Program 

Letter

United States Railroad 

Retirement Board

Office of Programs

Quality Reporting Service Center

e-mail: qrsc@rrb.gov

 Phone: (312) 751-4992

 Fax: (312) 751-7190

Letter No. 

2012-02

Amended February 29, 2012

TO: Certification Registration, Retirement and Unemployment Contact Officials

SUBJECT: Notice of Annual Rates (2012)

Please distribute this notice to all individuals within your organization who may need the 

information in connection with their work. 

Creditable and Taxable Compensation

The 2012 railroad retirement tax rates and maximum compensation bases are as follows:

Tax Rate Earnings Base

Employee Tier I 4.2% $110,100

Medicare 1.45% No Limit

Employer Tier I 6.2% $110,100

Medicare 1.45% No Limit

Employee Tier II 3.9% $81,900

Employer Tier II 12.1% $81,900

Railroad Unemployment Insurance Variable $1,365

Railroad Unemployment Insurance Maximum Variable $1,763

The Tier II tax rates are determined annually from a tax rate schedule based on an average 

account benefits ratio reflecting railroad retirement fund levels. Employer tax rates can range 

from 8.2 percent to 22.1 percent. Employee tax rates can range from 0 percent to 4.9 percent.

Experience Rating 

In October 2011, each employer was sent a notice of their 2012 Railroad Unemployment 

Insurance Act (RUIA) contribution rate. If you have not received your notice, please contact the 

Quality Reporting Service Center. 
Retirement and Survivor Benefits

Exempt Amounts for Annual Earnings Test for Less Than Full Retirement Age

Annuitants: In 2012, the annual exempt amount for less than full retirement age annuitants is 

$14,640. The monthly exempt amount for the first year of retirement in 2012 is $1,220.

Exempt Amounts for Annual Earnings Test for Full Retirement Age Annuitants: In 2012, 

the annual exempt amount for full retirement age annuitants is $38,880. The monthly exempt 

amount for the first year of retirement in 2012 is $3,240.

Cost-of-living Increase: Annuitants will receive a cost-of-living increase effective January

2012. Tier I will increase 3.6% and Tier II will increase by 1.2%. This increase is before 

adjustment for other benefits.

Unemployment and Sickness Benefits

Maximum Daily Benefit Rate: Under the Railroad Unemployment Insurance Act (RUIA), the 

maximum daily benefit rate is equal to 5 percent of the monthly RUIA compensation base, 

rounded down to the nearest multiple of $1.00. For days of unemployment and sickness in 

registration periods beginning on and after July 1, 2012, the maximum daily rate is $66.00. The 

maximum rate for registration periods beginning on or after July 1, 2013, is $68.00.

Monthly Compensation Base: The monthly compensation base under the Railroad 

Unemployment Insurance Act for calendar year 2012 is $1,365.

Qualifying Base Year Compensation: The amount of base year compensation required in 2012

to qualify for benefits in the benefit year beginning July 1, 2013, is $3,412.50.

Compensation of $3,412.50 is also the amount of creditable compensation required to end a 

voluntary leaving of work disqualification period in months in calendar year 2012. In addition, 

remuneration earned in calendar year 2012 from employment covered under the Act cannot be 

considered subsidiary remuneration if the employee’s base year earnings are less than $3,412.50.

Maximum Benefits: The monthly amount of base year 2012 compensation that can be counted 

in determining the maximum amount of normal benefits payable to an employee in the benefit 

year beginning July 1, 2013, is $1,763.

Maximum Monthly Compensation Base and the Earnings Test: For unemployment 

registration periods beginning July 1, 2012 and later, no benefits are payable for which the total 

amount of an employee’s earnings and other remuneration from railroad and non-railroad work 

for days in the period exceeds the monthly compensation amount of $1,365.