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 self-employment.
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.
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.
- 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 self-employed 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.
- 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.
- Comparison Chart -
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.
|