In response to a fraud probe, the Railroad Retirement Board (RRB) will issue Termination of Disability Notices to some 600 annuitants.
An investigation, which targeted Long Island Rail Road (LIRR) disability annuitants, was initiated on October 27, 2011, by the United States Attorney for the State of New York. This investigation followed a New York Times story that alleged that the Railroad Retirement System was being abused and defrauded because of a higher than normal number of disability claims from that property.
One of the doctors charged with fraud by the United States Attorney admitted under oath that he had misclassified a number of LIRR employees as being disabled when, in fact, they were not. This misclassification paved the way for those employees to qualify for occupational disability payments under Railroad Retirement and to draw money from their LIRR early retirement plan simultaneously.
The RRB voted June 27, 2013, to terminate the disability benefits for those annuitants who received their disability classification from that doctor. The RRB is not planning to go after those annuitants to recover any benefits previously paid and is not accusing anyone of fraud or wrongdoing. All affected annuitants may reapply for their disability benefits with current medical evidence from a different healthcare provider.
“The response from the [Railroad Retirement] Board is fair,” stated Brotherhood of Railroad Signalmen President W. Dan Pickett. “It makes certain that our retirement system is no longer being taken advantage of and creates a path for those who are truly disabled to continue receiving the benefits to which they are entitled.” President Pickett also serves as the Chairman of the Railroad Retirement Committee for Rail Labor.
The affected LIRR employees were covered by a private pension plan which provided for early retirement with a full pension at age 50 with 20 years of LIRR service. That early retirement plan has since been superseded by a different plan. It is not believed that this is a widespread problem because most railroad employees are covered only by Railroad Retirement and do not have an additional employer-based pension system.