16368 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Rules and Regulations

Paragraph 2004—Jet Routes

* * * * *

J–20 [Revised]

From Seattle, WA, via Yakima, WA;

Pendleton, OR; Donnelly, ID; Pocatello, ID;

Rock Springs, WY; Falcon, CO; Hugo, CO;

Lamar, CO; Liberal, KS; INT Liberal 137° and

Will Rogers, OK, 284° radials; Will Rogers;

Belcher, LA; Jackson, MS; Montgomery, AL;

Meridian, MS; Tallahassee, FL; INT

Tallahassee 129° and Orlando, FL, 306°

radials; Orlando; INT Orlando 140° and

Virginia Key, FL, 344° radials; Virginia Key.

* * * * *

Issued in Washington, DC, on March 24,

1995.

Harold W. Becker,

Manager, Airspace-Rules and Aeronautical

Information Division.

[FR Doc. 95–7830 Filed 3–29–95; 8:45 am]

BILLING CODE 4910–13–P

RAILROAD RETIREMENT BOARD

20 CFR Parts 228 and 237

RIN: 3220–AA59

Computation of Survivor Annuities

AGENCY: Railroad Retirement Board.

ACTION: Final rule.

SUMMARY: The Railroad Retirement

Board amends its regulations by adding

a new part dealing with the

computation of survivor annuities as

provided in the Railroad Retirement Act

of 1974 (Act). This part replaces part

237 of the Board’s regulations, which is

removed. The Board’s previous

regulations regarding the computation

of survivor annuities were promulgated

under the Railroad Retirement Act of

1937 and no longer reflect the

computational provisions contained in

the Act.

EFFECTIVE DATE: March 30, 1995.

ADDRESSES: Secretary to the Board,

Railroad Retirement Board, 844 North

Rush Street, Chicago, Illinois 60611.

FOR FURTHER INFORMATION CONTACT:

Thomas W. Sadler, Assistant General

Counsel, Railroad Retirement Board,

844 North Rush Street, Chicago, Illinois

60611, telephone 312–751–4513, (FTS

312–386–4513), TTD 312–751–4701,

TTD (FTS 312–386–4701).

SUPPLEMENTARY INFORMATION: This

regulation provides the rules for

computing the amount of a survivor

annuity under the Railroad Retirement

Act of 1974. In general, the annuity

consists of two components or tiers. The

first tier (tier I) is a social security level

benefit that is generally computed under

social security rules based on the

employee’s earnings under both the

railroad retirement and the social

security systems. The second tier (tier II)

is based solely on the employee’s

railroad earnings and is a set percentage

of the employee’s tier II annuity

component.

The rule is divided into three

subparts, A–C:

Subpart A is an introduction to the

part. It provides a listing of other

relevant regulations, part 225, Primary

Insurance Amount Determinations, and

part 216, Eligibility for an Annuity

(§ 228.1) and sets forth a general

explanation of tier I and tier II annuity

components (§ 228.2).

Subpart B sets forth the computation

of the tier I annuity component. Section

228.10 describes the tier I of the

widow(er)’s annuity; § 228.11, the tier I

of widow(er) with a child in care;

§ 228.12, the tier I of child’s annuity;

and § 228.13, the tier I of a parent’s

annuity.

Section 228.14 describes when and

how the tier I annuity component is

reduced for the family maximum, which

is a provision in the Social Security Act

that limits the total monthly benefits to

which beneficiaries may be entitled.

Section 228.15 describes the age

reduction applicable to the tier I annuity

component if the survivor begins to

receive benefits prior to the retirement

age specified in the Social Security Act.

Section 228.16 describes the

adjustment of the age reduction factor

when the widow(er) attains retirement

age.

Section 228.17 describes how the

widow(er)’s annuity is adjusted if the

employee died before he or she reached

age 62.

Section 228.18 describes how the tier

I is reduced due to receipt of a public

pension.

Section 228.19 describes how the tier

I component is reduced due to receipt

of a social security benefit.

Sections 228.20–228.22 describe the

reduction in a survivor annuity due to

receipt of other types of railroad

retirement annuities.

Section 228.23 describes the order in

which the above-described reductions

are made. Finally, § 228.40 describes the

cost-of-living increases applicable to the

tier I annuity component.

Subpart C describes the computation

of the tier II annuity component. Section

228.50 describes the tier II annuity

component for various types of survivor

annuitants. It also describes the age

reduction applicable to the tier II

annuity component.

Section 228.51 describes the

reduction to the tier II annuity

component known as the takeback

amount which was imposed by the 1983

amendments to the Railroad Retirement

Act.

Section 228.52 describes the increase

in the tier II annuity component when

a widow(er) is entitled to a railroad

retirement annuity which caused a

reduction in the widow(er)’s tier I

annuity component.

Section 228.53 describes the increase

in the tier II annuity component to

insure that a widow(er)’s annuity is no

less than the spouse annuity the

widow(er) was receiving before the

employee died.

Finally, § 228.60 describes the cost-ofliving increase applicable to the tier II

annuity component.

The Board published this rule in

proposed form on September 30, 1993

(58 FR 51024) inviting comment by

November 1, 1993; no comments were

received.

The Board, with the concurrence of

the Office of Management and Budget,

has determined that this is not a

significant regulatory action under

Executive Order 12866; therefore, no

regulatory impact analysis is required.

There are no information collections

associated with this rule.

List of Subjects in 20 CFR Part 228

Pensions, Railroad employees,

Railroad retirement.

For the reasons set out in the

preamble, chapter II of title 20 of the

Code of Federal Regulations is amended

as follows:

1. Part 228, Computation of Survivor

Annuities, is added to read as follows:

PART 228—COMPUTATION OF

SURVIVOR ANNUITIES

Subpart A—General

Sec.

228.1 Introduction.

228.2 Tier I and tier II annuity components.

Subpart B—The Tier I Annuity Component

228.10 Computation of the tier I annuity

component for a widow(er), disabled

widow(er), remarried widow(er), and a

surviving divorced spouse.

228.11 Computation of the tier I annuity

component of a widow(er) with a child

in care, remarried widow(er) with a child

in care, or a surviving divorced spouse

with a child in care.

228.12 Computation of the tier I annuity

component of a child’s insurance

annuity.

228.13 Computation of the tier I annuity

component of a parent’s insurance

annuity.

228.14 Family maximum.

228.15 Reduction for age.

228.16 Adjustments in the age reduction

factor (ARF).
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Rules and Regulations 16369

228.17 Adjustments to the widow(er)’s,

disabled widow(er)’s, surviving divorced

spouse’s, and remarried widow(er)’s tier

I annuity amount.

228.18 Reduction for public pension.

228.19 Reduction for a social security

benefit.

228.20 Reduction for an employee annuity.

228.21 Entitlement as a spouse or divorced

spouse and as a survivor.

228.22 Entitlement to more than one

survivor annuity.

228.23 Priority of reductions.

228.40 Cost of living increase applicable to

the tier I annuity component.

Subpart C—The Tier II Annuity Component

228.50 Tier II annuity component for

widow(er), child, or parent.

228.51 Takeback amount.

228.52 Restored amount.

228.53 Spouse minimum guarantee.

228.60 Cost of living increase.

Authority: 45 U.S.C. 231f.

PART 228—COMPUTATION OF

SURVIVOR ANNUITIES

Subpart A—General

§ 228.1 Introduction.

(a) What does this part include? This

part includes the computation of a

widow(er)’s, disabled widow(er)’s,

remarried widow(er)’s, surviving

divorced spouse’s, parent’s, and child’s

insurance annuity under the Railroad

Retirement Act. This part describes the

two annuity components or tiers which

are included in these annuities. The tier

I annuity component, which may be

payable in all of the above annuities, is

described in subpart B of this part.

Subpart C of this part describes the tier

II annuity component which is only

applicable to the widow(er)’s, disabled

widow(er)’s, parent’s, and child’s

annuity.

(b) Other relevant parts. (1) Part 225,

Primary Insurance Amount

Determinations, describes the various

types of primary insurance amounts

which form the basis of the computation

of the tier I annuity component

described in this part.

(2) Part 216, Eligibility for an

Annuity, describes the eligibility

requirements for receipt of the annuity

computations described in this part.

§ 228.2 Tier I and tier II annuity

components.

(a) Tier I annuity component. The

Tier I annuity component is generally

the amount that would have been

payable under the Social Security Act if

all of the employee’s earnings after 1936

under both the railroad retirement

system and the social security system

had been creditable under the Social

Security Act.

(b) Tier II annuity component. The

tier II annuity component is the portion

of the survivor’s annuity which is based

on an employee’s railroad earnings only.

The tier II component of an annuity

described in this part is a specified

percentage of the employee’s actual or

anticipated tier II annuity component.

Subpart B—The Tier I Annuity

Component

§ 228.10 Computation of the tier I annuity

component for a widow(er), disabled

widow(er), remarried widow(er), and a

surviving divorced spouse.

The tier I annuity component for

these beneficiaries is generally based on

the survivor tier I Primary Insurance

Amount (PIA). The survivor tier I PIA is

determined in accordance with section

215 of the Social Security Act using the

deceased employee’s combined railroad

and social security earnings after 1950

(or after 1936 if a higher PIA would

result) up to the maximum creditable

amounts through the year of the

employee’s death. See part 225 of this

chapter. This amount may be further

adjusted for certain reductions or

deductions as described in §§ 228.15–

228.20 of this part and is subject to the

family maximum. See § 228.14 of this

part.

§ 228.11 Computation of the tier I annuity

component of a widow(er) with a child in

care, remarried widow(er) with a child in

care, or a surviving divorced spouse with a

child in care.

The tier I annuity component of a

widow(er), remarried widow(er), or a

surviving divorced spouse with a child

of the employee in his or her care is 75

percent of the PIA computed under

§ 228.10 of this part. The amount may

be adjusted for certain reductions and

deductions described in §§ 228.15–

228.20 of this part and is subject to the

family maximum. See § 228.14 of this

part.

§ 228.12 Computation of the tier I annuity

component of a child’s insurance annuity.

The tier I annuity component of a

child’s insurance annuity is 75 percent

of the PIA computed under § 228.10 of

this part. The amount may be adjusted

for the family maximum. See § 228.14 of

this part.

§ 228.13 Computation of the tier I annuity

component of a parent’s insurance annuity.

The tier I annuity component of a

parent’s insurance annuity is dependent

on whether one or two parents are

entitled.

(a) One parent entitled. A parent’s tier

I annuity component is equal to 821⁄2

percent of the PIA computed under

§ 228.10 of this part.

(b) More than one parent entitled. A

parent’s tier I annuity component is

equal to 75 percent of the PIA computed

under § 228.10 of this part.

(c) The amounts computed under

paragraph (a) or (b) of this section may

be adjusted for the family maximum.

See § 228.14 of this part.

§ 228.14 Family maximum.

(a) Family maximum defined. Under

the Social Security Act, the amount of

total monthly benefits that can be paid

for any month on one person’s earnings

record is limited. This limited amount

is called the family maximum. The

family maximum is based on the

survivor tier I PIA (see part 225 of this

chapter). Generally, if three or more

persons are entitled to benefits, their

benefits will be adjusted for the family

maximum.

(b) Computation of the family

maximum.—(1) The employee attains

age 62, has a period of disability or dies

prior to 1979. The maximum is the

amount appearing in column V of the

applicable table published each year by

the Secretary of Health and Human

Services on the line on which appears

in column IV the primary insurance

amount of the insured individual whose

compensation is the basis for the

benefits payable. Where the total of the

survivor benefits exceeds the maximum,

the total tier I benefits for each month

after 1964 are reduced to the amount

appearing in column V. Each survivor’s

benefit is proportionately reduced,

based on the percentage of the PIA used

to compute the survivor benefits.

However, when any of the persons

entitled to benefits on the insured

individual’s compensation would,

except for the limitation described in

§ 404.353(b) of title 20 (dealing with the

entitlement to more than one child’s

benefit), be entitled to a child’s annuity

on the basis of the compensation of one

or more other insured individuals, the

total benefits payable may not be

reduced to less than the smaller of—

(i) The sum of the maximum amounts

of benefits payable on the basis of the

compensation of all such insured

individuals, or

(ii) The last figure in column V of the

applicable table published each year by

the Secretary of Health and Human

Services. The ‘‘applicable table’’ refers

to the table which is effective for the

month the benefit is payable.

(2) The employee attains age 62, has

a period of disability or dies in 1979.

The maximum is computed as follows:

(i) 150 percent of the first $230 of the

individual’s primary insurance amount,

plus
16370 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Rules and Regulations

(ii) 272 percent of the primary

insurance amount over $230 but not

over $332, plus

(iii) 134 percent of the primary

insurance amount over $332 but not

over $433, plus

(iv) 175 percent of the primary

insurance amount over $433.

If the total of this computation is not

a multiple of $0.10, it will be rounded

to the next lower multiple of $0.10.

(3) The employee attains age 62, or

has a period of disability or dies after

1979. The maximum is computed as in

paragraph (b)(2) of this section.

However, the dollar amounts shown

there will be updated each year after

1979 as average earnings rise. This

updating is done by first dividing the

average of the total wages for the second

year before the individual dies or

becomes eligible, by the average of the

total wages for 1977. The result of that

computation is then multiplied by each

dollar amount in the formula in

paragraph (b)(2) of this section. Each

updated dollar amount will be rounded

to the nearer dollar, if the amount is an

exact multiple of $0.50 (but not of $1),

it will be rounded to the next higher $1.

Before November 2 of each calendar

year after 1978, the Secretary of Health

and Human Services will publish in the

Federal Register the formula and

updated dollar amounts to be used for

determining the monthly maximum for

the following year.

(c) Special minimum PIA. Regardless

of the method used to compute the

primary insurance amount, if the special

minimum primary insurance amount

described in § 404.261 to this title is

higher, then the family maximum will

be based upon the special minimum

primary insurance amount.

§ 228.15 Reduction for age.

(a) Widow(er), surviving divorced

spouse, or remarried widow(er). The tier

I annuity component is reduced 19/40

of 1 percent multiplied by the number

of months before the annuitant attains

full retirement age (presently age 65)

effective with the annuity beginning

date for widow(ers) born before 1/2/40.

(For widow(ers) born after 1/1/40, see

section 216(l) of the Social Security

Act.)

(b) Disabled widow(er), disabled

surviving divorced spouse, or disabled

remarried widow(er). The tier I annuity

component is reduced for a maximum of

60 months even though the annuity may

begin at age 50.

§ 228.16 Adjustments in the age reduction

factor (ARF).

Upon the attainment of retirement

age, the previously-computed age

reduction factor is adjusted to remove

those months for which a full annuity

was not paid even though the individual

was entitled.

§ 228.17 Adjustments to the widow(er)’s,

disabled widow(er)’s, surviving divorced

spouse’s, and remarried widow(er)’s tier I

annuity amount.

(a) If the employee died before

attaining age 62 and after 1978 and the

widow(er), disabled widow(er),

remarried widow(er), or surviving

divorced spouse is first eligible after

1984, the Board will compute the tier I

annuity amount as if the employee had

not died but had reached age 62 in the

second year after the indexing year (see

§ 225.2 of this chapter); provided,

however, that if the employee was

entitled to a primary insurance amount

based on average monthly wages this

section is not applicable. The indexing

year is never earlier than the second

year before the year of the employee’s

death. Except for this limitation it is the

earlier of——

(1) The year the employee attained

age 60, or would have attained age 60

had the employee lived, and

(2) The second year before the year in

which the widow(er), remarried

widow(er), or surviving divorced spouse

becomes eligible for such an annuity,

has attained age 60, or is age 50–59 and

disabled.

(b) The tier I annuity component is

increased if the employee’s annuity was

increased or would have been increased

based on delayed retirement credits (see

§ 225.36 of this chapter).

(c) The tier I annuity component is

reduced if the employee had been

entitled to an age reduced annuity,

including an annuity based on 30 years

of service, which is reduced for age

because it began before the employee

attained age 62. In this instance, the

widow(er)’s, remarried widow(er)’s, or

surviving divorced spouse’s tier I

annuity component after applying any

reduction for age is further reduced to

the larger of amount the employee

would have received as a tier I annuity

component if still alive or 821⁄2 percent

of his or her primary insurance amount.

§ 228.18 Reduction for public pension.

(a) The tier I annuity component of a

widow(er), remarried widow(er),

surviving divorced spouse, or disabled

widow(er) annuity, as described in the

preceding sections of this part, is

reduced if the survivor is in receipt of

a public pension.

(b) When reduction is required.

Unless the survivor annuitant meets one

of the exceptions in paragraph (d) of this

section, the tier I annuity component is

reduced each month the survivor

annuitant is receiving a monthly

pension from a Federal, State, or local

government agency (Government

pension) for which he or she was

employed in work not covered by social

security on the last day of such

employment. For purposes of this

section, Federal government employees

are not considered to be covered by

social security if they are covered for

Medicare but are not otherwise covered

by social security, or if they are covered

under social security solely by an

election to become subject to the

Federal Employees and Retirement

System made after December 31, 1987,

and have not worked 60 months under

that system.

(c) Payment in a lump sum. If the

Government pension is not paid

monthly or is paid in a lump-sum

payment, the Board will determine how

much the pension would be if it were

paid monthly. If one of the alternatives

to a lump-sum payment is a life annuity,

and the amount of the monthly benefit

for the life annuity can be determined,

the reduction will be based on that

monthly benefit amount. Where the

period for the equivalent monthly

pension benefit is not clear, it may be

necessary for the Board to determine the

reduction period on an individual case

basis.

(d) Exceptions. The reduction does

not apply:

(1) If the survivor is receiving a

Government pension based on

employment for an interstate

instrumentality; or

(2) If the survivor receives or is

eligible to receive a Government

pension for one or more months in the

period December 1977 through

November 1982 and he or she meets the

requirements for social security benefits

that were applied in January 1977,

assuming the employee’s earnings had

been covered under that Act (even

though he or she did not actually claim

such benefits or become entitled for

such benefits until a later month). The

January 1977 requirements are, for a

man, a one-half support test (see

paragraph (e) of this section), and, for a

woman claiming benefits as a surviving

divorced spouse, marriage for at least 20

years to the insured worker. A person is

considered eligible for a Government

pension for any month in which he or

she meets all the requirements for

payment except that he or she is

working or has not applied; or

(3) If a survivor annuitant was

receiving or eligible (as defined in

paragraph (d)(2) of this section) to

receive a Government pension for one or

more months before July 1983, and he
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Rules and Regulations 16371

or she meets the one-half support test

(see paragraph (e) of this section). If a

survivor annuitant meets the exception

in this paragraph but he or she does not

meet the exception in paragraph (d)(2)

of this section, December 1982 is the

earliest month for which the reduction

will not affect his benefits; or

(4) If a survivor annuitant was eligible

for a Government pension in a given

month except for a requirement which

delayed eligibility for such pension

until the month following the month in

which all other requirements were met,

the Board will consider the annuitant to

be eligible in that given month for the

purpose of meeting one of the

exceptions in paragraphs (d) (2) and (3)

of this section. If an annuitant meets an

exception solely because of this

paragraph, his or her benefits will be

unreduced for months after November

1984 only.

(e) The one-half support test. For a

man to meet the January 1977

requirement as provided in the

exception in paragraph (d)(2) of this

section and for a man or a woman to

meet the exception in paragraph (d)(3)

of this section, he or she must meet a

one-half support test. One-half support

is defined in part 222 of this chapter.

One-half support must be met at one of

the following times:

(1) If the employee upon whose

compensation the survivor annuity is

based had a period of disability which

did not end before he or she became

entitled to an age and service or

disability annuity, or died, the survivor

annuitant must have been receiving at

least one-half support from the

employee—

(i) At the beginning of his or her

period of disability; or

(ii) At the time he or she became

entitled to an age and service or

disability annuity; or

(iii) At the time of his or her death.

(2) If the employee upon whose

compensation the survivor annuity is

based did not have a period of disability

at the time of his or her entitlement or

death, the survivor annuitant must have

been receiving at least one-half support

from the employee—

(i) At the time he or she became

entitled to an age and service annuity or

disability annuity; or

(ii) At the time of his or her death.

(f) Amount of reduction. (1) If a

survivor annuitant becomes eligible for

a Government pension after June 1983,

the Board will reduce (but not below

zero) the tier I annuity component by

two-thirds of the amount of the monthly

pension. If the amount of the reduction

is not a multiple of 10 cents, it will be

rounded to the next higher multiple of

10 cents.

(2) If a survivor annuitant became

eligible for a Government pension

before July 1983 and he or she did not

meet one of the exceptions in paragraph

(d) of this section, the Board will reduce

(but not below zero) the tier I

component by the full amount of the

pension for months before December

1984 and by two-thirds the amount of

his or her monthly pension for months

after November 1984. If the amount of

the reduction is not a multiple of 10

cents, it will be rounded to the next

higher multiple of 10 cents.

(g) Reduction not applicable. This

reduction is not applied to claimants

who both filed and were entitled to

benefits prior to December 1977.

§ 228.19 Reduction for a social security

benefit.

The tier I annuity component is

reduced for the amount of any social

security benefit to which the survivor

annuitant is entitled.

§ 228.20 Reduction for an employee

annuity.

(a) General. If an individual is entitled

to an annuity as a survivor, and is also

entitled to an employee annuity, then

the survivor annuity must be reduced by

the amount of the employee annuity.

However, this reduction does not apply

(except as provided in paragraph (b) of

this section) if the survivor or the

individual upon whose earnings record

the survivor annuity is based worked for

a railroad employer or as an employee

representative before January 1, 1975.

(b) Tier I reduction. If an individual

is entitled to an annuity as a survivor,

then the tier I component of the survivor

annuity must be reduced by the amount

of the tier I component of the employee

annuity after reduction for age. Where

the survivor is entitled to a tier II

component and either the survivor or

the employee had railroad earnings

before 1975, a portion of this reduction

may be restored in the computation of

the tier II component (see § 228.52 of

this part).

§ 228.21 Entitlement as a spouse or

divorced spouse and as a survivor.

If an individual is entitled to both a

spouse or divorced spouse and survivor

annuity, only the larger annuity will be

paid. However, if the individual so

chooses, he or she may receive the

smaller annuity rather than the larger

annuity.

§ 228.22 Entitlement to more than one

survivor annuity.

If an individual is entitled to more

than one survivor annuity, only the

larger annuity will be paid. However, if

the individual so chooses, he or she may

receive the smaller annuity rather than

the larger annuity.

§ 228.23 Priority of reductions.

The tier I component of the survivor

annuity is first reduced by the family

maximum, if applicable, then any

applicable age reduction, then by any

public pension offset, then by any social

security benefit payable, then by the tier

I component of any employee annuity

payable to the survivor annuitant.

§ 228.40 Cost of living increase applicable

to the tier I annuity component.

The tier I annuity component of a

survivor annuity is increased at the

same time and by the same percentage

as the increase provided for under

section 215(i) of the Social Security Act.

The amount of the increase is published

in the Federal Register annually. The

cost-of-living increase is payable

beginning with the benefit for the month

of December of the year for which the

increase is due. The increase is paid in

the January payment.

Subpart C—The Tier II Annuity

Component

§ 228.50 Tier II annuity component

widow(er), child, or parent.

(a) General. The tier II annuity

component is an additional amount

payable to a widow(er), disabled

widow(er), child, or parent, but not to

a surviving divorced spouse or

remarried widow(er), and a parent as

provided in paragraph (b)(2) of this

section, based on the railroad

employee’s earnings in the railroad

industry. Unlike the tier I annuity

component it is not reduced for any

other social insurance benefit except a

railroad retirement annuity. See

§§ 228.20–228.23 of this part.

(b) Amount of the tier II annuity

component (1981 amendment).—(1)

Widow(er) or disabled widow(er). The

amount of a widow(er)’s or disabled

widow(er)’s tier II annuity component is

50 percent of the amount of the

employee’s tier II which would have

been payable in the month in which the

widow became entitled had the

employee been alive and in receipt of an

annuity under the Railroad Retirement

Act at that time.

(2) Parent. The amount of a parent’s

tier II annuity component is 35 percent

of the amount of the employee’s tier II

annuity component which would have

been payable in the month in which the

parent became entitled had the

employee been alive and in receipt of an

annuity under the Railroad Retirement

Act at that time. However, if another
16372 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Rules and Regulations

survivor is entitled, or potentially

entitled, to a tier II annuity component,

the parent tier II annuity component is

zero.

(3) Child. The amount of each child’s

tier II annuity component is 15 percent

of the employee’s tier II annuity

component which would have been

payable in the month in which the child

became entitled had the employee been

alive and in receipt of an annuity under

the Railroad Retirement Act at that time.

(c) Minimum tier II survivor annuity

components. If the total tier II annuity

components payable to survivors is less

than 35 percent of the employee’s tier II

annuity component which would have

been payable in the month the survivors

became entitled had the employee been

alive and in receipt of an annuity under

the Railroad Retirement Act at that time,

the individual tier II annuity

components computed in paragraph (b)

of this section shall be increased

proportionally so that the total of all

such tier II annuity components equals

35 percent of the employee’s tier II

annuity component.

(d) Maximum tier II annuity

components. If the total tier II survivor

annuity components payable to

survivors exceeds 80 percent of the

employee’s tier II annuity component

which would have been payable in the

month the survivors became entitled

had the employee been alive and

entitled to an annuity under the

Railroad Retirement Act at that time, the

individual tier II annuity components

computed in paragraph (b) of this

section shall be reduced proportionally

so that the total of all such tier II

annuity components totals no more than

80 percent of the employee’s tier II

annuity component.

(e) Age reduction. The tier II annuity

component of a widow(er) or disabled

widow(er) is subject to reduction by the

same age reduction factor as is

applicable to the tier I annuity

component. See § 228.15 of this part.

§ 228.51 Takeback amount.

(a) The 1983 amendments to the

Railroad Retirement Act provided that a

portion of the cost-of-living increases

payable on the tier I annuity component

be offset from the amount of the tier II

annuity. This amount is the takeback

amount. The amount of the takeback

and its application depends on the

employee and survivor’s annuity

beginning dates.

(b)(1) The tier II takeback amount for

survivors whose annuity beginning date

is January 1, 1984 or later is usually the

amount of the employee’s takeback

amount. That amount is equal to 5

percent of the employee’s primary

insurance amount, less all applicable

reductions (net tier I), on November 1,

1983. However, if the employee’s

annuity was reduced for a social

security benefit but the survivor’s

annuity is not, the takeback amount is

the amount the employee’s annuity

would have been reduced for the

takeback if the employee’s annuity had

not been reduced for a social security

benefit. If the employee’s annuity had

not been tiered or was being paid under

the overall minimum, the Board will

compute the amount of the tier II

takeback that would have been

applicable to the employee’s annuity.

(2) The tier II takeback amount for

survivors whose annuity beginning date

is before January 1, 1984 is equal to 5

percent of the survivor’s net tier I

annuity component, before deduction

on account of work, on November 1,

1983.

(3) The tier II takeback will be applied

in accord with the above paragraphs in

any case where the employee died or

retired before January 1, 1984. If the

employee died or retires after December

31, 1983, or the employee never retired

and dies after December 31, 1993, no

takeback will be applied to the

survivor’s annuity.

(c) No takeback is applied if the

survivor tier II annuity amount before

the takeback is applied is $10.00 or less

and cost-of-living increases have not

increased the tier II annuity amount to

more than $10.00 (the takeback may

never reduce the tier II to an amount

less than $10.00).

§ 228.52 Restored amount.

(a) General. A restored amount is

added to the tier II annuity component

of a widow(er)’s annuity whose annuity

is reduced for receipt of an employee

annuity under the Railroad Retirement

Act provided either the employee or the

widow(er) had ten years of creditable

railroad service prior to January 1, 1975.

(b) Amount. The amount of the tier II

restored amount for a widow(er) is the

difference between the amount payable

as a widow(er) under the Railroad

Retirement Act of 1937 as increased by

all annual social security cost-of-living

percentage increases from January 1,

1975, until the later of the annuity

beginning date of either the employee’s

annuity or the widow(er)’s annuity and

the amount payable to the widow(er)

under the Railroad Retirement Act of

1974 under the rules set forth in this

part.

(c) Widower. In order to qualify for an

annuity under the 1937 Act and thus for

a restored amount, a widower must have

been dependent on his spouse for at

least 50 percent of his support in the

year prior to her death or at the time the

spouse’s annuity began.

§ 228.53 Spouse minimum guarantee.

The Railroad Retirement Act provides

that a spouse should receive no less as

a widow(er) than he or she received as

a spouse. However, if the widow(er)

becomes entitled to a social security

benefit, thus reducing his or her

annuity, the spouse minimum guarantee

is payable only to the extent that it

guarantees the amount that the

widow(er) would have received as a

spouse had he or she been entitled to a

social security benefit in the month

preceding the employee’s death in an

amount equal to the amount of the

social security benefit payable at the

time the widow(er) first became entitled

to the social security benefit.

§ 228.60 Cost-of-living increase.

The tier II annuity component of a

survivor annuity under the Railroad

Retirement Act is increased by 32.5

percent of the percentage increase under

section 215(i) of the Social Security Act

at the same time that any such increase

is payable. The amount of the increase

is published in the Federal Register

annually. The cost-of-living is payable

beginning with the benefit payable for

the month of December of the year for

which the increase is due. The increase

is paid in the January payment. In

addition, in determining the amount of

the tier II component at the time the

survivor annuity begins, all cost-ofliving increases that were applied or

would have been applied after the

employee’s annuity beginning date or

death and prior to the surviving annuity

beginning date are taken into

consideration.

PART 237—[REMOVED AND

RESERVED]

2. Part 237 consisting of §§ 237.101–

237.108 is hereby removed and

reserved.

Dated: March 24, 1995.

By authority of the Board.

For the Board,

Beatrice Ezerski,

Secretary to the Board.

[FR Doc. 95–7778 Filed 3–29–95; 8:45 am]

BILLING CODE 7905–01–P