The Basics of the Railroad Retirement Board

Railroad retirement board is a federal agency that provides retirement benefits for American railroad workers. This includes workers who were employed by private railroad companies. Some companies, like Amtrak, have their own pension system. The agency is responsible for managing the benefits and ensuring that they are property distributed. It is also responsible for providing unemployment insurance for railroad workers. The board's retirement benefits are specifically tailored to fit the unique needs of railroad employees, and the agency continues to adjust the benefits to make sure they continue to fit those needs.  

History of the Railroad Retirement Board

During the first half of the 20th century, private railroad companies were responsible for virtually all freight and passenger transportation throughout United States. Together, they employed millions of people. As the Great Depression devastated the country, the railroads suffered steep financial losses. This, in turn, compelled them to cut pensions, especially for the new hires. At the time, Social Security didn't exist, so workers depended on company pensions to cover their retirement needs.

In 1994, the Roosevelt administration established the Railroad Retirement Board as part of the executive branch. The board created a standard system of guaranteed retirement benefits for all railroad workers. When Social Security system was established, the law was changed to allow the two agencies to coordinate their services and ensure that railroad workers would get the Social Security benefits they deserved.

In 1938, the board's scope was further extended to provide unemployment insurance. Until that point, unemployment coverage for railroad workers was state-based. This posed a problem for railroad workers who worked on longer-range railroads that crossed several states. In some cases, railroad workers qualified for unemployment coverage in several states, while others didn't qualify for any coverage at all. The Railroad Retirement Board simplified the process considerably, ensuring that railroad workers would get unemployment insurance regardless of where they worked.

How Railroad Retirement Board Works

The Railroad Retirement Board is headed by three members that are appointed by the President and confirmed by the Senate. To ensure that all aspects of railroad industry are represented equally, the first member is appointed based on the recommendation of the railroad companies, while the second member is appointed based on the recommendation of the railroad labor organizations and the third member is appointed to represent public interest. The third member acts as the chairman of the board.

The Railroad Retirement Board has a staff of field representatives, examiners and technology staff who help railroad retirees file their claims, examine how much those claims are worth and make sure that those claims are paid properly. The board also employs actuaries to examine the current financial trends and predict how much funding it will have and what kind of benefits it would have to offer to meet the needs of future retirees.

Railroad Retirement Board Benefits

Railroad retirement board starts paying monthly annuities to retired railroad workers are soon as they reached retirement age. The annuities are funded using the workers' railroad retirement taxes. The retirement age varies depending on when they were hired. The value of the annuities varies depending on how long they worked. A worker must have worked for at least 10 years, or 5 if they started working after 1995. If a railroad worker dies, the annuity payments are made to their surviving spouse and dependents (if any).