1 G-177L (05-03)

General Information about Continuing in or

Returning to Nonrailroad Employment after Retirement

under the Railroad Retirement Act

Definition of Last Pre-Retirement Nonrailroad Employer

Your Last Pre-Retirement Nonrailroad Employer (LPE) is defined as any nonrailroad individual,

company or institution for whom you are working on your annuity beginning date (ABD) or for

whom you stopped working in order to receive an annuity. This includes work for a Canadian

railroad that is not covered under the Railroad Retirement Act and work as an elected or

appointed public official.

The nonrailroad employer is always your LPE if you are working in nonrailroad employment on

your ABD or, if you have stopped working and you still hold rights to return to service of the

nonrailroad employer on your ABD.

The nonrailroad employer is presumed to be your LPE if you are:

• The employee annuitant, and stopped working for the nonrailroad employer within six

months immediately before your employee ABD, whether or not you also had been

working for a railroad employer at the same time, or,

• The spouse annuitant, who may have never worked for a railroad, and stopped working

for the nonrailroad employer within the six months immediately before your ABD.

When you were working for two or more persons, companies, or institutions within the six

months preceding your ABD, all such employers are presumed to be your LPE.

If you begin nonrailroad employment after your ABD, the RRB does not consider that

nonrailroad employment to be LPE.

Exceptions to LPE

Types of work that are not considered to be LPE are: military service, jury duty, mail handling by

contract with the U.S. Postal Service, volunteer work, work for which you only receive payment

of expenses, work as a member (owner) of a Limited Liability Corporation (LLC), or selfemployment.

The Effect of LPE on Your Annuity

LPE does not affect your ABD. You are not required to relinquish rights or stop working for your

LPE to receive annuity payments. However, reductions for LPE earnings on or after your ABD

apply regardless of your age.

If you are:

• The employee annuitant, work for your LPE requires deductions of $1 for every $2 of

LPE earnings from your Tier 2 and any supplemental annuity and your spouse's Tier 2.

• The spouse annuitant, work for your own LPE requires deductions of $1 for every $2 of

your own LPE earnings from your spouse Tier 2.

LPE cannot reduce the employee or spouse Tier 2 or employee supplemental annuity by more

than 50%.

Regular Work Deductions

If you are under Full Retirement Age, earnings over your Annual Earnings Exempt Amount from

LPE may cause regular work deductions to your RRB annuity. Refer to Form G-77a How

Earnings Affect Payment of Retirement Annuities for current Annual Earnings Exempt Amounts.
2 G-177L (05-03)

LPE vs. Self-Employment Determinations

The RRB considers some work claimed as self-employment to actually be work for an employer.

Whether the RRB classifies a particular activity as self-employment or as work for an employer

depends upon the circumstances of each case.

A. Self-Employed Independent Contractor -. Worked claimed as self-employment and the

payment of self-employment taxes may be evidence of an independent contractor status,

but are not conclusive. In general, if the arrangement between you and your client is such

that you are not supervised by your client when you perform your services and you are not

integrated into the staff or operations of that client, then you will be considered to be a selfemployed independent contractor.

However, if your business is incorporated in other than a Limited Liability Corporation

(LLC), you will be considered to be an employee of the corporation.

B. Work for an Employer - If, on the other hand, you perform work for your client subject to the

continuing authority of that client to supervise and direct the manner in which you work, or if

you are integrated into the staff or operations of your client while performing such work,

then you will be considered to be acting as an employee and your client is your LPE

employer.

Note: If your client or employer is a railroad, the RRB would consider that work to be

railroad employment, not LPE. Your annuity is not payable for any month you work for a

railroad.

C. Comparison Chart

Self-Employed Independent Contractor Work for an Employer

Maintains independent office or works in places not

connected with the client’s premises. Works on the client’s premises.

Uses own tools and equipment. Uses the client’s tools and equipment.

Has complete freedom as to the amount of time

spent in rendering a particular service.

Has contract for continuing services over a long or

indefinite period and devotes substantially all of

working time to such service.

Bears a risk of profit or loss in the endeavor and,

• Receives payments for a particular result

accomplished rather than regular

remuneration on a time basis or

• Has agreements or arrangements for the

performance of specific services of

limited duration for a particular project.

Receives periodic payment of regular remuneration

rather than payment for a specific result or work

product.

Performs similar services for persons other than one

client. Works only for one client.

Maintains own health or life insurance and retirement

benefit plan.

Participates in the client’s benefit programs such as

health or life insurance and retirement plans.

Performs duties similar in many respects to those

previously performed as an employee before

retirement.

LPE Determinations

The RRB will make LPE vs. self-employment determinations. You may request this decision

before you apply for your annuity. Contact the nearest office of the RRB for further information.

Most RRB offices are open to the public Monday through Friday from 9:00 am to 3:30 p.m. You

may be asked to complete Form AA-4 Self-Employment and Substantial Service Questionnaire.