U n i t e d S t a t e s G o v e r n m e n t

M e m o r a n d u m

FORM 0-1151 (1-«2)

R a i l r o a d R e t i r e m e n t b o a r d

1-9 8-27

J UN 2 01996

TO

FROM

John Baer

Acting Director of Survivor Benefits 

Through: Bobby V. Ferguson

Director of Programs

Steven A. Bartholow,^^?^^^'-^ ^ 

Deputy General Cetmsel/Director of Law 

Through: Catherine C. Cook r r r

General Counsel vl \

SUBJECT Crediting of Military Service

This is in reply to your memorandum of May 23, 1996, regarding the 

crediting of military service in connection with the computation of 

survivor annuities.

•

You point out that for retirement annuities a decision is made to 

use creditable military service as compensation or as wages, or to 

not use it, whichever alternative is most advantageous to the 

employee. In some cases the alternative which is most advantageous 

to the employee may not be the most advantageous to a survivor 

beneficiary who receives a benefit based on the same earnings 

record. You state that some cases have been discovered where the 

inclusion of military service can lower the basic amount 

calculation, which lowers the amount of the survivor lump-sum death 

benefit payable. Also, the inclusion of creditable military 

service as compensation in the 1981 tier II computation will 

increase the tier'll payable to a survivor beneficiary because the 

inclusion increases the service months used in the calculation.

You inquire whether in the adjudication of survivor cases the RRB 

is bound by the decision regarding the use or non-use of military 

service in connection with the employee's annuity.

The survivor tier II component is based on the tier II component to 

which the employee would have been entitled for the month the 

survivor's annuity began to accrue (see section 4(g)(1) of the 

Railroad Retirement Act). Since the survivor's tier II component 

is based on an extrapolation from the employee's actual tier II 

component, it necessarily follows that, in computing the survivor 

tier II component, the RRB is bound by the decision regarding the 

use or non-use of military service in connection with the 

employee's annuity.
John Baer

Acting Director of Survivor Benefits 

Through: Bobby V. Ferguson

Director of Programs

The lump-sum death payment is equal to ten times the basic amount 

(see section 5(f)(1) of the Railroad Retirement Act of 1937) based 

on the employee's compensation after December 31, 1936, and prior 

to January 1, 1975, and the individual's wages prior to January 1, 

1975 (see section 6(b) (1) of the Railroad Retirement Act of 1974). 

Although it could be argued that since the Act is silent as to the 

compensation and service to be used in the calculation of the lump 

sum death payment, the Board could decide anew whether to use the 

military service or not, it would appear to me that the more 

reasonable interpretation would be the interpretation supporting 

your current procedure of not altering the crediting of military 

service once it has been considered to be creditable or not 

creditable. This would also be consistent with the doctrine of 

administrative finality.

MCL: cmw

MS.MCL