M e m o r a n d u m

U n it e d Sta t e s Go v e r n m e n t FORM G-11Sf (1*92)

Ra il r o a d Re t ir e m e n t Bo ard

September 30,2002

L-2002-11

TO Ronald Russo

Director of Policy and Systems

FROM Steven A. Be 

General Co

SUBJECT : Summary of RRSIA Legal Interpretations

This is in response to your memorandum wherein you outlined several 

interpretations of the language contained in P.L. 107-90, the Railroad Retirement 

and Survivor's improvement Act of 2001, and asked that we review and confirm 

those interpretations.

Section 101 of P.L 107-90 creates an additional amount that is payable under 

the Railroad Retirement Act to certain widow(er]s. Attachment 1 of your 

memorandum concerns interpretations made with regard to the computation 

of this additional amount, called the widow(er)'s initial minimum amount 

(WIMA). We agree with your interpretation that only widow(er)s paid under the 

1981 amendments to the Railroad Retirement Act (RR Act) that provided that 

the survivor tier 2 amount should be a percentage of the employee’s tier 2 

amount are eligible for the WIMA. We also agree that the WIMA is effective 

February 1,2002. For those individuals whose original annuity beginning date is 

prior to February 1,2002, the WIMA is computed based on the amounts to which 

the widow(er) was entitled on the original beginning date, using the family 

group in existence in February 2002. The WIMA is compared to the regular 

annuity amount payable for February 2002, and the higher amount is payable.

ATTACHMENT 1 - SECTION 101 OF P.L 107-90
- 2-

We agree that the computation of the tier 1 annuity component of the WIMA is 

the same as that com puted under section 4(f) of the RRA, except the tier I is not 

reduced for any public service pension, social security benefits, dual RR Act 

entitlement, or excess earnings. The widow(er)'s WIMA tier I is the widow(er)'s 

statutory share of the Social Security Primary Insurance Amount (PIA) payable on 

the widow(er)'s original beginning date including any cost of living increases 

that were payable on the original beginning date adjusted for the family 

maximum, early retirement, and any retirement insurance benefit (RIB) limit. Like 

any tier I annuity, the WIMA amount is rounded down to the nearest dollar. 

Finally, we agree that if the widow(er) is not entitled to a tier I annuity 

component on the original beginning date of the widow(er)’s annuity, the WIMA 

tier I is zero.

We agree that the computation of the tier II amount to be included in the WIMA 

is computed as provided in Section 4(g) of the RR Act, except that 100 percent 

of the deceased employee's tier II amount is used. The WIMA tier II is the 

deceased employee's basic tier II adjusted for vested dual benefit entitlement 

and cost-of-living increases payable between the employee's annuity 

beginning date (or date of death if the employee never filed for an annuity) 

and the widow(er)'s original annuity beginning date. The WIMA tier II amount is 

reduced for the family maximum, the number of months the widow(er) is under 

full retirement age on the widow(er)'s original annuity beginning date, and any 

applicable take-back amount under Sections 4(g)(7), 4(g)(8) and 4(g)(9).

In addition, we agree that since the WIMA tier I amount is not reduced for dual 

RR entitlement, the WIMA tier II amount does not include any dual entitlement 

restored amount.

In applying the age reduction factor of the WIMA, we agree that the following 

considerations should apply:

In accordance with Section 134(c) of P.L. 98-21, the age reduction factor 

applied to the WIMA for a disabled widow(er) is based on the number of months 

between ages 60 and full retirement age, even if the annuity began before 

1984 and was reduced on the widow(er)'s original annuity beginning date by 

the number of months between ages 50 and full retirement age.

If the widow(er) is entitled to a disability insurance benefit (DIB) at SSA, the age 

reduction applied to the WIMA tier I is modified in the same manner as the age 

reduction that is applied to the regular tier I. Only the portion of the WIMA tier I 

that exceeds the DIB is reduced for age.
We also agree that the family maximum reduction of the Railroad Retirement 

Act applicable to the tier II annuity component is also applicable to the 

computation of the tier II component of the WIMA. The WIMA tier II is limited to 

the widow(er)'s share of 130 percent of the deceased employee’s tier II. To 

determine the widow(er)’s share, hypothetical shares of the 130 percent 

maximum are calculated for the other family members. We agree with the 

computation set forth in the example set forth in your memorandum.

We agree that the WIMA is not adjusted for any cost-of-living increases payable 

after the widow(er)'s original annuity beginning date. The WIMA tier I and tier II 

do, however, include any cost-of-living increases payable on the widow(erj's 

original annuity beginning date.

We also agree that the WIMA amount computed on the widow(er)'s original 

annuity beginning date is recomputed in only two situations, first, if a young 

mother or father becomes entitled to a widow(er)'s annuity based on age or 

disability, or, secondly, if the tier I is restricted by the family maximum and the 

number of annuitants in the family changes. The WIMA is recomputed as if the 

new family group had existed on the widow(er)’s original annuity beginning 

date. The recomputed WIMA replaces the original WIMA effective with the 

date the family group changed.

In making the WIMA test, we agree that the WIMA amount is compared to the 

following portion of the widow(er)'s regular annuity amount: The statutory share 

of the cost-of-living increased PIA adjusted for the family maximum, early 

retirement and the RIB limit, and the cost-of-living increased tier II adjusted for 

early retirement, takebacks, and the spouse minimum. The dual entitlement 

restored amount is not included in the tier II amount used for the WIMA test.

If the WIMA is higher than the above amount, the difference between the two 

amounts is added to the regular tier II.

We agree that the spouse minimum remains a part of the law; the WIMA is 

another alternative to the regular widow(er)’s annuity amount. In any month, 

the widow(er) is entitled to the higher of the regular widow(er)'s annuity rate, 

the previous spouse rate, or the WIMA.

We agree that the WIMA is compared to the regular annuity amount each time 

the regular annuity amount changes. As the regular annuity amount is 

increased for cost-of-living adjustments, the WIMA increase amount added to 

tier II would decrease. Eventually, the WIMA will cease to apply when annual 

cost-of-living increases cause the regular annuity amount to exceed the WIMA.
We also agree that if the widow(er) receives a public service pension, a social 

security benefit or another RR annuity, the widow(er)'s monthly payment may 

decrease when the annual cost-of-living increase (COL) is added to the regular 

annuity rate. The WIMA increase amount included in tier II is reduced by the 

gross COL paid in tier I, while the rate actually paid includes the net tier I COL 

reduced by the increase in the other benefit the widow(er) receives.

ATTACHMENT 2 - SECTION 102 OF P. L 107-90

Section 102 of P.L. 107-90 am ended the Railroad Retirement Act to provide for 

employee and spouse annuities that are not reduced for age when the 

annuities are based on at least 30 years of railroad service and the individual is 

at least age 60. We agree with your interpretation that employee and spouse 

annuitants are eligible for full tier I benefits if (1) the employee has 30 years of RR 

service, the employee receives an annuity based on age, and the em ployee’s 

ABD is January 1,2002, or later; or (2) the employee receives a disability annuity 

and the spouse’s annuity beginning date is January 1,2002, or later.

We agree with your interpretation that for individuals entitled to an unreduced 

annuity at age 60 based on 30 years of service, the PIA 1, the primary insurance 

amount (PIA) used to compute the gross tier I annuity component, will be 

computed as described in 20 CFR 225.11 (c), which provides that the eligibility 

year for indexing earnings is the year in which the annuity begins, and the 

benefit computation years (BCYs) (number of years of earnings used) are based 

on the deemed date of birth derived by deeming the employee to have 

attained full retirement age in the year in which the annuity began to accrue. 

Since all employees retiring under this provision will be born after 1940, the BCYs 

will be 35 in all cases.

We also agree that in accordance with 20 CFR 217.26(b)(3), annuitants who 

began receiving annuities before 2002 based on 30 years of RR service can 

cancel their original application for benefits and file an application for an 

annuity to begin January 1, 2002 in order to receive a full tier I amount. All 

annuities paid for months prior to 2002 must be repaid. In accordance with 

20 CFR 217.27, a new application is required.

We also agree that applications for annuities filed before the date of 

enactment of P. L. 107-90 (December 21,2002) can be used to pay annuities 

computed under section 102 if the applicant either designated an ABD of 

January 1,2002 or later, or asked for the earliest ABD permitted by law and that 

date is January 1,2002 or later.
We agree that in accordance with legal opinion L-89-28, the annuity beginning 

date for 60/30 annuities cannot be earlier than the first month the applicant is 

age 60 for the entire month.

For purposes of computing the tier I annuity component of individuals qualifying 

for an annuity under section 102 of P.L. 107-90, we agree that the tier I should be 

increased for all cost-of-living increases payable beginning in the year the 

annuity begins to accrue. The gross tier I should be rounded down to the 

nearest dollar.

ATTACHMENT 3 - SECTION 103 OF P. L 107-90

Section 103 of P.L. 107-90 establishes entitlement for a new class of beneficiaries 

based on 5 years of railroad service after 1995. The types of annuities that can 

be paid to employees who have less than 10 years of RR service provided the 

employee has at least 5 years of railroad service after 1995 are a full age annuity 

at full retirement age, a reduced age annuity at age 62, and total and 

permanent (T&P) disability annuity at any age. Spouses and divorced spouses 

of employees entitled under this provision can receive annuities at full retirement 

age or age 62; spouses can also receive annuities based on children. We agree 

that military service creditable under the RRA can be used to establish 5 years of 

service after 1995. The 5 years of service after 1995 can be composed entirely 

of military service creditable under the RRA.

We agree that the earliest possible annuity beginning date under section 103 is 

January 1, 2002. Otherwise, there are no special rules for establishing the 

annuity beginning date of an annuity based on less than 10 years of service; the 

normal rules in the RRA continue to apply.

If the employee receives a T&P disability annuity under section 103, we agree 

that tier II is not payable until the first month in which the employee is age 62 for 

the entire month. We also agree that a spouse may not receive tier II until both 

the employee and the spouse attain age 62 (only the employee must be age 

62 if the spouse annuity is based on a child). Finally, we agree that tier II annuity 

component is reduced for the number of months between age 62 and full 

retirement age.

We agree that if the employee dies before attaining age 62, (s)he is deemed to 

have attained age 62 under section 4(g)(1) of the RRA for purposes of survivor 

annuity computations; a tier II is payable to the survivors.
We agree that neither the employee, the spouse, nor a survivor annuitant is 

entitled to the tier I annuity component under section 103 unless the employee 

has enough quarters of coverage (QCs) to be insured under the SS Act based 

on combined RR and SS earnings. The required number of QCs is based on the 

date of birth if the employee has attained age 62. If the employee is under age 

62 (i.e., receives a T&P annuity), (s)he must have acquired the number of QCs 

required based on the date of birth, and (s)he must have acquired 20 QCs (or a 

lesser number if the employee became disabled before age 31) in the ten years 

immediately preceding the onset of the disability. If the employee does not 

have the required QCs to receive the tier I annuity component on the annuity 

beginning date, the tier I annuity component can become payable later if the 

employee subsequently acquires sufficient QCs. In this situation, the tier I annuity 

component would become payable from the first month of the qualifying 

quarter, and the tier I would be reduced by the number of months the person 

was under full retirement age on that date.

We also agree that the rules used by the Social Security Administration to 

determine entitlement to a social security benefit apply to entitlement to the tier 

I annuity component for survivor annuities under section 103. If the employee 

has a fully insured status or a currently insured status, the tier I annuity 

component is payable to survivor annuitants.

We also agree that if the disabled employee is under age 62 and does not have 

enough QCs to be entitled to tier I, no annuity is payable. The application for an 

annuity should be denied.

We agree that in computing the PIA that will be used for computing the tier I 

annuity component of an annuity based on less than 10 years of service, the 

eligibility year for indexing earnings and determining the number of benefit 

computation years is the year the employee attains age 62, and that cost-ofliving increases are added to the PIA 1, beginning with the COL payable in the 

year the employee attains age 62. This is true even if the employee does not 

acquire an SS insured status until after the year (s)he attains age 62.

We agree that with regard to annuities based on less than 10 years of service, if 

the employee retires after full retirement age, delayed retirement credits (DRCs) 

are payable. The DRCs are accrued from the month the employee attains full 

retirement age, even if the employee attains full retirement age before January 

1,2002. If the employee becam e entitled to an SS benefit under Section 202(a) 

of the SS Act before the RR annuity beginning date, DRCs are accrued only up 

to the date of entitlement to the SS benefit.
If an employee or spouse receives an annuity under section 103 based on age 

(not on disability or on a child) and they began receiving certain types of SS 

benefits before the RR annuity beginning date, we agree that the tier I must be 

reduced by the number of months the person was under full retirement age on 

the later of the date they becam e entitled to the SSA benefit or the date they 

becam e eligible for tier I. This rule applies regardless of whether the person 

actually receives a monthly SS payment (e.g., if the benefit is withheld because 

of excess earnings). The rule applies if the SSA benefit is based on age (not 

disability) and is any of the types of benefits, regardless of the account upon 

which the benefit is paid, provided for by section 202(a) (wage earner), or 

section 202(b) (wife or divorced wife), or section 202(c) (husband or divorced 

husband) of the Social Security Act. This rule does not apply if the SS benefit is 

terminated or cancelled before the annuity beginning date (ABD).

If the person became entitled to a retirement insurance benefit under the 

provisions of the Social Security Act (SSA) before the RR annuity beginning date, 

we agree that the tier I age reduction should be based on the SSA retirement 

insurance benefit date of entitlement even if the retirement insurance benefit is 

converted to a disability insurance benefit after the annuity beginning date. If 

the conversion from retirement insurance benefit to disability insurance benefit 

took place before the annuity beginning date, the SS entitlement has no impact 

on the computation of the tier I age reduction.

We agree that the annuity of an employee who receives a tier II annuity 

component based on 5 years of service after 1995 can, like any other tier II 

annuity component, be divided in a divorce or legal separation.

We agree that if an employee with 5 years of service after 1995 and a current 

connection with the RR industry died in 2001 or earlier and jurisdiction of survivor 

benefits was transferred to the Social Security Administration, jurisdiction can be 

transferred back to the RRB effective January 1,2002.

We also agree that an application for retirement benefits filed by a person with 

less than 10 years of service is deemed to be an application for any wage 

earner or spouse benefits to which the person may be entitled under the 

provisions of the SSA. The person cannot waive entitlement to such SS benefits 

for months after the month of filing. However, the person can waive payment of 

the SS benefits to which (s)he is entitled. If the SS benefit payment is waived, tier 

I should not be reduced for the benefit.
We agree that if an employee who receives an annuity under section 103 later 

acquires 120 service months, the rules of section 103 no longer apply to the 

annuity. The original application for benefits remains in force. The annuity 

beginning date remains the same (unless the employee receives a T&P annuity 

which is terminated because of the return to service). Effective with the date 

the employee ceases RR service, the annuity should be computed under the 

rules that apply based on 10 years of service. If the disabled employee began 

receiving an age-reduced tier II at age 62, the age reduction should be 

removed from the tier II annuity component effective with the date the annuity 

is reinstated. If the tier I annuity component is age reduced based on the 

number of months the annuitant was under full retirement age on the date of 

entitlement to an social security benefit, tier I will be reduced for the number of 

months the annuitant was under full retirement age on the annuity beginning 

date of the railroad retirement annuity effective with the date the annuity is 

reinstated. The annuity beginning date of the railroad retirement annuity is used 

to calculate the number of age reduction months even though the employee 

did not have 10 years of service on that date.

We also agree that if the annuity based on less than 10 years of railroad service

did not include a tier I because the employee did not have the required insured 

status under the SS Act, tier I becomes payable effective with the date the 

annuity is reinstated. If delayed retirement credits (DRCs) were accrued from 

the attainment of full retirement age up to the date of entitlement of the social 

security benefit that preceded the annuity beginning date of the railroad 

retirement annuity, DRCs should be accrued from full retirement age up to the 

annuity beginning date of the railroad retirement annuity effective with the date 

the annuity is reinstated.

ATTACHMENT 4- SECTION 104 OF P.L. 107-90

We have provided no specific guidance with regard to section 104 of P.L. 107- 

90, which eliminated the RRA maximum effective with benefits payable January 

1,2002 and later. The RRA maximum continues to apply for benefits payable for 

months before 2002.

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