connection” – Why is this important?
By Jenn King
The idea of a Current Connection comes up in the Railroad Benefit conversation often. But what does this have to do with your benefits?
FIRST - You need to have qualified for a Current Connection to be insured under the Railroad Retirement Act.
NEXT - If you are “insured” under the Railroad Retirement Act, then you and your family can qualify for the following benefits:
Occupational Disability Annuity
Supplemental Annuity
Survivor Benefits
So, what do you need to establish a Current Connection?
You need to have worked for the Railroad in at least 12 of the 30 consecutive months immediately before the month when your annuity begins OR
You worked in Railroad for 12 months of any period of 30 months, BUT then you DID NOT work in any significant NON-RAILROAD employment between the end of the 30 month period and the month when your annuity begins.
For example, John will retire from CSX this month and his annuity begins next month in August, 2021. He would have to have worked for the railroad for at least 12 months in between February 2019 and July 2021 to establish a Current Connection. He did – great for John as he established his Current Connection!
Now let’s say John’s co-worker, Paul, left CSX as an IT professional after working there 15 years, and then decided to go to work for a local bank as their Head of Information Technology. Paul hadn’t yet started his monthly retirement annuity…AND he’s not going to be able to. Working for the bank broke his Current Connection and therefore he lost his eligibility for the supplemental annuity AND future survivor benefits for his spouse!
Are there any EXCEPTIONS to this???
Yes, a Current Connection can be “deemed” for purposes of the supplemental annuity and survivor annuity (NOT occupational disability), if the employee:
Completed 25 years of railroad service
Was involuntary terminated without fault from his last job in the railroad industry, and
After termination, did not decline an offer to remain or return to employment in the same class or craft as their most recent railroad service.
So in Paul’s case, if he had worked 25 years in the railroad industry instead of 15, he would have a “deemed connection” even if he did go to work for the bank and would still be eligible for his annuity and his spouse would be able to get future survivor annuity benefits.
Now let’s say Paul decided that instead of being an employee of the bank, he was going to do IT contract work for the bank and earn self-employment income in an un-incorporated business. In this case, the self-employment income would NOT BREAK the Current Connection.
Other employment options that would not break the Current Connection?
Federal Employment with the DOT (Department of Transportation), NTSB (National Transportation Safety Board), TSA (Transportation Security Administration), RRB (Railroad Retirement Board), Surface Transportation Board and National Mediation Board.
State Employment with the Alaska Railroad
Canadian Railroad Service
Interestingly, once your Current Connection is established at the time your Railroad Annuity BEGINS, you can never lose your Current Connection no matter what work you do after you begin your annuity.
What benefits does Current Connection status NOT impact?
Eligibility for age and service (including 60/30 benefits) or total disability annuities
Spouse’s eligibility for an annuity while the employee is alive
Having a Current Connection can be critical to your retirement income and even more important to your family when you pass away. Make sure you’ve met the requirements to establish your Current Connection and be careful not to make choices that would break that connection after you leave Railroad service. As always, your best resource to determine if you have met the Current Connection requirement is by contacting your local Railroad Retirement Benefit Field office.
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