National Academies Press: OpenBook

Railroad Legal Issues and Resources (2015)

Chapter: XXXV. Railroad Retirement and Disability Earnings Act

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Suggested Citation:"XXXV. Railroad Retirement and Disability Earnings Act." National Academies of Sciences, Engineering, and Medicine. 2015. Railroad Legal Issues and Resources. Washington, DC: The National Academies Press. doi: 10.17226/22093.
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Suggested Citation:"XXXV. Railroad Retirement and Disability Earnings Act." National Academies of Sciences, Engineering, and Medicine. 2015. Railroad Legal Issues and Resources. Washington, DC: The National Academies Press. doi: 10.17226/22093.
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Suggested Citation:"XXXV. Railroad Retirement and Disability Earnings Act." National Academies of Sciences, Engineering, and Medicine. 2015. Railroad Legal Issues and Resources. Washington, DC: The National Academies Press. doi: 10.17226/22093.
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Suggested Citation:"XXXV. Railroad Retirement and Disability Earnings Act." National Academies of Sciences, Engineering, and Medicine. 2015. Railroad Legal Issues and Resources. Washington, DC: The National Academies Press. doi: 10.17226/22093.
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Page 144
Suggested Citation:"XXXV. Railroad Retirement and Disability Earnings Act." National Academies of Sciences, Engineering, and Medicine. 2015. Railroad Legal Issues and Resources. Washington, DC: The National Academies Press. doi: 10.17226/22093.
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Page 145
Suggested Citation:"XXXV. Railroad Retirement and Disability Earnings Act." National Academies of Sciences, Engineering, and Medicine. 2015. Railroad Legal Issues and Resources. Washington, DC: The National Academies Press. doi: 10.17226/22093.
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Page 145

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140 within the preemption exemption”656 and was “precisely what the federal regulations permit State authorities to do.”657 Article 748 H. Guidance on How to Create a Quiet Zone 748 The FRA provides guidance on how to create Quiet Zones, flow charts illustrating the steps that need to be followed, and sample documents and checklists.658 XXXV. RAILROAD RETIREMENT AND DISABILITY EARNINGS ACT 749 A. Introduction 749 In 1934, Congress enacted legislation for the regulation of railroad employees’ pensions.659 In 1937, Congress enacted the Railroad Retirement Program.660 The Railroad Unemployment Insurance Act (RUIA), which replaces state unemployment taxes and arrangements for railroad employees, is discussed in Part XXXVII. Sections B and C discuss the Railroad Retirement Act of 1974 (RRA) and the amendments to the Act, as well as the Railroad Retirement Solvency Act of 1983, the Railroad Retirement and Survivors’ Improvement Act of 2001, and ARRA. Section D explains some of the key provisions of the RRA. Sections E through K discuss disability benefits; the effect, if any, of retirement benefits on claims for damages; and other issues. Sections L and M summarize articles on the collateral source rule and on the Railroad Retirement Tax Act and the role of the Railroad Retirement Board. Statutes 750 B. Railroad Retirement Act of 1974 750 The RRA sets forth the framework currently used for railroad retirement. The 1974 Act divided benefits into two tiers: Tier I, similar to the annuity benefits provided by Social Security, and Tier II, similar to private pension plans with more benefits.661 656 Id. at 1145. 657 Id. at 1146. 658 United States Dep’t of Transp., Federal Railroad Administration, How to Create a Quiet Zone (Sept. 27, 2012), available at http://www.fra.dot.gov/eLib/details/L03055 (last accessed Mar. 31, 2015). See link for downloading a PDF document for the referenced guidance. 659 U.S. Comm. on Ways & Means, “Earned Entitlements for Railroad Employees–Legislative History,” Green Book (2011), available at http://greenbook.waysandmeans.house.gov/2011-green-book/chapter-5- earned-entitlements-for-railroad-employees/railroad-retirement-legislative (last accessed Mar. 31, 2015). 660 Id. 661 45 U.S.C. §§ 231–31v (2014).

141 C. Amendments to the 1974 Act 751 1. Railroad Retirement Solvency Act of 1983 751 The Railroad Retirement Solvency Act of 1983 instituted measures to increase the financial stability of the program, such as increasing payroll taxes, subjecting Tier II benefits to federal income taxes the same as private pensions, and instituting a 5-month waiting period for disability benefits.662 2. Railroad Retirement and Survivors’ Improvement Act 751 of 2001 In 2001, Congress modified railroad retirement benefits and financing with the Railroad Retirement and Survivors’ Improvement Act (RRSIA). For example, the RRSIA provides full Tier I and II benefits to employees (and their spouses) who retire after the age of 60 after completing at least 30 years of railroad service.663 3. American Recovery and Reinvestment Act of 2009 752 ARRA664 included railroad retirement beneficiaries in its one-time economic recovery payments;665 for example, extending the length of the maximum time that railroad workers could receive unemployment benefits.666 D. Key Provisions of the Railroad Retirement Act 753 1. Definition of Employer 753 Section 231(a) of the RRA defines an employer to include, for instance, “any carrier by railroad subject to the jurisdiction of the Surface Transportation Board under part A of subtitle 662 Railroad Retirement Solvency Act of 1983, Pub. L. No. 98-76, 97 Stat. 411, 45 U.S.C. §§ 231–231f, 231f-1, 231m, 231n, 231n-1, 231u, and 231v (1983). 663 Railroad Retirement and Survivors’ Improvement Act of 2001, Pub. L. No. 107-90, 115 Stat. 878, 45 U.S.C. §§ 231a–31f, 231n, 231n-1, 231q, 231r, 231u, and 231v (2001). See U.S. Comm. on Ways & Means, Earned Entitlements for Railroad Employees–Legislative History, Green Book (2011), available at http://greenbook.waysandmeans.house.gov/2011-green-book/chapter-5-earned-entitlements-for- railroad-employees/railroad-retirement-legislative (last accessed Mar. 31, 2015), hereinafter referred to as “Earned Entitlements for Railroad Employees–Legislative History.” 664 Pub. L. No. 111-5, 123 Stat. 115 (2009). 665 Earned Entitlements for Railroad Employees–Legislative History, supra note 663. 666 Id.

142 IV of title 49”667 and “any railway labor organization, national in scope, which has been or may be organized in accordance with the provisions of the Railway Labor Act, as amended.”668 2. Definition of Employee 753 Under Section 231(b) of the RRA, an employee includes “any individual in the service of one or more employers for compensation”669 and “any individual who is in the employment relation to one or more employers,”670 as well as other categories set forth in the statute.671 3. Eligibility Requirements for an Annuity 753 Under Section 231a(a) of the RRA, an employee generally qualifies for an annuity. For example, when the employee has worked for a railroad for 10 years and reached the age of retirement under the Social Security Act or has worked for 30 years and reached the age of 60.672 4. Supplemental Annuity 754 Under 45 U.S.C. § 231a(b) of the RRA, a supplemental annuity is payable when a railroad employee is 60 years of age and has worked in the industry for at least 30 years or is age 65; has worked in the railroad industry for at least 25 years; is eligible to receive an annuity under § 231(a)(1); was connected to the railroad industry at the time the annuity began to accrue; and “performed compensated service in at least one month prior to October 1, 1981.”673 667 45 U.S.C. § 231(a)(1)(i) (2014). 668 45 U.S.C. § 231(a)(v) (2014). 669 45 U.S.C. § 231(b)(1)(i) (2014). 670 45 U.S.C. § 231(b)(1)(ii) (2014). 671 45 U.S.C. § 231(b) (2014). 672 45 U.S.C. §§ 231a(a)(1)(i) and (ii) (2014). 673 45 U.S.C. § 231a(b) (2014).

143 5. Other Individuals Who Are Eligible for an Annuity 755 Other provisions of the RRA provide for an annuity for spouses,674 surviving widows and widowers,675 children,676 and others.677 6. Computation of an Annuity 755 Section 231b of the RRA governs the computation of an annuity. The amount of the annuity is usually equal to the old-age insurance benefit or disability benefit for which the employee would be eligible under Social Security.678 7. Railroad Retirement Board 755 The RRA is administered by the Railroad Retirement Board (RRB or Board).679 8. Judicial Review 755 Decisions of the RRB “determining the rights or liabilities of any person under this subchapter shall be subject to judicial review in the same manner…as though the decision were a determination of corresponding rights or liabilities under the Railroad Unemployment Insurance Act [45 U.S.C. 351 et seq.].”680 E. Disability Benefits 756 The Board has the authority to determine the physical and mental conditions for which employees may be disqualified to work in the several occupations in the railroad industry. Regulations regarding the Board’s determination of a disability under the RRA are set forth in 20 C.F.R. §§ 220.1–220.187. 674 45 U.S.C. § 231a(c) (2014). 675 45 U.S.C. §§ 231a(d)(i) and (ii) (2014). 676 45 U.S.C. § 231a(d)(iii) (2014). 677 See 45 U.S.C. §§ 231(e) and (e)(a)(5) (2014). 678 45 U.S.C. § 231b(a)(1) (2014). 679 45 U.S.C. § 231f(a) (2014). 680 45 U.S.C. § 231g (2014).

144 Cases 756 F. Effect of Retirement Benefits on Damages 756 In McCarthy v. Palmer,681 involving a railroad employee who sustained injuries working as a trainman, the Second Circuit held that the railroad employer could not use the amounts contributed to the railroad pension system to reduce the damages to which the employee was entitled. G. Employers Subject to the Railroad Retirement Act 757 In Herzog Transit Services v. United States Railroad Retirement Board,682 the plaintiff Herzog Transit Services (Herzog) contracted with the owners of a railway to operate an interstate commercial rail service and perform dispatching services. The Seventh Circuit upheld a decision of the RRB that Herzog’s dispatching services meant that Herzog was a covered employer under the RRA. H. Effect of Retirement on an Employee’s Ability Under FELA 758 to Recover Damages for Lost Future Wages In CSX Transportation, Inc. v. Miller,683 CSX unsuccessfully argued that Miller, a CSX employee who brought a FELA claim for a permanent injury that caused him to retire early, could not because of his retirement recover damages for his loss of future wages. The Supreme Court of Alabama held that the trial court did not err in denying CSX’s pre-verdict motion for judgment as a matter of law on Miller’s claim for lost wages after March 2003.684 681 113 F.2d 721, 723 (2d Cir. 1940), cert. denied, 311 U.S. 680, 61 S. Ct. 50, 85 L. Ed. 438 (1940). 682 624 F.3d 467, 469 (7th Cir. 2010). 683 46 So. 3d 434, 444 (Ala. 2010). 684 Id. at 453–54.

145 I. Computation of Disability Benefits 758 The Supreme Court of Montana held in Bonner v. Railway Employees Mutual Ass’n685 that the benefits in § 231(a)(1)(iv) are not measured by an employee’s disability. J. Railroad Retirement Benefits Are a Collateral Source 759 In Sloas v. CSX Transp. Inc.,686 the Fourth Circuit held that Tier II benefits received by railroad workers under the RRA qualify as a collateral source and that the railroad employer’s contribution to funds used to pay for the employee’s disability benefits could not be used to offset damages in a FELA claim. K. Admissibility of Evidence of Retirement Benefits in 759 FELA Claims In Norfolk Southern Railway Co. v. Tiller,687 involving a FELA claim for work-related injuries, the Court of Special Appeals of Maryland held that the employee’s retirement benefits are a collateral source; thus, the court upheld the trial court’s decision not to admit evidence of the employee’s eligibility for railroad retirement benefits.688 Articles 760 L. Recourse for Railroads After the Tiller Decision 760 An article entitled “Pension Benefits as an Evidentiary Collateral Source” discusses a possible unique application of the collateral source rule after the decision in Tiller, supra, Part XXXV.K.689 The authors argue that an expert for the defense “could presumably testify about the percentages of railroad workers with 30 years of railroad experience who retire at ages 60, 61, 62, and 63,” as long as the intent is not to “bring pension benefits to the attention of the jury.”690 685 119 Mont. 63, 170 P.2d 400 (1946) (cited by Laird v. Illinois C. G. R. Co., 208 Ill. App. 3d 51, 566 N.E.2d 944, 956 (Ill. App. Ct. 5th Dist. 1991)). 686 616 F.3d 380, 392 (4th Cir. 2010). 687 179 Md. App. 318, 944 A.2d 1272 (Md. Ct. Sp. App. 2008). 688 Id., 179 Md. App. at 339–40, 944 A.2d at 1285–86. 689 Lane B. Hudgins & Thomas R. Ireland, Pension Benefits as an Evidentiary Collateral Source, 15 J. LEGAL ECON. 75 (2008). 690 Id. at 78.

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TRB’s National Cooperative Rail Research Program (NCRRP) Legal Research Digest 2: Railroad Legal Issues and Resources presents legal issues of importance that attorneys may encounter when representing both freight and passenger railroad owners, and operators involved in railroad-related transactions. Issues explored in the report range from abandonment and discontinuance to constitutional law, construction, contracts, interaction with regulatory agencies, safety, retirement, and numerous other subjects.

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