For CSX Transportation and Select Other Positions Only
Railroad employees and employers are required by law to pay Railroad Retirement Taxes in place of Social Security Taxes (FICA).
Railroad Retirement Taxes are divided into two categories: Tier 1 both employee and employer tax rate is 6.2 percent (equivalent to FICA). The Tier 2, employee rate is 4.9 percent, and the employer is 13.10 percent.
CSX contributes an additional 13.10% toward the Railroad Retirement fund compared to FICA. Vested employees (five years of creditable service after 1995 or 10 years of service at any time) will receive an annuity from the Railroad Retirement Board upon retirement. It is not associated with the Company Pension Plan. If an employee leaves railroad service prior to the vested period, the employee’s railroad retirement credits are treated as social security credits by the Social Security Administration. Benefits paid by that agency would accordingly consider both railroad and social security covered earnings.