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 Funding of Railroad Retirement Annuities
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          Attorney's Guide to the Partition of Railroad Retirement Annuities (07-20)
          Funding of Railroad Retirement Annuities
 Topics
    

      
              Purpose of this Guide
          The Railroad Retirement Act
          Employee Retirement Income Security Act (ERISA)
          Funding of Railroad Retirement Annuities
          Railroad Retirement Annuity Components
          Statement or Estimate of Railroad Retirement Benefits
          Summary of RRB Requirements for a Partition Order
          Railroad Retirement Disability Annuities are Subject to Division
          RRB Action on Receipt of Decree or Court Order
          Termination of Partition
          Effect of Ambiguity and Other Provisions
          Name and Address Changes
          Legal Process for Enforcement of Support Obligations (Garnishment)
          Appendix A - Frequently Asked Questions
          Appendix B - Sample Award Language
          Appendix C - Sample Court Order
          PDF Version
          Appendix D: Form G-177C (08-07) Divorced Spouse Annuity Requirements Funding of Railroad Retirement Annuities
							 
							
							
            Railroad employees and employers pay employment taxes under the Railroad Retirement Tax Act (RRTA) (26 U.S.C. §§ 3201-3241) to fund payment of railroad retirement annuities. The taxes paid are credited to trust funds from which annuities are paid. RRTA taxes are analogous to contributions under the Federal Insurance Contributions Act (FICA). The Internal Revenue Service collects RRTA taxes just as it collects FICA and other Federal taxes. Like FICA contributions, properly collected RRTA taxes are not refundable.

**"Valuation" and Railroad Retirement Annuities**

Railroad retirement taxes are not credited to individual employee "accounts" that accrue value over time as an independent monetary asset. Rather, an employee's monthly annuity rate is computed solely on the basis of his or her length of service and earnings in covered employment. Therefore, it is impossible to segregate or establish a separate account for the share of the employee's future annuity awarded as property to a spouse or former spouse. A court order that divides an employee's "account" instead of his or her retirement annuity will not be valid under the RRA.

In addition, the RRB does not administer any private pensions, therefore, questions regarding any stock options, deferred savings plan, employee stock ownership plan, life insurance, etc., should be directed to the employee's railroad employer.

**Status of Railroad Retirement Tax as Marital Asset**

The amount of taxes paid by an individual employee under the RRTA is not a marital or community property asset available for division by court order.
        ‹ Employee Retirement Income Security Act (ERISA) | 
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 Last updated: 04/27/2017