Railroad Retirement Board:
Retirement, Survivor, Disability,
Unemployment, and Sickness Benefits
Scott D. Szymendera
Analyst in Disability Policy
September 16, 2014
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Railroad Retirement, Survivor, Disability, Unemployment, and Sickness Benefits

Summary
The Railroad Retirement Board (RRB) administers retirement, survivor, disability,
unemployment, and sickness insurance for railroad workers and their families. Benefits provided
by the RRB are separate from those provided by the Social Security system, although the railroad
and Social Security systems share common features and are linked in several key ways. This
report describes Railroad Retirement Act (RRA) and Railroad Unemployment Insurance Act
(RUIA) eligibility requirements, benefit types and compensation amounts, and program
financing.
During FY2013, the RRB paid $11.6 billion in retirement and survivor benefits to approximately
568,000 beneficiaries. Unemployment and sickness benefits totaling $91 million, including more
than $7 million in temporary extended unemployment benefits, were paid to approximately
26,000 claimants.
Extended unemployment benefits had been available to railroad workers since 2009, but have
expired with no new periods of extended eligibility authorized to begin after December 31, 2013.
In addition, the railroad unemployment system is still feeling the impact of sequestration as
unemployment benefits will continue to be reduced through September 30, 2014.

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Introduction
The Railroad Retirement Board (RRB), an independent federal agency, administers retirement,
survivor, disability, unemployment, and sickness insurance for railroad workers and their families
under the Railroad Retirement Act (RRA) and Railroad Unemployment Insurance Act (RUIA).1
Workers covered by those acts include those employed by railroads engaged in interstate
commerce and related subsidiaries, railroad associations, and railroad labor organizations. During
FY2013, the RRB paid $11.6 billion in retirement and survivor benefits to approximately 568,000
beneficiaries. Unemployment and sickness benefits totaling $91 million, including more than $7
million in temporary extended unemployment benefits, were paid to approximately 26,000
claimants.2 Lifelong railroad workers receive railroad retirement benefits instead of Social
Security benefits; railroad workers with non-railroad experience receive benefits from either
railroad retirement or from Social Security, depending on the length of their railroad service.
Railroad retirement is separate from the Social Security system, but the two programs are closely
coordinated. The first legislation to establish a federal retirement program for railroad workers
passed shortly before the Social Security Act of 1935. The funding of railroad retirement and
Social Security was first linked in 1951, when a financial interchange was established. This
annual exchange of funds places the Social Security trust funds in the same financial position
they would have been in if railroad service had been covered by Social Security. The two
programs’ benefits are also coordinated. In 1974, railroad retirement benefits were divided into
two tiers (discussed below). Tier I benefits are computed using the Social Security benefit
formula based on earnings covered by either program. Tier II benefits are similar to private
pension benefits and are based only on railroad work.
Railroad Retirement, Survivor, and
Disability Benefits
The Railroad Retirement Act authorizes retirement, survivor, and disability benefits for railroad
workers and their families.3 To be insured for railroad benefits, a worker must generally have at
least 10 years of covered railroad work, or 5 years performed after 1995 and “insured status”
under Social Security rules (generally 40 quarters of coverage) based on combined railroad
retirement and Social Security-covered earnings. The family of an insured railroad worker may be
entitled to receive railroad retirement benefits. If a worker does not qualify for railroad retirement
benefits, his or her railroad work counts toward Social Security benefits.
Table 1 provides current data on Railroad Retirement, Survivor, and Disability Benefits.

1 The RRB is governed by three board members: one recommended by railroad employers, one recommended by
railroad labor organizations, and one appointed to represent the public interest.
2 Railroad Retirement Board, An Agency Overview, January 2014; http://www.rrb.gov/opa/agency_overview.asp.
3 45 U.S.C. §§ 231 et seq.
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Table 1. Railroad Retirement, Survivor, and Disability Benefits
March 2014
Percentage of Total
Average Monthly
Type of Annuity
Number of Benefitsa
Benefits
Benefit ($)
Age-Based
189,511
28.7
2,507.72
Disability -Under Ful Retirement Age
39,363
6.0
2,601.11
Disability -At or Above Ful
40,561
6.1
2,230.59
Retirement Age
Supplemental
121,542
18.4
41.58
Spouse
137,008
20.7
945.51
Divorced Spouse
4,435
0.7
583.26
Aged Widow(er)
99,898
15.1
1,504.26
Disabled Widow(er)
3,912
0.6
1,236.61
Widowed Mother and Father
667
0.1
1,762.48
Remarried Widow(er)
3,556
0.5
1,001.82
Divorced Widow(er)
9,676
1.5
996.68
Children
9,351
1.4
1,028.75
Partition Payments
1,165
0.2
1,165
Total Benefits
660,645
100.0
1,507.49b
Source: Railroad Retirement Board, Bureau of the Actuary, Quarterly Benefit Statistics, January-March 2014,
August 8, 2014, Table 1, http://www.rrb.gov/pdf/act/stat_qbs314.pdf.
Notes: Numbers may not add due to rounding.
a. Total number of benefits paid, including multiple benefits paid to individual beneficiaries.
b. Estimated based on total number and amount of benefits.
Tier I Retirement Annuities
Tier I benefits are designed to be nearly equivalent to Social Security benefits. Tier I benefits are
calculated using the Social Security benefit formula and are based on both railroad retirement and
Social Security-covered employment. At the full retirement age, which is gradually increasing
from 65 to 67 for Social Security and railroad retirement beneficiaries, insured workers with
fewer than 30 years of service may receive full retirement annuities.4 Alternatively, workers with
fewer than 30 years of service may, starting at age 62, receive annuities that have been reduced
actuarially for the additional years the worker is expected to spend in retirement. Tier I benefit
reductions for early retirement are similar to those in the Social Security system. As the full
retirement age rises, so will the reduction for early retirement.5 Tier I benefits are more generous
than Social Security benefits in that, at the age of 60, railroad workers with at least 30 years of
covered railroad work may receive unreduced retirement annuities.

4 Full retirement age is rising from 65 for those born before 1938 to 67 for those born after 1959.
5 The reduction at the age of 62, Social Security’s earliest eligibility age, is rising from 20% to 30% as the normal
retirement age rises from age 65 to age 67.
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Generally, Social Security benefits are subtracted from tier I benefits, because work covered by
Social Security is counted toward tier I benefits. Beneficiaries insured by both systems receive a
single check from the RRB. Railroad retirement benefits may also be reduced for certain pensions
earned through federal, state, and local government work that is not covered by Social Security.
For early retirees who continue to work while receiving the retirement benefit, tier I benefits are
reduced by $1 for every $2 earned above an exempt amount ($15,480 in 2014).6
After tier I benefits are first paid, they increase annually with a cost-of-living adjustment (COLA)
in the same manner as Social Security benefits.7
Retirement annuities are not payable to workers who continue to work in a covered railroad job or
who return to railroad work after retirement.
Tier II Retirement Annuities
Tier II retirement annuities are paid in addition to tier I annuities and any private pension and
retirement savings plans offered by railroad employers. They are similar to private pensions and
based solely on covered railroad service. Tier II benefits for current retirees are equal to seven-
tenths of 1% of the employee’s average monthly earnings in the 60 months of highest earnings,
times the total number of years of railroad service. Tier II benefits are increased annually by
32.5% of the Social Security COLA.
Tier II benefits are not (in contrast to tier I benefits) reduced if a worker receives Social Security
benefits or a pension from government employment that was not covered by Social Security.
Generally, the early retirement reductions for tier II benefits are the same as for tier I benefits.
The reductions for earnings are different. For railroad retirees who continue to work while
receiving retirement benefits, tier II benefits are reduced by $1 for every $2 earned, up to 50% of
the tier II benefit (there is no cap to the earnings-related reduction in railroad tier I or Social
Security benefits). In addition, the earnings-related reduction applies to all tier II beneficiaries,
regardless of age (for railroad tier I and Social Security benefits, the earnings-related reduction
applies only until the beneficiary reaches the normal retirement age).
Other Retired Worker Benefits: Supplemental Annuities and
Vested Dual Benefits
Tier II payroll taxes also finance a supplemental annuity program. Supplemental annuities are
payable to employees first hired before October 1981, aged 65 and over, with at least 25 years of
covered railroad service and a current connection with the railroad industry.8

6 During the calendar year that a retiree will reach the full retirement age, the formula for calculating the early
retirement reduction changes: benefits are reduced $1 for every $3 earned above an exempt amount ($41,400 in 2014)
until the beneficiary reaches full retirement age.
7 For additional information on the Social Security benefit formula, see CRS Report R43542, How Social Security
Benefits Are Computed: In Brief, by Noah P. Meyerson and for additional information on the Social Security COLA,
see CRS Report 94-803, Social Security: Cost-of-Living Adjustments, by Gary Sidor.
8 People have a current connection if they worked in a covered railroad job for at least 12 of the 30 months before death
or receipt of a railroad annuity. The current connection is not broken during employment at certain U.S. government
agencies, or in other special circumstances.
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In addition, general revenues finance a vested dual benefit for those who were insured for both
railroad retirement and Social Security in 1974 when the two-tier railroad retirement benefit
structure was established. Neither supplemental annuities nor vested dual benefits are adjusted for
changes in the cost of living during retirement. Supplemental annuities are subject to the same
earnings reductions as tier II benefits; vested dual benefits are subject to the same earnings
reductions as tier I benefits.
Retirement Benefits for Railroad Workers’ Families
In any month that a worker collects a railroad retirement benefit, his or her spouse may also be
eligible for a retirement benefit equal to or greater than the benefits he or she would have
received if the worker’s railroad work had been covered by Social Security.9 A spouse is eligible
for a retirement annuity when he or she reaches the same minimum age required for the worker to
collect a retirement annuity (i.e., either at the age of 60 or 62, depending on years of service). At
any age, a spouse may be eligible for a retirement annuity if he or she cares for the retired
worker’s unmarried child under the age of 18 (or a child disabled before the age of 22). A
qualifying spouse receives 50% of the worker’s tier I benefit before reductions (or, if higher, a
Social Security benefit based on his or her own earnings). Spouses may also receive 45% of the
worker’s tier II benefit before reductions.
For spouses, as for railroad workers, Social Security benefits are subtracted from tier I benefits.
The benefit reductions for post-retirement earnings and for government pensions from
government employment that was not covered by Social Security also apply to spouses and
workers as under Social Security. Spouses are subject to reductions based on the primary
worker’s earnings as well as on their own earnings. As for early retirement, spouses are subject to
different benefit reductions than are workers.10 Finally, spouses’ benefits are reduced by the
amount of any railroad benefits they earned based on their own work.
Survivor Benefits for Railroad Workers’ Families
Surviving spouses, former spouses, children, and other dependents of railroad workers may be
eligible to receive survivor benefits after the worker’s death. These benefits are paid in addition to
any private life insurance offered by railroad employers. To be insured for survivor benefits, the
worker on whose record the survivor benefits are based must have had a current connection with
the railroad industry at the time of death. Railroad survivor benefits are generally higher than
comparable Social Security benefits because families of railroad workers may be entitled to tier II
benefits as well as tier I benefits (as noted above, tier I benefits are equivalent to Social Security
benefits). In cases where no monthly survivor benefits are paid, a lump-sum payment may be
made to certain survivors.
The widows and widowers of railroad workers may be eligible to receive survivor benefits. At
full retirement age, a surviving spouse may be eligible for 100% of the worker’s tier I benefit (or

9 Divorced spouses of retired railroad workers may also be eligible for retirement annuities. A divorced spouse may
receive 50% of the worker’s tier I benefit before reductions, but no tier II benefits. To qualify, the former spouse must
have been married to the worker for at least 10 years and must not be remarried; both the worker and former spouse
must be at least 62 years old.
10 For spouses, the reduction at the age of 62 is gradually rising from 25% to 35%.
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his or her own Social Security or railroad retirement tier 1 benefit, if higher). The widow(er) may
also receive up to 100% of the worker’s tier II benefit. As early as the age of 60 (or age 50, if
disabled), widows and widowers may receive reduced survivor benefits.11 At any age, a
widow(er) caring for a deceased worker’s child under the age of 18 may receive a survivor
benefit equal to 75% of the worker’s tier I benefit, as well as up to 100% of the worker’s tier II
benefit.
Children of railroad workers may also receive survivor benefits. To qualify, a child must be
unmarried and under the age of 18 (or 19 if still in high school). Disabled adult children may
qualify if their disability began before the age of 22. Eligible children receive 75% of the
worker’s tier I benefit and 15% of the worker’s tier II benefit. In addition, if a parent of a railroad
worker was dependent on the worker for at least half of the parent’s support, he or she may
receive 82.5% of the worker’s tier I benefit and 35% of the worker’s tier II benefit.
Survivor benefits are not payable to a current railroad employee, and survivor benefits are
reduced by any railroad retirement benefit the survivor has earned through his or her own railroad
work. Survivors receive the same reductions as retired workers for Social Security benefit receipt;
they also have reductions for government pension receipt and earnings. A family maximum
applies to survivor benefits, usually applicable when three or more survivors receive benefits on a
worker’s record (not counting divorced spouses).
Disability Benefits for Railroad Workers
Railroad workers may be eligible for benefits if they become disabled. The Railroad Retirement
Board determines whether a worker is disabled based on the medical evidence provided during
the application process. Railroad workers found to be totally and permanently disabled from all
work may be eligible for total disability annuities. Totally disabled workers may receive tier I
benefits after a five-month waiting period and tier II benefits at the age of 62 if they have 10 or
more years of service. Occupational disability annuities are also payable to workers found to be
permanently disabled from their regular railroad occupations, at least 60 years old with 10 years
of service (or any age with 20 years of service), and with a current connection to the railroad
industry.
Disability annuities are not payable if a worker is currently employed in a covered railroad job.
Disability benefits are suspended if a beneficiary earns more than $840 in a month in 2014 after
deducting certain disability-related work expenses. After the full retirement age, the earnings
reductions for retired railroad workers apply. The tier I portion of disability benefits may be
reduced for the receipt of workers compensation or government disability benefits.
Financing of Retirement, Survivor, and Disability Benefits Under
the Railroad Retirement Act
Payroll taxes, which provided 46.0% of gross RRA funding in FY2013, are the largest funding
source for railroad retirement, survivor, and disability benefits.12 Railroad retirement payroll taxes

11 For widow(er)s, the reduction at the age of 60 (Social Security’s earliest eligibility age for widowed spouses) is
rising from 17.10% to 20.36%.
12 Railroad Retirement Board, 2014 Railroad Retirement Board Annual Report, p. 9, http://www.rrb.gov/pdf/opa/
(continued...)
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are divided into two tiers. The tier I tax is the same as the Social Security payroll tax: railroad
employers and employees each pay 6.2% on earnings up to $117,000 in 2014.13 Tier I payroll
taxes are deposited in the Social Security Equivalent Benefit Account (SSEBA), which pays the
Social Security-level of benefits and administrative expenses allocable to those benefits. The
SSEBA also receives or pays the financial interchange transfers between the railroad retirement
and Social Security systems. The financial interchange with Social Security provided 34.4% of
gross RRA funding in FY2013.14
The tier II tax is set each year based on the railroad retirement system’s asset balances, benefit
payments and administrative costs. In 2013, the tier II tax is 12.6% for employers and 4.4% for
employees on earnings up to $87,000. Tier II taxes are used to finance tier II benefits, “excess”
tier I benefits (the portion of tier I benefits are more generous than Social Security retirement
benefits), and supplemental annuities.
Revenues not needed to pay current benefits and administrative costs are held in the National
Railroad Retirement Investment Trust (NRRIT), which is invested in both government securities
and private equities.15 Transfers and interest from the NRRIT provide another revenue source for
railroad benefits, and were 13.4% of gross RRA funding in FY2013.16 Prior to the Railroad
Retirement and Survivors’ Improvement Act of 2001, P.L. 107-90, surplus railroad retirement
assets could only be invested in U.S. government securities—just as the Social Security trust
funds must be invested in securities issued or guaranteed by the U.S. government. The 2001 act
established the NRRIT to manage and invest the RRB’s surplus tier II assets in the same way that
the assets of private-sector and most state and local government pension plans are invested. The
remainder of the railroad retirement system’s assets (tier I assets) continue to be invested solely in
securities issued or guaranteed by the U.S. government. The NRRIT is designed to maintain four
to six years’ worth of benefits in case of lower-than-expected returns. To maintain this balance,
the tier II tax is set to automatically adjust to maintain the fund balance at four to six years. This
tax adjustment does not require congressional action.
Federal income taxes levied on railroad retirement benefits, interest on RRB investments, and
general fund transfers to pay the costs of phasing out vested dual benefits combined to make up
less than 6.5% of gross RRA funding in FY2013.17

(...continued)
AnnualRprt/AnnualReport.pdf. Gross RRA funding does not include funding sources offset by reductions in National
Railroad Retirement Investment Trust (NRRIT) assets, salaries and expenses for the RRB Office of the Inspector
General, and reductions in contingency liability and unexpended appropriations.
13 During 2011 and 2012, Congress provided a temporary reduction of two percentage points in the payroll tax rate paid
by employees, from 6.2% to 4.2%.
14 Railroad Retirement Board, 2014 Railroad Retirement Board Annual Report, p. 9. The Railroad Retirement system
and the Social Security system have been coordinated financially since 1951. The purpose of the financial interchange
is to place the Social Security trust funds in the same position they would have been in, if railroad employment had
been covered under Social Security since that program’s inception.
15 For additional information on the NRRIT, see CRS Report RS22782, Railroad Retirement Board: Trust Fund
Investment Practices, by Scott D. Szymendera.
16 Railroad Retirement Board, 2014 Railroad Retirement Board Annual Report, p. 9.
17 Ibid.
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Railroad Unemployment and Sickness Benefits
Railroad workers may qualify for daily unemployment and sickness benefits under the Railroad
Unemployment Insurance Act.18 These benefits are paid in addition to any paid leave or private
insurance an employee may have. For sickness benefits, a worker must be unable to work because
of illness or injury. Sickness benefits are distinct from disability benefits because they are
intended to cover a finite, temporary period of time. Workers may not earn any money while
receiving unemployment or sickness benefits.
Eligibility for railroad unemployment and sickness benefits is based on recent railroad service
and earnings. Each year, the benefit year begins on July 1. Eligibility is based on work in the prior
year, or the base year. To qualify, railroad workers must have a minimum amount of creditable
annual earnings in the base year ($3,600 in the 2014 base year), not counting earnings above a
monthly maximum ($1,860 in the 2014 base year). New railroad workers must also have at least
five months of covered railroad work in the base year. To receive unemployment benefits, a
worker must be ready, willing, and able to work.
The maximum daily benefit payable in the benefit year that began July 1, 2014 is $70, and
maximum benefits for biweekly claims is $700. However, due to sequestration pursuant to the
Budget Control Act of 2011, the maximum biweekly benefit is reduced by 7.2% to $649.60
through September 30, 2014.19 Railroad workers only receive these benefits to the extent that they
are higher than other benefits they receive under the Railroad Retirement Act, the Social Security
Act, or certain other public programs, including workers compensation.
Unemployment and sickness beneficiaries may receive normal benefits for up to 26 weeks in a
benefit year, or until the benefits they receive equal their creditable earnings in the base year (if
sooner).20 Employees with at least 10 years of covered railroad service may qualify for extended
benefits for 13 weeks after they have exhausted normal benefits. Legislation beginning in 2009
included additional, temporary, extensions of extended railroad unemployment benefits through
the end of 2013.21
Workers who apply for unemployment benefits are enrolled automatically in a free job placement
service run by railroad employers and the RRB.

18 45 U.S.C. §§ 351-369.
19 Railroad unemployment benefits are paid biweekly for up to 10 days of unemployment.
20 There is essentially a one-week waiting period for unemployment and sickness benefits. There is a two-week waiting
period for unemployment benefits if a worker participates in a legal strike.
21 Pursuant to Section 504 of the American Taxpayer Relief Act of 2012, P.L. 112-240, no new period of temporary
extended unemployment benefits can begin after December 31, 2013.
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Financing of Unemployment and Sickness Benefits Under the
Railroad Unemployment Insurance Act
Railroad unemployment and sickness benefits are financed solely by railroad employers.
Employers’ contributions are based on the taxable earnings of their employees. The employer’s
tax rate depends on the past rates of unemployment and sickness claims by employees. For
calendar year 2014 the tax rate ranges from 0.65% to 12.0% on the first $1,440 paid to each
employee per month.
The Railroad Unemployment Insurance Act provides for a surcharge to be paid by employers if
the Railroad Unemployment Insurance Account falls below an indexed threshold amount.22 The
surcharge is added to the tax rate paid by employers. However, the total tax rate plus the
surcharge cannot exceed the maximum rate of 12%, unless the surcharge is 3.5%, in which case
the maximum tax rate is increased to 12.5%. From 2004 through 2010 the surcharge was 1.5%.
The surcharge in 2011 was 2.5% and 1.5% in 2012. There was no surcharge in 2013 and there is
none in 2014.
Railroad unemployment funds not needed immediately are deposited into an account that is part
of the national unemployment insurance trust fund and the railroad account receives interest
based on these deposits.

22 45 U.S.C. § 358(a)(14).
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