IB-2

February 2007

SURVIVOR BENEFITS
provider of health care services is performing unnecessary or inappropriate services or billing Medicare forservices not provided. You may also use the Hot Lineto report any suspected misconduct by a RailroadRetirement Board employee. The Hot Line has beeninstalled by the Railroad Retirement Board’s InspectorGeneral to receive any evidence of such fraud or abuseof the Board’s benefit programs.

The toll-free Hot Line number nationwide is 

1-800-772-4258. Or you may send your complaints inwriting to RRB, OIG, Hot Line Officer, 844 North RushStreet, Chicago, Illinois 60611-2092 or via e-mail athotline@oig.rrb.gov.

Please do not call or write the Inspector General’s

Hot Line with questions about eligibility requirements,delayed payments, or similar problems. Such mattersshould be directed to the nearest Railroad RetirementBoard office.

s under the Railroad Retirement 

mployment Insurance Act. These 

 protection during old age and in 

ath or temporary unemployment 

ad Retirement Board also admin

care program and has administra

 the Social Security Act and the 

mission, the Railroad Retirement 

o the right people, in the right 

ner, and will take appropriate 

ustomers’ trust funds. The 

d will treat every person who 

he agency with courtesy and con

nquiries promptly, accurately and 
xiliary aids or program infor

mats) should contact the near

laints of alleged discrimination

s of disability must be filed

g with the Director of

ailroad Retirement Board, 

Chicago, Illinois 60611-2092.

ual rights under this regulation

oard's Director of Equal

e address.

have any comments or sugges

ntation of information in this

 know. You can fax us at 

us at opa@rrb.gov or write us at

ublic Affairs, U.S. Railroad

orth Rush Street, Chicago, IL

trative responsibilities under the Social Security Act for certain benefit payments and railroad workers’ Medicare coverage. 

This pamphlet describes the retirement and disability 

annuities provided for employees under the Railroad Retirement Act, and the benefits available to their spouses and survivors. Medicare and unemployment-sickness insurance payments are described in separate pamphlets. 

The information in this pamphlet supersedes earlier 

editions. If you have any questions about the information covered in this pamphlet, or if you want one of the Railroad Retirement Board’s pamphlets on Medicare or unemployment and sickness insurance benefits, contact one of the Board’s field offices. The personnel there will be glad to answer your questions and explain your benefit rights. Cities with these offices are listed at the back of this pamphlet. 

In addition, a toll-free Help Line is available at 

1-800-808-0772, which can be used to obtain the addresses and telephone numbers of the Board’s field offices. Employees can use the Help Line to obtain statements of creditable service and compensation, and beneficiaries on 
ALABAMA

BirminghamARIZONAMesaARKANSASLittle RockCALIFORNIACovinaOaklandSacramentoCOLORADODenverFLORIDAJacksonvilleTampaGEORGIAAtlantaILLINOISChicagoDecaturJolietINDIANAIndianapolis

IOWADes MoinesKANSASWichitaKENTUCKYLouisvilleLOUISIANANew OrleansMARYLANDBaltimoreMASSACHUSETTSBostonMICHIGANDetroitMINNESOTADuluthSt. PaulMISSOURIKansas CitySt. LouisMONTANABillings

NEBRASKAOmahaNEW JERSEYNewarkNEW MEXICOAlbuquerqueNEW YORKAlbanyBuffaloNew YorkWestburyNORTH CAROLINACharlotteNORTH DAKOTAFargoOHIOCincinnatiClevelandOREGONPortland

PENNSYLVANIAAltoonaHarrisburgPhiladelphiaPittsburghScrantonTENNESSEENashvilleTEXASFort WorthHoustonUTAHSalt Lake CityVIRGINIARichmondRoanokeWASHINGTONBellevueSpokaneWEST VIRGINIAHuntingtonWISCONSINMilwaukee

59

 estimates, review their service 

 and apply for or claim unem

 services are part of the Board’s 

ement comprehensive Internet 

access to information and allow 

duct its business with the agency 

 of the Board’s publications are 

 downloading, as is information 

s and other topics of interest. 

issued for the purpose of 

Certain limitations, exceptions, 

ases are not covered.
ation, the guaranty did not apply.

tions that apply to tier I amounts

ts.

o a railroad employee annuitant

d the deceased employee started

1974, the amount of any survivor

amount of the employee annuity

so entitled.

15% of the deceased employee’s

rviving parent receives 35%.

amount payable to a family is

r II amount, and the maximum,

ot provided for a surviving

rried widow(er). 

A tier II benefit

 parents if other family members

the parent has remarried.

58

1

2

3

4

5

6

7

Employees with Public, Non-profit 

or Foreign Pensions . . . . . . . . . . . . . . . . . . . . . . 11 

Workers’ Compensation . . . . . . . . . . . . . . . . . . . . 12 

Spouses with Dual Benefits . . . . . . . . . . . . . . . . . . . . . . . . 12 

Social Security Benefits . . . . . . . . . . . . . . . . . . . . 12 Public Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Employee Annuity . . . . . . . . . . . . . . . . . . . . . . . . 13 

Minimum Guaranty for Employee and Spouse Annuities . 13 Cost-of-living Increases in Employee and Spouse 

Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

Working After Retirement . . . . . . . . . . . . . . . . . . . . . . . . . 15 

Disability 

Work Restrictions . . . . . . . . . . . . . . . . . 7 

When Annuities 

Stop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

SURVIVOR BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . 0 Types of Survivor Benefits . . . . . . . . . . . . . . . . . . . . . . . . 

20 

Survivor Annuity Estimates . . . . . . . . . . . . . . . . . . . . . . . . 2 Survivor Annuity 

Tiers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

23 

Survivors with Dual Benefits . . . . . . . . . . . . . . . . . . . . . . . 2 

Social Security Benefits . . . . . . . . . . . . . . . . . . . . 

24 

Public Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Employee Annuity . . . . . . . . . . . . . . . . . . . . . . . . 

25 

Cost-of-living Increases in Survivor Annuities . . . . . . . . . 2 Work and Earnings Limitations . . . . . . . . . . . . . . . . . . . . . 

26 

When Survivor Payments 

Stop . . . . . . . . . . . . . . . . . . . . . 2 

Lump-sum Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 

28 

Residual Lump-sum Payment . . . . . . . . . . . . . . . . 30 
widow(er)’s own employee annuity.

The tier I amount may also be reduced by certain

Federal, State or local government pensions which arebased on a widow(er)’s own earnings. For widow(er)ssubject to the government pension reduction, the tier Ireduction is equal to 2/3 of the public pension.Tier IIWidow(er)s

December 2001 legislation established an “initial

minimum amount” which yields, in effect, a widow(er)’stier II benefit equal to the tier II benefit the employeewould have received at the time of the award of thewidow(er)’s annuity, minus any applicable age reduction.It does this by adding a “guaranty amount,” initially set at50% of the employee’s tier II, to the 100% tier I and 50%tier II benefits provided under prior law.

This “guaranty amount” is offset each year by the

dollar amount of the cost-of-living increases payable inboth the tier I and tier II benefits provided under prior law.Consequently, such a widow(er)’s net benefit payment willnot increase until such time as the widow(er)’s annuity, as

57

ance Payments . . . . . . . . . . . . 39

 . . . . . . . . . . . . . . . . . . . . . . . . 40

ds . . . . . . . . . . . . . . . . . . . . . . 41

 . . . . . . . . . . . . . . . . . . . . . . . . 41

 . . . . . . . . . . . . . . . . . . . . . . . . 42

T ANNUITY

TS . . . . . . . . . . . . . . . . . . . . . 44

ity . . . . . . . . . . . . . . . . . . . . . . 44

 . . . . . . . . . . . . . . . . . . . . . . . . 44 . . . . . . . . . . . . . . . . . . . . . . . . 49

Dual Benefit Payment . . . . . . 50

ity Formula . . . . . . . . . . . . . . 50

 . . . . . . . . . . . . . . . . . . . . . . . . 51

 . . . . . . . . . . . . . . . . . . . . . . . . 51 . . . . . . . . . . . . . . . . . . . . . . . . 54

 . . . . . . . . . . . . . . . . . . . . . . . . 54

 . . . . . . . . . . . . . . . . . . . . . . . . 55

 . . . . . . . . . . . . . . . . . . . . . . . . 55 . . . . . . . . . . . . . . . . . . . . . . . . 57

MENT BOARD OFFICES . . 59
viving divorced spouse whose eli

g for a child of the employee

er I amount. Benefits to a sur

nd when the child is 16. An eligi

% of the full tier I amount. The

an receive is subject to a maxi

f there are three or more family

ed or disabled surviving divorced

or annuities).

 can receive 82.5% of the full 

parents are eligible, the total

han 150% of the full tier I

reviously described is reduced by

security benefit or by the tier I

tirement employee annuity the

 the case of a widow or depend

a railroad employee annuitant,

or the deceased employee had

rvice before 1975, the tier I

56

cases, military service may be counted as railroad service. 

Credit for a month of railroad service is given for 

every month in which an employee had some compensated service for an employer covered by the Railroad Retirement Act, even if only one day’s service is performed in the month. (However, local lodge compensation earned after 1974 is disregarded for any calendar month in which it is less than $25.) Under certain circumstances, additional months of service may be deemed. 

Covered employers include railroads engaged in 

interstate commerce and certain of their subsidiaries, railroad associations and national railway labor organizations. 

Railroad retirement benefits are based on months of 

service and earnings credits. Earnings are creditable up to certain annual maximums on the amount of compensation subject to railroad retirement taxes. 

AGE AND SERVICE, DISABILITY AND

SUPPLEMENTAL ANNUITIES

An AGE AND SERVICE ANNUITY can be paid to: 

 Employees with 30 or more years of creditable 

service. 

1 
y 

, 

p

g 

y 

In general, the survivor tier I amount is equal to theamount of survivor benefits that would have been payableunder social security.

The gross survivor tier I amount (before reductions

for early retirement, or other benefits) is generally equivalent to the unreduced tier I retirement benefit the deceasedemployee had, or would have, received.

For surviving aged or disabled widow(er)s, remarried

widow(er)s and surviving divorced spouses whose annuities begin a year or more after the employee’s death, the“average indexed monthly earnings,” upon which the tier Ibenefit is based, may be reindexed using a later year if itwould result in a higher benefit, provided the employeedied before age 62. The reindexing takes into accountchanges in national earnings levels which occur after theemployee’s death but before the survivor becomes eligiblefor benefits. This provides a benefit consistent with earnings levels at the time of the survivor’s eligibility, ratherthan the time of the employee’s death.

A widow(er), surviving divorced spouse or remarried

widow(er) whose annuity begins at full retirement age orlater receives the full tier I amount unless the deceased

55

annuities awarded before full 

ges from age 65 for those born 

 those born in 1960 or later, the 

rity. Reduced annuities are still 

maximum reduction will be 30% 

ar 2022. The tier II portion of an 

ge 8) is not reduced beyond 20% 

reditable railroad service before 

ges 46-50 for a detailed explana

n age cannot be paid until the 

mployment, files an application 

 return to work for a railroad 

an be paid for: 

t any age, if an employee is per

regular work and has at least 10 

ditable railroad service. 

 of creditable railroad service, if 

ormed after 1995, may qualify for 

page 8) before retirement age on 

y if they also meet certain social 

2 
, 

g

g

y

e reduction for spouses of

ess than 30 years of service is

 36 months the spouse is under

her or his annuity begins and

h month (if any) over 36.

ployee had any creditable rail

st 12, 1983, the employee and

tier II purposes remains age 65.

plied to spouse annuities based

 a child.

e and spouse are railroad employ

me railroad service before 1975,

s reduced by the amount of the

o which the spouse is entitled and

stored in the spouse tier II

I amount cannot be reduced

 railroad employee annuitant and

ouse started railroad employment

any spouse or divorced spouse

amount of the employee annuity

o entitled.

54

A 5-month waiting period beginning with the month 

after the month of the onset of disability is required before any disability annuity payments can begin. 

An employee can be in compensated service while 

filing a disability annuity application as long as the compensated service terminates within 90 days from the date of filing. However, in order for a supplemental annuity to be paid by the Board, or for an eligible spouse to begin receiving annuity payments, a disabled annuitant under full retirement age must relinquish employment rights. 

A SUPPLEMENTAL ANNUITY can be paid at: 

 Age 60, if the employee has at least 30 years of 

creditable railroad service. 

 Age 65, if the employee has 25-29 years of 

railroad service. 

In addition to the service requirements, a “current 

connection” with the railroad industry is required for all supplemental annuities. An employee must also be receiving a railroad retirement age and service or disability annuity before a supplemental annuity can be paid. Eligibility 

3 
if the spouse

s annuity beginning date was before 2002. If

the spouse’s annuity beginning date is January 1, 2002, orlater, the spouse can receive an unreduced annuity as earlyas age 60. If the spouse is entitled based on having aminor or disabled child in care, there is no age reduction.

Reductions for other benefits

After any applicable age reduction required for the

spouse’s early retirement, the spouse tier I amount isreduced by the amount of any social security benefit towhich the spouse is entitled.

The tier I amount may also be reduced for certain

Federal, State or local government pension paymentsbased on the spouse’s own earnings. For spouses subjectto the public pension reduction, the tier I reduction is equalto 2/3 of the public pension.

The spouse tier I amount may also be reduced if the

employee under age 65 is receiving a disability annuityand a workers’ compensation or public disability benefit.Divorced spouse

The annuity of a divorced spouse is limited to the

tier I amount and thus equal to what social security wouldpay.

53

lroad service in at least 12 

before the month of death will 

on requirement for the purpose of 

 

s not qualify on this basis, but has 

earlier 30-month period, he or she 

 connection requirement. This 

es if the employee did not have 

outside the railroad industry after 

nth period which included 12 

e and before the month the annu

eath. Full or part-time work for a 

he interval between the end of the 

uding 12 months of railroad serv

e of an employee’s annuity, or the 

can break a current connection. 

an unincorporated business will 

ction; however, self-employment 

ction if the business is incorpo

 U.S. Government agencies--

tion, National 

Transportation 

4 
islation eliminated the tier I age

ges 60 or 61 with 30 or more

lroad retirement annuities begin

The spouses of these employees

nnuities at age 60.

uired for spouses of employees

who attained 60/30 eligibility after

uities began before January 2002

r I portion of the spouse annuity.

60/30 eligibility before July 1984,

years of service or begins receiv

or 61 after 2001 with 30 years of

portion is not subject to these

nnuity is subject to 60/30 age

such an employee may receive a

n if the spouse does not retire

ouse cases, the tier I benefit is

yee’s reduced tier I on the

ning date and is also frozen until

52

A current connection can also be maintained, for 

purposes of supplemental and survivor annuities, if the employee completed 25 years of railroad service, was involuntarily terminated without fault from his or her last job in the railroad industry, and did not thereafter decline an offer of employment in the same class or craft in the railroad industry, regardless of the distance to the new position. A termination of railroad service is considered voluntary unless there was no choice available to the individual to remain in service. Generally, where an employee has no option to remain in the service of his or her railroad employer, the termination of the employment is considered involuntary, regardless of whether the employee does or does not receive a separation allowance. However, each case is decided by the Board on an individual basis. This exception to the normal current connection requirements became effective October 1, 1981, but only for employees still living on that date who left the rail industry on or after October 1, 1975, or who were on leave of absence, on furlough, or absent due to injury on October 1, 1975. 

Once a current connection is established at the time 

the railroad retirement annuity begins, an employee never loses it no matter what kind of work is performed thereafter. 

5
by a railroad labor organization.

SPOUSE ANNUITY

The spouse annuity formula is based on certain percentages of the employee’s tier I and tier II amounts.

Tier I

The tier I portion of a spouse annuity is 1/2 of the

employee’s tier I amount after any reduction for theemployee’s noncovered service pension but before anyreduction in the employee’s annuity for early retirement orentitlement to a social security benefit.Spouse age reductions

Age reductions required for those spouses between

age 62 and full retirement age of employees retiring withless than 30 years of service are applied separately to eachannuity component. Full retirement age for a spouse isgradually rising, just as for an employee. Actuariallyreduced benefits continue to be available but at greaterreductions. The tier I reduction is 1/144 for each of thefirst 36 months the spouse is under full retirement agewhen her or his annuity begins and will decrease to 1/240

51

61 before 2002. If the employee 

annuity, has attained age 60 and 

e spouse can receive an unre

l month she or he is age 60, 

employee annuity began before 

he spouse’s annuity beginning 

yee with less than 30 years of 

loyee’s spouse is also eligible for 

onth the spouse is age 62. Early 

applied to the spouse annuity if 

 her or his full retirement age. 

pouse is gradually rising to age 

e, depending on the year of birth. 

payable at age 62, but the maxi

% rather than 25% by the year 

of a spouse annuity (as defined 

beyond 25% if the employee had 

vice before August 12, 1983. 

mployee receiving an age and 

use of a disability annuitant who 

n age and service annuity) is eli

 at any age if caring for the 

ld, and the child is under age 18 

6 
 before 1975. The vested dual

which the total of these two com

 security benefit based on com

security covered earnings before

efit is increased by the cumula

age increases applicable to tier I

ween January 1, 1975, and the

ary 1, 1982, whichever was earli

t is then frozen; that is, no further

e applied thereafter. The amount

 due is added to the tier portions

gular annuity.

tion applied to the tier I compo

ed dual benefit component of an

ees retiring before full retirement

s of service.

ormula

pplemental annuity awarded after

$4 for each year of service over

43. A fraction of $4 is added for

vice.

50

g 

p

, 

g 

y

g 

(father), or remarried widow(er) annuity does not waive the 1-year marriage requirement. 

An annuity may also be payable to the divorced wife 

or husband of a retired employee if their marriage lasted for at least 10 consecutive years, both have attained age 62 for a full month and the divorced spouse is not currently married. The amount of a divorced spouse’s annuity is, in effect, equal to what social security would pay in the same situation and therefore less than the amount of the spouse annuity otherwise payable (tier I only). Effective August 17, 2007, a divorced spouse can receive an annuity even if the employee has not retired, provided they have been divorced for a period of not less than 2 years, and the employee and spouse are at least age 62 and the employee is fully insured under the Social Security Act using combined railroad and social security earnings. 

EMPLOYEE AND SPOUSE ANNUITY ESTIMATES 

Railroad employees can get estimates of future annuities for themselves and their spouses through the Board’s 

Web site at www.rrb.gov. The estimates are based on the service and earnings records maintained by the Board and 

7 
the product which is obtained by multiplying an individual’s years of service by such individual’s average monthlycompensation using the tier II tax base in the 60 months ofhighest earnings. The tier II component is reduced by 25%of any gross employee vested dual benefit amount due.Age reductions

Age reductions required for those employees retiring

between age 62 and full retirement age with less than 30years of service are also applied to the tier II component ofan annuity. The reduction is 1/180 for each of the first 36months the employee is under full retirement age when hisor her annuity begins and 1/240 for each additional month.

Full retirement age is gradually rising as mentioned

earlier. However, if an employee had any creditable railroad service before August 12, 1983, the retirement age fortier II purposes will remain 65.

Employees with 5-9 years of creditable service, if at

least 5 years were after 1995, are eligible for tier II benefits the first full month they are age 62. Their tier II benefits are subject to the same age reductions that apply toemployees with 10 to 29 years of service. If they are eligi

49

0

year employees retiring before 

) fiscal year 2006 annuity awards 

rage of less than 30 years of serv

IES AND DUAL BENEFITS 

irement annuities are calculated 

The annuity formula compo

pouses are described in the sec

ck of this pamphlet. 

d on railroad retirement credits 

edits an employee has acquired. 

er is calculated using social secu

lroad retirement age and service 

ased on railroad retirement cred

pared to the retirement benefits 

l security benefits to workers in 

nt may also be payable as part of 

mployee had at least 120 months 

quired sufficient quarters of 

(continued on page 10) 

8 
r public disability 

 are under age 65 and receiving a

 I amount is, under certain cir

eceipt of workers’ compensation

ts.

age reduction, the tier I amount is

any social security benefits also

unt below zero.

n-profit or foreign pensions

 attain eligibility for both tier I

rnment pension or other payments

ay be required for receipt of a

art or in whole, on employment

tirement or social security after

o payments from a non-profit

ain foreign governments or

mployee’s tier I benefit will not

1/2 of his or her pension from

48

nection, a supplemental annuity may be payable. The supplemental annuity amount, for awards after 1974, is $23 plus $4 for each year of service over 25 years, up to a maximum of $43 for employees with 30 or more years of service. Figures in the tables on this page include supplemental annuity amounts. 

Table 2.--Fiscal Year 2006 Annuity Awards 

Based on Service Averaging Less than 30 Years

Average Average years 

award of service 

Employee full retirement age or over $1,861 22.4 Employee full retirement age or over and spouse $2,766 25.3 Employee under full retirement age with less than 30 years of service $1,317 17.4 Employee under full retirement age with less than 30 years of service and spouse $1,765 17.6 Employee retiring because of disability $2,309 24.5 

9 
security benefit, the age reduction in his or her tier I will

be based on the age reduction applicable on the beginningdate of the employee’s social security benefit, even if theemployee is already of full retirement age on the beginningdate of his or her railroad retirement annuity.

Age reductions are required in the tier I annuity

amounts of 30-year employees who retired at ages 60-61before 2002 and attained age 60 or completed 30 years ofservice after June 1984. The age reductions are appliedonly to the tier I annuity portion. If an employee affectedby this provision was born before 1938 and attained 60/30eligibility after December 1985, tier I is permanently

47

1940 65 and 6 months 22.50%1941 65 and 8 months 23.333%1942 65 and 10 months 24.167%1943 through 1954 66 25.00%1955 66 and 2 months 25.833%1956 66 and 4 months 26.667%1957 66 and 6 months 27.50%1958 66 and 8 months 28.333%1959 66 and 10 months 29.167%1960 or later 67 30.00%

 an employee annuity is based on 

ad retirement and social security 

al security formulas, and approx

y would pay if railroad work 

em. It is reduced by the amount 

ty benefit paid on the basis of the 

mployment in order to prevent a 

sed on social security covered 

nt is also reduced in the event a 

payable to the employee on the 

earnings. This reduction follows 

ty law which, in effect, limit pay

two or more benefits payable to 

 An annuitant is required to 

ment Board if any benefits are 

 Social Security Administration 

se other than for an annual cost

lified for dual benefits before 

ing requirements, he or she can 

uity amount, which offsets, in 

ction. This additional amount, 

nefits payable prior to 1975, is 

10 
age for employee and spouse

5 to 66 and from 66 to 67 at the

ar over two separate six-year

lso affect how reduced benefits

irement. The increase in full

5 to age 66 affects those people

rs 1938 through 1942. The full

n at age 66 for people born in the

 The increase in full retirement

 affects those who were born in

959. For people who were born

tirement age will be age 67.

ontinue to be available but at

arly-retirement reduction factor

for each of the first 36 months of

dless of the age of initial entitle

40 for each month (if any) over

This will result in a gradual

at age 62 to 30% for an employee

t age is in effect.

less than 10 years of railroad

tled to an age-reduced social

46

Vested dual benefit payments are funded by annual 

appropriations from general U.S. Treasury revenues, rather than the railroad retirement payroll taxes and other revenues that finance about 95% of the railroad retirement system’s benefit payments. 

Payment of these vested dual benefits is dependent 

on the time and amount of such appropriations. If the appropriation in a fiscal year is for less than the estimated total vested dual benefit payments, individual payments must be reduced. Employees with Public, Non-profit or Foreign Pensions 

For employees first eligible for a railroad retirement 

annuity and a Federal, State or local government pension after 1985, there may be a reduction in the tier I amount for receipt of a public pension based, in part or in whole, on employment not covered by social security or railroad retirement after 1956. This may also apply to certain other payments not covered by railroad retirement or social security, such as from a non-profit organization or from a foreign government or a foreign employer, but it does not include military service pensions, payments by the 

11 
status

 under Social Security Act rules (usually 40 quarters

of coverage), counting both railroad retirement and socialsecurity covered earnings.

Delayed retirement credits

Tier I benefits are increased for each month an

employee delays retirement past full retirement age, upuntil age 70. For those who attain full retirement age onJanuary 1, 2006, or later with a date of birth January 2,1940, through January 1, 1941, the delayed retirementcredit is 7/12 of 1% per month. For those with a date ofbirth of January 2, 1941, through January 1, 1943, thedelayed retirement credit is 5/8 of 1% per month. Forthose who attain full retirement age in later years, thedelayed retirement credit gradually increases every otheryear until it becomes 8% per year beginning in 2008(earned in 2008 but payable effective 2009). Delayedretirement credits are not given to an employee with lessthan 10 years of railroad service, even if the employee isover full retirement age when he or she retires from his orher railroad job, if the employee is also entitled to an agereduced social security benefit and the beginning date ofthat social security benefit precedes the beginning date ofhis or her railroad retirement annuity.

45

mes entitled to any pensions or 

ve, the Board must be notified 

TH DUAL BENEFITS 

 

 a spouse annuity is reduced for 

ment, regardless of whether the 

based on the spouse’s own earn

ngs or the earnings of another 

llows principles of social security 

 payment to the higher of any 

able to an individual at one time. 

 a spouse annuity may also be 

 Federal, State or local govern

ayable to the spouse based on the 

he reduction generally does not 

on which the pension is based 

cial Security Act throughout the 

mployment. (This 60-month 

12 
ETIREMENT ANNUITY

gular annuity is the total of por

 separately under different for

us any vested dual benefit pay

ulated in generally the same way

t. Any social security credits of

d with his or her railroad retire

mputation purposes.

 an employee’s creditable earn

nto account the changes in wage

etime. This procedure, called

able earnings from past years to

age levels just prior to the

ligibility. The adjusted earnings

rage indexed monthly earnings,”

o determine the gross tier I

ble in 2007, the gross tier I is

44

If both the husband and wife are qualified railroad 

employees and either had some railroad service before 1975, both can receive separate railroad retirement employee and spouse annuities, without a full dual benefit reduction. 

If both the husband and wife started railroad employment after 1974, the amount of any spouse or divorced 

spouse annuity is reduced by the amount of the employee annuity to which the spouse is also entitled. 

MINIMUM GUARANTY FOR EMPLOYEE 

AND SPOUSE ANNUITIES 

Under a special minimum guaranty provision, railroad families will not receive less in monthly benefits than 

they would have if railroad earnings were covered by social security rather than railroad retirement laws. This guaranty is intended to cover situations in which one or more members of a family would otherwise be eligible for a type of social security benefit which is not provided under the Railroad Retirement Act. 

For example, social security provides children’s ben13 
if the service has previously been reported to the Board.The BA-6 form should be carefully reviewed to make surethat it is correct. Employees can view their individual railroad retirement records of service months and compensation via the Board’s Web site. This service, called “Serviceand Compensation History,” can be accessed by visitingwww.rrb.gov and clicking on “Benefit Online Services(MainLine).” This electronic alternative does not replaceForm BA-6 but makes the same information availableonline.

If an employee disagrees with the information shown

on the BA-6 form, he or she should write to the Board asearly as possible. The law limits to 4 years the period during which corrections can be made. All letters concerningBA-6 forms must show the employee’s social securitynumber and should be addressed to:

Protest Unit - CES

U.S. Railroad Retirement Board

844 North Rush Street

Chicago, Illinois 60611-2092

43

ETIREMENT BENEFITS

e tier I portions of both employee 

generally increased for higher liv

, and by the same percentage, as 

These increases, effective 

 in the January payment, are trig

s when the Consumer Price 

months ending the previous 

 if the Index increases by 5%, for 

 increases by 5%. Under certain 

e can be based on average 

ather than price increases. 

ceiving both railroad retirement 

ts, the increased tier I portion is 

social security benefit. 

of retired employee and spouse 

reased annually by 32.5% of the 

Price Index. 

g increases are generally payable 

cost-of-living increases. Vested 

d supplemental annuities are not 

-living adjustments. 

14 
50, to September 14, 1978.

o date as yet undetermined.

egan during a war or national

tive duty service the employee

n beyond the end of the war or

ditable, except that voluntary

 September 14, 1978, is not cred

who voluntarily served in the

ne 15, 1948, and December 15,

declared national state of emer

ad retirement credit for their mil

rmed railroad service in the year

efore they entered military serv

o rail service in the year their mil

he following year and had no

mployment.

itary service are encouraged to

advance of retirement regarding

 service.

es in the industry receive a

42

earnings deduction. Such employment will reduce tier II benefits and supplemental annuity payments, which are not otherwise subject to earnings deductions, by $1 for each $2 of earnings received, subject to a maximum reduction of 50%. These reductions continue after full retirement age. 

Retired employees and spouses who have not yet 

attained full social security retirement age, which ranges from age 65 for those born before 1938 to age 67 for those born in 1960 or later, may also be subject to additional earnings deductions for any earnings, in or outside the rail industry, that exceed certain exempt amounts. The tier I and vested dual benefits of these employee and spouse annuities are subject to deductions if earnings exceed the exempt amounts applicable to social security beneficiaries. Prior to the calendar year in which full social security retirement age is attained, the deduction is $1 in benefits for every $2 of annual earnings exceeding an exempt amount ($12,960 in 2007). 

If the employee or spouse has a tier I reduction for 

social security benefits, the tier I benefit is not reduced for excess earnings. 

In the first year in which an employee subject to 

15 
y

deemed, the employee’s compensation for the year, up tothe tier II maximum, must exceed an amount equal to 1/12of the tier II maximum multiplied by the number of servicemonths actually worked. The excess amount is then divided by 1/12 of the tier II maximum; the result, rounded upto a whole number, yields the number of deemed servicemonths. The employee must be in an employment relation(on an approved leave of absence) with a covered railroademployer, or be an employee representative, during adeemed service month. An employee may never be credited with more than 12 service months in any calendar year.

Except for benefits paid for on-the-job injuries, sickness benefits are subject to tier I railroad retirement taxes

if paid within 6 months after the month in which theemployee last worked. They are credited as compensationfor tier I benefits, but are not credited as service months.

Military Service

Military service may be credited towards retirement

benefits under certain conditions. To be creditable as compensation under the Railroad Retirement Act, service in theU.S. Armed Forces must be preceded by railroad service in

41

 in which an individual attains 

ment age, deductions of $1 are 

dual benefits for every $3 earned 

mount ($34,440 in 2007), but only 

n the months prior to the month 

ned. These tier I and vested dual 

fective with the month full retire

or services rendered, plus any net 

yment, are considered when 

arnings. Interest, dividends, cer

me from stocks, bonds, or other 

ally considered earnings for this 

ll retirement age who work after 

 their earnings for a year will be 

mpt amount must promptly notify 

estimate of their expected earn

n overpayment and penalties. 

he Board if their original estimate 

and spouses who return to work 

16 
 a railroad retirement annuity that

 social security benefit is treated

t for Federal income tax purpos

ount of other income received in

 of these benefit payments may

me tax.

eding social security benefits,

s payable between ages 60 and

al disability annuities, plus the

retirement annuities, vested dual

l annuities paid by the Board are

ns for Federal income tax pur

rement Act specifically exempts

d from State and local income

ment Board and the Social

ssue tax information statements to

In the absence of a request not to

eld from U.S. citizens or residents

 benefits in excess of the social

otal more than certain annual

amounts withheld during the tax

the annual statements.

40

which the employee’s annuity is not payable, or for any month in which the spouse works for an employer covered under the Railroad Retirement Act. Disability Work Restrictions 

If an annuity is based on disability, there are certain 

work restrictions that can affect payment, depending on the amount of earnings. The annuity is not payable for any month in which the annuitant works for an employer covered under the Railroad Retirement Act. The annuity is not payable for any month in 2007 in which the annuitant earns more than $700 in any employment or net selfemployment, exclusive of disability-related work expenses. If a disabled annuitant’s earnings in a year (after deduction of disability-related work expenses) exceed the annual limit, the annuity is not payable for the number of months derived by dividing the amount by which those earnings exceed the annual limit by the amount of the monthly limit. Any resulting fraction of a month equal to or greater than one-half (0.5) is rounded up, increasing the number of months in which the annuity is not payable by one. For example, a disability annuitant earns $9,500 in 2007, which is $1,100 over the 2007 annual limit of $8,400. 

17 
Employees who worked for two or more railroads, or

had both railroad retirement and social security taxes withheld from their earnings, should see Internal RevenueService publication 505, Tax Withholding and EstimatedTax, for information on how to figure any excess railroadretirement or social security tax withheld.

Dual Railroad Retirement-Social Security Taxes Paid,1951-74

An employee with 10 or more years of railroad service who is not entitled to a vested dual benefit payment

may be entitled to a refund of excess social security taxesif his or her combined taxable earnings from the railroadretirement and social security systems in any year in theperiod 1951-1974 exceeded a maximum annual amountcreditable under the Railroad Retirement Act. Eligibleemployees will receive their refunds from the Board atretirement without applying for them. In the event anemployee should die before receiving the refund, paymentwill be made to the employee’s survivors.Separation or Severance Payments

A lump sum, approximating railroad retirement 

39

onrailroad employer. 

ant works before full retirement 

question about the possibility of 

 from disability, regardless of the 

sequently, any earnings must be 

d overpayments, which are 

and may also include penalties. 

NNUITIES STOP 

uity stops upon the annuitant’s 

not payable for any day in the 

 stops after the employee recov

can be reinstated if the disabling 

ops if the employee’s annuity ter

nuity was based on caring for a 

onger under age 18 or disabled or 

he spouse’s care. However, the 

nue if she or he is qualified with

ume when the spouse attains a 

18 
presentatives is 12.10% in 2007.

ve is a labor official of a noncov

ho represents employees covered

ed by the Railroad Retirement

h employers and employees are

in asset balances to the sum of

e expenses (the average account

g on the average account benefits

loyers range between 8.20% and

ax rate for employees is between

taxes apply to earnings on an

ts of earnings subject to these

ually on the basis of national

AX PAYMENTS

d employees who also worked for

employer in the same year may,

es, receive a tax credit equivalent

ity taxes withheld.

38

tled to a railroad retirement annuity. 

It is important to notify the Railroad Retirement 

Board promptly if one of the above changes occurs. Failure to report can result in an overpayment, which the Board will take action to recover, sometimes with interest or penalties. Failure to report changes promptly or making a false statement can also result in a fine or imprisonment. 

19 
37

Tier IEmployees and Employers 7.65%* $97,500Tier IIEmployees 3.90% $72,600Employers 12.10% $72,600

Annual regular taxes

on employees earning $97,500Tier I Tier II Total

Employees $7,458.75 $2,831.40 $10,290.15Employers $7,458.75 $8,784.60 $16,243.35

* The tier I tax rate is divided into 6.20% for railroad retirement

and 1.45% for Medicare hospital insurance. The 2007 maximumearnings base for railroad retirement is $97,500 and the Medicarehospital insurance tax is applied to all earnings. Consequently,employee and employer contributions continue to be made at the1.45% rate, even after the employee has earned $97,500.

d

 under the Railroad Retirement 

ured if he or she has at least 10 

or 5 years performed after 1995, 

” with the railroad industry as of 

gins or the month of death, 

he current connection require

eginning of this pamphlet. 

yee was not so insured, jurisdic

fits payable is transferred to the 

ation and any survivor benefits 

stead of the Board. Regardless 

diction, the deceased employee’s 

cial security credits will be com

enefit computations. 

URVIVOR BENEFITS 

le to widows, widowers, and 

tain cases, benefits are also 

ried widow(er)s, grandchildren 

ouses. 

20 
60 months of creditable service

of service at any time. Service

ilitary service.

are not payable unless the employ

on with the railroad industry and

able service after 1995 or 120

ime.

ve circumstances, if the require

ployee’s railroad retirement 

he Social Security Administration

rity credits. Benefits paid by that

y take into account both railroad

d earnings.

ment Act does not allow a former

draw his or her retirement taxes.

 railroad retirement taxes are not

ent tax withholding has exceeded

RETIREMENT TAXES

rement tier I payroll taxes are 

(continued on page 38)

36

tion of an annuity based on caring for a child of the deceased employee. A 5-month waiting period is required after the onset of disability before a disability annuity can begin. 

 Any age if the widow(er) is caring for an unmarried child of the deceased employee under age 18 or a disabled child of any age who became disabled before age 22. Generally, the widow(er) must have been married to 

the employee for at least 9 months prior to death, unless she or he was the natural parent of their child, the employee’s death was accidental or while on active duty in the U.S. Armed Forces, the widow(er) was potentially entitled to certain railroad retirement or social security benefits in the month before the month of death, or the marriage was postponed due to State restrictions on divorce due to mental incompetence or similar incapacity. 

Survivor annuities may also be payable to a surviving 

divorced spouse, or remarried widow(er). Benefits are limited to the amounts social security would pay and therefore are less than the amount of the survivor annuity otherwise payable. However, effective August 17, 2007, tier II benefits may be extended to surviving former spouses pursuant to divorce agreements. 

21 
tlement to social security benefits affects the amount of allannuities.

RIGHT OF APPEAL

Persons who believe that their claims have not been

adjudicated correctly may ask for reconsideration from theBoard unit that denied the claim. If not satisfied with thatreview, the applicant may appeal to the Board’s Bureau ofHearings and Appeals.

Further appeals can be carried to the three-member

Board itself, and beyond the Board to Federal courts. TheBoard’s field office personnel will explain these appealsprocedures and the time limits on filing appeals to thoseseeking reconsideration of their claims.

GARNISHMENT/PROPERTY SETTLEMENTS

Garnishment

Certain percentages of an employee, spouse or survivor annuity may be subject to legal process (i.e., garnishment) to enforce an obligation for child support and/or

alimony payments.

35

r I) may be paid to a widow(er) 

use who remarries after age 60, 

) or disabled surviving divorced 

er age 50; however, remarriage 

 if disabled) would not prevent 

age ends. Such social security 

 paid to a younger widow(er) or 

e caring for the employee’s child 

sabled, if the remarriage is to a 

retirement or social security ben

ds. 

TIES are payable to: 

ld under age 18. ld age 18 in full-time attendance 

dary school or in approved 

student attains age 19 or the end 

ress when the student attains age 

a student attains age 19 during 

are limited to the 2 months fol

is attained. 

abled child over age 18 if the 

permanently disabled before age 

22 
of of relationship to the employ

om the employee.

gible for benefits, proof of the

ch child is needed. If a child is

 supporting medical evidence is

ld students must provide proof of

gh school attendance. A step

st furnish proof of dependency on

rvivor annuity application is 

w(er)s and 6 months for full retire

thers (fathers), children and par

dow(er)s ages 60-61 is 6 months

age reduction (this does not

ed spouses or remarried

there is generally no retroactivity

)s’ annuities. Lump-sum death

be filed within 2 years after the

here is no time limit on filing for

34

SURVIVOR ANNUITY ESTIMATES 

The best way for survivors to obtain an annuity estimate is to visit or telephone the nearest Board field office. 

Active or retired employees who are concerned about the amount of benefits which would be payable to their survivors may also receive estimates from the nearest Board field office. 

The following information may be helpful in providing an idea of the amount of potential survivor benefits: The average annuity awarded to widow(er)s in fiscal 

year 2006, excluding remarried widow(er)s and surviving divorced spouses, was $1,489 a month. Children received $1,056 a month, on the average. Total family benefits for widow(er)s with children averaged $2,989 a month. The average annuity awarded to remarried widow(er)s or surviving divorced spouses in fiscal year 2006 was $831 a month. 

SURVIVOR ANNUITY TIERS 

Survivor annuities, like retirement annuities, consist 

of tier I and tier II components. 

23 
record that shows the dates of service.

Employees are encouraged to file proofs of age, and

especially of any military service, well in advance ofretirement in order to expedite the annuity applicationprocess and avoid delays resulting from inadequate proofs.

Applicants for disability annuities are required to

submit supporting medical information. They are sometimes asked to take a special medical examination given bya doctor designated by the Board.

An annuity is payable as of the first full month

throughout which the employee and/or spouse is age 60, orage 62 in the case of reduced annuities. An annuity ispayable the first day of the month full retirement age isattained in the case of unreduced annuities with less than30 years of service.

The retroactivity of a retirement annuity application

is limited to one year for disability annuities and sixmonths for full age annuities. There is generally noretroactivity for reduced age annuities.

Any social security benefits due the retired employee

or family member which begin after 1974 are paid through

33

be at least equal to the two-tier 

oyee would have received at the 

widow(er)’s annuity, minus certain 

e for age and receipt of social 

ess than the spouse annuity she 

rior to the employee’s death. 

WITH DUAL BENEFITS 

 

 reduced by the amount of any 

ceived by a survivor annuitant, 

 benefits are based on the sur

is reduction follows the princi

 which, in effect, limit payment 

r more benefits payable to an 

When both railroad retirement 

ity benefits are payable, they are 

 single payment issued through 

nuitant must notify the Board if 

directly from the Social Security 

 benefits increase other than for 

ncrease. 

24 
applicants should contact their

re-retirement consultation.

quired when filing a railroad

ation, such as:

ses:

oyee’s age.

tary service.

e if the spouse is eligible or will 

igible for a spouse annuity. A

must furnish proof of divorce

e.

se’s or divorced spouse’s age.

 relationship and age, if the 

g for an annuity based on caring 

s child.

ial security benefit award or 

ity claim determination.

t any public service pension for 

nt qualifies.

32

are some exceptions.) 

Most military service pensions and payments from 

the Department of Veterans Affairs will not cause a reduction. Pensions paid by a foreign government or interstate instrumentality will also not cause a reduction. For those subject to a public pension reduction, the tier I reduction is equal to 2/3 of the amount of the public pension. Employee Annuity 

If a widow(er) is qualified for a railroad retirement 

employee annuity as well as a survivor annuity, a special guaranty applies in some cases. If either the deceased employee or the survivor annuitant completed 120 months of railroad service before 1975, the widow or dependent widower may receive both an employee annuity and a survivor annuity, without a full dual benefit reduction. 

If either the deceased employee or the survivor annuitant had some service before 1975 but had not completed 

120 months of railroad service before 1975, the employee annuity and the tier II portion of the survivor annuity would be payable to the widow(er). The tier I portion of the survivor annuity would be payable only to the extent that it exceeds the tier I portion of the employee annuity. 

25 
phone and mail. The Board accepts applications up to 3months in advance of an annuity beginning date whichallows the agency to complete the processing of most newclaims by a person’s retirement date. Also, effective forapplications filed on or after January 1, 2006, an employeecan be in compensated service while filing a disabilityapplication provided that the compensated service terminates within 90 days from the date of filing. When anemployee files a disability application while still in compensated service, it will be necessary for the employee toprovide a specific ending date of the compensation.Compensated service includes not only compensation withrespect to active service performed by an employee for anemployer, but also includes pay for time lost, wage continuation payments, certain employee protection paymentsand any other payment for which the employee will receiveadditional creditable service.

Railroad employees can also get estimates of their

future annuities over the Internet. Employees can accessthis service by visiting www.rrb.gov and clicking on“Benefit Online Services (MainLine)” for directions onestablishing an RRB Internet Services account.

Persons applying for railroad retirement benefits will

be automatically enrolled in the U.S. 

Treasury’s Direct

31

s or, in some circumstances, 

nd calculated the same way as 

 employee and spouse annuities. 

e of widow(er)s’ annuities com

nitial minimum amount provided 

e monthly amount will not 

payable under previous law plus 

increases is higher than the initial 

RNINGS LIMITATIONS 

s not payable for any month the 

ployer covered under the Railroad 

eceiving social security benefits 

ment annuity and social security 

ings limitations purposes. Prior 

ich full retirement age is 

ion of $1 in benefits for every $2 

mount ($12,960 in 2007). The 

$3 earned over an exempt 

 for the months in the calendar 

26 
30

annuity, they must be reported promptly to the Board in order to prevent potential overpayments. 

These earnings restrictions do not apply to disabled 

widow(er)s under age 60 or to disabled children. However, any work or earnings by a disability annuitant must be reported and are reviewed to determine whether they indicate recovery from the disability. 

WHEN SURVIVOR PAYMENTS STOP 

All survivor payments stop upon death; no annuity is 

payable for the month of death. 

A widow(er)’s annuity will be reduced upon remarriage and in some cases payment will be prevented. A 

widow(er)’s, surviving divorced spouse’s and remarried widow(er)’s annuity could also end upon entitlement to another survivor or spouse annuity under the Railroad Retirement Act which is greater than the widow(er)’s annuity. 

A surviving divorced spouse’s or remarried 

widow(er)’s annuity could stop when entitled to a social security benefit which equals or exceeds the deceased employee’s basic tier I amount and reduces the annuity amount to zero. 

27 
under a court order for support. If the employee was notsurvived by a qualified widow(er), the benefit may be paidto the funeral home or the payer of the funeral expenses,but the amount paid cannot exceed the actual costsinvolved. If the employee did not have 10 years of servicebefore 1975, the lump sum is payable only to thewidow(er) living in the same household as the employee atthe time of the employee’s death.

If the employee had less than 10 years of service but

had 5 years after 1995, he or she must have met socialsecurity’s insured status requirements for the lump sum tobe payable.

If a widow(er) is eligible for monthly benefits at the

time of the employee’s death, but the widow(er) had excessearnings deductions which prevented annuity payments orfor any other reason did not receive monthly benefits in the12-month period beginning with the month of the employee’s death totaling at least as much as the lump sum, thedifference between the lump-sum benefit and monthly benefits actually paid, if any, is payable in the form of adeferred lump-sum benefit.

29

f age 19. In most cases, when a 

ing the school term, benefits are 

following the month age 19 is 

p if it was based on disability and 

rom the disability before age 60. 

e reinstated if the disability 

the widow(er) is still under age 

annuity may stop upon remar

married parent is entitled to a 

ccurrences must be reported 

order to prevent an overpayment. 

 DEATH BENEFITS 

benefit is payable to certain sur

th 10 or more years of railroad 

ars if at least 5 years were after 

ction with the railroad industry if 

diately eligible for a monthly 

e’s death. 

28 
f age 19. In most cases, when a

ing the school term, benefits are

following the month age 19 is

p if it was based on disability and

rom the disability before age 60.

e reinstated if the disability

the widow(er) is still under age

annuity may stop upon remar

married parent is entitled to a 

ccurrences must be reported

order to prevent an overpayment.

 DEATH BENEFITS

benefit is payable to certain sur

th 10 or more years of railroad

ars if at least 5 years were after

ction with the railroad industry if

diately eligible for a monthly

e’s death.

28

under a court order for support. If the employee was not survived by a qualified widow(er), the benefit may be paid to the funeral home or the payer of the funeral expenses, but the amount paid cannot exceed the actual costs involved. If the employee did not have 10 years of service before 1975, the lump sum is payable only to the widow(er) living in the same household as the employee at the time of the employee’s death. 

If the employee had less than 10 years of service but 

had 5 years after 1995, he or she must have met social security’s insured status requirements for the lump sum to be payable. 

If a widow(er) is eligible for monthly benefits at the 

time of the employee’s death, but the widow(er) had excess earnings deductions which prevented annuity payments or for any other reason did not receive monthly benefits in the 12-month period beginning with the month of the employee’s death totaling at least as much as the lump sum, the difference between the lump-sum benefit and monthly benefits actually paid, if any, is payable in the form of a deferred lump-sum benefit. 

29 
annuity, they must be reported promptly to the Board inorder to prevent potential overpayments.

These earnings restrictions do not apply to disabled

widow(er)s under age 60 or to disabled children. However,any work or earnings by a disability annuitant must bereported and are reviewed to determine whether they indicate recovery from the disability.

WHEN SURVIVOR PAYMENTS STOP

All survivor payments stop upon death; no annuity is

payable for the month of death.

A widow(er)’s annuity will be reduced upon remarriage and in some cases payment will be prevented. 

A

widow(er)’s, surviving divorced spouse’s and remarriedwidow(er)’s annuity could also end upon entitlement toanother survivor or spouse annuity under the RailroadRetirement Act which is greater than the widow(er)’s annuity.

A surviving divorced spouse’s or remarried

widow(er)’s annuity could stop when entitled to a socialsecurity benefit which equals or exceeds the deceasedemployee’s basic tier I amount and reduces the annuityamount to zero.

27

30 
s or, in some circumstances,

nd calculated the same way as

 employee and spouse annuities.

e of widow(er)s’ annuities com

nitial minimum amount provided

e monthly amount will not

payable under previous law plus

increases is higher than the initial

RNINGS LIMITATIONS

s not payable for any month the

ployer covered under the Railroad

eceiving social security benefits

ment annuity and social security

ings limitations purposes. Prior

ich full retirement age is

ion of $1 in benefits for every $2

mount ($12,960 in 2007). The

$3 earned over an exempt

 for the months in the calendar

26

phone and mail. The Board accepts applications up to 3 months in advance of an annuity beginning date which allows the agency to complete the processing of most new claims by a person’s retirement date. Also, effective for applications filed on or after January 1, 2006, an employee can be in compensated service while filing a disability application provided that the compensated service terminates within 90 days from the date of filing. When an employee files a disability application while still in compensated service, it will be necessary for the employee to provide a specific ending date of the compensation. Compensated service includes not only compensation with respect to active service performed by an employee for an employer, but also includes pay for time lost, wage continuation payments, certain employee protection payments and any other payment for which the employee will receive additional creditable service. 

Railroad employees can also get estimates of their 

future annuities over the Internet. Employees can access this service by visiting www.rrb.gov and clicking on “Benefit Online Services (MainLine)” for directions on establishing an RRB Internet Services account. 

Persons applying for railroad retirement benefits will 

be automatically enrolled in the U.S. 

Treasury’s Direct 

31 
are some exceptions.)

Most military service pensions and payments from

the Department of 

Veterans Affairs will not cause a reduction. Pensions paid by a foreign government or interstate

instrumentality will also not cause a reduction. For thosesubject to a public pension reduction, the tier I reduction isequal to 2/3 of the amount of the public pension.Employee Annuity

If a widow(er) is qualified for a railroad retirement

employee annuity as well as a survivor annuity, a specialguaranty applies in some cases. If either the deceasedemployee or the survivor annuitant completed 120 monthsof railroad service before 1975, the widow or dependentwidower may receive both an employee annuity and a survivor annuity, without a full dual benefit reduction.

If either the deceased employee or the survivor annuitant had some service before 1975 but had not completed

120 months of railroad service before 1975, the employeeannuity and the tier II portion of the survivor annuitywould be payable to the widow(er). The tier I portion ofthe survivor annuity would be payable only to the extentthat it exceeds the tier I portion of the employee annuity.

25

applicants should contact their 

re-retirement consultation. 

quired when filing a railroad 

ation, such as: 

ses: 

oyee’s age. 

tary service. 

e if the spouse is eligible or will 

igible for a spouse annuity. A 

must furnish proof of divorce 

e. 

se’s or divorced spouse’s age. 

 relationship and age, if the 

g for an annuity based on caring 

s child. 

ial security benefit award or 

ity claim determination. 

t any public service pension for 

nt qualifies. 

32 
be at least equal to the two-tier

oyee would have received at the

widow(er)’s annuity, minus certain

e for age and receipt of social

ess than the spouse annuity she

rior to the employee’s death.

WITH DUAL BENEFITS

 reduced by the amount of any

ceived by a survivor annuitant,

 benefits are based on the sur

is reduction follows the princi

 which, in effect, limit payment

r more benefits payable to an

When both railroad retirement

ity benefits are payable, they are

 single payment issued through

nuitant must notify the Board if

directly from the Social Security

 benefits increase other than for

ncrease.

24

record that shows the dates of service. 

Employees are encouraged to file proofs of age, and 

especially of any military service, well in advance of retirement in order to expedite the annuity application process and avoid delays resulting from inadequate proofs. 

Applicants for disability annuities are required to 

submit supporting medical information. They are sometimes asked to take a special medical examination given by a doctor designated by the Board. 

An annuity is payable as of the first full month 

throughout which the employee and/or spouse is age 60, or age 62 in the case of reduced annuities. An annuity is payable the first day of the month full retirement age is attained in the case of unreduced annuities with less than 30 years of service. 

The retroactivity of a retirement annuity application 

is limited to one year for disability annuities and six months for full age annuities. There is generally no retroactivity for reduced age annuities. 

Any social security benefits due the retired employee 

or family member which begin after 1974 are paid through 

33 
SURVIVOR ANNUITY ESTIMATES

The best way for survivors to obtain an annuity estimate is to visit or telephone the nearest Board field office.

Active or retired employees who are concerned about theamount of benefits which would be payable to their survivors may also receive estimates from the nearest Boardfield office.

The following information may be helpful in providing an idea of the amount of potential survivor benefits:The average annuity awarded to widow(er)s in fiscal

year 2006, excluding remarried widow(er)s and survivingdivorced spouses, was $1,489 a month. Children received$1,056 a month, on the average. Total family benefits forwidow(er)s with children averaged $2,989 a month. Theaverage annuity awarded to remarried widow(er)s or surviving divorced spouses in fiscal year 2006 was $831 amonth.

SURVIVOR ANNUITY TIERS

Survivor annuities, like retirement annuities, consist

of tier I and tier II components.

23

of of relationship to the employ

om the employee. 

gible for benefits, proof of the 

ch child is needed. If a child is 

 supporting medical evidence is 

ld students must provide proof of 

gh school attendance. A step

st furnish proof of dependency on 

rvivor annuity application is 

w(er)s and 6 months for full retire

thers (fathers), children and par

dow(er)s ages 60-61 is 6 months 

age reduction (this does not 

ed spouses or remarried 

there is generally no retroactivity 

)s’ annuities. Lump-sum death 

be filed within 2 years after the 

here is no time limit on filing for 

34 
r I) may be paid to a widow(er)

use who remarries after age 60,

) or disabled surviving divorced

er age 50; however, remarriage

 if disabled) would not prevent

age ends. Such social security

 paid to a younger widow(er) or

e caring for the employee’s child

sabled, if the remarriage is to a

retirement or social security ben

ds.

TIES are payable to:

ld under age 18.ld age 18 in full-time attendance

dary school or in approved

student attains age 19 or the end

ress when the student attains age

a student attains age 19 during

are limited to the 2 months fol

is attained.

abled child over age 18 if the

permanently disabled before age

22

tlement to social security benefits affects the amount of all annuities. 

RIGHT OF APPEAL 

Persons who believe that their claims have not been 

adjudicated correctly may ask for reconsideration from the Board unit that denied the claim. If not satisfied with that review, the applicant may appeal to the Board’s Bureau of Hearings and Appeals. 

Further appeals can be carried to the three-member 

Board itself, and beyond the Board to Federal courts. The Board’s field office personnel will explain these appeals procedures and the time limits on filing appeals to those seeking reconsideration of their claims. 

GARNISHMENT/PROPERTY SETTLEMENTS 

Garnishment 

Certain percentages of an employee, spouse or survivor annuity may be subject to legal process (i.e., garnishment) to enforce an obligation for child support and/or 

alimony payments. 

35 
tion of an annuity based on caring for a child of thedeceased employee. A 5-month waiting period is requiredafter the onset of disability before a disability annuity canbegin.

 Any age if the widow(er) is caring for an unmarried child of the deceased employee under age 18 or a disabled child of any age who became disabled before age 22.Generally, the widow(er) must have been married to

the employee for at least 9 months prior to death, unlessshe or he was the natural parent of their child, the employee’s death was accidental or while on active duty in theU.S. Armed Forces, the widow(er) was potentially entitledto certain railroad retirement or social security benefits inthe month before the month of death, or the marriage waspostponed due to State restrictions on divorce due to mental incompetence or similar incapacity.

Survivor annuities may also be payable to a surviving

divorced spouse, or remarried widow(er). Benefits arelimited to the amounts social security would pay and therefore are less than the amount of the survivor annuity otherwise payable. However, effective August 17, 2007, tier IIbenefits may be extended to surviving former spouses pursuant to divorce agreements.

21

60 months of creditable service 

of service at any time. Service 

ilitary service. 

are not payable unless the employ

on with the railroad industry and 

able service after 1995 or 120 

ime. 

ve circumstances, if the require

ployee’s railroad retirement 

he Social Security Administration 

rity credits. Benefits paid by that 

y take into account both railroad 

d earnings. 

ment Act does not allow a former 

draw his or her retirement taxes. 

 railroad retirement taxes are not 

ent tax withholding has exceeded 

RETIREMENT TAXES 

rement tier I payroll taxes are 

(continued on page 38) 

36 
d

 under the Railroad Retirement

ured if he or she has at least 10

or 5 years performed after 1995,

” with the railroad industry as of

gins or the month of death,

he current connection require

eginning of this pamphlet.

yee was not so insured, jurisdic

fits payable is transferred to the

ation and any survivor benefits

stead of the Board. Regardless

diction, the deceased employee’s

cial security credits will be com

enefit computations.

URVIVOR BENEFITS

le to widows, widowers, and

tain cases, benefits are also

ried widow(er)s, grandchildren

ouses.

20

Tier I Employees and Employers 7.65%* $97,500 Tier II Employees 3.90% $72,600 Employers 12.10% $72,600 

Annual regular taxes 

on employees earning $97,500 Tier I 

Tier II 

Total 

Employees $7,458.75 $2,831.40 $10,290.15 Employers $7,458.75 $8,784.60 $16,243.35 

* The tier I tax rate is divided into 6.20% for railroad retirement 

and 1.45% for Medicare hospital insurance. The 2007 maximum earnings base for railroad retirement is $97,500 and the Medicare hospital insurance tax is applied to all earnings. Consequently, employee and employer contributions continue to be made at the 1.45% rate, even after the employee has earned $97,500. 

37 
tled to a railroad retirement annuity.

It is important to notify the Railroad Retirement

Board promptly if one of the above changes occurs.Failure to report can result in an overpayment, which theBoard will take action to recover, sometimes with interestor penalties. Failure to report changes promptly or makinga false statement can also result in a fine or imprisonment.

19

presentatives is 12.10% in 2007. 

ve is a labor official of a noncov

ho represents employees covered 

ed by the Railroad Retirement 

h employers and employees are 

in asset balances to the sum of 

e expenses (the average account 

g on the average account benefits 

loyers range between 8.20% and 

ax rate for employees is between 

taxes apply to earnings on an 

ts of earnings subject to these 

ually on the basis of national 

AX PAYMENTS 

d employees who also worked for 

employer in the same year may, 

es, receive a tax credit equivalent 

ity taxes withheld. 

38 
onrailroad employer.

ant works before full retirement

question about the possibility of

 from disability, regardless of the

sequently, any earnings must be

d overpayments, which are

and may also include penalties.

NNUITIES STOP

uity stops upon the annuitant’s

not payable for any day in the

stops after the employee recov

can be reinstated if the disabling

ops if the employee’s annuity ter

nuity was based on caring for a

onger under age 18 or disabled or

he spouse’s care. However, the

nue if she or he is qualified with

ume when the spouse attains a

18

Employees who worked for two or more railroads, or 

had both railroad retirement and social security taxes withheld from their earnings, should see Internal Revenue Service publication 505, Tax Withholding and Estimated Tax, for information on how to figure any excess railroad retirement or social security tax withheld. 

Dual Railroad Retirement-Social Security Taxes Paid, 1951-74 

An employee with 10 or more years of railroad service who is not entitled to a vested dual benefit payment 

may be entitled to a refund of excess social security taxes if his or her combined taxable earnings from the railroad retirement and social security systems in any year in the period 1951-1974 exceeded a maximum annual amount creditable under the Railroad Retirement Act. Eligible employees will receive their refunds from the Board at retirement without applying for them. In the event an employee should die before receiving the refund, payment will be made to the employee’s survivors. Separation or Severance Payments 

A lump sum, approximating railroad retirement 

39 
which the employee’s annuity is not payable, or for anymonth in which the spouse works for an employer coveredunder the Railroad Retirement Act.Disability Work Restrictions

If an annuity is based on disability, there are certain

work restrictions that can affect payment, depending on theamount of earnings. The annuity is not payable for anymonth in which the annuitant works for an employer covered under the Railroad Retirement Act. The annuity is notpayable for any month in 2007 in which the annuitantearns more than $700 in any employment or net selfemployment, exclusive of disability-related work expenses.If a disabled annuitant’s earnings in a year (after deductionof disability-related work expenses) exceed the annuallimit, the annuity is not payable for the number of monthsderived by dividing the amount by which those earningsexceed the annual limit by the amount of the monthlylimit. Any resulting fraction of a month equal to or greaterthan one-half (0.5) is rounded up, increasing the number ofmonths in which the annuity is not payable by one. Forexample, a disability annuitant earns $9,500 in 2007,which is $1,100 over the 2007 annual limit of $8,400.

17

 a railroad retirement annuity that 

 social security benefit is treated 

t for Federal income tax purpos

ount of other income received in 

 of these benefit payments may 

me tax. 

eding social security benefits, 

s payable between ages 60 and 

al disability annuities, plus the 

retirement annuities, vested dual 

l annuities paid by the Board are 

ns for Federal income tax pur

rement Act specifically exempts 

d from State and local income 

ment Board and the Social 

ssue tax information statements to 

In the absence of a request not to 

eld from U.S. citizens or residents 

 benefits in excess of the social 

otal more than certain annual 

amounts withheld during the tax

the annual statements. 

40 
 in which an individual attains

ment age, deductions of $1 are

dual benefits for every $3 earned

mount ($34,440 in 2007), but only

n the months prior to the month

ned. These tier I and vested dual

fective with the month full retire

or services rendered, plus any net

yment, are considered when

arnings. Interest, dividends, cer

me from stocks, bonds, or other

ally considered earnings for this

ll retirement age who work after

 their earnings for a year will be

mpt amount must promptly notify

estimate of their expected earn

n overpayment and penalties.

he Board if their original estimate

and spouses who return to work

16

y

deemed, the employee’s compensation for the year, up to the tier II maximum, must exceed an amount equal to 1/12 of the tier II maximum multiplied by the number of service months actually worked. The excess amount is then divided by 1/12 of the tier II maximum; the result, rounded up to a whole number, yields the number of deemed service months. The employee must be in an employment relation (on an approved leave of absence) with a covered railroad employer, or be an employee representative, during a deemed service month. An employee may never be credited with more than 12 service months in any calendar year. 

Except for benefits paid for on-the-job injuries, sickness benefits are subject to tier I railroad retirement taxes 

if paid within 6 months after the month in which the employee last worked. They are credited as compensation for tier I benefits, but are not credited as service months. 

Military Service 

Military service may be credited towards retirement 

benefits under certain conditions. To be creditable as compensation under the Railroad Retirement Act, service in the U.S. Armed Forces must be preceded by railroad service in 

41 
earnings deduction. Such employment will reduce tier IIbenefits and supplemental annuity payments, which are nototherwise subject to earnings deductions, by $1 for each $2of earnings received, subject to a maximum reduction of50%. These reductions continue after full retirement age.

Retired employees and spouses who have not yet

attained full social security retirement age, which rangesfrom age 65 for those born before 1938 to age 67 for thoseborn in 1960 or later, may also be subject to additionalearnings deductions for any earnings, in or outside the railindustry, that exceed certain exempt amounts. The tier Iand vested dual benefits of these employee and spouseannuities are subject to deductions if earnings exceed theexempt amounts applicable to social security beneficiaries.Prior to the calendar year in which full social securityretirement age is attained, the deduction is $1 in benefitsfor every $2 of annual earnings exceeding an exemptamount ($12,960 in 2007).

If the employee or spouse has a tier I reduction for

social security benefits, the tier I benefit is not reduced forexcess earnings.

In the first year in which an employee subject to

15

50, to September 14, 1978. 

o date as yet undetermined. 

egan during a war or national 

tive duty service the employee 

n beyond the end of the war or 

ditable, except that voluntary 

 September 14, 1978, is not cred

who voluntarily served in the 

ne 15, 1948, and December 15, 

declared national state of emer

ad retirement credit for their mil

rmed railroad service in the year 

efore they entered military serv

o rail service in the year their mil

he following year and had no 

mployment. 

itary service are encouraged to 

advance of retirement regarding 

 service. 

es in the industry receive a 

42 
ETIREMENT BENEFITS

e tier I portions of both employee

generally increased for higher liv

, and by the same percentage, as

These increases, effective

 in the January payment, are trig

s when the Consumer Price

months ending the previous

 if the Index increases by 5%, for

 increases by 5%. Under certain

e can be based on average

ather than price increases.

ceiving both railroad retirement

ts, the increased tier I portion is

social security benefit.

of retired employee and spouse

reased annually by 32.5% of the

Price Index.

g increases are generally payable

cost-of-living increases. Vested

d supplemental annuities are not

-living adjustments.

14

if the service has previously been reported to the Board. The BA-6 form should be carefully reviewed to make sure that it is correct. Employees can view their individual railroad retirement records of service months and compensation via the Board’s Web site. This service, called “Service and Compensation History,” can be accessed by visiting www.rrb.gov and clicking on “Benefit Online Services (MainLine).” This electronic alternative does not replace Form BA-6 but makes the same information available online. 

If an employee disagrees with the information shown 

on the BA-6 form, he or she should write to the Board as early as possible. The law limits to 4 years the period during which corrections can be made. All letters concerning BA-6 forms must show the employee’s social security number and should be addressed to: 

Protest Unit - CES

U.S. Railroad Retirement Board

844 North Rush Street

Chicago, Illinois 60611-2092

43 
If both the husband and wife are qualified railroad

employees and either had some railroad service before1975, both can receive separate railroad retirementemployee and spouse annuities, without a full dual benefitreduction.

If both the husband and wife started railroad employment after 1974, the amount of any spouse or divorced

spouse annuity is reduced by the amount of the employeeannuity to which the spouse is also entitled.

MINIMUM GUARANTY FOR EMPLOYEE 

AND SPOUSE ANNUITIES

Under a special minimum guaranty provision, railroad families will not receive less in monthly benefits than

they would have if railroad earnings were covered bysocial security rather than railroad retirement laws. Thisguaranty is intended to cover situations in which one ormore members of a family would otherwise be eligible fora type of social security benefit which is not providedunder the Railroad Retirement Act.

For example, social security provides children’s ben

13

ETIREMENT ANNUITY 

gular annuity is the total of por

 separately under different for

us any vested dual benefit pay

ulated in generally the same way 

t. Any social security credits of 

d with his or her railroad retire

mputation purposes. 

 an employee’s creditable earn

nto account the changes in wage 

etime. This procedure, called 

able earnings from past years to 

age levels just prior to the 

ligibility. The adjusted earnings 

rage indexed monthly earnings,” 

o determine the gross tier I 

ble in 2007, the gross tier I is 

44 
mes entitled to any pensions or

ve, the Board must be notified

TH DUAL BENEFITS

 a spouse annuity is reduced for

ment, regardless of whether the

based on the spouse’s own earn

ngs or the earnings of another

llows principles of social security

 payment to the higher of any

able to an individual at one time.

 a spouse annuity may also be

 Federal, State or local govern

ayable to the spouse based on the

he reduction generally does not

on which the pension is based

cial Security Act throughout the

mployment. (This 60-month

12

status

 under Social Security Act rules (usually 40 quarters 

of coverage), counting both railroad retirement and social security covered earnings. 

Delayed retirement credits 

Tier I benefits are increased for each month an 

employee delays retirement past full retirement age, up until age 70. For those who attain full retirement age on January 1, 2006, or later with a date of birth January 2, 1940, through January 1, 1941, the delayed retirement credit is 7/12 of 1% per month. For those with a date of birth of January 2, 1941, through January 1, 1943, the delayed retirement credit is 5/8 of 1% per month. For those who attain full retirement age in later years, the delayed retirement credit gradually increases every other year until it becomes 8% per year beginning in 2008 (earned in 2008 but payable effective 2009). Delayed retirement credits are not given to an employee with less than 10 years of railroad service, even if the employee is over full retirement age when he or she retires from his or her railroad job, if the employee is also entitled to an agereduced social security benefit and the beginning date of that social security benefit precedes the beginning date of his or her railroad retirement annuity. 

45 
Vested dual benefit payments are funded by annual

appropriations from general U.S. 

Treasury revenues, rather

than the railroad retirement payroll taxes and other revenues that finance about 95% of the railroad retirementsystem’s benefit payments.

Payment of these vested dual benefits is dependent

on the time and amount of such appropriations. If theappropriation in a fiscal year is for less than the estimatedtotal vested dual benefit payments, individual paymentsmust be reduced.Employees with Public, Non-profit or Foreign Pensions

For employees first eligible for a railroad retirement

annuity and a Federal, State or local government pensionafter 1985, there may be a reduction in the tier I amountfor receipt of a public pension based, in part or in whole,on employment not covered by social security or railroadretirement after 1956. This may also apply to certain otherpayments not covered by railroad retirement or social security, such as from a non-profit organization or from a foreign government or a foreign employer, but it does notinclude military service pensions, payments by the

11

age for employee and spouse 

5 to 66 and from 66 to 67 at the 

ar over two separate six-year 

lso affect how reduced benefits 

irement. The increase in full 

5 to age 66 affects those people 

rs 1938 through 1942. The full 

n at age 66 for people born in the 

 The increase in full retirement 

 affects those who were born in 

959. For people who were born 

tirement age will be age 67. 

ontinue to be available but at 

arly-retirement reduction factor 

for each of the first 36 months of 

dless of the age of initial entitle

40 for each month (if any) over 

This will result in a gradual 

at age 62 to 30% for an employee 

t age is in effect. 

less than 10 years of railroad 

tled to an age-reduced social 

46 
 an employee annuity is based on

ad retirement and social security

al security formulas, and approx

y would pay if railroad work

em. It is reduced by the amount

ty benefit paid on the basis of the

mployment in order to prevent a

sed on social security covered

nt is also reduced in the event a

payable to the employee on the

earnings. This reduction follows

ty law which, in effect, limit pay

two or more benefits payable to

 An annuitant is required to

ment Board if any benefits are

 Social Security Administration

se other than for an annual cost

lified for dual benefits before

ing requirements, he or she can

uity amount, which offsets, in

ction. This additional amount,

nefits payable prior to 1975, is

10

1940 65 and 6 months 22.50% 1941 65 and 8 months 23.333% 1942 65 and 10 months 24.167% 1943 through 1954 66 25.00% 1955 66 and 2 months 25.833% 1956 66 and 4 months 26.667% 1957 66 and 6 months 27.50% 1958 66 and 8 months 28.333% 1959 66 and 10 months 29.167% 1960 or later 67 30.00% 

security benefit, the age reduction in his or her tier I will be based on the age reduction applicable on the beginning date of the employee’s social security benefit, even if the employee is already of full retirement age on the beginning date of his or her railroad retirement annuity. 

Age reductions are required in the tier I annuity 

amounts of 30-year employees who retired at ages 60-61 before 2002 and attained age 60 or completed 30 years of service after June 1984. The age reductions are applied only to the tier I annuity portion. If an employee affected by this provision was born before 1938 and attained 60/30 eligibility after December 1985, tier I is permanently 

47 
9

Table 2.--Fiscal Year 2006 Annuity Awards 

Based on Service Averaging Less than 30 Years

Average Average years

award of service

Employee full retirementage or over $1,861 22.4Employee full retirement age or over and spouse $2,766 25.3Employee under fullretirement age with less than 30 years of service $1,317 17.4Employee under full retirement age with less than 30 years of serviceand spouse $1,765 17.6Employee retiring because of disability $2,309 24.5

nection, a supplemental annuity may be payable. The supplemental annuityamount, for awards after 1974, is $23 plus $4 for each year of service over25 years, up to a maximum of $43 for employees with 30 or more years ofservice. Figures in the tables on this page include supplemental annuityamounts.

r public disability 

 are under age 65 and receiving a 

 I amount is, under certain cir

eceipt of workers’ compensation 

ts. 

 

age reduction, the tier I amount is 

any social security benefits also 

unt below zero. 

n-profit or foreign pensions 

 attain eligibility for both tier I 

rnment pension or other payments 

ay be required for receipt of a 

art or in whole, on employment 

tirement or social security after 

o payments from a non-profit 

ain foreign governments or 

mployee’s tier I benefit will not 

1/2 of his or her pension from 

48 
0

year employees retiring before

) fiscal year 2006 annuity awards

rage of less than 30 years of serv

IES AND DUAL BENEFITS

irement annuities are calculated

The annuity formula compo

pouses are described in the sec

ck of this pamphlet.

d on railroad retirement credits

edits an employee has acquired.

er is calculated using social secu

lroad retirement age and service

ased on railroad retirement cred

pared to the retirement benefits

l security benefits to workers in

nt may also be payable as part of

mployee had at least 120 months

quired sufficient quarters of

8

(continued on page 10)

the product which is obtained by multiplying an individual’s years of service by such individual’s average monthly compensation using the tier II tax base in the 60 months of highest earnings. The tier II component is reduced by 25% of any gross employee vested dual benefit amount due. Age reductions 

Age reductions required for those employees retiring 

between age 62 and full retirement age with less than 30 years of service are also applied to the tier II component of an annuity. The reduction is 1/180 for each of the first 36 months the employee is under full retirement age when his or her annuity begins and 1/240 for each additional month. 

Full retirement age is gradually rising as mentioned 

earlier. However, if an employee had any creditable railroad service before August 12, 1983, the retirement age for tier II purposes will remain 65. 

Employees with 5-9 years of creditable service, if at 

least 5 years were after 1995, are eligible for tier II benefits the first full month they are age 62. Their tier II benefits are subject to the same age reductions that apply to employees with 10 to 29 years of service. If they are eligi49 
g 

p

, 

g 

y

g 

(father), or remarried widow(er) annuity does not waivethe 1-year marriage requirement.

An annuity may also be payable to the divorced wife

or husband of a retired employee if their marriage lastedfor at least 10 consecutive years, both have attained age 62for a full month and the divorced spouse is not currentlymarried. The amount of a divorced spouse’s annuity is, ineffect, equal to what social security would pay in the samesituation and therefore less than the amount of the spouseannuity otherwise payable (tier I only). Effective August 17, 2007, a divorced spouse can receive an annuityeven if the employee has not retired, provided they havebeen divorced for a period of not less than 2 years, and theemployee and spouse are at least age 62 and the employeeis fully insured under the Social Security Act using combined railroad and social security earnings.

EMPLOYEE AND SPOUSE ANNUITY ESTIMATES

Railroad employees can get estimates of future annuities for themselves and their spouses through the Board’s

Web site at www.rrb.gov. The estimates are based on theservice and earnings records maintained by the Board and

7

 before 1975. The vested dual 

which the total of these two com

 security benefit based on com

security covered earnings before 

efit is increased by the cumula

age increases applicable to tier I 

ween January 1, 1975, and the 

ary 1, 1982, whichever was earli

t is then frozen; that is, no further 

e applied thereafter. The amount 

 due is added to the tier portions 

gular annuity. 

tion applied to the tier I compo

ed dual benefit component of an 

ees retiring before full retirement 

s of service. 

ormula 

pplemental annuity awarded after 

$4 for each year of service over 

43. A fraction of $4 is added for 

vice. 

50 
61 before 2002. If the employee

annuity, has attained age 60 and

e spouse can receive an unre

l month she or he is age 60,

employee annuity began before

he spouse’s annuity beginning

yee with less than 30 years of

loyee’s spouse is also eligible for

onth the spouse is age 62. Early

applied to the spouse annuity if

 her or his full retirement age.

pouse is gradually rising to age

e, depending on the year of birth.

payable at age 62, but the maxi

% rather than 25% by the year

of a spouse annuity (as defined

beyond 25% if the employee had

vice before August 12, 1983.

mployee receiving an age and

use of a disability annuitant who

n age and service annuity) is eli

 at any age if caring for the

ld, and the child is under age 18

6

by a railroad labor organization. 

SPOUSE ANNUITY 

The spouse annuity formula is based on certain percentages of the employee’s tier I and tier II amounts. 

Tier I 

The tier I portion of a spouse annuity is 1/2 of the 

employee’s tier I amount after any reduction for the employee’s noncovered service pension but before any reduction in the employee’s annuity for early retirement or entitlement to a social security benefit. Spouse age reductions 

Age reductions required for those spouses between 

age 62 and full retirement age of employees retiring with less than 30 years of service are applied separately to each annuity component. Full retirement age for a spouse is gradually rising, just as for an employee. Actuarially reduced benefits continue to be available but at greater reductions. The tier I reduction is 1/144 for each of the first 36 months the spouse is under full retirement age when her or his annuity begins and will decrease to 1/240 

51 
A current connection can also be maintained, for

purposes of supplemental and survivor annuities, if theemployee completed 25 years of railroad service, wasinvoluntarily terminated without fault from his or her lastjob in the railroad industry, and did not thereafter declinean offer of employment in the same class or craft in therailroad industry, regardless of the distance to the newposition. A termination of railroad service is consideredvoluntary unless there was no choice available to the individual to remain in service. Generally, where an employeehas no option to remain in the service of his or her railroademployer, the termination of the employment is consideredinvoluntary, regardless of whether the employee does ordoes not receive a separation allowance. However, eachcase is decided by the Board on an individual basis. Thisexception to the normal current connection requirementsbecame effective October 1, 1981, but only for employeesstill living on that date who left the rail industry on or afterOctober 1, 1975, or who were on leave of absence, on furlough, or absent due to injury on October 1, 1975.

Once a current connection is established at the time

the railroad retirement annuity begins, an employee neverloses it no matter what kind of work is performed thereafter.

5

islation eliminated the tier I age 

ges 60 or 61 with 30 or more 

lroad retirement annuities begin 

The spouses of these employees 

nnuities at age 60. 

uired for spouses of employees 

who attained 60/30 eligibility after 

uities began before January 2002 

r I portion of the spouse annuity. 

60/30 eligibility before July 1984, 

years of service or begins receiv

or 61 after 2001 with 30 years of 

portion is not subject to these 

nnuity is subject to 60/30 age 

such an employee may receive a 

n if the spouse does not retire 

ouse cases, the tier I benefit is 

yee’s reduced tier I on the 

ning date and is also frozen until 

52
lroad service in at least 12

before the month of death will

on requirement for the purpose of

s not qualify on this basis, but has

earlier 30-month period, he or she

 connection requirement. This

es if the employee did not have

outside the railroad industry after

nth period which included 12

e and before the month the annu

eath. Full or part-time work for a

he interval between the end of the

uding 12 months of railroad serv

e of an employee’s annuity, or the

can break a current connection.

an unincorporated business will

ction; however, self-employment

ction if the business is incorpo

 U.S. Government agencies--

tion, National Transportation

4

if the spouse

s annuity beginning date was before 2002. If 

the spouse’s annuity beginning date is January 1, 2002, or later, the spouse can receive an unreduced annuity as early as age 60. If the spouse is entitled based on having a minor or disabled child in care, there is no age reduction. 

Reductions for other benefits 

After any applicable age reduction required for the 

spouse’s early retirement, the spouse tier I amount is reduced by the amount of any social security benefit to which the spouse is entitled. 

The tier I amount may also be reduced for certain 

Federal, State or local government pension payments based on the spouse’s own earnings. For spouses subject to the public pension reduction, the tier I reduction is equal to 2/3 of the public pension. 

The spouse tier I amount may also be reduced if the 

employee under age 65 is receiving a disability annuity and a workers’ compensation or public disability benefit. Divorced spouse 

The annuity of a divorced spouse is limited to the 

tier I amount and thus equal to what social security would pay. 

53 
A 5-month waiting period beginning with the month

after the month of the onset of disability is required beforeany disability annuity payments can begin.

An employee can be in compensated service while

filing a disability annuity application as long as the compensated service terminates within 90 days from the date offiling. However, in order for a supplemental annuity to bepaid by the Board, or for an eligible spouse to beginreceiving annuity payments, a disabled annuitant under fullretirement age must relinquish employment rights.

A SUPPLEMENTAL ANNUITY can be paid at:

 Age 60, if the employee has at least 30 years of

creditable railroad service.

 Age 65, if the employee has 25-29 years of 

railroad service.

In addition to the service requirements, a “current

connection” with the railroad industry is required for allsupplemental annuities. An employee must also be receiving a railroad retirement age and service or disability annuity before a supplemental annuity can be paid. Eligibility

3

, 

g

g

y 

e reduction for spouses of 

ess than 30 years of service is 

 36 months the spouse is under 

her or his annuity begins and 

h month (if any) over 36. 

ployee had any creditable rail

st 12, 1983, the employee and 

tier II purposes remains age 65. 

plied to spouse annuities based 

 a child. 

e and spouse are railroad employ

me railroad service before 1975, 

s reduced by the amount of the 

o which the spouse is entitled and 

stored in the spouse tier II 

I amount cannot be reduced 

 railroad employee annuitant and 

ouse started railroad employment 

any spouse or divorced spouse 

amount of the employee annuity 

o entitled. 

54 
annuities awarded before full

ges from age 65 for those born

 those born in 1960 or later, the

rity. Reduced annuities are still

maximum reduction will be 30%

ar 2022. The tier II portion of an

ge 8) is not reduced beyond 20%

reditable railroad service before

ges 46-50 for a detailed explana

n age cannot be paid until the

mployment, files an application

 return to work for a railroad

an be paid for:

t any age, if an employee is per

regular work and has at least 10

ditable railroad service.

 of creditable railroad service, if

ormed after 1995, may qualify for

page 8) before retirement age on

y if they also meet certain social

2

y 

, 

p

g 

y 

In general, the survivor tier I amount is equal to the amount of survivor benefits that would have been payable under social security. 

The gross survivor tier I amount (before reductions 

for early retirement, or other benefits) is generally equivalent to the unreduced tier I retirement benefit the deceased employee had, or would have, received. 

For surviving aged or disabled widow(er)s, remarried 

widow(er)s and surviving divorced spouses whose annuities begin a year or more after the employee’s death, the “average indexed monthly earnings,” upon which the tier I benefit is based, may be reindexed using a later year if it would result in a higher benefit, provided the employee died before age 62. The reindexing takes into account changes in national earnings levels which occur after the employee’s death but before the survivor becomes eligible for benefits. This provides a benefit consistent with earnings levels at the time of the survivor’s eligibility, rather than the time of the employee’s death. 

A widow(er), surviving divorced spouse or remarried 

widow(er) whose annuity begins at full retirement age or later receives the full tier I amount unless the deceased 

55 
cases, military service may be counted as railroad service.

Credit for a month of railroad service is given for

every month in which an employee had some compensatedservice for an employer covered by the RailroadRetirement Act, even if only one day’s service is performed in the month. (However, local lodge compensationearned after 1974 is disregarded for any calendar month inwhich it is less than $25.) Under certain circumstances,additional months of service may be deemed.

Covered employers include railroads engaged in

interstate commerce and certain of their subsidiaries, railroad associations and national railway labor organizations.

Railroad retirement benefits are based on months of

service and earnings credits. Earnings are creditable up tocertain annual maximums on the amount of compensationsubject to railroad retirement taxes.

AGE AND SERVICE, DISABILITY AND

SUPPLEMENTAL ANNUITIES

An AGE AND SERVICE ANNUITY can be paid to:

 Employees with 30 or more years of creditable

service. 

1

viving divorced spouse whose eli

g for a child of the employee 

er I amount. Benefits to a sur

nd when the child is 16. An eligi

% of the full tier I amount. The 

an receive is subject to a maxi

f there are three or more family 

ed or disabled surviving divorced 

or annuities). 

 can receive 82.5% of the full 

parents are eligible, the total 

han 150% of the full tier I 

reviously described is reduced by 

security benefit or by the tier I 

tirement employee annuity the 

 the case of a widow or depend

a railroad employee annuitant, 

or the deceased employee had 

rvice before 1975, the tier I 

56 
ance Payments . . . . . . . . . . . . 39

 . . . . . . . . . . . . . . . . . . . . . . . . 40

ds . . . . . . . . . . . . . . . . . . . . . . 41

 . . . . . . . . . . . . . . . . . . . . . . . . 41

 . . . . . . . . . . . . . . . . . . . . . . . . 42

T ANNUITY

TS . . . . . . . . . . . . . . . . . . . . . 44

ity . . . . . . . . . . . . . . . . . . . . . . 44

 . . . . . . . . . . . . . . . . . . . . . . . . 44 . . . . . . . . . . . . . . . . . . . . . . . . 49

Dual Benefit Payment . . . . . . 50

ity Formula . . . . . . . . . . . . . . 50

 . . . . . . . . . . . . . . . . . . . . . . . . 51

 . . . . . . . . . . . . . . . . . . . . . . . . 51 . . . . . . . . . . . . . . . . . . . . . . . . 54

 . . . . . . . . . . . . . . . . . . . . . . . . 54

 . . . . . . . . . . . . . . . . . . . . . . . . 55

 . . . . . . . . . . . . . . . . . . . . . . . . 55 . . . . . . . . . . . . . . . . . . . . . . . . 57

MENT BOARD OFFICES . . 59

widow(er)’s own employee annuity. 

The tier I amount may also be reduced by certain 

Federal, State or local government pensions which are based on a widow(er)’s own earnings. For widow(er)s subject to the government pension reduction, the tier I reduction is equal to 2/3 of the public pension. Tier II Widow(er)s

December 2001 legislation established an “initial 

minimum amount” which yields, in effect, a widow(er)’s tier II benefit equal to the tier II benefit the employee would have received at the time of the award of the widow(er)’s annuity, minus any applicable age reduction. It does this by adding a “guaranty amount,” initially set at 50% of the employee’s tier II, to the 100% tier I and 50% tier II benefits provided under prior law. 

This “guaranty amount” is offset each year by the 

dollar amount of the cost-of-living increases payable in both the tier I and tier II benefits provided under prior law. Consequently, such a widow(er)’s net benefit payment will not increase until such time as the widow(er)’s annuity, as 

57 
Employees with Public, Non-profit 

or Foreign Pensions . . . . . . . . . . . . . . . . . . . . . . 11

Workers’ Compensation . . . . . . . . . . . . . . . . . . . . 12

Spouses with Dual Benefits . . . . . . . . . . . . . . . . . . . . . . . . 12

Social Security Benefits . . . . . . . . . . . . . . . . . . . . 12Public Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Employee Annuity . . . . . . . . . . . . . . . . . . . . . . . . 13

Minimum Guaranty for Employee and Spouse Annuities . 13Cost-of-living Increases in Employee and Spouse

Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Working After Retirement . . . . . . . . . . . . . . . . . . . . . . . . . 15

Disability 

Work Restrictions . . . . . . . . . . . . . . . . . 17

When Annuities 

Stop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

SURVIVOR BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . .

2

0

Types of Survivor Benefits . . . . . . . . . . . . . . . . . . . . . . . .

2

0

Survivor Annuity Estimates . . . . . . . . . . . . . . . . . . . . . . . .

23

Survivor Annuity 

Tiers . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23

Survivors with Dual Benefits . . . . . . . . . . . . . . . . . . . . . . .

2

4

Social Security Benefits . . . . . . . . . . . . . . . . . . . .

2

4

Public Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . .

25

Employee Annuity . . . . . . . . . . . . . . . . . . . . . . . .

25

Cost-of-living Increases in Survivor Annuities . . . . . . . . .

2

6

Work and Earnings Limitations . . . . . . . . . . . . . . . . . . . . .

2

6

When Survivor Payments 

Stop . . . . . . . . . . . . . . . . . . . . .

2

7

Lump-sum Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . .

28

Residual Lump-sum Payment . . . . . . . . . . . . . . . . 30

ation, the guaranty did not apply. 

tions that apply to tier I amounts 

ts. 

o a railroad employee annuitant 

d the deceased employee started 

1974, the amount of any survivor 

amount of the employee annuity 

so entitled. 

15% of the deceased employee’s 

rviving parent receives 35%. 

amount payable to a family is 

r II amount, and the maximum, 

ot provided for a surviving 

rried widow(er). A tier II benefit 

 parents if other family members 

the parent has remarried. 

58 
 estimates, review their service

 and apply for or claim unem

 services are part of the Board’s

ement comprehensive Internet

access to information and allow

duct its business with the agency

 of the Board’s publications are

 downloading, as is information

s and other topics of interest.

issued for the purpose of 

Certain limitations, exceptions, 

ases are not covered.

ALABAMA Birmingham ARIZONA Mesa ARKANSAS Little Rock CALIFORNIA Covina Oakland Sacramento COLORADO Denver FLORIDA Jacksonville Tampa GEORGIA Atlanta ILLINOIS Chicago Decatur Joliet INDIANA Indianapolis 

IOWA Des Moines KANSAS Wichita KENTUCKY Louisville LOUISIANA New Orleans MARYLAND Baltimore MASSACHUSETTS Boston MICHIGAN Detroit MINNESOTA Duluth St. Paul MISSOURI Kansas City St. Louis MONTANA Billings 

NEBRASKA Omaha NEW JERSEY Newark NEW MEXICO Albuquerque NEW YORK Albany Buffalo New York Westbury NORTH CAROLINA Charlotte NORTH DAKOTA Fargo OHIO Cincinnati Cleveland OREGON Portland 

PENNSYLVANIA Altoona Harrisburg Philadelphia Pittsburgh Scranton TENNESSEE Nashville TEXAS Fort Worth Houston UTAH Salt Lake City VIRGINIA Richmond Roanoke WASHINGTON Bellevue Spokane WEST VIRGINIA Huntington WISCONSIN Milwaukee 

59 
trative responsibilities under the Social Security Act forcertain benefit payments and railroad workers’ Medicarecoverage.

This pamphlet describes the retirement and disability

annuities provided for employees under the RailroadRetirement Act, and the benefits available to their spousesand survivors. Medicare and unemployment-sicknessinsurance payments are described in separate pamphlets.

The information in this pamphlet supersedes earlier

editions. If you have any questions about the informationcovered in this pamphlet, or if you want one of theRailroad Retirement Board’s pamphlets on Medicare orunemployment and sickness insurance benefits, contact oneof the Board’s field offices. The personnel there will beglad to answer your questions and explain your benefitrights. Cities with these offices are listed at the back ofthis pamphlet.

In addition, a toll-free Help Line is available at 

1-800-808-0772, which can be used to obtain the addressesand telephone numbers of the Board’s field offices.Employees can use the Help Line to obtain statements ofcreditable service and compensation, and beneficiaries on

xiliary aids or program infor

mats) should contact the near

laints of alleged discrimination 

s of disability must be filed 

g with the Director of 

ailroad Retirement Board, 

Chicago, Illinois 60611-2092. 

ual rights under this regulation 

oard's Director of Equal 

e address. 

have any comments or sugges

ntation of information in this 

 know. You can fax us at 

us at opa@rrb.gov or write us at 

ublic Affairs, U.S. Railroad 

orth Rush Street, Chicago, IL 
s under the Railroad Retirement

mployment Insurance Act. These

 protection during old age and in

ath or temporary unemployment

ad Retirement Board also admin

care program and has administra

 the Social Security Act and the

mission, the Railroad Retirement

o the right people, in the right

ner, and will take appropriate

ustomers’ trust funds. The

d will treat every person who

he agency with courtesy and con

nquiries promptly, accurately and

provider of health care services is performing unnecessary or inappropriate services or billing Medicare for services not provided. 

You may also use the Hot Line 

to report any suspected misconduct by a Railroad Retirement Board employee. The Hot Line has been installed by the Railroad Retirement Board’s Inspector General to receive any evidence of such fraud or abuse of the Board’s benefit programs. 

The toll-free Hot Line number nationwide is 

1-800-772-4258. Or you may send your complaints in writing to RRB, OIG, Hot Line Officer, 844 North Rush Street, Chicago, Illinois 60611-2092 or via e-mail at hotline@oig.rrb.gov. 

Please do not call or write the Inspector General’s 

Hot Line with questions about eligibility requirements, delayed payments, or similar problems. Such matters should be directed to the nearest Railroad Retirement Board office. 
SURVIVOR BENEFITS

IB-2

February 2007