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8.11.1 Introduction

This chapter explains the basic computations of the Primary Insurance Amount (PIA) 

under the Social Security Act. Prior to the 1977 Amendments to the SS Act, the PIA 

was selected from a table based on the average monthly wage (AMW). The 1977 

Amendments introduce a new method for computing a PIA based on formula 

percentages of the employee's average indexed monthly earnings (AIME).

The Tier system under the 1974 RR Act requires a number of PIAs to calculate an 

employee, spouse or survivor annuity. The purpose of this chapter is to explain how the 

different PIAs are calculated, how they are used, and the effect of the 1977 and 1981 

SS Act Amendments on these PIAs.

8.11.2 Definitions of SS Act Terms in Effect Prior to 1977

1. Retirement Age - Retirement age for women is age 62. The 1972 Social Security 

Act amendments changed retirement age for men from age 65 to age 62 

beginning January 1, 1973. For men who attain age 62 in 1975 or later, the 

number of elapsed years is determined up to the year of attainment of age 62 (or, 

if earlier, the year of death) rather than age 65. Men who attain age 62 in 1973 

or 1974 will be deemed to have attained age 65 in 1975. Elapsed years for these 

men will be counted up to 1975. Men who attain age 62 before 1973 are not 

affected by the 1972 amendments.

2. Average Monthly Wage (AMW) - This is the result of dividing the total of the (nonindexed) earnings in the computation base years (commonly known as divisor 

months).

3. Primary Insurance Benefit (PIB) - This is the result of a formula applied to the 

AMW under the Old Start Computation. The Primary Insurance Amount is 

determined from the PIB based on a conversion table.

4. Primary Insurance Amount (PIA) - The Primary Insurance Amount (PIA) is the 

basis of all Social Security Act benefits.

5. Eligible - The individual meets the requirements for a Social Security Act benefit 

and has an insured status. (This definition is changed under the 1977 SS Act 

Amendments to delete the reference to an insured status as of eligibility year.)

6. Recalculation - The PIA, once established can be changed by recalculation 

which:

(a) Involves the reopening of previous computations to change the factors of 

the benefit computations; and,

(b) Can result in an increase of a decrease in the PIA; and,
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(c) May or may not be specifically provided for in the law.

7. Recomputation - The PIA, once established, can be changed by recomputation 

which:

(a) Involves the use of a new computation period; and,

(b) Can be effective only to increase the PIA; and,

(c) Is specifically provided for in the Social Security Act.

8. Life Benefits - The benefits payable to the living wage earner and auxiliaries 

upon filing of an application.

9. Death Benefits - The benefits payable on the deceased wage earner's wage 

record to the eligible survivors upon filing of an application.

10. Drop-out Years - Up to five years of lowest earnings which are excluded from 

most PIA computations.

11. Date of Entitlement - The initial date of entitlement is the month for which 

payments are due before adjustment for work deductions or SS Act non-payment 

provisions. This is similar to the annuity beginning date under the RRA.

8.11.3 Definitions of SS ACT Terms Effective 1977 or Later

1. Entitled - The person is "entitled" when (s)he meets all the requirements 

including the insured status and the filing of an application. Entitlement exists 

even though payments are not being made.

2. Eligible - A wage earner is "eligible" for life benefits with a beginning date of 

1-1979 or later under the 1977 SSA Amendments in the earliest of:

(1) The year of disability onset; or,

(2) The year of attainment of age 62.

Insured status is not considered at SSA when determining whether an individual 

is eligible for a life benefit effective 1-1-79 or late under the 1977 SSA 

Amendments. A person age 62 in 1979 and not insured until 1980 is considered 

"eligible" in 1979 for computational purposes. However, the onset date of a 

period of disability is contingent upon the meeting of DIB insured status.

If the wage earner dies before becoming eligible for life benefits, survivor benefits 

are computed using the year of death as the eligibility year.

NOTE: The deeming provisions under the RR Act can make an RR employee 

"eligible" for the RRA PIA #1 or PIA #3 even though he or she would not be 
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eligible under the SS Act. For example, an occupational disability annuitant is 

deemed to be entitled to a DIB under the SS Act even though there is no SS Act 

DF. A 60/30 annuitant is deemed to be eligible on the ABD if he or she is under 

age 62 on the ABD.

3. Eligibility Year (Benchmark Year) - The "eligibility year" (or benchmark year) is 

the earliest of:

(1) the year of death; or

(2) the year of disability onset; or

(3) the year of attainment of age 62.

The "eligibility year" governs the type of PIA computation. If the employee is 

eligible before 1979, generally, the PIA is selected from a table based on the 

AMW. If the employee is eligible after 1978, generally, the PIA is determined 

under a formula based on the AIME. In the latter cases, the eligibility year also 

determines the formula used to calculate the AIME PIA. (See 8.11.40 and 

8.11.70 for exceptions.)

4. Average Annual Wage (AAW) - The average annual wage is the average of 

actual covered and non-covered wages for all workers in a given year. Prior to 

1978, this equals four times the average social security earnings reported for the 

first quarter of each year. After 1977, it is based on earnings reported to the 

Internal Revenue Service.

5. Indexing - Indexing is a means of expressing prior year’s earnings in terms of 

their current dollar value. The method for accomplishing this involves the 

multiplying of the previously reported earnings for each year after 1950 up 

through the indexing year by the quotient of the average annual wage (AAW) of 

all workers for the year being indexed.

(Unindexed earnings 

for year N)

x (Average annual wage 

for indexing year)

= Indexed earnings

(Average annual wage for year N)

Earnings for years subsequent to the indexing year are not indexed. The actual 

reported earnings are considered.

6. Indexing Year - The indexing year is the second year before the individual's year 

of eligibility as defined in item 3.

7. Average Indexed Monthly Earnings (AIME) - This is the result of dividing the total 

of the indexed and non-indexed earnings in the benefit computation years by the 
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number of months in the computation base years (commonly known as divisor 

months).

8. Bend Points - Bend points are the amounts of the AIME which are multiplied by 

the constant percentages in the PIA formula contained in the law. The term also 

refers to the amounts of the AIME PIA which are multiplied by constant 

percentages in the formula used to determine the family maximums applicable to 

AIME PIAs.

The law as amended provides that by November 1 of each year after 1978, the 

Secretary of Health Education and Welfare will publish in the Federal Register 

the bend points that will be applicable to workers who become "eligible" for 

benefits in the following year.

9. Decoupling - Decoupling is a term which denotes that all prior cost-of-living 

increases are not considered when computing the starting Old Start, TRANS or 

AIME PIA under the 1977 SSA Amendment provisions. The PIA is either derived 

from the June 1978 PIA Table or computed by applying a formula to the AIME. 

Cost-of-living increases are added, generally, after the starting PIA has been 

determined, beginning with the year of eligibility (see 8.11.91 for exceptions).

The Special Minimum PIA is not subject to the decoupling provision.

10. RAW PIA or RAW Maximum - This is the basic result of applying the PIA formula 

based on the benchmark year to the AIME amount or the family maximum 

formula based on the benchmark year to the PIA amount.

11. Variable Dropout - This is a provision of the 1980 Social Security Disability 

Amendments which limits the low years of earnings to be excluded from disability 

PIA computations.

8.11.4 Types of PIAS Under the Social Security Act

The Primary Insurance Amount (PIA) is the basis of all Social Security Act benefits and, 

therefore, all RR annuity Tier I amounts and rates payable under the Retirement O/M 

computation. The basic SS Act PIA computations are explained in this section.

The PIA's designated under the RRA as PIA 1, PIA 3, 

PIA 9, PIA 17, and the SSEB PIA are basically subject to the SSA rules based on the 

eligibility year. However, refer to section 8.11.103 - 8.11.105 for an explanation of the 

effect of RR Act deeming provisions on the determination of the PIA 1, PIA 3, and PIA 

17 eligibility year.

Under the 1977 Amendments to the SS Act, the "eligibility year" determines the type of 

PIA to be computed.
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A. Eligibility Year Before 1979 - The possible PIA computations for cases with an 

eligibility year before 1979 are:

1. "New Start" Method (AMW PIA) - The PIA is obtained directly from the 

Average Monthly Wage (AMW) under the "New Start" method; or,

2. Special Minimum PIA (SPC MIN PIA) - The PIA is obtained by multiplying 

an amount specified in the law by the number of "years of coverage" 

under the Special Minimum Guarantee; or,

3. "Old Start" Method (AMW PIA) - The PIA is obtained from the Primary 

Insurance Benefit under the "Old Start" methods (including the 1977 Old 

Start computation for eligibilities in 1978).

B. Eligibility Year 1979 or Later - The possible PIA computations for cases with an 

eligibility year 1979 or later are:

1. AIME PIA - The AIME (average indexed monthly earnings) PIA is 

determined by means of a formula in which variable portions of the AIME 

(the bend points established for the employee's eligibility year) are 

multiplied by constant percentages contained in the law. Cost-of-living 

increases are added under specific rules after the AIME PIA has been 

computed.

2. Frozen Minimum PIA (FRZN MIN PIA) - The minimum starting AIME PIA 

for initial entitlement effective January, 1979 and later is frozen at $122.00 

(June, 1978 minimum PIA rounded to the next higher multiple of $1.00). 

Cost-of-living increases are added under specific rules.

The 1981 SS Act Amendments eliminated the Frozen Minimum PIA for 

most earnings records based on eligibility years 1982 or later.

3. Transitional Guarantee PIA (TRANS PIA) - This is a "New Start" AMW 

based PIA limited to certain benefits as explained in RCM 8.11.25. This 

PIA does not include earnings in the eligibility year or later years. Cost-ofliving increases are added under specific rules.

4. 1977 Old Start PIA (1977 O.S. PIA) - The primary Insurance Amount is 

determined by computing the PIB and then converting it to the PIA using a 

conversion chart. However, for eligibilities in 1979 or later, the AMW 

cannot include earnings in the eligibility year or later years. Cost-of-living 

increases are added under specific rules.

5. Special Minimum PIA (SPC. MIN. PIA.) - The PIA is obtained by 

multiplying an amount specified in law by the number of "years of 

coverage" under the Special Minimum Guarantee.
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6. DIB Guarantee PIA - When an individual has been entitled to monthly 

disability benefits that terminated more than 12 months before the current 

disability, age and service, or survivor entitlement, the "eligibility year" of 

the current entitlement determines the computation to be used. However, 

the starting PIA may not be less than the PIA which was in effect in the 

month of termination of the disability benefits.

NOTE: When an individual has been entitled to monthly disability benefits 

that terminated within 12 months of the current disability, age and service, 

or survivor entitlement, the previous PIA computation applies.

7. Vow of Poverty Minimum PIA - The SS Act Amendments retains the 

minimum PIA's for certain members of religious orders (or an autonomous

part of such order) until 1992 provided:

• The individual was required to take a vow of poverty; and,

• The religious order must have elected Social Security coverage for 

their members prior to 12/29/81 (the enactment date of PL 97-123).

8.11.5 PIAs Under the RRA not Subject to 1977 SS ACT Amendments 

or 1981 SS Act Amendments

The PIA's designated under the Railroad Retirement Act as PIA #4, PIA #5, PIA #6, PIA 

#7, PIA #8, PIA #10, PIA #11, PIA #15 and PIA #21 are frozen under the computation in 

effect on 12-1974 (see 8.11.100 through 8.11.117). Therefore, regardless of the wage 

earner's eligibility year, these PIA's are always either based on the AMW under the 

higher of the "Old Start" or "New Start" method or, if higher, are based on the Special 

Minimum PIA. 

The elimination of the minimum benefit under the 1991 SS Act Amendments does not 

affect these PIAs.

8.11.10 Determining the Elapsed Years

The Social Security Act rules are explained in this section. Refer to RCM 

8.11.100-8.11.117 for an explanation of the effect of RR Act deeming provisions on the 

determination of the elapsed years.

The elapsed years determine the number of computation years which must be used in 

computing the AMW or AIME.

The elapsed years depend on the method of computing the AMW or AIME.

A. "Old Start" AMW Computation - The Elapsed Years for all Social Security Act Old 

Start AMW computations are the years since January 1, 1937 up to the earlier of 

the end of the year before the year of attainment of retirement age, the end of the 
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year before the year the period of disability begins, or the end of the year before 

the year of death, but excluding:

• Any years prior to the year in which the wage earner attained age 22; and,

• Any years partly or wholly within a previous "disability freeze" period 

established after 1-1-1951 (or after 1-1-1937 if Revised PIB Method) unless 

including these years would result in a higher AMW (benefits payable after 

June 1955 only).

B. New Start AMW Method or AIME Method - The Elapsed Years for the "New 

Start" AMW or for the AIME are the years since January 1, 1951 up to the earlier 

of the end of the year before the year of attainment of retirement age, the end of 

the year before the year the period of disability begins, or the end of the year 

before the year of death, but excluding:

• Any years prior to the year in which the wage earner attained age 22; and,

• Any years partly or wholly within a previous "disability freeze" period 

established after 1-1-1951 unless including these years would result in a 

higher AMW (benefits payable after June 1955 only) or would result in a 

higher AIME.

8.11.11 Determining the Divisor Months

The divisor months are determined from the elapsed years (see RCM 8.11.10). For 

benefits payable after 1954, the months in up to five years of lowest earnings are 

deducted from the elapsed years as explained in RCM 8.11.16. The divisor months 

used in computing the AMW or AIME equal the number of months in the elapsed years 

minus the number of months in the years deducted (i.e., (elapsed years - 5) x 12 = 

divisor months). However, the minimum divisor is 24. If the number of months 

remaining after excluding the years of disability and up to five low years is less than 24, 

the divisor will be 24.

EXAMPLE 1: The employee was born 8-17-14 and therefore has 39 elapsed years 

(1937 through 1975) under the Old Start Computation before the year he attained age 

62 (1976). The months in the five years of lowest earnings are dropped from the divisor 

months. The 34 remaining years times 12 months per year equal 408 divisor months.

EXAMPLE 2: The employee was born 8-17-14 and therefore has 25 elapsed years 

(1951 through 1975) under the "New Start Computation" before the year he attains age 

62 in 1976. The months in the five years of lowest earnings are dropped from the AMW 

divisor months. The 20 remaining years times 12 months per year equal 240 divisor 

months.

EXAMPLE 3: The employee was born 9-27-42 and therefore has 40 elapsed years 

(1964 through 2003) under the AIME computation before the year he attains age 62 
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(2004). The months in the five years of lowest earnings are dropped from the AIME 

divisor months. The 35 remaining years times 12 months per year equal 420 divisor 

months.

EXAMPLE 4: The employee was born 5-24-55. He is entitled to a "disability freeze" 

effective 9-30-2003. Since the employee attained age 22 in 1977, there are 26 elapsed 

years (1977 through 2002) under the "New Start Computation" before the year his 

period of disability began. The months in the five years of lowest earnings are dropped 

from the divisor. The 21 remaining years times 12 months per year equal 252 divisor 

months.

EXAMPLE 5: The employee was born 5-24-52. He is entitled to a "disability freeze" 

(DF) effective 9-30-2003. Since the employee attained age 22 in 1974, there are 29 

elapsed years (1974 through 2002) under the AIME computation before the year his 

period of disability began. The months in the five years of lowest earnings are dropped 

from the AIME divisor. The 24 remaining years times 12 months per year equal 288 

divisor months. 

EXAMPLE 6: The employee was born 9-11-60. He died on 8-3-2004 before entitlement 

to life benefits. Since the employee attained age 22 in 1982, there are 22 elapsed years 

(1982 through 2003) under the AIME computations. The months in the five years of 

lowest earnings are dropped from the AIME divisor. The 17 remaining years times 12 

months per year equal 204 divisor months.

EXAMPLE 7: The employee was born 9-11-59. He became disabled on 8-3-2004 (year 

age 45). Since the employee attained age 22 in 1981, there are 23 elapsed years 

(1981 through 2003) under the AIME computations. Since his PIA will be calculated 

under the 1980 SS Act Amendments he is only entitled to 4 drop-out years, and 

therefore, the months in the four years of lowest earnings are dropped from the AIME 

divisor. The 19 remaining years times 12 months per year equal 228 divisor months.

Once determined, the divisor months remain constant regardless of whether the living 

wage earner keeps working.

The chart in Exhibit 1 illustrates the determination of divisor months for employees born 

before 1-2-30. 

8.11.12 Determining Base Years - General

The base years are the years from which the benefit computation years are chosen for 

the AMW dividend or AIME dividend. The number of base years depends on the SS 

Act method of computing the PIA:

• Old Start AMW Computation

The base years are the years since January 1, 1937 through the Last Computation 

Base Year, excluding years wholly within a period of disability.
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• "New Start" AMW or AIME Computation

The base years are the years since January 1, 1951 through the Last Computation 

Base Year, excluding years wholly within a period of disability.

In life cases, the Last Computation Base Year for the initial (Old Start or New Start) 

AMW or AIME ends on the earlier of December 31, of the year prior to the effective date 

of the PIA or December 31, of the year of the disability onset.

In death cases, the Last Computation Base Year for the Old Start or New Start AMW or 

the AIME is the year of the wage earner's death.

EXCEPTION: The AMW Computation in life or death cases for the TRANS PIA or for 

the 1977 Old Start PIA for eligibilities in 1979 or later cannot include earnings in the 

"eligibility year" or later years.

8.11.13 Determining Benefit Computation Years - General

The benefit computation years for the (Old Start or New Start) AMW or for the AIME 

computation are chosen from the base years. The total number of benefit computation 

years equal the number of years used in the AMW or AIME divisor (elapsed years 

minus up to five years of lowest earnings as explained in RCM 8.11.16). However, 

earnings for a base year prior to the year of attainment of age 22, after the year of 

attainment of retirement age, or a base year partly within a period of disability may be 

substituted for a benefit computation year in which the wage earner had lower earnings.

EXCEPTION: The AMW computation for the TRANS PIA or for 1977 Old Start PIA for 

eligibilities in 1979 or later cannot include earnings in the "eligibility year" or later years.

Example 1: The employee was born 8-17-14. He attained age 62 in 8-1976 but did not 

file for benefits until 8-1979. The AMW PIA is effective 8-1979. In this case, December 

31, of the year prior to the effective date of the PIA is used. The last computation base 

year for the initial AMW ends on December 31, 1978. Exclude five years of lowest 

earnings. Earnings for 1976, 1977 and 1978 are used only if they are higher than some 

other benefit computation year.

Example 2: The employee was born 11-14-18. He attained age 62 in 11-1980 but did 

not file for benefits until 11-1982. The AIME, TRANS or 1977 O.S PIA is effective 

11-1982. In this case, December 31, of the year prior to the effective date of the PIA is 

used. The last computation base year for the initial AIME ends on December 31, 1981. 

Earnings for 1980 and 1981 are used only if they are higher than some other benefit 

computation year. The last computation base year for the TRANS PIA or 1977 Old 

Start PIA ends on December 31, 1979. 

Example 3: The employee's date of birth is 5-24-31. He is rated disabled from 9-30-76 

and the SS Act initial PIA is effective 3-1-77. In this case, December 31, of the year of 

disability onset and December 31, of the year prior to the effective date of the AMW PIA 
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are the same. Therefore, the last computation base year for the initial AMW ends on 

December 31, 1976.

After excluding five years of lowest earnings, the earnings for 1951 and 1952 which are 

prior to the year in which the employee attained age 22, and the earnings for 1976 (a 

year partly within a period of disability) are used only if they are higher than some other 

benefit computation year.

Example 4: The employee's date of birth is 5-24-31. He is rated disabled from 10-5-79 

and the SS Act initial PIA is effective 4-1-80. In this case, December 31, of the year of 

disability onset and December 31, of the year prior to the effective date of the AIME PIA 

are the same.

The last computation base year for the initial AIME ends on December 31, 1979. After 

excluding five years of lowest earnings, the earnings for 1951 and 1952 which are prior 

to the year in which the employee attained age 22 and the earnings for 1979 (a year 

partly within a period of disability) are used only if they are higher than some other 

benefit computation year.

The last computation base year for the 1977 Old Start PIA in this case ends on 

December 31, 1978. After excluding five years of lowest earnings, the earnings for 

1951 and 1952 are used only if they are higher than some other benefit computation 

year.

Example 5: The employee's date of birth is 5-24-31. He is rated disabled from 2-9-76 

and the SS Act initial PIA is effective 8-1976. In this case, December 31, of the year 

prior to the effective date of the PIA is earlier than December 31, of the year of disability 

onset. The last computation base year for the initial AMW ends on December 31, 1975.

After excluding the five years of lowest earnings, the earnings for 1951 and 1952 which 

are prior to the year in which the employee attained age 22, are used only if they are 

higher than some other benefit computation year.

The AMW may be recomputed effective 1-1-77 if the 1976 earnings are higher than 

some other benefit computation year.

Example 6: The employee's date of birth is 5-24-31. He is rated disabled form 3-10-79 

and the SS Act initial AIME PIA is effective 9-1-79. In this case, December 31, of the 

year prior to the effective date of the PIA is earlier than December 31, of the year of 

disability onset.

After excluding five years of lowest earnings, the earnings for 1951 and 1952 which are 

prior to the year in which the employee attained age 22, are used only if they are higher 

than the indexed earnings of some other benefit computation year.

The last computation base year for the initial AIME ends on December 31, 1978. The 

AIME may be recomputed effective 1-1-80 if the actual reported earnings for 1979 are 

higher than the indexed earnings of some other benefit computation year.
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The last computation base year for the 1977 Old Start PIA in this case ends on 

December 31, 1978. The AMW may not be recomputed.

Example 7: The employee attained age 62 in 8-1975 and died on 7-10-80. The last 

computation base year for the AMW is 1980. Earnings for 1975 through the year of 

death are used only if they are higher than some other benefit computation year. 

Example 8: The employee attained age 62 on 2-9-80 and died on 9-2-81. The last 

computation base year for the AIME is 1981. Earnings for 1980-1981 are used only if 

they are higher than some other benefit computation year.

The last computation base year for the AMW for the TRANS PIA or 1977 Old Start PIA 

in this case is December 31, 1979.

Example 9: The employee was born 9-11-50. He died on 8-3-2004 before entitlement 

to life benefits. The last computation base year for the AIME is 2004. After excluding 

the five years of lowest earnings, the earnings for 1951-1971 (which are prior to 

attainment of age 22), and for 2004 (the year of death) are used only if they are higher 

than some other benefit computation year.

Example 10: The employee was born 9-11-59. He became disabled on 8-3-2004 at age 

45. The last computation base year for the AIME is 2004. After excluding the four

years of lowest earnings under the 1980 SS Act Amendments, the earnings for 1951-

1980 (which are prior to attainment of age 22) and for 2004 (partial year of disability) are 

used only if they are higher than some other benefit computation year.

8.11.14 Yearly Earnings Maximums

The Social Security Act limits the yearly reported earnings that may be considered in 

the AMW computations or indexed for the AIME computation. The earnings to be used 

include all wages, self-employment income, creditable compensation and creditable 

M/S including deemed M/S credits up to the maximum for each year. RCM 8.11.42

explains the Old Start method of determining earnings for base years before 1951.

Note: The Annual and Monthly Earnings Maximums are now located on Boardwalk. For 

more information click here. 

The yearly maximums for reported earnings between 1937 and 1950 are as follows:

YEARS MAXIMUM

Old Start Only 1937-1939 $ 3,000.00 From each employer

1940-1950 3,000.00 Total per year
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Click here for a chart of the yearly maximums for reported earnings after 1950.

8.11.15 Excluding Period of Disability

A. Determination of DF Period - The period of disability is determined by the 

Disability Rating Section at RRB or SSA (see RCM 1.2). It may apply in either an 

age and service or disability case.

When a disability freeze (DF) is established, the worker's wage record is frozen 

and the period during which he is rated disabled (and not likely to have 

substantial earnings) is usually excluded from the "Old Start" or "New Start" 

AMW computation or the AIME computation. However, the disability period is 

not excluded unless dropping these years produces a higher AMW or AIME than 

would otherwise be possible. If the period of disability is disregarded in the AMW 

or AIME computation, the disability freeze cannot be used to establish a DIB 

insured status or to pay a DIB VDB.

A disability annuitant who does not have a disability freeze on the ABD is 

deemed to be entitled to a DIB on the ABD for the purpose of computing PIAs 1, 

3, and 10. Since (s)he is deemed to be entitled to a DIB, (s)he is also deemed to 

be entitled to a period of disability beginning with the ABD. Therefore, PIAs 1, 3, 

and 10 for a disability annuitant who does not have a DF on the ABD are 

computed as though the annuitant has a deemed DF.

The examiner may not exclude part of a disability freeze period and include part 

of the disability freeze period in order to compute a higher AMW or AIME.

B. Period of Disability - A period of disability is slightly different in disability cases 

than in age and service or survivor cases. Therefore, PIA 1, PIA 3, PIA 9 and the 

SSEB PIA are not necessarily computed at the same time or with the same 

earnings (see RCM 8.11.111). RCM 8.11.122 and 8.11.124-125 explain when a 

manual PIA computation is required.

1. Period of Disability In Disability Cases

(a) The Waiting Period - Under the Social Security Act, before 

entitlement to a DIB windfall or DIB O/M benefit can begin, the 

wage earner must have served a waiting period consisting of five 

full calendar months throughout which (s)he is under disability. He 

also must have a disability insured status (see RCM 5.6.11) in the 

first of those five months.

EXCEPTION: If (s)he previously had a freeze or DIB which ended 

within five years (60 months) before the month his/her current 

disability began, no waiting period is required. This 60 month period 

begins with the month in which the prior freeze ceased or DIB 
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terminated and ends with the month before the first month 

throughout all of which the W/E is under a disability.

The waiting period begins in the first month, no earlier than 17 

months prior to the month of filing in which:

• The W/E has been under a disability for the entire month (i.e., 

the date of onset is on or before the first day of the month); and,

• The W/E has a disability insured status. (Under the disability 

exclusion computation, an individual who becomes disabled as 

of any particular date in which (s)he has a disability insured 

status, and who remains continuously disabled thereafter will 

continue to meet these requirements in the first month of the 

waiting period (even if the waiting period begins in a quarter 

after onset) and hence will have a disability insured status at 

that time because the establishment of a period of disability 

protects the insured status the W/E had at onset.

NOTE: Prior to January, 1973, the waiting period was six full 

calendar months. For waiting periods prior to November, 1960, see 

the SSCM section 6056.

A statutorily blind W/E (see RCM 1.2) who is in disability freeze 

status but cannot become entitled to a monthly disability benefit 

(i.e., (s)he is under age 55 and able to engage in SGA or (s)he is 

age 55 or over and able to engage in comparable SGA) and who 

later becomes unable to engage in such SGA and is therefore 

found entitled to a DIB under SSA rules, must serve a waiting 

period before DIB (or DIB O/M) payments can begin. However, 

months after age 55 in which (s)he was engaging in "noncomparable" SGA can be counted as months in the waiting period if 

they fall within the period of disability.

(b) When a Period of Disability Begins In Disability Cases - The first 

month of the waiting period or the month of entitlement to the 

disability benefit, if there is no waiting period, is used to determine 

the deemed retirement age under SS Act rules. Retirement age for 

women is 62. For a male wage earner born 1-2-13 or later, 

retirement age is 62. The AMW or AIME for an employee who has 

a DF on the ABD is computed with the employee deemed to be age 

62 in the first month of his waiting period, in the first month (s)he is 

entitled to the disability benefit. The AMW or AIME for an 

employee who has a deemed DF on the ABD is computed with the 

employee deemed to be age 62 in the ABD month. (The male 

wage earner born before 1-2-13 is deemed to be age 65 in the first 
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month of his waiting period or, if there is no waiting period, in the 

first month (s)he is entitled to the disability benefit.)

(i) Disability Exclusion - Under the Social Security Act, the 

disability exclusion can apply to all disability PIA computation 

for monthly benefits payable for months after June, 1955. In 

this type of computation, earnings within the period of 

disability are excluded. A disability insured status on the 

disability onset date is preserved through the first full month 

of the waiting period in the disability exclusion computation.

In cases where the employee has a DF on the ABD, the 

disability period begins with the determined onset date and 

continues up to the earlier of the deemed attainment of age 

65, actual attainment of age 65, or death. In applying the 

disability exclusion computation for these cases, elapsed 

years are figured based on the date of disability onset. 

Therefore, the year of disability onset is treated as a partial 

year of disability (unless onset is January 1 of a year).

In cases where the employee has a deemed DF on the ABD, 

the disability period begins with the ABD and continues up to 

the earlier of the deemed attainment of age 65, actual 

attainment of age 65, or death. In applying the disability 

exclusion computation for these cases, elapsed years are 

figured based on the ABD. Therefore, the ABD year is 

treated as a partial year of disability (unless the ABD is 

January 1 of a year).

EXAMPLE: The employee (DOB 5-7-38) files for a disability 

annuity on 4-1-99 and is found to have a disability onset of 

7-2-1996. The waiting period does not begin until 11-1-1997 

(17 months before the filing date - see RCM 5.6.11). The 

employee is deemed age 62 on 11-1-1997. Under disability 

exclusion, the freeze period begins on 7-2-1996 but benefits 

cannot be paid until 4-1-1998.

The G-90 program provides disability exclusion 

computations. No special entries are required on Form G-90 

in order to obtain disability exclusion computations. 

When an SSA and RRB disability onset date conflict refer to 

section E.

(ii.) Disability Non-Exclusion - Under the disability non-exclusion 

computation, earnings within the period of disability can be 

included. If the wage earner has high earnings in the year(s) 
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after his DF or deemed DF begins, the disability nonexclusion computation should be considered to determine if 

the PIA would be higher if the wage earner did not have a 

DF (since a DF is meant to increase the PIA, not lower it). 

Under the SS Act, the W/E must meet DIB insured status in 

the first month of the waiting period in order to apply the 

disability non-exclusion computation.

In cases where the employee has a DF on the ABD, the 

elapsed years for the disability non-exclusion computation 

are figured based on the first full month of the waiting period. 

Therefore, the year of the first full month of the waiting 

period is treated as a partial year of disability (when first full 

month is after January of that year). In this type of case, 

earnings in the year of disability onset up to the year in 

which the waiting period begins can be included in the PIA 

computation as regular benefit computation years (see 

8.11.13). Earnings after deemed retirement age (first full 

month of waiting period) up to the earlier of deemed 

attainment of age 65, actual attainment of age 65 or death 

can be used in the non-exclusion PIA recomputation as base 

years.

In cases where the employee has a deemed DF on the ABD, 

the disability non-exclusion computation is similar to the 

disability exclusion computation, except that earnings within 

the deemed period of disability can be included in the 

disability non-exclusion computation. The elapsed years are 

based on the ABD, and the ABD year is treated as a partial 

year of disability. Earnings after deemed retirement age (the 

ABD month) up to the earlier of deemed attainment of FRA, 

actual attainment of FRA, or death can be included in the 

non-exclusion PIA recomputation.

EXAMPLE: In the example cited in section (1) the employee 

is deemed age 62 on 7-2-1996. Under disability nonexclusion, the freeze period is ignored and earnings from 

1996through 1999 (his assumed FRA) can be included in 

this computation.

A disability non-exclusion computation cannot be obtained 

from the G-90 program. Therefore, if a disability 

non-exclusion computation is needed, request the Claim 

Certification unit (CCU) to manually compute a nonexclusion computation (see Section 8.11.122).
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When the SSA disability onset date precedes the RR ABD, 

refer to section E for possible application of this provision.

(c) When a Period of Disability Ends In Disability Cases - In a disability 

exclusion case, the period of disability in disability cases ends as 

follows:

2. Recomputation Purposes Only - Under the SS Act, for PIA recomputation 

purposes, the period of disability ends with the earlier of:

• The last day of the second month after the disability ceases; or,

• The last day of the month preceding the month the wage earner attains 

FRA; or,

• The last day of the month preceding the month the wage earner is 

deemed FRA).

NOTE 1: A male employee born 1-1-13 or earlier is deemed age 65 in the 

earlier of the first month of the waiting period of 1975. The period of 

disability is also assumed to terminate in that year. 

NOTE 2: SSA does not convert a DIB to an RIB until the beneficiary 

actually attains FRA.

Earnings for the partial year before the period of disability begins and 

earnings for the partial year in which the period of disability ends and later 

years may be considered for a benefit recomputation for the AMW PIA or 

AIME Disability Exclusion PIA (see RCM 8.11.22 and 8.11.33). 

EXAMPLE: The employee (DOB 5-7-50) has a disability onset of 

7-2-2001. The waiting period does not begin until 11-1-2002 (17 months 

before the filing date of 4-1-2004). The employee is deemed age 62 on 

11-1-2002 and deemed FRA (deemed age 66) on 11-1-2006. Therefore, 

for recomputation purposes, the disability period ends 10-31-2006. 

Earnings for 2006 or later years may be used in the disability exclusion 

PIA computation.

3. New Disability Entitlement after Closed Period of Disability - Under the SS 

Act, for the initial computation of the PIA for new entitlement, the closed 

period of disability ends with the last day of the second month after the 

disability ceases.

Earnings for the partial year before the prior period of disability begins and 

earnings for the partial year in which the prior period of disability ends and 

later years (in life cases) may be considered in the Disability Exclusion 

computation of the AMW PIA or AIME PIA if they are higher than some 

other benefit computation year (see RCM 8.11.22 and 8.11.33).
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The period of disability for the new disability entitlement ends as explained 

in section 1 above.

If two or more periods of disability are involved, they all must be excluded 

for the disability freeze to be applicable.

NOTE: This type of PIA computation for an RRB PIA must be manually 

computed by CCU on Form G-90a (see RCM 8.11.120).

EXAMPLE: The employee (DOB 8-16-44) filed for a disability freeze in 

1995 and a date of onset of 2-10-95 was established. Since 3-1-95 was 

the first full month of his waiting period he was deemed age 62 in that 

month and deemed age 65 three years later. His period of disability for 

PIA computation purposes was 3-1-95 through 2-29-98. Earnings for 

1998 were included in the DF recomputation effective 1-1-99. His 

disability terminated 9-30-99.

In 2001, the employee again filed for a disability freeze and a new onset 

date of 11-4-2001 was established. (Since there are less than 60 months 

after termination of his previous disability, there is no new waiting period.) 

This is considered new entitlement because the prior disability terminated 

more than 12 months before his present disability. The employee is 

deemed age 62 on 11-4-2001 and deemed FRA (age 66) in 11-2005.

In computing the initial PIA for the new entitlement with the disability 

freeze exclusion, two periods of disability must be excluded (3-1-95 

through 9-30-99 and 11-4-2001 through 10-31-2005). The earnings in 

1998 could be used in the recomputation of his PIA for his first entitlement 

if they were higher than some other benefit computation year. However, 

when computing the initial PIA for his new entitlement, the earnings and 

divisor months for 1998 are excluded because they are in a year fully 

within a period of disability.

4. Period of Disability In Age and Service or Survivor Cases - The period of 

disability in age and service or survivor cases begins with the date of 

disability onset and ends with the earlier of:

• The last day of the month in which the wage earner dies (survivor 

entitlement); or,

• The last day of the month preceding the month the wage earner 

actually attains FRA (there is no deeming of FRA under the SS Act); 

or,

• The last day of the second month after the disability ceases.
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Under the disability exclusion provision (freeze computation), years wholly 

within the disability period are not used in the PIA computation. Earnings 

for the partial year before the period of disability begins and earnings for 

the partial year in which the period of disability ends and later years (in life 

cases) may be considered in the computation of the AMW PIA or AIME 

PIA if they are higher than some other benefit computation year (see RCM 

8.11.22 and 8.11.33).

If two or more periods of disability are involved, they all must be excluded 

for the disability freeze to be applicable.

EXAMPLE 1: The employee (DOB 9-7-48) dies on 5-1-00. His survivors 

file for a DF which is established after death with disability onset of 

11-6-98.

The PIA based on the DF eligibility year 1998 is computed and in this case 

is less than the PIA based on the date of death (eligibility year 2000).

The DF is disregarded in this case to allow use of the higher PIA.

EXCLUSION NONEXCLUSION

1998 (DF) 2000 (DOD)

-1970 (age 22) -1970 (age 22)

28 (EY) 30 (EY)

Substantial earnings postings in 1999 and 2000 results in a higher nonexclusion PIA computation than exclusion computation even though 2 

additional benefit comp. years (BCYs) are included in the computation.

EXAMPLE 2:

EXCLUSION NONEXCLUSION

Dis onset 12/88 1988 (dis onset) 1989 (yr of w.p.)

DOB 9/46 -1968 (age 22) -1968 (age 22)

Filing date 4/91 20 (EY) 21 (EY)

W.P. 11/89 - 3/90

ABD 4/90 (one year prior to DOF)
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For purposes of determining elapsed years (EY), exclude any years 

partially or wholly in a period of disability for the EXCLUSION (freeze) 

computation. This leaves 20 elapsed years for the EXCLUSION 

computation and 21 elapsed years for the NONEXCLUSION (non-freeze) 

computation.

From the elapsed years, subtract the dropout years (4 for this employee 

based on his age on the disability onset date). This leaves 17 benefit 

comp. years (BCYs) for the NONEXCLUSION computation and 16 BCYs 

for the EXCLUSION computation, i.e. 204 divisor months and 192 divisor 

months, respectively.

The EXCLUSION computation uses 1988, the disability onset date in 

determining the benchmark year (YOE). The NONEXCLUSION PIA 

computation uses 1989, the beginning of the waiting period (W.P.), to 

determine the benchmark year (YOE). Note that this date can be no 

earlier than 17 months prior to the date of filing (12 months retroactivity 

from DOF plus 5 months waiting period).

EXAMPLE 3:

EXCLUSION NONEXCLUSION

Dis onset 11/95 1995 (dis onset.) 1999 (yr of w.p.)

DOB 5/39 -1961 (age 22) -1961 (age 22)

Filing date 1/00 34 (EY) 38 (EY)

W.P. 8/99-12/99

ABD 1/1/00 (designated ABD)

For purposes of determining elapsed years (EY), exclude any year(s) 

partially or wholly in a period of disability for the exclusion (freeze) 

computation. This leaves 38 elapsed years for the NONEXCLUSION 

(non-freeze) computation, and 34 elapsed years for the EXCLUSION 

(freeze) computation. 

From the elapsed years, subtract the drop-out years (5 for this employee 

based on his age on the disability onset date). This leaves 33 benefit 

comp year (BCYs) for the NONEXCLUSION (non-freeze) computation, 

and 29 BCYs for the EXCLUSION (freeze) computation (i.e., 348 divisor 

months and 392 divisor months, respectively).
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The EXCLUSION PIA computation uses the disability onset date in 

determining the benchmark year (1995 YOE), while the NONEXCLUSION 

PIA computation uses the beginning of the waiting period in determining 

the benchmark year (1999 YOE).

Because this employee had maximum earnings in the years 1995-1999, 

the NONEXCLUSION computation was higher, even though more BCYs & 

divisor months were factored into the computations. 

C. Effect on AMW or AIME Computation - If a period of disability is excluded for one 

purpose (e.g. elapsed years) it must be excluded for all purposes (e.g. insured 

status). 

1. Effect On AMW or AIME Divisor - When the disability freeze is applied to 

the AMW or AIME computation all months in years partly or wholly within 

the period of disability after 1-1-51 (or after 1-1-37, if 1965 Old Start 

Method) are excluded from the divisor (see RCM 8.11.10 and RCM 

8.11.11).

2. Effect On AMW or AIME Dividend - When the "disability freeze" is applied 

to the AMW or AIME computation, earnings from years wholly within a 

period of disability after 1-1-51 (or after 1-1-37, if 1965 Old Start Method) 

are excluded from the dividend (see RCM 8.11.13). For eligibilities prior to 

1-1-79, earnings from years partly within the disability period can be 

considered for inclusion in the AMW dividend for the AMW PIA if they are 

higher than some other benefit computation year.

For eligibilities 1-1-79 or later, earnings for years partly within a disability 

period can be considered for inclusion in the AIME dividend if they are 

higher than some other benefit computation year. Earnings from years 

partly within a disability period can be considered for inclusion in the AMW 

dividend for the 1977 Old Street PIA if they are higher than some other 

benefit computation year and the year is before the employee's eligibility 

year.

D. When Disability Freeze Affects PIA Computation

1. General

(a) Male Wage Earner - A DF granted to the eligible wage earner could 

increase the PIA if:

• He is born before 1910 and had a disability onset before the 

earlier of attainment of age 65 or death; or

• He is born 1910-1913 and has disability onset before the earlier 

of 1975 or death; or
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• He is born after 1913 and had disability onset before the earlier 

of attainment of age 62 or death.

(b) Female Wage Earner - A DF to the eligible wage earner could 

increase the PIA if she had disability onset before the earlier of 

attainment of age 62 or death.

2. Disability Freeze Effective After ABD - When a disability freeze is granted 

with an onset after the ABD, that DF will not affect the computations of PIA 

#1, PIA #3, PIA #5, PIA #6, PIA #10, or the PT PIA. This is due to the 

Railroad Retirement Act deeming provisions explained in RCM Chapter 

8.11.100, 8.11.107 and 8.11.108. 

A DF established after the ABD can affect the following PIA computations:

(a) Windfall PIAs - If there is no actual DF on the ABD and the 

employee is vested, PIA #4, PIA #7 and PIA #8 will be computed 

based on the employee's projected attainment of age 62. A DF will 

decrease the number of divisor months, increase AMW PIA's, and 

permit payment of the DIB windfall before age 62.

(b) PIA #9 and the SSEB PIA - A DF will permit the computation of PIA 

#9 and the SSEB PIA prior to age 62. The eligibility year for these 

PIA's will be based on the year of DF onset. PIA #9 may be used 

for purposes of testing and paying the OM as explained in RCM 

8.3.2. The SSEB PIA can be used for tax purposes, whether or not 

the OM is payable.

The SSEB PIA may also exceed PIA 1 in some cases, but since the SSEB 

paid amount is limited to the tier 1 paid amount, the higher SSEB PIA 

does not increase the SSEB paid to an amount greater than tier 1.

E. Disability Freeze Conflicts at RRB and SSA

1. Both RRB and SSA Have Established an Actual Disability Freeze - There 

are cases in which the Board grants a period of disability to an employee 

but the Social Security Administration either denies the period of disability 

or establishes a different eligibility onset date. Handle these cases as 

follows:

(a) SSA's DF Onset Date is Earlier Than RRB's Onset Date for Actual 

DF - Use SSA's DF onset date for all PIA computations unless RRB 

previously determined that the employee was not disabled as of 

SSA's DF onset date and denied an RRB D/A application. In that 

case, RRB's DF onset date must be used for all PIAs instead of 

SSA's. 
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(b) SSA's DF Onset Date is Later than RRB's Onset Date for Actual DF

- Use SSA's DF onset date to compute the WF PIA's. Use RRB's 

DF onset date to compute all PIA's other than WF PIA's.

(c) SSA Denied the DF But RRB Granted an Actual DF - Use RRB's 

onset date to compute all PIA's other than WF PIA's. The DF 

cannot be used to determine WF entitlement or to compute the WF 

PIA's.

(d) SSA Paying Benefit Without DF but Joint Actual DF Granted - Use 

RRB's onset date to compute all PIA's other than WF PIA's. The 

DF cannot be used to determine WF entitlement or to compute the 

WF PIA's. In these cases, SSA is paying a benefit based on SS 

earnings only. RRB is paying a benefit based on combined SS 

earnings and compensation with an SS benefit offset.

2. Only SSA Established a DF – Use SSA’s DF onset date (and/or closed 

freeze period) for all PIA computations in cases where the EE never filed 

for a disability annuity at RRB.

3. RR Act Deemed DF For 2a(I)(IV) and 2a(I)(V) Annuitants

(a) Deemed DF to Compute PIA - Section 3(a)(2) of the 1974 RRA 

deems all 2a(I)(IV) and 2a(I)(V) annuitants to be entitled to a DIB 

under section 223 of the Social Security Act as of their RR disability 

onset date and deems them to be age 62 on that date (unless an 

actual DF is earlier, in which case the actual DF is used). This 

deeming provision is for the computation of RR Act PIA's 1, 3, 10, 

17, and the PT-PIA only, as explained in RCM 8.11.100. It does 

not entitle the employee to the Retirement DIB O/M computation, a 

windfall benefit based on disability, HI coverage based on disability, 

or SSEB entitlement prior to age 62.

If SSA has established an actual DF prior to the RR disability onset 

date, consider the disability non-exclusion provision of the SS Act.

EXAMPLE: The employee DOB 2-26-23 has an actual DF at SSA 

beginning 5-76. If this DF were not considered he would have an 

RR Act deemed DF on the RR ABD (no waiting period applied prior 

to the 1983 amendments) of 1-1-79. The rates with and without the 

actual DF are as follows:

Rates With DF 5-76 Without Actual DF

PIA 1 331.30 PIA 1 356.10
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PIA 4 126.80 PIA 4 114.40

PIA 6 194.10 PIA 6 194.10

PIA 7 181.60 PIA 7 153.20

PIA 8 194.10 PIA 8 171.40

6/79 Gross 

Tier I

331.30 6/79 Gross Tier 

I

356.10

SS Ben -215.30 SS Ben 215.30

Net Tier I 116.00 Net Tier I 140.80

Tier II 22.03 Tier II 22.03

DIB WF 148.13 WF none until age 62

Total Tier 

Rate

286.16 Total Tier Rate 162.83

Therefore, the actual DF effective 5-1976 provides a higher total 

tier rate.

(b) DF For HI Coverage Only - Section 7(d)(3) of the 1974 Railroad 

Retirement Act deems certain 2a(1)(IV) or 2a(1)(V) annuitants to be 

entitled to HI coverage as explained in RCM 5.6.12. This DF 

determination is for the purpose of establishing HI only. It is not 

applied to a PIA computation and does not entitle the employee to 

the Retirement DIB O/M computation, a windfall benefit based on 

disability or SSEB entitlement prior to age 62.

8.11.16 Excluding up to Five Years of Lowest Earnings (Dropout 

Years)

A. Age and Service Annuities - Effective with benefits paid after 1954, the months 

and earnings in up to five full calendar years with the lowest earnings after the 

starting date and before the last computation base year may be excluded from 

the dividend and divisor when computing the AMW or the AIME (effective 1979 

or later). These years are called dropout years. This provision applies only to 

determining the dividend and divisor. It does not prevent the use of the affected 

years in determining quarters of coverage or insured status.

Up to five years of lowest earnings can be excluded in every case, including 

those in which a disability freeze has been established, as long as there remains 
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a minimum of two benefit computation years with the corresponding minimum 24 

divisor months.

EXAMPLE 1: The employee's date of birth is 11-10-05. The five lowest years of 

earnings (indicated with an asterisk for illustration) are excluded from the AMW 

divisor and AMW dividend. The earnings for 1970 and 1971 are used in place of 

the 1953 and 1955 earnings.

1951 - 2714.76* 1962 - 4218.29

1952 - 3140.76 1963 - 4350.46

1953 - 3059.76 1964 - 4832.52

1954 - 3136.75 1965 - 4908.55

1955 - 2804.76 1966 - 5357.75

1956 - 3298.75 1967 - 4751.55

1957 - 2759.75* 1968 - 6016.18

1958 - 863.16* 1969 - 6849.22

1959 - 2600.00* 1970 - 6610.71

1960 - 2600.00* 1971 - 7100.77

1961 - 3656.25

Therefore, his dividend is 68,228.51 and his divisor is 168. The AMW is $406.

EXAMPLE 2: The employee's date of birth is 7-5-39, so his eligibility year is 

2001 (age 62). The earnings are indexed for the AIME computation. The 35 

highest years of indexed earnings (indicated with an asterisk* for illustration) are

included in the AIME divisor and AIME dividend. 

1955 2295.96 1973 43412.58* 1987 71161.35* 

1960 3801.96 1974 50082.67* 1988 70918.59*

1961 13163.64 1975 49777.40* 1989 71788.40*

1962 8760.74 1976 50527.24* 1990 73123.66*
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1963 15623.01 1977 51409.12* 1991 69404.41*

1964 31959.14 1978 51090.81* 1992 67108.03*

1965 31393.87 1979 60783.29* 1993 67780.54*

1966 40722.21* 1980 61886.66* 1994 69640.14*

1967 38573.56* 1981 65588.95* 1995 75478.83*

1968 42655.24* 1982 67937.49* 1996 67392.39*

1969 40324.81* 1983 67456.75* 1997 72658.34*

1970 38418.29* 1984 71382.40* 1998 72211.82*

1971 36580.24* 1985 71725.66* 1999 66882.66*

1972 38440.74* 1986 73879.84* 2000 76200.00*

Therefore, his dividend is 2,104,405.11 and his divisor is 420. The AIME is 

$5010. 

B. Disability Annuities

1. Prior to 1980 Social Security Disability Amendments - For computation of 

disability PIA's for individuals who first became entitled to a disability 

before 7-1-80, the provisions for excluding the five full calendar years with 

the lowest earnings were the same as those explained in section A, 

above.

EXAMPLE 1: The employee's date of birth is 5-24-31. He is rated 

disabled from 9-30-76 and his SS Act initial PIA is effective 3-1-77. The 

five lowest years of earnings (indicated with an asterisk for illustration) are 

excluded from the AMW divisor and AMW dividend. Since they do not 

exceed another benefit computation year, earnings prior to attaining 22 

are not used. The earnings for 1976, a year partly within a period of 

disability, are used because they are higher than the earnings for 1957.

1951 2453.27** 1964 4800.00

1952 2998.48** 1965 4800.00

1953 3452.48* 1966 5476.57
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1954 3243.48* 1967 5478.50

1955 3745.48* 1968 5374.94

1956 3374.48* 1969 6205.70

1957 3947.49** 1970 6304.10

1958 3714.49* 1971 7095.93

1959 4389.93 1972 7945.49

1960 4655.79 1973 9029.86

1961 4549.44 1974 7757.68

1962 4664.89 1975 8011.36

1963 4730.91 1976 6196.14

Therefore, his dividend is 107,466.23 and his divisor is 216. The AMW is 

$497.00.

** Not used.

EXAMPLE 2: The employee's date of birth is 7-9-32. He is rated disabled 

from 9-30-79 and his SS Act initial PIA is effective 3-1-80. The earnings 

are indexed for the AIME computation.

The five lowest years of earnings (indicated with an asterisk for illustration) 

are excluded from the AIME divisor and AIME dividend. Since they do not 

exceed another benefit computation year, earnings for 1951 and 1952 

(prior to attaining 22) are not used, but earnings for 1953 are used in place 

of 1968 earnings. The earnings for 1979, a year partly within a period of 

disability are not used because they are not higher than the earnings in 

another benefit computation year.

1951 6172.53** 1966 11,440.55

1952 9042.75** 1967 10,841.95

1953 11,344.85 1968 9,954.39**

1954 10,602.94 1969 10,866.18
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1955 11,704.63 1970 10,521.54

1956 9,853.48* 1971 11,268.34

1957 11,183.24 1972 11,489.18

1958 10,430.29 1973 12,289.62

1959 11,747.45 1974 9,968.62

1960 11,988.66 1975 9,573.58*

1961 11,487.34 1976 6,927.28*

1962 11,211.99 1977 8,266.19*

1963 11,103.45 1978 8,917.65*

1964 10,819.20 1979 6,217.92**

1965 10,632.00

Therefore, his dividend is 222,942.04 and his divisor is 300. The AIME is 

743.00.

** Not used.

2. Changes Under 1980 Social Security Disability Amendments - PL 96-265

a. General - Under the "Variable Dropout" provision of the 1980 Social 

Security Disability Amendments, the number of years dropped out 

of the calculation of disability PIA's for individuals who first become 

entitled to a disability benefit July 1, 1980 or later are computed 

under the "1 for 5 rule". This provision does not apply to workers 

who were ever entitled to disability benefits prior to July 1, 1980. 

The dropout equals the total number of elapsed years divided by 5, 

but not to exceed 5 drop-out years. Any fraction is disregarded.

The variable dropout can apply to the AIME or 1977 Old Start PIA 

computations.

This provision currently reduces the number of dropout years for 

employees who become disabled (onset date) between the ages of 

27 and 46 and completely eliminates the dropout years for disabled 

employees under age 27.
RCM 8.11

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Worker's Age In Year of 

Disability Onset

Number of 

Dropout Years

Under Age 27 0

Ages 27 through 31 1

Ages 32 through 36 2

Ages 37 through 41 3

Ages 42 through 46 4

Ages 47 and over 5

EXCEPTION: There is a special "Child Care Dropout Year" 

provision effective July 1, 1981 which provides an additional 

dropout year for any year after 1950 in which the disabled worker is 

under age 37, has no earnings, and is living in the same household 

with a child less than three years old of the employee or spouse. 

However, the total dropout years in these cases cannot exceed 

three. Additional dropout years under this provision are determined 

as explained in Section 8.11.17. 

b. Disability Freeze/Non-Freeze - The number of dropout years may 

vary in situations where the onset date and the first month of the 

waiting period occur in different years if the employee has an 

insured status in the first month of the waiting period. Since the 

number of dropout years are based on elapsed years, they are 

determined separately for the disability freeze/non-freeze 

computations. (The disability freeze/non-freeze provision is 

explained in RCM 8.11.15.)

EXAMPLE: The employee DOB 2-15-54 has a disability onset and 

freeze effective 1-18-99 at age 45. He applied for disability benefits 

on 9-5-2002 and became entitled to the DIB O/M in 9-2001. The 

disability freeze computation years for PIA #9 are determined as 

follows:

Elapsed Years: 1976 through1998

Number of Elapsed Years: 23

Number of Dropout Years: 4

(23 divided by 5)
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Number of Computation Years: 19

(23-4)

In addition, the employee has DIB insured status in the first full 

month of his waiting period when he is age 47 (4-2001 or 17 

months prior to filing). The computation years for PIA #9 under the 

non-freeze computation are:

Elapsed Years: 1976 through2000

Number of Elapsed Years: 25

Number of Dropout Years: 5

(25 divided by 5)

Number of Computation Years: 20

(25-5)

c. Effect On Railroad Retirement Act PIAs - Due to the 1980 Social 

Security Disability Amendments, the computation of PIA 1, PIA 3, 

and PIA 17 is effective on the ABD, while the computation of PIA 9 

and the SSEB PIA is effective in the first full month after the waiting 

period. Therefore these amendments result in a PIA 1 with dropout 

years that differ from those excluded from PIA 9 or the SSEB PIA.

The pre-1980 amendment rules for determining the dropout years 

will apply to the survivor PIA 1 at the disabled employee's death. 

Therefore, the survivor PIA will always have five dropout years, 

provided there remains a minimum of two benefit computation 

years. 

The PIAs are subject to recomputation under regular procedure. 

The number of dropout years used in the initial PIA computation are 

also used in the recomputation.

EXAMPLE 1: The employee's date of birth is 5-19-35. At age 45, 

he is deemed disabled on the ABD of 5-16-80 for PIA 1. The DIB 

O/M is not payable until 11-1-80. The pre-amendment rules apply 

for PIA 1 with five dropout years. The amendment rules apply for 

PIA 9 which has only four dropout years.

EXAMPLE 2: The employee (DOB 7-10-43) has a disability onset 

date of 9-6-80. She received a disability annuity from that date. 

The dropout years determined under the 1 for 5 rule are three, 

applicable to live disability annuities. The employee dies in April 
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2004. The survivor PIA 1 is computed under pre-amendment rules 

having five dropout years, as do all survivor annuities.

EXAMPLE 3: The employee's date of birth is 11-12-62. He is rated 

disabled with an onset of 3-21-2004. The ABD is 9-1-2004. The 

four years of lowest earnings are dropped from the AIME dividend 

and the AIME divisor for both the initial and recomputed PIAs.

8.11.17 Additional Dropout Years Based on Child Care

The 1980 Disability Amendments provide for the crediting of dropout years based on 

child care in addition to those computed under the 1 for 5 rule (see Section 8.11.16 B 2) 

effective with monthly benefits beginning July 1, 1981. The sum of the dropout years 

computed under the 1 for 5 rule and the child care dropout years cannot exceed 3. But, 

since the minimum number of computation years is 2, any individuals who receive less 

than 3 dropout years under the 1 for 5 rule and who have more than 2 computation 

years may be eligible for additional dropout years effective July 1, 1981 or later.

See RCM Chapter 4.7.120ff for an explanation of how to determine if the child care 

dropout years provision may apply.

A. Requirements - In general, for the child care dropout provision to apply, the 

employee must:

• Be receiving a disability annuity; and

• Have an ABD of July 1, 1980 or later OR a disability freeze date of February 

1, 1980 or later, and

• Be under age 37 in the earlier of the year of his ABD or disability onset; and

• Have a benefit computation year in which he has no earnings and he was 

living with his or her spouse's child under age 3 substantially throughout that 

year.

In survivor cases, the employee must have met the criteria listed above and must 

have died after July 31, 1981.

B. Determining Child Care Years - Where an individual receives less than 3 regular 

dropout years under the 1 for 5 rule, the child care dropout provision must be 

considered effective July 1, 1981 or later. The following chart lists the maximum 

number of child care dropout years, based on the number of elapsed years 

involved in computing the PIA.
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Number of 

Elapsed 

Years

Number of Regular 

Dropout Years (1 

for 5 rule)

Maximum 

Number of Child 

Care Years

 0 0 0

 1 0 0 Dropout Limited

 2 0 0 By the Minimum

 3 0 1 of 2 Computation

 4 0 2 Years.

 5 1 2

 6 1 2

 7 1 2

 8 1 2

 9 1 2

10 2 1

11 2 1

12 2 1

13 2 1

14 2 1

15 or More: Worker is Not eligible for child care dropout years - at least 3 

dropout years given under 1 for 5 rule. 

By comparing the above chart to the chart given in Section 8.11.16 B 2 for the 1 

for 5 rule, it becomes apparent that the only employees who would be eligible for 

child care years are employees under age 37 in the earlier of the ABD year or DF 

onset year. This is because in most cases only a person under age 37 would 

have less than 15 elapsed years (and still be payable under the 1980 Disability 

Amendments).

36 years of age (or less)

22 years of age (years before age 22 are excluded)
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14 elapsed years (or less)

If the child care dropout provision may be applicable, the earnings record is 

reviewed. The years of highest earnings from the employee's base years (see 

Section 8.11.12) are selected that are equal in number to the employee's 

computation years (see Section 8.11.13). The number of computation years 

equals the number of elapsed years (see Section 8.11.10) minus the number of 

dropout years under the 1 for 5 rule (see Section 8.11.16). If each of the 

selected years contains any earnings, then the child care dropout provision does 

not apply.

If at least one of the selected computation years contains no earnings, the child 

care dropout provision should be developed according to RCM Chapter 4.7.120ff. 

Where one or more years qualify as an eligible child care year, the number of 

computation years is reduced by the number of child care years. However, the 

number of child care years is limited to the maximum shown in the chart, above. 

In addition, the number of child care years is also limited to the number of 

computation years with no earnings. The number of child care dropout years and 

the years chosen as child care years are based on the initial computation. Future 

recomputations do not affect the number of, or the chosen, child care dropout 

years. 

NOTE: The years of no earnings selected as computation years are not the only 

years available for consideration as child care years. Any year of no earnings 

within the initial base year period may be an eligible computation year and 

dropped, if the other criteria for a child care year are met.

EXAMPLE 1: The employee's DOB is 8-4-76, her disability annuity ABD is 

7-1-2003 and her DF onset is 1-15-2003. The DIB O/M entitlement date is 

7-1-2003. Her PIA #9 is computed using 4 computation years (5 elapsed years 

minus 1 drop-out year under the 1 for 5 rule).

Her PIA #9 should also consider dropout years for child care. Based on 5 

elapsed years, she may be credited with a maximum of 2 child care years. She 

has no earnings in the period 1951-1999 and in 2003. Since she is age 22 in 

1998 and her DF onset date is in 2003, only the years 1998-2002 can be 

considered as computation years. She's entitled to 1 dropout year under the 1 

for 5 rule which would be a year with no earnings. Therefore, only 1 year of no 

earnings is left so she can only be credited with 1 child care year.

EXAMPLE 2: The same facts as in EXAMPLE #1, except the employee has no 

earnings in the period 1951-1997 and in 2003. Since the only computation year 

in which she has no earnings is 1998, that year would be dropped out under the 

“1 for 5” rule. None of the 4 computation years remaining has no earnings. 

Therefore, although she has other base years with no earnings, the child care 

provision does not apply.
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8.11.20 Entitlement to "New Start" AMW Method

Before the 1977 Social Security Act Amendments, the 1965 "New Start" AMW method 

was used to compute the PIA if considering the earnings after 1950 only would result in 

the highest AMW and corresponding PIA, and the wage earner:

A. became entitled to an annuity on the basis of an application filed after 1965; or,

B. qualified for an automatic recomputation after 1965 (see RCM 8.11.22). 

If the AMW computed under the "New Start" method is less than $250 and there are 

significant earnings before 1951, refer to RCM 8.11.40-8.11.48 "Computation of Old 

Start PIA".

Benefits based on an "eligibility year" before 1979 will continue to be computed based 

on the AMW PIA. The AMW PIA conversion table will be updated for each cost-of-living 

increase.

Benefits paid on the wage records of employees who attain age 62 in the years 

1979-1983 can be computed using a "New Start" AMW computation for the Transitional 

PIA (TRANS PIA) as an alternative to the AIME computation, the 1977 Old Start 

computation or the Special Minimum PIA computation.

NOTE: The deeming provisions under the RR Act can make an RR employee "eligible" 

for the AMW computation even though he or (s)he would have a later eligibility year 

under the SS Act rules (see RCM 8.11.100 through 8.11.117).

8.11.21 Initial Computation of New Start AMW

The basic benefit computation years for the "New Start" AMW are chosen from the base 

years from the later of 1951 or the year of attainment of age 22 up to the last 

computation base year (See RCM 8.11.12). Five years of lowest earnings are dropped 

as explained in RCM 8.11.16. 

The AMWs computed for cases in which the wage earner attained age 62, had a date of 

disability onset or died before 1979, may include as a benefit computation year: years 

prior to year W/E attained age 22, a year partly within a period of disability, the year in 

which the employee attains age 62 or later years, or the year of death if the employee's 

earnings in these years are higher than earnings in some other benefit computation 

year. The year of lower earnings is dropped.

The AMW's computed for the Transitional PIA for wage earners who attain age 62 after 

12-31-78 but before 1-1-84 can include as a benefit computation year earnings in a year 

prior to the year in which the W/E attained age 22. The year of lower earnings is 

dropped. The TRANS PIA cannot include earnings in the eligibility year or later years.

Example: Two separate wage earners file for benefits payable 1-1982. Herman (DOB 

5-7-14) has an "eligibility year" of 1976 and is entitled to the AMW PIA computation. The 
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1-1982 AMW PIA can include earnings after the "eligibility year." Alfonso (DOB 

7-10-17) has an "eligibility year" of 1979 and is entitled to the TRANS PIA computation. 

The 1-1982 TRANS PIA cannot include earnings in or after the "eligibility year". 

Assuming both had the same earnings, their benefit computation years are indicated by 

"X" in the chart in Exhibit 2.

There will be the same number of years in the resulting benefit computation years for 

the AMW dividend as there are years (elapsed years minus drop-out) used to determine 

the AMW divisor months.

The actual reported earnings from the benefit computation years, subject to the yearly 

maximums, are added together to obtain the dividend used in computing the AMW.

The "New Start" Average Monthly Wage (AMW) is the quotient obtained by dividing the 

total earnings in the benefit computation years after 1950 by the number of months in 

the elapsed years minus the five years of lowest earnings. The amounts less than $1 in 

the quotient are dropped so that the AMW is expressed in whole dollar amounts.

8.11.22 Recomputation of "New Start" AMW

A. Age and Service Cases - The "New Start" AMW computed for employees who 

attained age 62 before 1-1-79 may be recomputed to include as a benefit 

computation year the ABD year or each subsequent year in which the employee 

has earnings higher than some other benefit computation year. The year of 

lower earnings is dropped. Therefore, there will be the same number of benefit 

computation years in the AMW dividend as there are years used to determine the 

AMW divisor months. Use the current AMW PIA Table to determine the 

recomputed AMW PIA.

In life cases, the recomputation is effective January 1, of the year following the 

year for which the earnings are credited.

Exception: If the employee's ABD is before 1-1967, refer to the Social Security 

Claims Manual section 4319.3.

EXAMPLE: The wage earner's date of birth is 5-20-15. The date of entitlement of 

his age and service benefit is 5-1-77. His earnings since 1951 are as follows:

1951 2671.47 1965 4800.00

1952 2892.79 1966 5374.75

1953 3120.72 1967 5478.50

1954 3201.91 1968 5392.94
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1955 3745.27 1969 6110.92

1956 3017.29 1970 6314.72

1957 3321.56 1971 7190.93

1958 3702.19 1972 7540.93

1959 3891.72 1973 9103.71

1960 4091.72 1974 8172.90

1961 4371.92 1975 8703.12

1962 4420.72 1976 9079.31

1963 4572.80 1977 6150.76

1964 4691.73 1978 4120.76

Under SSA rules, the initial AMW for benefits payable 5-1-77 was computed 

based on earnings through December 31, 1976. Earnings for the years 1951, 

1952, 1953, 1954 and 1956 were dropped from the AMW dividend. The AMW is 

recomputed for benefits payable effective 1-1-78 to include the earnings for 1977 

in the AMW dividend and to drop the earnings for 1957 from the AMW dividend. 

The AMW is again recomputed for benefits payable effective 1-1-79 to include 

the earnings for 1978 in the AMW dividend and to drop the earnings for 1958 

from the AMW dividend.

The "New Start" AMW computed for the TRANS PIA for employees who attain 

age 62 after 12-31-78 but before 1-1-84 is not subject to recomputation. 

Therefore, it is possible for a recomputed AIME PIA or Special Minimum PIA to 

exceed an initial TRANS PIA.

B. Disability Cases - The "New Start" AMW computed for employees with a 

disability onset date before 1-1-79 may be recomputed if the employee's reported 

earnings in the ABD year prior to the first month of the waiting period, or DIB 

effective date if there is not waiting period, or the employee's partial year after the 

actual or deemed attainment of age 65 or a subsequent year are higher than 

earnings in some other benefit computation year. (The period of disability is 

considered terminate, for PIA recomputation purposes only, when the EE is 

deemed to be age 65. However SSA does not convert a DIB to an RIB until the 

wage earner actually attains age 65. The year of lower earnings is dropped. 

Therefore, there will still be the same number of benefit computation years for the 

AMW dividend as there are years used to determine the AMW divisor. Use the 
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current AMW PIA Table to determine the recomputed AMW PIA. The 

recomputation is effective January 1, of the year following the year for which the 

earnings are credited. (The "New Start" AMW is not computed in disability cases 

with an eligibility year of 1979 or later.)

EXAMPLE: The employee's date of birth is 5-24-29. He is rated disabled from 6-

20-76 and deemed to be age 62 on that date for PIA computation purposes. The 

DIB O/M effective date is 12-1-76. For purposes of the PIA computation, the 

employee is deemed age 65 on 6-20-79.

The yearly earnings are as follows:

1951 2453.27 1966 5476.57

1952 2998.49 1967 5476.57

1953 3452.48 1968 5374.94

1954 3243.48 1969 6205.70

1955 3745.48 1970 6304.10

1956 3374.48 1971 7095.93

1957 3947.48 1972 7945.49

1958 3714.49 1973 9029.86

1959 4389.93 1974 7757.68

1960 4655.79 1975 8011.36

1961 4549.44 1976 4210.70

1962 4663.89 1977 976.00

1963 4730.91 1978 1909.00

1964 4800.00 1979 3995.48

1965 4800.00

The initial AMW for O/M benefits payable 12-1-76 was computed based on 

earnings through 12-31-75. Earnings for the years 1951, 1952, 1953, 1954 and 

1956 were dropped from the AMW dividend. The AMW is recomputed for 

benefits payable effective 1-1-77 to include the 1976 earnings in the AMW 
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dividend and to drop the earnings from 1958 from the AMW dividend. The 

6-1976 PIA Table is used in this case to determine the recomputed AMW PIA 

effective 1-1-77.

The wage earner does some odd jobs beginning in 1977, the scope of which is 

not sufficient to terminate his disability. Since 1979 is not wholly within a period 

of disability, the AMW is recomputed for benefits payable effective 1-1-80 to 

include the 1979 earnings in the AMW dividend and to drop the earnings for 1958 

from the AMW dividend. The 6-1979 PIA Table is used in this case to determine 

the recomputed AMW PIA effective 1-1-80.

C. Survivor Cases - The "New Start" AMW computed for employees who attained 

age 62 or died before 1-1979 may be "recomputed" if the "lag" earnings in the 

year of death are higher than some other benefit computation year. The year of 

lower earnings is dropped. Therefore, there will still be the same number of 

benefit computation years in the AMW dividend a there are years used to 

determine the recomputed AMW PIA. In survivor cases the recomputation is 

effective in the month of death.

The "New Start" AMW computed for the TRANS PIA for employees who attain 

age 62 after 12-31-78 but before 1-1-84 is not subject to recomputation for lag 

earnings in the year of death.

8.11.23 AMW Maximum and Minimum

Under the 1965 PIA formula, the average monthly wage cannot exceed the highest 

amount indicated in the AMW column in Appendix B. 

The AMW PIA is not affected by the elimination of the minimum social security benefit. 

The lowest AMW for the AMW PIA is $76.00 and the lowest PIB for the AMW PIA is 

$16.20.

The TRANS PIA for eligibility years 1982 and 1983 is subject to the 1981 SS Act 

Amendments. Therefore, the AMW for these PIAs is based on the actual amount of 

earnings. The minimum does not apply.

EXCEPTION: If the vow of poverty rule applies, refer to SSCM A4330.

8.11.24 Determining the Primary Insurance Amount for Pre-1977 SS 

Act Amendment Cases - (AMW PIA)

To find the AMW PIA when the AMW is figured under the 1965 "New Start" method, 

refer to the table in Appendix B of this chapter. Find the AMW in the first column. The 

PIA is on the same line as the AMW under the appropriate effective date. The amount 

of this PIA is increased for each cost-of-living increase.
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To find the AMW PIA when the PIB is figured under the "Old Start" method for an 

eligibility year before 1979, refer to RCM 8.11.48. 

8.11.25 Determining the Primary Insurance Amount under the 

Transitional Guarantee PIA (TRANS PIA)

A. Requirements for TRANS PIA

The Transitional Guarantee PIA is computed when the following requirements 

are met:

1. An age and service or survivor benefit is involved; and,

2. The employee attains age 62 in 1979-1983, even though the ABD or date 

of death is after the year the employee attained age 62.

3. The wage earner had some earnings before 1979; and,

4. The employee must not have established a period of disability which 

began prior to 1979, unless there was a period of at least 12 months prior 

to the month of attainment of age 62 or death during which (s)he is not 

entitled to a disability benefit (based on a DF) or the period of disability is 

disregarded.

The TRANS PIA is derived from the June 1978 PIA Table. Determine the 

employee's "eligibility year." Then use the corresponding Appendix based on the 

eligibility year at the end of this chapter to determine the TRANS PIA. The 

amount of this PIA is increased for the cost-of-living from the "eligibility year" as 

explained in RCM 8.11.91. 

B. Minimum TRANS PIA - The 1981 SS Act Amendments eliminated the minimum 

TRANS PIA for eligibility years 1982 and 1983.

1. Age and Service Cases - The minimum TRANS PIAs 1, 9, and SSEB PIA 

can apply if the employee attained age 62 before 1982.

2. Survivor Cases - The minimum TRANS PIAs 1 and 3 can apply if the 

employee attained age 62 before 1982, even if the employee died after 

1981.

C. TRANS PIA Family Maximum - The TRANS PIA Family Maximum Amount is 

computed as explained in RCM 8.11.86. 

8.11.30 Entitlement to AIME Method

The 1977 Amendments to the Social Security Act provide a formula for computing the 

PIA. This formula is applied to the average indexed monthly earnings (AIME) which is 

computed for wage earners who in 1979 or later, attain age 62, have a date of disability 
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onset, or die before becoming eligible for a life benefit. The indexed earnings bring the 

actual reported earnings for early years of employment up to the dollar value level of the 

recent earnings.

The AIME under the SSA formula is an alternative computation to the 1977 Old Start 

based on eligibility year 1979 or later, the SPC MIN PIA, or the TRANS PIA (when 

applicable).

The RRA PIA 1, PIA 3, PIA 9, PIA 17, or SSEB PIA may be computed under the AIME 

method for eligibilities 1979 or later. The deeming provisions of the RRA can make an 

employee eligible at an earlier year than the "eligibility year" under SS Act rules 

(see RCM 8.11.100 - 8.11.117). 

The AIME Family Maximum Benefit is computed as explained in RCM 8.11.86. 

8.11.31 Indexing Reported Earnings for AIME Computation

To compute an AIME PIA, the earnings reported for previous years must first be 

indexed to reflect their relative values in comparison to recent earnings levels. The 

earnings used in the AIME computation include all wages, self-employment income, 

compensation and M/S creditable up to the yearly maximum, for years after 1950.

The indexing for the AIME PIA is the second year before the employee's year of 

eligibility. To index reported earnings, multiply the reported earnings for each year after 

1950 through the indexing year, by the quotient of the average earnings for the indexing 

year divided by the average earnings for the year being indexed. Round the result to a 

penny.

Reported earnings 

for 19xx

x Average earnings 

for indexing year

= indexed earnings 

for 19xx

Average earnings for 19xx

Click here for a chart that shows the average earnings for years through the indexing 

year applicable to 1998. 

For benefit estimate purposes, estimated average earnings amounts for future eligibility 

years are also provided.

The amounts for 1978 - 2017 are based on IRS records.

The amounts for years prior to 1979 generally represent four times the average social 

security taxable wage reported for all workers for the first calendar quarter of each year. 

(Self-employment wage records were not included in these averages, as those earnings 

were not posted quarterly.)
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Earnings for years subsequent to the indexing year are not adjusted. The actual 

reported earnings for these years are considered. 

EXAMPLE: The employee's DOB is 5-10-17. He has 25 years RR service. Under the 

RR Act, due to last person service, the ABD is 2-1-80. The indexing year is 1977 based 

on his attainment of age 62 in 1979. The year 1977 has an average wage of $9,779.44.

The earnings record is adjusted as follows:

Year Reported 

Earnings

Indexed 

Earnings

1951 2,371.92 $ 8,286.79

1952 2,971.18 9,772.40

1953 3,476.91 10,830.67

1954 3,297.58 10,219.32

1955 3,751.26 11,111.88

1956 3,592.71 9,946.52

1957 3,957.89 10,628.48

1958 3,792.78 10,096.16

1959 4,792.16 12,154.32

1960 4,800.00 11,714.48

1961 4,800.00 11,486.19

1962 4,800.00 10,938.46

1963 4,800.00 10,676.63

1964 4,800.00 10,257.44

1965 4,800.00 10,076.01

1966 5,271.59 10,439.34

1967 6,576.72 12,336.70

1968 7,800.00 13,690.40
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1969 7,800.00 12,942.44

1970 7,800.00 12,330.53

1971 7,800.00 11,740.60

1972 8,179.28 11,212.65

1973 9,215.76 11,889.59

1974 11,735.28 14,290.61

1975 14,100.00 15,976.29

1976 15,300.00 16,216.96

1977 16,129.78 16,129.78

1978 16,752.79

1979 18,917.38

8.11.32 Initial Computation of AIME

The basic benefit computation years for the average indexed monthly earnings (AIME) 

are chosen from the indexed (or unindexed if after indexing year) base years (see RCM 

8.11.12). Up to five years of lowest earnings are dropped as explained in RCM 8.11.16. 

The AIME may include as a benefit computation year indexed earnings for years prior to 

the year in which the W/E attained age 22, actual reported earnings in a year partly 

within a period of disability (assuming after indexing year), actual reported earnings in 

the year in which the employee attains age 62 or later years, or actual reported earnings 

in the year of death if they are higher than the indexed (or unindexed if after indexing 

year) earnings in some other benefit computation year. The year of lower earnings is 

dropped.

The indexed (or unindexed if after indexing year) earnings from the benefit computation 

years are added together to obtain the dividend used in computing an AIME.

There will be the same number of years in the benefit computation years for the AIME 

dividend as there are years (elapsed years minus up to five years of lowest earnings) 

used to determine the AIME divisor months.

The Average Indexed Monthly Earnings (AIME) is the quotient obtained by dividing the 

total earnings in the benefit computation years by the divisor months. The amounts less 

than $1 in the quotient are dropped so that the AIME is expressed in whole dollar 

amounts.
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8.11.33 Recomputation of AIME

A. Age and Service Cases - The AIME may be recomputed to include, as a benefit 

computation year, the ABD year or each subsequent year in which the actual 

reported earnings are higher than the indexed earnings (or actual earnings for 

year after indexing year) of some other benefit computation year. The year of 

lower earnings is dropped. Therefore, there will still be the same number of 

benefit computation years for the AIME dividend as there are years (elapsed 

years minus up to five years of lowest earnings) used to determine the AIME 

divisor. The recomputed AIME is rounded down to the nearest whole dollar 

amount.

The same "bend points" used in the initial AIME PIA computation, based on the 

employee's year of attainment of age 62, are used to determine the amount of 

the recomputed AIME PIA. The AIME PIA must be increased by at least a $1.00 

for the recomputation to apply. Subsequent cost-of-living increases are added 

from the eligibility year after the AIME PIA is determined.

The recomputation is effective January 1, of the year following the year for which 

the earnings are reported.

Since the AMW for the Transitional PIA ("New Start") cannot be recomputed, it is 

possible for an AIME PIA calculation in a life case to overtake and pass the 

TRANS PIA because of a recomputation.

EXAMPLE: The employee's date of birth is 9-20-17. The effective date of his 

age and service benefit is 9-1-79. His earnings since 1951 indexed to the 1977 

average wage of $9,779.44 are as follows: 

1951 8,287.48 1966 10,437.75

1952 9,772.21 1967 12,337.93

1953 10,830.57 1968 13,689.00

1954 10,219.22 1969 12,940.20

1955 11,111.23 1970 12,331.80

1956 9,948.21 1971 11,739.00

1957 10,626.93 1972 11,213.74

1958 10,092.59 1973 11,888.33

1959 12,152.92 1974 14,293.57
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1960 11,716.80 1975 15,975.30

1961 11,486.40 1976 16,218.00

1962 10,939.20 1977 16,129.78*

1963 10,675.20 1978 16,752.79*

1964 10,257.60 1979 12,917.38*

1965 10,075.20

* Actual reported earnings

The initial AIME for benefits payable 9-1-79 was computed based on earnings 

through December 31, 1978. Earnings for the years 1951, 1952, 1956, 1958 and 

1965 were dropped from the AIME dividend. A cost-of-living percentage 

increase is added to the AIME formula effective 6-1-79. The AIME is recomputed 

for benefits payable effective 1-1-80 to include earnings for 1979 in the AIME 

dividend and to drop the earnings for 1954 from the AIME dividend. The same 

"bend points" plus COL increase percentage are used for the AIME PIA 

recomputation effective 1-1-80. 

Note: There are special rules for employees who are entitled based on 

60/30 provisions. 

• Employee eligible for a 60/30 annuity before 7-1-84: Earnings in the 

ABD year or later cannot be included in the computation of PIA 1 until 

January after the employee attains age 62. The eligibility year is the 

earlier of age 62 or the ABD year.

• Employee eligible for a 60/30 annuity 7-1-84 or later with an ABD 

before age 62 and before 1-1-02: Earnings in the ABD year or later 

cannot be included in the computation of PIA 1 until the later of January of 

the following year or the first full month the employee is age 62. PIA 1 is 

then recomputed based on all earnings. A new PIA 1 is computed using 

the year age 62 is attained as the eligibility year. The number of months 

used for the employee's age reduction in the recalculation is changed to 

reflect the number of full months under FRA. The new PIA is effective the 

first full month the employee is 62. 

• Employee eligible for a 60/30 annuity with an ABD of 01-01-02 or 

later: Earnings in the ABD year or later cannot be included in the 

computation of PIA 1 until the January after the employee attains age 62. 

Eligibility year is the earlier of age 62 or the ABD year.
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B. Disability Cases - A disability PIA (except those paid under the non-exclusion 

provision) is recomputed based on including earnings years not wholly within the 

period of disability. The period of disability begins at deemed age 62, which is 

the first full month of the waiting period and ends at the end of the month prior to 

the month the employee attains deemed FRA (deemed age 65 if the disability 

ABD is prior to 1/1/2000). The deemed FRA is based on the actual DOB.

The AIME may be recomputed to include as a benefit computation year: 

• The ABD year prior to the first full month of the waiting period, or 

• The ABD year prior to the disability annuity effective date for cases where 

there is no waiting period, or 

• The partial year after the actual or deemed attainment of FRA when the 

ABD is 1/1/2000 or later, (actual or deemed age 65, when the ABD is prior 

to 1/1/2000), or

• Each subsequent year in which the actual reported earnings are higher 

than the indexed (or unindexed if after indexing year) earnings of some 

other benefit computation year. 

 The year of lower earnings is dropped. Therefore, there will still be the same 

number of benefit computation years for the AIME dividend as there are years 

(elapsed years minus up to five years of lowest earnings) used to determine the 

AIME divisor. The recomputed AIME is rounded down to the nearest whole 

dollar amounts.

The same "bend points" used in the initial AIME PIA computation, based on the 

employee's year of disability onset, are used to determine the amounts of the 

recomputed AIME PIA. The AIME PIA must be increased by at least a $1.00 for 

the recomputation to apply. Subsequent cost-of-living increases are added from 

the eligibility year after the AIME PIA is determined.

The recomputation is effective January 1, of the year following the year for which 

the earnings are credited. 

1) Disability Exclusion Cases with ABD 1/1/2000 or later: Effective with ABD’s 

1/1/2000 and later, the end of the employee’s period of disability is the month 

before the month the employee attains deemed FRA (based on actual DOB). 

The existence of entitlement prior to 1/1/2000 on a prior claim is immaterial. 

EXAMPLE: The employee born 1/10/1962 has a disability onset of 

6/10/2001 (ABD is 12/1/2001), and is deemed age 62 on the onset date. 

FRA for a person born in 1962 is age 67. This employee is deemed to be 

age 67 (FRA) in 6/2006, five years after deemed age 62. Earnings years 

beginning 2002 through 2005 cannot be used in a disability exclusion 
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computation because those years are wholly within the period of disability. 

Possible recomp effective dates for this employee are January 1, 2002, 

January 1, 2007, and every January 1 thereafter.

2) Disability Exclusion Calculation with ABD prior to 1/1/2000: The end of the 

employee’s period of disability is the month before the month the employee 

attains deemed age 65.

EXAMPLE: The employee born 12/9/1946 has a disability onset of 

5/20/1999 (ABD is 11/1/1999), and is deemed age 62 on that date. Age 

65 is used as the FRA for all employees having a disability ABD prior to 

2000. This employee is deemed to be age 65 in 5/2002, three years after 

deemed age 62. Earnings years from 2000 through 2001 cannot be used 

in a disability exclusion computation because those years are wholly 

within the period of disability. Possible recomp effective dates for this 

employee are January 1, 2000, January 1, 2003, and every January 1 

thereafter.

3) Disability Non-exclusion Calculation – any ABD: Disability annuities paid 

under the non-exclusion provision allow PIA recomputations for all years 

beginning with January 1 of the year after the ABD. A period of disability is 

ignored for these type cases. 

EXAMPLE: The employee born 2/19/1956 has a disability onset of 12/7/2004 (ABD is 

6/1/2005). Because the period of disability is not a factor under the non-exclusion 

provision, PIA recomputations are payable effective immediately after the ABD year. 

This employee’s annuity can be recomputed as early as January 1, 2006, and every 

January 1 thereafter.

C. Survivor Cases - The AIME computed for employees who attain age 62 or who 

have a date of disability onset in 1979 or later or who die 1979 or later before 

becoming entitled to life benefits may be "recomputed" if the "lag" earnings in the 

year of death are higher than some other benefit computation year. The year of 

lower earnings is dropped. Therefore, there will still be the same number of 

benefit computation years in the AIME dividend as there are years used to 

determine the recomputed AIME PIA. In survivor cases, the recomputation is 

effective in the month of death. 

EXAMPLE: The employee whose DOB is 2/19/43 dies in 8/2004, without ever 

having been entitled to life benefits. The employee’s widow is entitled to a WIA 

on 8/1/2004. The employee’s earnings in 2004 are higher than in some other 

years used in the initial PIA calculation. The 2004 earnings year replaces the 

lowest year of earnings used in the PIA calculation. The recomputed PIA is 

effective with the WIA effective date (8/1/2004).
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8.11.34 Determining the Primary Insurance Amount Based on the 

AIME - (AIME PIA)

The 1977 SS Act Amendments established a three step formula to compute the AIME 

PIA for wage earners who have an eligibility year of 1979 or later. The percentages in 

the formula are constant but the amounts (bend points) in each step will be adjusted 

each year as average wages rise. The bend points will be published by SSA in the 

November before the eligibility year to which they apply.

The AIME PIA is determined with bend points based on the year of first eligibility year, 

regardless of date of filing. When the ABD is June 1 of the eligibility year or later, a 

cost-of-living percentage increase is applied to the initial AIME PIA amount. The Social 

Security Amendments of 1983 change the effective month for the cost-of-living 

adjustment from June 1983 to December 1983 and provide for future automatic cost-ofliving adjustments on a calendar year basis, with the increase payable in January rather 

than in July of each year. Subsequent cost-of-living percentage increases are payable 

from the eligibility year. Each cost-of-living increase is computed and rounded before 

the next cost-of-living is applied.

Under the 1981 SS Act Amendments, AIME PIAs for eligibility years 1982 or earlier, if 

not a multiple of $.10, are rounded up to the next higher multiple of $.10 in the initial 

computation, or adjustment through 5-31-82. Effective with the 6-1-82 COL, 

adjustments to these PIA's, if not a multiple of $.10 are rounded down to the next lower 

multiple of $.10.

Click here for a chart summarizing AIME bend points.

Add the results together: if the sum is not a multiple of $.10, round it as explained 

above, if it is less than $122.00, see FOM-I-1005.35.6. 

Example 1: If the ABD is 3-1-97 and the AIME is 3,502.00, based on a 1995 eligibility 

year, the AIME PIA effective 3-1-97 is $1,276.00 ($1,068.52 + 15% of $935.00, rounded 

down to the dime, plus the 12/95 2.6% cost-of-living increase effective 12/95 and the 

2.9% cost-of-living increase effective 12/96). This amount is later increased for 

subsequent cost-of-living increases.

Example 2: If the ABD is 12-1-96 and the AIME is 1,780.00, based on a 1996 eligibility 

year, the AIME PIA effective 12-1-96 is $846.80 ($393.30 + 32% of $1,343.00, rounded 

down to the dime, plus the 2.9% cost-of-living increase effective 12/96. This amount is 

later increased for subsequent cost-of-living increases.

Example 3: If the ABD is 5-1-97 and the AIME is $2,840.00, based on a 1997 eligibility 

year, the AIME PIA effective 5-1-97 is $1,155.80 ($1,141.02 + 15% of $99.00 rounded 

down to the dime). This amount is later increased for subsequent cost-of-living 

increases in 12/97 or later.
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8.11.35 Determining the Primary Insurance Amount Based on the 

Frozen Minimum - (FRZN MIN PIA)

Wage earners whose eligibility year is 1979, 1980, or 1981, are guaranteed an initial 

PIA amount of not less than $122.00. Therefore, whenever a PIA less than $122 is 

computed, recomputed, or carried over from prior entitlement, it must be raised to $122. 

The $122 PIA amount is actually the minimum AIME PIA. It is called the frozen 

minimum PIA because special rules for adding COL increases apply (see 8.11.91).

Because COL increases may not always apply to the frozen minimum PIA, the actual 

AIME PIA, although initially lower than the frozen minimum PIA, may eventually be 

increased by COL's to the point where it exceeds the frozen minimum PIA. The type of 

PIA on which the benefit is based may not be switched, however, unless the PIA is 

recomputed to include earnings in base year(s) not included in previous computations 

(the PIA before COL's must be increased by $1 or more), or the PIA is recalculated for a 

reason other than the inclusion of lag which would cause the switch from the frozen 

minimum PIA to the table minimum or vice versa. 

EXCEPTION: If the vow of poverty rule applies, refer to SSCM A4330.

A. Age and Service Cases - The Frozen Minimum PIA's 1, 9, and SSEB PIA can 

apply if the employee attained age 62 before 1982.

In 60/30 cases, the Frozen Minimum PIA can apply to PIA 1 if the employee's 

ABD is before 1982. See RCM 8.11.100 for RR Act deeming provisions.

B. Disability Cases - The Frozen Minimum PIA's 1, 9, and SSEB PIA can apply if 

the employee's disability freeze onset was before 1982.

In disability cases with no freeze or a disability freeze onset after 1981, the 

Frozen Minimum PIA 1 can apply if the employee's ABD is before 1982. See 

RCM 8.11.100 for RR Act deeming provisions.

C. Survivor Cases - The Frozen Minimum PIA's 1, 3, and 9 can apply if the 

employee attained age 62, has a disability onset, or died before 1982. The actual 

survivor benefit ABD may be after 12-1981. 

8.11.40 Use of "Old Start" Method

The "Old Start" method can be an alternative benefit computation if the "New Start" 

AMW is less than $250 for the AMW PIA or if the SPC MIN PIA computation includes 

significant earnings between January 1, 1937 and December 30, 1950.

The three basic "Old Start" methods currently in use are explained in this section. The 

old PIB method and revised PIB method are basically obsolete. Refer to the Social 

Security Claims Manual section 4380-4384 for an explanation of these computations.
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A. 1965 "Old Start" Method - Under the Social Security Act, this method applied 

when:

• The wage earner:

• Was born before January, 1929, and has less than 6 QC's after 1950; or

• Becomes entitled after 1965 to an OAIB or DIB; or

• Dies after 1965 with no prior entitlement;

AND,

• The wage earner has at least one QC prior to 1951;

AND,

• The wage earner is not eligible for the 1967 Simplified Old Start MethodI or 

the 1977 Simplified Old Start Method.

Note: A comparison of the above requirements with those in B and C below 

shows that the 1965 "Old Start" is obsolete for computing a PIA where eligibility 

or death is after 1977, unless the wage earner had a period of disability which 

began before 1951 that is used for computation purposes.

B. 1967 Simplified "Old Start" Method - The 1967 Simplified "Old Start" method is 

used for qualified wage earners whenever the "Old Start" computation would 

yield a higher benefit than the "New Start" AMW method, there is no D/F before 

1951, and either benefits are payable before 1-1-78 or the effective date is 

1-1-78 or later and the employee attained age 21 before 1937. This method 

applied for months beginning January 1, 1967. (The 1965 table PIA rate applied 

for months 1/67 through 1/68.)

1. Social Security Act Requirements

Under the Social Security Act, the 1967 simplified old start method is 

applicable if:

• At least one quarter prior to 1951 is a QC; and,

• The wage earner attained age 21 either:

• In or before 1936; or,

• After 1950 but less than six quarters elapsing after 1950 are QC's; 

and,
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• The wage earner did not have a period of disability which began before 

1951 unless such a period of disability is entirely disregarded (i.e. the 

PIA is computed as though the period of disability had not been 

established); and,

• The wage earner:

• Became entitled to an RIB or DIB after January 2, 1968; or,

• Died after 1-2-68 without having been entitled to an RIB or DIB; or

• Qualifies for an automatic recomputation of the PIA after the 1967 

amendments, and,

• The wage earner is not eligible for the 1977 Simplified Old Start.

A last computation base year based on first eligibility or death before 1961 

cannot be used to compute the PIA under the 1967 simplified old start 

method.

2. The Railroad Retirement Act Provisions - In order to meet the requirements 

for the 1967 simplified "Old Start" computation, the 1968 Amendments to the 

1937 Railroad Retirement Act deemed any employee (except an employee 

who died before 1939) on whose service and compensation an annuity is 

based, to have:

• Become entitled (assumed filing) to social security benefits after January 

2, 1968; or,

• Died after January 2, 1968 without having been entitled to social security 

benefits.

Under the 1974 RRA, the deeming provision applies to the "Old Start" 

calculation of the 1937 Act O/M PIA only. It does not apply to "New Start" or 

SPC MIN calculations of the O/M PIA or the calculation of any other PIA.

C. 1977 Simplified "Old Start" Method - The 1977 Simplified "Old Start" method is 

used for benefits initially payable after December 1977 for employees whose 

eligibility year is 1978 when there is no DF before 1951 and this computation 

would yield a higher benefit than the "New Start" AMW PIA or SPC MIN PIA 

methods. For benefits based on eligibility year 1979 or later, the 1977 Simplified 

Old Start is an alternative to the TRANS PIA (when applicable) AIME PIA and 

SPC MIN PIA. The following requirements must be met for the 1977 Simplified 

"Old Start" to apply:

1. At least one quarter prior to 1951 is a quarter of coverage; and,

2. The wage earner either:
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• Attained age 22 after 1950 and had less than 6 QC's after 1950; or

• Attained age 21 after 1936 and before 1950; and,

3. The wage earner did not have a period of disability which began before 

1951 unless such a period of disability is entirely disregarded (i.e. the PIA 

is computed as though the period of disability had not been established).

Note: When the wage earner had a period of disability which began 

before 1951 that is used for computational purposes, the 1965 "Old Start" 

method will apply if it results in a higher PIA than any other applicable 

method.

4. The 1977 O.S. Family Maximum benefit is computed as explained in RCM 

8.11.86. 

8.11.41 Use of the AMW

The Average Monthly Wage (AMW) is the quotient of the divisor months and dividend 

(total earnings in benefit computation years). Its use in the 

PIB computation depends on the "Old Start" Computation that applies (see 8.11.47).

8.11.42 Base Years Before 1951

The base years are the years from which the benefit computation years are chosen.

A. 1965 "Old Start" Computation - The actual reported earnings for each year from 

1-1-37, subject to the yearly maximum, are used in this computation. This 

includes all wages, self-employment income, creditable compensation and 

creditable M/S.

This computation applies only to applications filed May 31, 1992 or earlier, and to 

June 1992 and later recomputations for affected beneficiaries who have recent 

earnings.

B. 1967 Simplified "Old Start" Computation - A formula is applied to the total pre1951 wages, self-employment income, creditable compensation and creditable 

M/S to determine the yearly earnings of each base year. This eliminates the 

need for a manual search of microfilm records to obtain a yearly breakdown of 

pre-1951 earnings.

The total of all credited pre-1951 earnings are broken down into base years as 

follows:

• If the total pre-1951 earnings are $27,000.00 or less, the total amount of the 

pre-1951 earnings is divided by 9. The result represents the yearly earnings 

for each of nine base years; or
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• If the total pre-1951 earnings exceed $27,000.00, but are less than

$42,000.00, the total amount of the pre-1951 earnings is divided by 

$3,000.00. The resulting whole number represents the number of pre-1951 

base years. Remaining earnings (i.e., any excess of the total pre-1951 

earnings over $3,000.00 times the whole number derived above) represents 

the earnings for an additional base year; or

• Total pre-1951 earnings of at least $42,000.00 represents 14 base years with 

earnings of $3,000.00 for each year.

C. 1977 Simplified "Old Start" Computation - The total pre-1951 wages, 

self-employment income, creditable compensation and creditable MS will be 

equally divided by the number of years elapsing after attainment of age 20 and 

prior to 1951. (In the case of an individual who attains age 20 in 1949, the 

earnings divided by the one year elapsed after 1949 and before 1951 equals the 

amount of the earnings.) The amount so obtained for each year subject to the 

maximum will be deemed to be the individual's wages credited to each year used 

in the AMW dividend. If the amount exceeds $3,000 for each year, only $3,000 

will be deemed to be the individual's wages for each of those years. The 

remainder of the individual's total wages prior to 1951 will be credited as follows:

1. If the wages are less than $3,000, they are credited to the year in which 

the individual attained age 20; or,

2. If the wages are $3,000 or more, they are credited, in $3,000 increments, 

to the year starting with the year in which the individual attained age 20 

and, subsequently, to each year consecutively preceding that year with 

any remainder less than $3,000 being credited to the year immediately 

preceding the earliest year to which a full $3,000 increment was credited; 

but,

3. No more than $42,000 may be taken into account, as total wages after 

1936 and prior to 1951.

8.11.43 Base Years After 1950

Under all "Old Start" Computations, the actual reported earnings after 1950 subject to 

the yearly maximums indicated in RCM 8.11.14 are used. These earnings are not 

indexed, even if the wage earner's eligibility year is 1979 or later.

8.11.44 Determining Benefit Computation Years for Initial "Old Start" 

AMW

The benefit computation years are chosen from the base years from 1-1937 up to the 

last computation base year (see RCM 8.11.12). Up to five of the years with the lowest 

earnings are excluded as explained in RCM 8.11.16. Years wholly within a period of 
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disability after 1-1951 (or after 1-1937 if 1965 "Old Start" method) are excluded as 

explained in RCM 8.11.15 . 

A. Employee Eligibility Year Before 1979 - (1965 "Old Start" With D F Before 1951 

or 1967 O.S) - A year prior to attainment of age 22, after attainment of age 62 or 

termination of disability freeze, or a year partly within a period of disability after 1-

1951 (or after 1-1937 if 1965 "Old Start" method) is included only if the earnings 

in that year are higher than earnings in some other benefit computation year. 

The year of lower earnings is dropped. Therefore, if there are 35 years used to 

determine the divisor months, there will be 35 benefit computation years for the 

AMW dividend.

B. Employee Eligibility Year 1979 or Later - (1965 "Old Start" With D F Before 1951 

or 1977 O.S) - Under the 1977 Social Security Act Amendments, the AMW 

cannot include earnings in the eligibility year or later years. A year prior to the 

year of attainment of age 22 or a year partially within a period of disability after 1-

1951 and before the eligibility year is included only if the earnings in that year are 

higher than earnings in some other benefit computation year. The year of lower 

earnings is dropped. Therefore, if there are 37 years used to determine the 

divisor months, there will be 37 benefit computation years for the AMW dividend.

C. Employee Was Previously Paid An "Old Start PIA" Disability Benefit Within 12 

Months - If the employee becomes disabled or attains age 62 or dies 1-1-79 or 

later and was previously paid a disability annuity with an "Old Start" PIA that 

terminated within 12 months of the current eligibility year of the previous PIA 

computation apply. (Recomputation allowed if previous eligibility year is before 

1979.)

Refer to RCM 8.11.100 through 8.11.117 for an explanation of the effects of the 

RR Act deeming provisions on the Benefit Computation Years.

The earnings from the benefit computation years, subject to the yearly maximum, 

are added together to obtain the dividend used in computing the AMW. The 

amounts less than $1 in the quotient are dropped so that the AMW is expressed 

in whole dollar amounts.

8.11.45 Determining Benefit Computation Years for Recomputed "Old 

Start" AMW When Eligibility is Before 1979

Under the 1967 SS Act Amendments, an "automatic" recomputation for benefits 

payable 1-1966 or later can be made if earnings in the ABD year or later years in life 

cases or earnings in the wage earner's year of death in survivor cases (lag earnings) 

are sufficient to cause an increase in the AMW if it is recomputed. If the earnings in a 

year after the last year used in the previous computation, excluding years fully within a 

period of disability, are higher earnings are added to the AMW dividend and the lower 

earnings are deducted from the AMW dividend. The AMW divisor and the number of 

benefit computation years remain the same.
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The effective date of the recomputation in life cases is January 1, of the year following 

the year for which the earnings are reported. The effective date of recomputation in 

survivor cases is the month of death. Earnings in the year of death may be used in the 

initial survivor PIA computation if the earnings are reported timely.

The 1977 SS Act Amendments limit the recomputation of the "Old Start" AMW to wage 

earners whose eligibility year is before 1979.

EXAMPLE 1: The female employee's date of birth is 5-20-13. The ABD of her age and 

service benefit is 5-1-75. Her earnings record (wages and compensation) is as follows:

The total earnings before 1951 = $16,678.60

Earnings 1951 - 1970 = -0-

Year Earnings

1971 $3,000.00

1972 $3,172.90

1973 $5,691.20

1974 $6,921.70

1975 $4,291.80

1976 $4,770.00

The initial AMW for benefits payable 5-1-75 was computed using earnings through 

December 31, 1974. Earnings (of zero) for the years 1951, 1952, 1953, 1954, 1955 

were dropped from the AMW dividend. The AMW is recomputed for benefits payable 

effective 1-1-76 to include the earnings for 1975 in the AMW dividend and to drop the 

zero earnings for 1956 from the AMW dividend. The AMW is again recomputed for 

benefits payable effective 1-1-77 to include the earnings for 1976 in the AMW dividend 

and drop the zero earnings for 1957 from the AMW dividend.

EXAMPLE 2: The female employee's date of birth is 7-16-23. The disability onset date 

is 5-10-78. Her earnings record (wages and compensation) is as follows:

Total earnings before 1951 = 23,715. Earnings 1951 - 1970 = 0

Year Earnings Year Earnings
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1971 6,713.28 1976 11,913.00

1972 7,295.76 1977 12,176.92

1973 9,173.95 1978 6,156.75

1974 10,192.15 1979 0

1975 10,713.20 1980 0

1981 1,975.63

The initial AMW for benefits payable 11-1-78 was computed using earnings through 

December 31, 1977. Earnings (of zero) for the years 1951, 1952, 1953, 1954 and 1955 

were dropped from the AMW dividend. Earnings for the years 1944 and 1943 which 

were prior to attainment of age 22 are substituted for the earnings (zero) in 1956 and 

1957. The AMW is recomputed effective 1-1979 to include the earnings for 1978 prior 

to disability onset and drop the earnings (zero) for 1958. The wage earner works in 

sheltered employment in 1981. Since the EE is deemed to be 65 in 1981 and the 

period of disability is deemed to be terminated, for PIA recomputation purposed, 

earnings in 1981 after termination of disability can be used in place of the zero 1959 

earnings to recompute the AMW effective 1-1982.

Note: SSA does not convert a DIB to an RIB until the wage earner actually attains age 

65.

8.11.46 Determination of Increment Years

Under the 1965 "Old Start" and 1977 Simplified "Old Start" methods, the increment year 

is computed as part of the PIB computation.

A. 1965 "Old Start" - An increment year is defined as a calendar year after 1936 and 

before 1951, including the year of death, if applicable, in which the wage earner 

was paid $200 or more in wages, compensation, or SEI. An increment is 

credited even though the year on which it is based is not a benefit computation 

year.

When the year of eligibility is before 1951, the year of first eligibility is included as 

an increment year if the wage earner was paid at least $200 through the end of 

the quarter of first eligibility.

In computing a benefit on the basis of an application filed before 1961, the year 

in which the disability began is considered to be an increment year only when the 

inclusion of earnings in that year increases the PIA. For applications filed after 

1960, an increment is not credited for any base year which is part of an excluded 

disability period or for any year after the last year included in the initial 

computation.
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EXAMPLE: The female employee's date of birth is 5-20-15. The ABD of her 

disability annuity is 5-1-75 based on twenty-three years of RR service. Her pre1951 earnings are as follows:

Year Earnings

1937 $2,175.12

1938 $2,079.15

1939 $2,276.94

1940 $2,301.75

1941 $2,375.92

1942 $2,416.75

1943 $2,571.23

1944 $2,719.15

1945 $3,000.00

1946 $3,000.00

1947 $3,000.00

1948 $ 198.00

1949 0

1950 0

She therefore has eleven increment years.

B. 1977 Simplified "Old Start" Computation - The number of increment years is the 

number, no more than 14 or less than 4, that is equal to the individual's total pre1951 earnings (wages, self-employment, creditable compensation and creditable 

M/S) divided by $1,650, dropping any remainder.

EXAMPLE 1: The employee's total pre-1951 earnings are $28,000. His 

increment years would be 14 ($28,000 divided by 1,650 = 16 reduced to 14 

increment years).
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EXAMPLE 2: The employee's total pre-1951 earnings are $2,050. His increment 

years would be 4 ($2,050 / 1,650 = 1 raised to 4 increment years).

8.11.47 Computation of the PIB

A. 1965 "Old Start" - The PIB is computed as follows:

Step 1: To obtain the "basic benefit," compute 40 percent of the first $50 of the 

AMW and add 10 percent of the next $200 of the AMW. (If the AMW exceeds 

$50, the basic benefit may be computed by adding $15 to 10 percent of the 

AMW).

Step 2: Multiply the number of increment years by 1 percent. Then multiply the 

"basic benefits" in step 1 by the resulting percentage to obtain the increment.

Step 3: Add the "basic benefit" and the increment. Drop fractions of less than half 

a cent and increase those of a half cent or more to the next higher cent. The 

result is the actual amount of the PIB.

B. 1967 Simplified "Old Start" Method - Instead of being derived from a "basic 

benefit" and "increment years" as in the 1965 "Old Start," the PIB under the 1967 

simplified "Old Start" method is merely the sum of 45.6 percent times the first $50 

of the AMW and 11.4 percent of the next $200 of the AMW. (This formula, in 

effect, grants the equivalent of 12 "increment years" in all cases). Round the PIB 

to the nearest whole cent.

C. 1977 Simplified Old Start Method - The PIB is computed as explained in (A) 

above.

D. Minimum PIB - The 1981 Social Security Act Amendments eliminated the 

minimum PIB benefit for eligibility years after 1981.

EXCEPTION: If the vow of poverty rule applies, refer to SSCM A4330.

1. Age and Service Cases - The minimum PIB of $16.20 can apply for PIA's 

1, 9, and SSEB PIA if the employee attained age 62 before 1982. In 60/30 

cases the Frozen Minimum PIA can apply to PIA 1 if the employee's ABD 

is before 1982. See RCM 8.11.100 RR Act deeming provisions.

2. Disability Cases - The minimum PIB of $16.20 can apply if the employee 

became disabled before 1982. In disability cases with no freeze or a 

disability freeze onset after 1981, the Frozen Minimum PIA 1 can apply if 

the employee's ABD is before 1982. See RCM 8.11.100 for RRA deeming 

provisions.

3. Survivor Cases - The minimum PIB of $16.20 can apply if the employee 

attained age 62, had a disability freeze, or died before 1982.
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8.11.48 Conversion of PIB to PIA

The method of converting the PIB to the PIA depends upon the employee's eligibility 

year.

A. Eligibility Year Before 1979 - (1965 "Old Start" With DF Before 1951 or 1967 "Old 

Start") - To determine the Primary Insurance Amount locate the amount of the 

PIB on the conversion chart in Appendix A. The PIA for 6/78 or earlier is 

indicated on the same line under the appropriate effective date. Use the 6/78 PIA 

in Appendix B to determine the updated AMW PIA based on the Old Start 

Method.

B. Eligibility Year 1979 or Later - (1965 "Old Start" With DF Before 1951 or 1977 

"Old Start") - If the PIB is $16.20 or more locate the amount of the PIB on the 

conversion chart in Appendix A. The starting PIA is indicated on the same line 

under the 6-1978 effective date. Cost-of-living percentage increases are added 

from the eligibility year. Use the appendix at the end of this chapter for the 

appropriate eligibility year to determine the updated 1977 O.S. PIA.

For eligibility years 1982 or later, the PIB may be less than $16.20. These PIBs are 

included in the RCM 8.11 Appendix for the applicable year.

8.11.60 Prior Disability Terminated Within 12 Months

If the employee has a disability insured status in the month of current disability, the prior 

period of disability can be excluded as explained in RCM 8.11.15. 

A. Determining PIA Formula - When the wage earner was entitled to a disability 

annuity for any part of the 12 months immediately preceding the month of current 

disability, the month of death, or the month of entitlement to an age and service 

benefit, the benchmark year for the PIA computation is the year of the disability 

onset for the prior disability annuity.

If a minimum PIA applied for the prior disability annuity, it will continue to apply 

for the current annuity.

The PIA 1, PIA 3, PIA 9, PIA 17 or SSEB PIA for the current retirement annuity is 

the greater of the PIA with the "eligibility year" upon which the previous disability 

annuity was based, increased by intervening general and automatic benefit 

increases or recomputations that would have applied to the PIA had the 

individual remained entitled to that benefit until the month in which (s)he became 

entitled to the current benefit; or, the Special Minimum PIA computed under the 

1977 SS Act Amendments.

The survivor annuity Tier I is based on the higher of the PIA computed with the 

"eligibility year" which was established for the prior disability annuity with 

increases or recomputations that would have applied to the PIA had the 
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individual remained entitled to that benefit until the month in which (s)he died; or 

the special minimum PIA computed under the 1977 SS Act Amendment.

B. Determining Dropout Years - The dropout provision is explained in RCM 8.11.16. 

• If the employee is again disabled, the number of dropout years used in the 

previous PIA computation apply. When there is more than one prior period of 

disability, the controlling point reverts back through the periods of disability 

until there is a period of disability that is preceded by a gap in disability 

entitlement of more than 12 months or up to the initial disability entitlement; 

or,

• If the new eligibility is at age 62, the number of dropout years used in the 

previous PIA computation apply; or,

• If the employee has died, five dropout years are applied to the survivor PIA.

There must remain a minimum of two benefit computation years. If applying the 

dropout results in less than 2 computation years, the benefit computation years 

are raised to two.

C. Family Maximum Benefit

In general, the Family Maximum Benefit is determined as follows:

• If the eligibility of the prior disability is before 1979 and the current eligibility 

for disability, age and service or survivor benefits is after 1978 but within 12 

months of the previous termination, the bend point formula for the current

eligibility year is applied to the PIA that was in effect in the last month of prior 

DIB entitlement (see RCM 8.11.86); or,

• If the eligibility of the prior disability is after 1978 and current eligibility for 

disability, age and service or survivor benefits is within 12 months of the 

previous termination, the bend point formula used for the prior eligibility year 

is applied to the PIA that was in effect in the last month of prior DIB 

entitlement. However, the bend point formula applicable for the current 

eligibility year will be used if the resulting formula maximum is higher than the 

maximum computed using the formula for the earlier eligibility year. (Insured 

status must be met at the current eligibility point, without considering the prior 

period of disability, before the current eligibility point, without considering the 

prior period of disability, before the current eligibility formula is used.)

If a prior savings clause maximum is higher than the maximum computed under 

the AIME family maximum formula the savings clause maximum would apply.

However, the 1980 Social Security Act Disability Amendments introduced a 

special limit on the family maximum for disability cases (DIB O/M) where first 
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entitlement to the DIB O/M is after 6-1980 based on disability onset after 1978 

(see RCM 8.11.88).

8.11.61 Prior Disability Entitlement Ended Before 12 Month Period 

Preceding Current Entitlement

If the employee has a disability insured status in the month of current disability, the prior 

period of disability can be excluded as explained in RCM 8.11.15. 

A. DIB PIA Guarantee - The 1977 SS Act amendments guarantee that the amount 

of the PIA computed for life or death benefits based on the current "eligibility 

year" cannot be less than the amount of the PIA that was in force when the 

former disability annuity ended (unless the prior disability is disregarded). This 

amount is not increased for intervening general and automatic benefit increases 

or recomputations after the termination of the prior disability and before the 

current entitlement.

The elimination of the minimum benefit does not affect the applicability or the use 

of the DIB Guarantee PIA. The DIB Guarantee PIA is a separate entity in itself. It 

is clearly defined in the law as the PIA that was in effect in the last month of prior 

DIB entitlement.

The PIA's designated under the Railroad Retirement Act as PIA 1, PIA 3, PIA 9, 

PIA 17 and the SSEB PIA are subject to the DIB PIA Guarantee.

B. Determining PIA Formula - When the wage earner was entitled to a disability 

annuity that terminated before the 12 month period immediately preceding the 

month of current disability, the month of death, or the month of entitlement to an 

age and service annuity, the "benchmark year" for the PIA 1, PIA 3, PIA 9, PIA 

17 and SSEB PIA computation is based on the year of current disability onset, 

year of attainment of age 62, or the year of death if prior to eligibility to a new 

retirement benefit. The PIA is computed under the method applicable to the new 

benchmark year. The AIME computation "bend points" are based on this 

benchmark year (if 1979 or later).

C. Determining Dropout Years - The dropout provision is explained in RCM 8.11.16. 

• If the current eligibility is for age and service or survivor benefits, five dropout 

years can be applied; or,

• If the PIA was previously computed for benefits paid before July 1980, five full 

dropout years can be applied; or,

• If the PIA was previously computed under the 1980 amendment method for 

benefits first payable July 1980 or later, regardless of disability onset date and 

the current entitlement is disability, the dropout years are computed under the 

"1 for 5" rule based on the elapsed years up to the current disability.
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The PIAs designated under the Railroad Retirement Act as PIA 1, PIA 3, PIA 9, 

PIA 17 and SSEB PIA are affected by this provision.

There must remain a minimum of two benefit computation years. If applying the 

dropout results in less, the benefit computation years are raised to two.

D. Family Maximum Benefit - If the current entitlement is based on eligibility after 

1978 for disability, age and service benefits, or survivor benefits, the family 

maximum for PIA 1 or PIA 9 is based on the current eligibility year as explained 

in RCM 8.11.86.

If the DIB Guarantee PIA is applicable as explained in A, above, the family 

maximum benefit for that PIA is based on the AIME family maximum formula for 

the current eligibility year regardless of the method used to compute the DIB 

Guarantee PIA.

If a prior savings clause maximum is higher than the maximum computed under 

the AIME family maximum formula, the savings clause maximum would apply.

However, the 1980 Social Security Act Disability Amendments introduced a 

special limit on the family maximum for disability cases (DIB O/M) where first 

entitlement to the DIB O/M is after 6/1980 based on disability onset after 1978 

(see RCM 8.11.88).

8.11.70 Special Minimum PIA

The 1972 Social Security Act Amendments established the computation of the Special 

Minimum PIA (SPC MIN PIA) to provide a higher benefit for wage earners who had 

consistently low earnings. The SPC MIN PIA is considered for benefits payable for 

months after December 1972 only, even if the employee's ABD is before 1-1-73.

The 1974 Railroad Retirement Act Pass-thru PIA, PIA 5, PIA 11 or PIA 21 are computed 

under the SS Act rules in effect in 12-1974. For these PIA's, the SPC MIN PIA 

computed as of 12-1974 is an alternative to the "Old Start" or "New Start" AMW PIA 

computation.

The 1974 RRA PIA 1, PIA 3, PIA 9, PIA 17 and SSEB PIA are computed under the 

current SS Act rules:

• If the employee attained age 62, had a disability onset date, or died (before 

entitlement to a life benefit) before 1-1979, the SPC MIN PIA is a continuing 

alternative to the corresponding AMW PIA and will be the PIA upon which all 

benefits are based until such time as it is exceeded by the corresponding AMW PIA. 

Therefore, the corresponding AMW PIA must also be maintained and updated. If for 

any month the corresponding AMW PIA exceeds the SPC MIN PIA, the 

corresponding AMW PIA will be used to determine benefit amounts effective with 

that month.
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• If the employee attained age 62, had a disability onset date, or died (before 

entitlement to a life benefit) on 1-1-79 or later, the SPC MIN PIA is a continuing 

alternative to the corresponding AIME PIA (including FRZN MIN PIA) and, if the nondisabled employee attained age 62 in 1979-1983, is a continuing alternative to the 

corresponding TRANS PIA. The SPC MIN PIA will be the PIA upon which all 

benefits are based until it is exceeded by one of the alternate PIA amounts. 

Therefore, the amounts of the TRANS PIA (if employee attained age 62 in 

1979-1983), AIME PIA, and FRZN MIN PIA must be maintained and updated. If for 

any month one of these alternate PIA's exceed the SPC MIN PIA, the alternate PIA 

will be used to determine benefit amounts effective with that month; and,

• Under the 1977 SS Act Amendments, the SPC MIN PIA under current SS Act rules 

(used for RR Act PIA 1, PIA 3, PIA 9, PIA 17, or SSEB PIA) is subject to automatic 

cost-of-living increases effective June 1979 or later. These increases are not 

"decoupled" i.e., cost-of-living increases beginning with June 1979 will be added to 

the SPC MIN PIA on a cumulative basis without special eligibility requirements.

The increased range of SPC MIN PIAs and increased range of SPC MIN PIA family 

maximums will be published with each cost-of-living increase. 

8.11.71 Years of Coverage for Initial Computation of Special Minimum 

PIA 

The Special Minimum PIA "years of coverage" are the base years since 1937 in which 

the wage earner is credited with the amount of earnings indicated in this section. If it is 

necessary to exclude a period of disability for purposes of determining an "insured 

status", the years wholly within the period of disability cannot be counted as years of 

coverage for purposes of establishing the Special Minimum PIA. Otherwise, years 

"within a period of disability" may be credited as years of coverage even if they are not 

used for the regular PIA computation.

A. For 1937-1950 Period - Divide the total earnings (wages and compensation) 

credited to the individual in the 1937-1950 period by $900 (disregarding any 

fraction). The result (up to a maximum of 14 years) is the number of years of 

coverage in the 1937-1950 period (wages and compensation of $12,600 or more 

will give 14 years of coverage).

The chart below displays the number of coverage years that can be creditable for 

years between 1937-1950. 

YEARS OF COVERAGE CHART

EARNINGS BETWEEN

1937-1950

COVERAGE 

YEARS
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900.00 - 1,799.99 1

1,800.00 - 2,699.99 2

2,700.00 - 3,599.99 3

3,600.00 - 4,499.99 4

4,500.00 - 5,399.99 5

5,400.00 - 6,299.99 6

6,300.00 - 7,199.99 7

7,200.00 - 8,099.99 8

8,100.00 - 8,999.99 9

9,000.00 - 9,899.99 10

9,900.00 - 10,799.99 11

10,800.00 - 11,699.99 12

11,700.00 - 12,599.99 13

12,600.00 - and over 14

B. For Period After 1950 through 1977 - One year of coverage is credited for each 

base year in which the wage earner has wage, compensation and SEI equal to or 

more than 25% of the maximum creditable earnings for that year (15% of the 

maximum for years after 1990).

Earnings are not indexed for the SPC MIN PIA. The years and amounts 

necessary to establish a "year of coverage" after 1950 through 1977 are as 

follows:

YEAR

25% 

MAXIMUM YEAR

25% 

MAXIMUM

1951-1954 $ 900 1973 $2,700

1955-1958 1,050 1974 3,300

1959-1965 1,200 1975 3,525
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1966-1967 1,650 1976 3,825

1968-1971 1,950 1977 4,125

1972 2,250

In determining a year of coverage for years after 1977, it is necessary to use the 

amounts that would have been computed if the 1977 SS Act amendments had 

not prescribed maximum creditable amounts. 

YEAR

25% 

MAXIMUM YEAR

25% 

MAXIMUM

1978 $4,425 1985 $7,425

1979 4,725 1986 7,875

1980 5,100 1987 8,175

1981 5,550 1988 8400

1982 6,075 1989 8,925

1983 6,675 1990 9,525

1984 7,050

Effective for years after 1990, 15% of the maximum creditable earnings for that 

year is used.

Click here for a chart of the amounts required to obtain a year of coverage for 

each year since 1991.

Under SS Act rules, the last base year for the initial 

computation of the Special Minimum PIA for life benefits 

ends on December 31 of the year before the effective date 

of the PIA. For death benefits, the SPC MIN PIA last 

computation base year is the year of death. Refer to RCM 

8.11.100 - 8.11.117 for the effect of RRA limitations on 

some PIA computations. 

EXAMPLE 1: The wage earner (DOB 7-11-14) is paid life benefits effective 

7-1-79. The last computation base year for the SPC MIN PIA effective 7-1-79 

ends on December 31, 1978.
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EXAMPLE 2: The wage earner dies 9-25-78. The last computation base year for 

the SPC MIN PIA effective 9-1-78 is 1978.

8.11.72 Additional Years of Coverage due to Earnings in or after ABD 

Year

Under SSA rules, in life cases when the wages, compensation and SEI of the date of 

entitlement (ABD) year of late years equal or exceed 25% of the yearly maximum for 

years through 1990, 15% of the yearly maximum for years 1991 and later, these 

earnings are used effective January 1 of the following year to add years of coverage to 

increase the SPC MIN PIA. Refer to RCM 8.11.100 - 8.11.117 for the effect of RRA 

limitations on some PIA recomputations.

8.11.73 Amount of Special Minimum PIA Based on Years of Coverage

A. Months Prior to 3-1974 - The SPC MIN PIA is equal to $8.50 multiplied by the 

number of "years of coverage" in excess of 10, up to the maximum of 30 years.

B. 3-1974 through 12-1978 - For months from 3-1974 through 12-1978, the Special 

Minimum PIA will equal $9 for each year of coverage in excess of 10 up to the 

maximum of 30 years.

C. 1-1979 through 5-1979 - For months from 1-1979 through 5-1979, the special 

minimum PIA will equal $11.50 for each year of coverage in excess of 10 up to 

the maximum of 30 years.

D. 6-1979 and Later Months - The SPC MIN PIA is subject to automatic cost-ofliving increase effective 6-1979 and later months. A table of the increased SPC 

MIN PIA amounts is published by SSA.

E. Possible Special Minimum PIAs - The possible special minimum PIAs are 

indicated in the on-line Appendix C of this chapter. 

8.11.74 Family Maximum Amount for Special Minimum PIA

The family maximum for Special Minimum PIA is explained in RCM 8.11.82. 

The family maximum amounts are indicated in the on-line Appendix C of this chapter.

8.11.75 Age Reductions to the Special Minimum PIA

The benefits payable to an employee, widow(er) or spouse based on the Special 

Minimum PIA are subject to the regular age reduction adjustments, when necessary.
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8.11.76 Adjustment to The PIA for a Non-covered Service Pension

The 1983 Social Security Act Amendments modify the PIA computations for some 

workers receiving a public service pension based on non-covered employment. The 

modified PIA computation must be applied when the following conditions are met: the 

individual attains age 62 after 1985, he/she becomes eligible for RIB or DIB after 1985, 

and he/she becomes entitled to a monthly payment based on non-covered work for 

which he/she became initially eligible after 1985. This provision eliminates some of the 

advantage when the regular PIA formula, which is weighted in favor of employees with a 

lower average wage, is applied to the low average wage of a worker whose major 

employment was non-covered.

A. AIME PIA

In the AIME PIA, the modified method reduces the percentage applied to the 

AIME up to the first bend point. The reduced percentage is phased in over a 5 

year period. The reduced percentage results in a lower PIA and family maximum 

than under the regular AIME formula.

B. AMW PIA

The amount of the AMW PIA is reduced. This also results in a lower family 

maximum than under the regular AMW formula.

C. Special Minimum PIA

The special Minimum PIA and Family Maximum are not adjusted for NCSP 

entitlement.

D.. Special Guaranty rate

This calculation reduces the regular unreduced PIA by 1⁄2 of the pension amount, 

attributable to post-1956 non-covered earnings. The Special Guaranty rate is not

recomputed for any change in pension amount or entitlement to an additional 

pension. Only if the pension ceases would the PIA be recomputed, and then 

without consideration for the NCSP, effective with the first month in which the 

employee is no longer entitled to the pension.

E. The reduced AIME and AMW PIA’s are based on the PIA’s in effect on the ABD. 

If the employee becomes entitled to the public service pension based on noncovered service after the ABD month, the PIA #1 or PIA #9 is computed as if the 

NCSP were payable in the ABD month. However, the reduced PIA’s are not 

used in the tier 1 or Retirement OM benefit until the employee actually is paid or 

indicates that he will be paid the NCSP.

F. Exceptions to the Provisions
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Several groups of individuals who would otherwise meet the requirements above 

are exempt from the Non-Covered Service Pension provision. Those exempt are:

1. Individuals to whom coverage was extended beginning on 1/84 under 

section 101 of the 1983 Social Security amendments.

2. Individuals who are employees of a nonprofit organization to which 

coverage was extended under section 102 of the 1983 Social Security 

amendments. However, employees of a nonprofit organization that were 

previously covered, terminated coverage, and were subsequently 

extended coverage under the 1983 amendments are not exempt from 

elimination of windfall provision.

3. Any individuals who has 30 years of coverage determined by applying the 

year of coverage test in RCM.8.11 Appendix M: and

4. Any individual who meets the requirement for his/her pension prior to 

1986, even if he/she does not elect to receive the pension until after 1985. 

In determining if this exemption applies, the individual must meet all

requirements for the pension (e.g., years of service, age, amount of 

contributions) prior to 1986.

8.11.77 Adjustment To The AIME PIA For Non-covered Service 

Pension

The AIME PIA 1, AIME PIA 9, AIME PIA 17 or AIME SSEB PIA is the larger of the 

following amounts. (Also refer to RCM 8.11.34 and 8.11.122.)

(1) The percentage applied to the AIME up to the first bend point is reduced. The 

reduced percentage is phased in over a 5 year period.

Year of Eligibility

Percentage of AIME 

up to 1st Bend Point

1986 80%

1987 70%

1988 60%

1989 50%

1990 or later 40% 
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OR

The following percentage is effective for PIA's before 1-1-89, if larger than the 

year of eligibility amount shown above, for individuals with more than 25 years of 

coverage.

Years of Coverage

Percentage of AIME 

up to 1st Bend Point

29 80%

28 70%

27 60%

26 50%

25 or less 40%

Effective 1-1-89, the following percentage applies, for individuals with more than 

20 years of coverage, as determined in RCM 8.11.Appendix M, if larger than the 

year of eligibility amount shown above. Note: Refer to Appendix M for 

information on handling NCSP PIA’s calculated prior to August 2002 based on an 

incorrect number of years of coverage.

Years of Coverage

Then percentage of 

AIME up to 1st Bend 

Point

29 85%

28 80%

27 75%

26 70%

25 65%

24 60%

23 55%
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22 50%

21 45%

20 or less 40% 

The remaining bend points of the AIME PIA formula remain the same. The AIME 

PIA computation continues under regular procedure.

Once an individual is entitled to a PIA computed as above, (s)he may receive an 

increase in PIA due to additional years of coverage. The increase is effective with 

January of the year following the year the additional year of coverage is earned.

Example: Brian Winslow attains age 62 in 7/89 and applies for benefits. He is 

receiving a NCSP beginning with age 62. Under the modified formula, his PIA 

would be computed using 50 percent of the AIME up to the first bend point. 

However, Brian has 27 years of coverage. His PIA in 8/88 will be based on 60 

percent of the first AIME bend point. Brian's 1989 earnings exceed 25 percent of 

the contribution and benefit base for that year, making his total years of coverage 

effective 1/90 equal to 28. Brian's PIA will be recomputed using 80 percent of the 

first bend point;

OR

(2) The Guaranty Amount

There is a guaranty amount, designed to protect workers with low pensions 

based on non-covered employment that limits the reduction in the social security 

benefit to one-half of that part of the pension based on non-covered employment 

after 1956.

The guaranty provides that the pension reduction is guaranteed not to be more 

than the amount computed based on the following formula.

The AIME PIA computed with regular bend points minus one-half of the portion of 

the monthly periodic payment (NCSP) which is based on non-covered service 

after 1956. The portion of the payment based on non-covered service after 1956 

is deemed to be:

years of non-covered service after 1956 

x monthly periodic payment (NCSP).

total years of service
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The amount of the pension to be used in computing the PIA is only the amount 

that is attributable to non-covered service after 1956. The full amount of the 

pension is reduced by the ratio of the years, or fraction of years, of non-covered 

service after 1956 to the total number of years, or fraction of years, used to 

compute the pension.

An individual whose pension is based on non-covered service prior to 1957 will 

have no pension amount to deduct from the PIA computed under the regular PIA 

formulas and will receive a regular PIA. Military retirees whose service began 

after 1956 will also receive a regular PIA since military service became covered 

after that year.

Example 1: Sally Baily is receiving a pension of $600 per month based on 30 

years of service with the State of California. Sally held two different positions 

during her service from 1957 through 1986. From 1957 through 1976 (20 years) 

she performed services in a non-covered position. Beginning in 1977, she began 

working in a state position covered by Social Security. The pension attributable to 

non-covered service after 1956 is $400 ($600 x 20 years of non-covered 

service). 

(30 total years of service used to compute pension).

Example 2: The employee is entitled to a monthly annuity of $500.00, based on 

Civil Service from January 1963 through December 1987 and FERS service 

(covered under the SS Act) from January 1988 through October 1994. In 

computing the portion of the $500.00 attributed to non-covered service, the 

number of non-covered service months after 1956, 300, and the total number of 

service months upon which the pension is based, 382, are used in the proration 

formula. The pension attributable to non-covered service after 1956 is $392.67 

($500.00 x 300 months of non-covered service) 

(382 total months of service used to compute pension).

Therefore, in the above case, the guaranty would provide that the AIME PIA not 

be reduced by more than $196.33 (1/2 of $392.67).

The 1988 amendments changed the way the guaranty amount is determined. 

Effective 12-1-88, the guaranty amount is based on the amount of the 

"non-covered service pension" in the first month of the employee's concurrent 

entitlement to both social security and the "non-covered service pension." 

Previously, the guaranty was based on the employee's concurrent eligibility for 

both benefits. This change eliminates the development of fictitious pension 

amounts.
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8.11.78 Adjustment to the Old Start PIA for Non-Covered Service 

Pension

The old start PIA #1 or old start PIA #9 or old start SSEB PIA is the larger of the 

following amounts. 

1. One half of the regular old start AMW PIA;

OR

2. The old start AMW PIA minus one half of the portion of the monthly periodic 

payment which is based on non-covered service. The portion of the payment 

based on non-covered service is deemed to be:

years of non-covered service after 1956 x 

monthly periodic payment (PSP)

total years of service

The amount of the pension to be used in computing the PIA is only the amount 

that is attributable to non-covered service after 1956. The full amount of the 

pension is reduced by the ratio of the years, or fraction of years, of non-covered 

service after 1956 to the total number of years, or fraction of years, used to 

compute the pension.

An individual whose pension is based on non-covered service prior to the 1957 

will have no pension amount to deduct from the PIA computed under the regular 

PIA formulas and will receive a regular PIA. Military retirees whose service began 

after 1956 will also receive a regular PIA since military service became covered 

after that year.

8.11.79 Effect of DIB Guarantee on Non-Covered Service Pension 

Reduction

The effect of a prior period of disability on a PIA computation is explained in 

RCM 8.11.60 - 8.11.61. In any case in which the employee was entitled to a disability 

annuity before 1986, the subsequent DIB guarantee PIA must be considered. If the DIB 

Guarantee PIA is greater than the PIA adjusted for the public service pension, the DIB 

Guarantee PIA may be used.
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8.11.80 Family Monthly Maximums

The Social Security Act limits the amount of monthly benefits which any be paid for any 

month on any one wage record. This limited amount is called the monthly maximum. 

The types of monthly maximums are explained in this section.

The 1980 Social Security Disability Amendments established separate family maximum 

rules for DIB O/M cases when the disability onset is after 1978 and the DIB O/M 

effective date is 7-1-80 or later as explained in RCM 8.11.88 and RCM 8.3.82. Prior to 

this, age and service and DIB O/M family maximums were the same.

Under the RRA, if three or more individuals are included in the family group in a 

Retirement O/M case or in a survivor case (two persons if one is an aged or disabled 

widow(er) or if it is a disability O/M case, their benefits (before adjustment for dual 

entitlement to other benefits) will usually be reduced for the family monthly maximum.

NOTE: Under the SS Act, the benefit of a divorced wife/husband or surviving divorced 

wife/husband is not reduced for the family maximum. Surviving divorced 

mothers/fathers and remarried widow(er)s are considered in the family monthly 

maximum.

8.11.81 Table Maximum Established By SSA

The Table Maximum for each "New Start" AMW or Old Start PIA for eligibilities before

1979 is written into the Social Security Act. From 1971-1978, the Table Maximum 

amounts have been increased with each amendment increase. After 12-1978, the 

"automatic" cost-of-living increase to the Table Maximum (first COL to be computed 

6-1979) will be applicable only for wage records in which the employee eligibility year is 

before 1979.

Refer to RCM 8.11.83 for an explanation of the benefit conversion savings clause that 

could apply to a family Table Maximum in effect before 1971.

8.11.82 Special Minimum PIA (SPC MIN) Maximum

The determination of the Special Minimum PIA Monthly Maximum depends upon the 

employee's eligibility year.

A. Prior to 1-1979 - If the Special Minimum PIA applies prior to 1-1-79, the monthly 

SPC MIN maximum is the Table Maximum indicated in the AMW PIA table for 

the AMW PIA that is either equal to the SPC MIN PIA or immediately greater 

than the SPC MIN PIA.

Prior to the 1977 SS Act Amendments, the AMW PIA was subject to the cost-ofliving increase and the Special Minimum PIA was not. The AMW PIA (and 

corresponding Table Maximum) that was equal to or immediately greater than 

the SPC MIN PIA before the cost-of-living adjustment may have been higher than 
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the regular PIA (and corresponding Table Maximum) that is equal to or 

immediately greater than the SPC MIN PIA after the cost-of-living adjustment. If 

the monthly SPC MIN maximum still applies, the initial family payment is 

protected under the Family Payment Savings Clause which states that the total 

family payment will be at least as much as the total family payment for the month 

preceding the cost-of-living adjustment.

EXAMPLE: With the Special Minimum PIA #9 of $153.00 effective 6/76, the 6/76 

Table Maximum for the regular PIA $155.00 was used which equaled $232.50. 

After the 6/77 cost-of-living adjustment, the next higher regular PIA #9 was 

$154.50 which had a Table Maximum of $231.80. However, the Family Payment 

Savings Clause guarantees the SPC MIN maximum of $232.50 effective 6/77. 

The regular PIA #9 effective 6/78 is $153.70 with a Table Maximum of $230.60. 

Since this amount is less than the 5/78 maximum, the Family Payment Savings 

Clause still applies.

B. 1-1979 or Later - Effective 1-1979, the Special Minimum PIA table maximums are 

published separate from the AMW PIA tables. The 1980 Social Security Disability 

Amendments later excluded from the family maximum computation disability 

claimants whose eligibility is 1978 or later and whose first month of entitlement to 

the DIB payment is July 1980 or later (see RCM 8.11.88). The SPC MIN PIA 

family maximum tables continue to apply for age and service, survivor, and 

disability cases payable prior to 7-1-80 with onset after 1978.

The January 1979 SPC MIN PIA family maximum benefit (FMB) is derived by 

multiplying the January, 1979 Special Minimum PIA by 150 percent and rounding 

the result up to the nearest multiple of 10 cents. These amounts are increased in 

each case by the percentage cost-of-living increases effective 6-1-79 or later. 

Use the table in the on-line Appendix C of this chapter to determine the Special 

Minimum PIA family maximum benefit.

EXAMPLE: Using the illustration from section A, the SPC MIN PIA of $153.00 is 

increased to $195.50 effective 1-1979. The family maximum benefit is $293.30 

effective 1-1979. Therefore, the Family Payment Savings Clause no longer 

applies.

C. Summary of SPC MIN PIA Maximums - A summary of SPC MIN PIA family 

monthly maximums is found in the on-line Appendix C of this chapter.

8.11.83 Benefit Conversion and Cost-of-Living Savings Clause Family 

Maximums

A. Benefit Conversion Savings Clause - Prior to the 1971 Social Security Act 

Amendments, the SSA Table Maximums were not always increased by the same 

percentage as the PIA increase. The amendments that increased the SS Act 

benefits in 1972 and earlier provided for a benefit conversion savings clause that 

guaranteed the family group on the rolls the same percentage increase in the 
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amount of the family monthly maximum as the Old Start or New Start PIA 

increase for the same years.

Such a maximum amount, once established, is not recomputed in a later month 

when the composition of the family group changes. However, the individual 

shares are redistributed and cannot exceed the benefit amount that would be 

payable without adjustment for a family monthly maximum (e.g. 50% of PIA for 

life benefit auxiliary). A newly entitled beneficiary can share in the previously 

established savings clause family monthly maximum amount payable to the 

family group.

The benefit conversion savings clause maximums established 9-1972 or earlier 

could be applicable until:

• A table maximum for a new PIA is higher; or

• A higher cost-of-living savings clause maximum is established (see section 

C); or,

• The family group is no longer subject to the family monthly maximum 

(although the savings clause may re-apply later).

B. Eligibility Requirement For SS Act Benefit Conversion Savings Clause

(1) The 1965 SS Act Benefit Conversion Savings Clause - The amendments 

passed July 30, 1965 provided a 7% increase in the previous family 

monthly maximum amount retroactive to 1-1-65 where two or more 

persons in the family group had filed and were entitled to benefits in or 

before 7-1965. For the retroactive period in 1965, the savings clause 

maximum is figured separately for each month (each beneficiary's share is 

increased by 7%) to arrive at the amount of underpayment which may be 

due. The amount determined to be the family monthly maximum for 

7-1965 is also the maximum for future months even though benefits are 

terminated or additional beneficiaries become entitled after 7-1965.

(2) The 1967 SS Act Benefit Conversion Savings Clause - The amendments 

provided a 13% increase in the previous family monthly maximum 

effective 2-1-68 where two or more persons were entitled in 2-1968 based 

on applications actually filed in or before 2-1968.

(3) The 1969 SS Act Benefit Conversion Savings Clause - The amendments 

provided a 15% increase in the previous family monthly maximum amount 

effective 1-1-70 where two or more persons were entitled for 1-1970 

based on applications actually filed in or before 1-1970, and at least one of 

them was entitled for 12-1969 based on an application filed in or before 

12-1969.
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(4) The 1971 SS Act Benefit Conversion Savings Clause - The amendments 

provided a 10% increase in the previous family monthly maximum amount 

effective 1-1-71 where two or more persons were entitled for 1-1971 

based on applications actually filed on or before 2-1-1971, and at least 

one of them was entitled for 12-1970 based on an application filed in or 

before 12-1970.

(5) The 1972 SS Act Benefit Conversion Savings Clause - The amendments 

provided a 20% increase in the previous family monthly maximum amount 

effective 9-1-72 where two or more persons were entitled for 8-1972 

based on applications actually filed in or before 8-1972, and the family 

monthly maximum provisions were in effect based on the same earnings 

for 1-1971 or earlier.

C. Cost-of-living Savings Clause - The 1972 Amendments to the Social Security Act 

establish a cost-of-living savings clause which guarantees the family group the 

full amount of any percentage increase to the previous family monthly maximum 

amount whenever a cost-of-living or general benefit increase occurs, provided:

• Two or more persons currently included in the computation were included in 

the family group for 1-1971 or any prior month based upon an application filed 

(or deemed to be filed) on or before 2-1-71; and,

• The family monthly maximum was in effect for such months; and,

• A prior S/C maximum is in effect in the month before the cost-of-living 

increase. 

Click here for a chart of the cost-of-living percentage increases that have been paid to 

date.

This guaranteed amount could be payable under the SSA formula until:

• A table maximum for a new PIA is higher (e.g., recomputation); or,

• A new cost-of-living savings clause maximum is established for a subsequent 

year; or,

• The family group is no longer subject to the family monthly maximum 

(although the savings clause may re-apply later).

D. Computation of Savings Clause Family Maximum amount - If the family 

composition did not change in the month of the PIA increase, the pre-PIA 

increase family maximum (unrounded) is multiplied by the percentage of the PIA 
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increase. The result (unrounded) is used to compute the beneficiaries' shares. If 

the family composition changed in the month of the PIA increase, the savings 

clause rates are determined by increasing each beneficiary's (unrounded and 

before age reduction) pre-PIA increase rate payable in the month of the PIA 

increase by the percentage of the PIA increase. The result (unrounded) is used 

to compute the beneficiary shares.

The 1981 amendments provide that calculations or adjustments of PIA's, family

maximum, or benefit amounts that are not multiple $0.10 are to be rounded to the 

next lower multiple of $0.10. Adjustments or calculations that are first effective in 

the period from 9/81 through 5/82 will not be subject to this provision. Since the 

6/82 cost-of-living (COL) increase is applicable to all benefits, except certain 

benefits based on the frozen minimum PIA, the 1981 amendments rounding 

provisions will apply in 6/82 and after to all benefits subject to the 6/82 increase.

Therefore, if the effective month is before 6/82 (eligibility year is 1982 or earlier), 

the raw PIA and the family maximum is rounded to the next higher multiple of 

$0.10. For eligibility years after 1982, the raw PIA and family maximum and 

rounded to the next lower multiple of $0.10.

8.11.84 The Family Payment Savings Clause (SAV. CL)

A. General

The Family Payment Savings Clause was originally set up under the 1969 Social 

Security Act Amendments to guarantee that family groups in which at least one 

person was entitled before January, 1971 on the basis of an application filed 

before January, 1971 would not receive less under these amendments than they 

would have received had the amendments not been enacted. The 1969 version 

of this savings clause had to be reworked if the family composition subsequently 

changed to ascertain whether the savings clause was still applicable.

The July, 1972 Amendments to the Social Security Act revised the Family 

Payment Savings Clause for months after December, 1971 to delete the 

requirement for filing before January, 1971. This version does not establish a 

new family monthly maximum for the wage record. It merely guarantees that the 

total family benefits are not decreased due to the PIA increase. The savings 

clause protection is maintained even when the family composition is altered. 

These amendments establish the following requirements:

(1) Two or more persons are entitled on a wage record for a month; and

(2) The benefits for that month are reduced for the family monthly maximum 

and at least one benefit amount is reduced for age; and

(3) The wage earner's PIA is increased for the following month; and
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(4) The total family payment would (except for this savings clause) be less 

than the total family payment for the month immediately preceding the 

month of the PIA increase. The Family Payment Savings Clause also 

applies to the Special Minimum PIA maximum as explained in RCM 

8.11.82. 

The 1977 Social Security Act Amendments expanded the Family Payment 

Savings Clause to include all cases where benefits are limited to the family 

monthly maximums.

B. Computation of Family Payment Savings Clause - The Family Payment Savings 

Clause originally computed under the 1969 Social Security Act Amendments was 

determined by computing the total monthly benefits payable under the SS Act 

under the 1967 law and the total monthly benefits payable under the SS Act as 

amended 1969. The higher of the two amounts was payable to the family group.

Under the July, 1972 SS Act Amendments, the Family Payment Savings Clause 

applies usually in life cases if the total monthly benefits in the month before the 

PIA increase is higher than the total monthly benefits established for the 

increased PIA (Table Maximum). The total monthly benefits for the wage record 

under the increased PIA are adjusted by the amount which will assure that the 

total monthly payment (after reduction for the maximum and for age) is not less 

than the total monthly benefits (after reduction for the maximum and for age) for 

the month immediately preceding the month of the PIA increase.

In effect, in life cases, the total family payment for the month preceding the 

month of the PIA increase is redistributed to the family. The wage earner will 

always be allocated the full amount due him/her after reduction for age under the 

increased PIA. The remainder will usually be distributed in one of two ways, 

depending on whether the spouse's benefit is subject to reduction for age.

1. Spouse Benefit Not Subject to Age Reduction - The amount to be 

allocated to each auxiliary beneficiary will be determined by:

(a) Subtracting the W/E's benefit (reduced for age) after the PIA 

increase from the total family payment for the month preceding the 

month of the PIA increase; and,

(b) Dividing the result in (a) by the number of auxiliaries. (Prior to 

9-1-81, any amount not a multiple of $0.10 will be raised to the next 

higher multiple of $0.10. Effective with changes in family 

composition or any PIA change on 9-1-81 or later, any amount not 

a multiple of $.10 will be rounded to the next lower multiple of 

$0.10.) The result is the amount of each auxiliary share.

EXAMPLE: The employee, spouse and two minor children, based on 

applications filed in December 1969, became entitled to benefits effective 
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December 1969 based on the employee's PIA of $128.30. The employee 

elected to have his benefit reduced by 36 months (DOB December 5, 

1907). The following monthly benefit amounts were payable effective 

December, 1969:

A $102.70 (Table max - $244.00)

B2 38.60 (PIA - 128.30)

C2 38.60

C1 38.60

$218.50 Total benefits

Due to the 15 percent increase effective January, 1970 the following 

benefits were payable to the family for January 1970. (Separate reduction 

of the employee's increase applies.)

A $118.30 (Savings clause max - $280.80)

B2 44.40 (PIA - $147.60)

C2 44.40

C1 44.40

$251.50 Total benefits

Due to the 10 percent increase effective January 1971 the following 

benefits were payable to the family for January 1971. (The employee's 

increase should be reduced separately.)

A $131.30 (Saving clause max - $309.10)

B2 48.90 (PIA - $162.40)

C2 48.90

C1 48.90

$278.00 Total benefits
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The employee had high earnings in 1971 and consequently had his PIA 

recomputed effective for January 1972. His PIA was recomputed effective 

for January 1972. His PIA was recomputed to $170.00. The following 

rates, except for the family payment saving clause, would be appropriate 

in January 1972:

A $138.50 (Saving clause max - $309.10)

B2 46.40

C2 46.40

C1 46.40

$277.70 Total benefits

In applying the family payment saving clause, the W/E's benefit is, of 

course, already up to the original rate (before reduction for age) and 

cannot be increased. The difference between $278.00 and $138.50 is 

distributed equally to the other auxiliaries and the rounded (if necessary). 

The following rates become payable effective January 1972:

A $138.50 (Saving clause max - $309.10)

B2 46.50

C2 46.50

C1 46.50

$278.00 Total benefits

2. Spouse Benefit Reduced For Age

(a) Compute the Spouse's new reduced rate:

• Divide the difference between the total benefits payable under 

the 1967 law or in the month preceding the PIA increase 

(including the wage earner's rate) and the total payable under 

the 1969 Amendments or in the month of the PIA increase 

(including the wage earner's rate) by the number of auxiliaries. 

Prior to 9-1-81, an amount not a multiple of $0.10 will be raised 

to the next higher multiple of $0.10. Effective with changes in 

family composition or any PIA changes on 9-1-81 or later, an 
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amount not a multiple of $0.10 will be rounded to the next lower 

multiple of $0.10; and,

• The quotient is reduced by the spouse's age reduction factor. (In 

July, 1972 Family Payment Savings Clause cases use the 

spouse's age reduction factor that applied in the month before 

the PIA increase.); and

• The remaining amount is added to the spouse benefit payable 

under the 1969 Amendments or in the month of the PIA 

increase; and,

(b) Add the W/E's new reduced rate to the spouse's new reduced rate; 

and,

(c) Subtract the result in (b) from the total benefits under the 1969 

Amendments or for the month before the month of the PIA 

increase; and

(d) Divide the result in (c) by the number of remaining auxiliaries 

excluding a divorced wife or divorced husband (e.g. 4 auxiliaries

less spouse = 3 remaining auxiliaries). Prior to 9-1-81, an amount 

which is not a multiple of $0.10 will be raised to the next higher 

multiple of $0.10. Effective with changes in family composition or 

any PIA changes on 9-1-81 or later, an amount not a multiple of 

$.10 will be rounded to the next lower multiple of $0.10. The result 

is the amount of each remaining auxiliary share.

EXAMPLE: The employee, spouse (DOB 3-27-07) and two students filed 

applications on 7/16/70 for benefits to begin 7/70. His PIA under the 1967 

law is $128.30 with a family maximum of $244.00. The monthly rates are 

as follows:

A $102.70 ($128.30 reduced 36 months)

B2 33.30 (38.60 reduced 20 months)

C2 38.60

C1 38.60

$213.20 Total benefits

Under the 1969 law, the PIA is $147.60 with a family maximum of 

$244.00. The monthly rates would be as follows:
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A $118.10 ($147.60 reduced 36 months)

B2 27.80 (32.20 reduced 20 months)

C2 32.20

C1 32.20

$210.30 Total benefits

In applying the 1969 family payment savings clause, the benefits would be 

as follows:

A $118.10 ($147.60 reduced 36 months)

B2 28.70 (27.80 plus 1.00 reduced 20 months)

C2 33.20

C1 33.20

$213.20 Total benefits

The 1977 Social Security Act Amendments established the AIME PIAs 

and Family Maximum Benefit. These computations have the guaranteed 

rates built into the TRANS and 1977 OLD START PIA's. Therefore, a 

Family Payment Savings Clause should not be necessary.

8.11.85 Redetermination Savings Clause

The October 1972 Amendments to the Social Security Act established a 

Redetermination Savings Clause for survivor cases in which the widow(er) is included in 

a family in both 12-1972 and 1-1973 and the benefits of the family require a reduction 

for the family maximum. The redetermination savings clause computation is explained 

in RCM 8.9. 

8.11.86 Basic Family Maximum Benefit (FMB) for AIME, TRANS or 

1977 Old Start PIA

The 1977 SS Act Amendments established a four step formula to compute the family 

maximum benefit for the AIME PIA, TRANS PIA or 1977 Old Start PIA for all wage 

earners who have an eligibility year of 1979 or later. The 1980 Social Security Disability 

Amendments later excluded from this family maximum computation disability claimants 

whose first eligibility is after 1978 and whose first month of entitlement to the DIB O/M 
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payment is July 1980 or later (see RCM 8.11.88). The formula continues to apply for 

age and service cases, survivor cases, disability cases payable prior to 7-1-80 with 

onset after 1978 and disability entitlement cases payable 7-1-80 or later in which 

disability benefits were previously paid before 7-1-80. 

Under this family maximum computation, the percentages in the formula are constant 

but the amounts, "bend points" in each step will be adjusted each year as average 

wages rise. The "bend points" will be published by SSA in the November before the 

eligibility year to which they apply.

The AIME, TRANS or "1977 Old Start" Family Maximum Benefit is determined with 

"bend points" based on the eligibility year regardless of date of filing. When the date of 

entitlement is June 1 of the eligibility year or later, a cost-of-living percentage increase is 

applied to the initial Family Maximum Benefit amount. Subsequent cost-of-living 

percentage increases are payable from the eligibility year.

Click here for a chart of the bend points used to calculate family maximum benefits for 

each year since 1979.

Under the 1981 SS Act Amendments, AIME, TRANS or 1977 OLD START PIAs for 

eligibility years 1982 or earlier, if not a multiple of $.10, are rounded up to the next 

higher multiple of $.10 in the initial computation or adjustment through 5-31-82. Effective 

with the 6-1-82 COL adjustments to these PIA's, if the result is not a multiple of $.10, it 

is rounded down to the next lower multiple of $.10.

The Family Maximum Benefit computed for eligibility years 1982 or later is subject to the 

1981 SS Act Amendments from the initial computation. If the result is not a multiple of 

$.10, it is rounded down to the next lower multiple of $.10.

Example 1: The AIME PIA based on the eligibility year 1995 and annuity beginning 

date of 8-1-97 is $990.40. The AIME Family Maximum Benefit equals $1,844.00 

($1,471.52 + 134% of $205.40, rounded down to the dime, plus the 2.6% cost-of-living 

increase effective 12/95 and the 2.9% cost-of-living increase effective 12/96). This 

amount is later increased for subsequent cost-of-living increases.

Example 2: The AIME PIA based on the eligibility year 1996 and annuity beginning 

date of 8-1-97 is $1,062.10. The AIME Family Maximum Benefit equals $1,911.40 

($1,839.98 + 175% of $10.10, rounded down to the dime, plus the 2.9% cost-of-living 

increase for 12/96). This amount is later increased for subsequent cost-of-living 

increases. 

Example 3: The AIME PIA based on the eligibility year 1997 and annuity beginning 

date of 8-1-97 is $990.40. The AIME Family Maximum Benefit equals $1,776.10 

($1,573.26 + 134% of $151.40, rounded down to the dime). This amount is later 

increased for subsequent cost-of-living increases.
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8.11.87 Combined Family Maximum

If a child is entitled to benefits on two wage records the combined family maximum may 

apply. Refer to RCM 8.3.115. 

8.11.88 Family Maximum Benefit For Disability Cases Under 1980 SS 

Act Amendments

Prior to the 1980 Social Security Disability Amendments, the computation of the family 

maximum was the same for both age and service and disability cases (see RCM 

8.11.80 - 8.11.87).

Under the 1980 Social Security Disability Amendments, the total family benefits of 

disability claimants whose first eligibility is after 1978 and whose first month of 

entitlement to the DIB O/M payment is July 1980 or later are limited as follows. (It is 

important that the comparison between 85% of the AIME, the PIA, and 150% of the PIA 

be made at the proper point in time.):

A. Payments Based on AIME PIA - This comparison is made based on the raw PIA 

computations (effective January of the eligibility year, before any cost-of-living 

increase). The DIB O/M MAX is the smaller of:

• 85 percent of the employee's average indexed monthly earnings (AIME) but 

not less than 100% of the employees raw AIME PIA; or 

• 150 percent of the worker's raw AIME PIA.

B. Payments Based on 1977 O.S PIA - The comparison is made based on the raw 

PIA computations (effective January of the Eligibility Year before any cost-ofliving increase). The DIB O/M MAX is the smaller of:

• 85 percent of the AIME from the companion (non-selected) AIME PIA 

computation but not less than 100% of the raw Old Start Guarantee PIA; or

• 150 percent of the raw Old Start Guarantee PIA.

C. Payments Based on SPC MIN PIA - This comparison is based on the actual 

PIA's effective on the DIB O/M effective date (including cost-of-living). The DIB 

O/M MAX is the smaller of:

• 85 percent of the RAW AIME multiplied by the percentage of all intervening 

COL increases up to the DIB O/M effective date, but no less than the SPC 

MIN PIA on the DIB O/M effective date; or 

• 150 percent of the SPC MIN PIA effective on the DIB O/M effective date.
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After the DIB O/M MAX is determined, subsequent percentage cost-of-living 

increases are applied to both the PIA and the DIB O/M MAX amounts.

For eligibility years 1982 or earlier, if the result of the DIB O/M MAX computation 

is not a multiple of $.10, it is rounded to the next higher multiple of $.10. Effective 

for initial DIB O/M entitlements, changes in the family composition, or PIA 

increases 6-1-82 or later, if the result is not a multiple of $.10, it is rounded to the 

next lower multiple of $.10.

If the PIA is recomputed, the above tests are also applied to the new PIA.

If PIA #9 is computed based on prior DIB entitlement under the 1980 SS Act 

Amendments as explained in RCM 8.11.60 or RCM 8.11.61 and the new 

eligibility is based on benefits payable beginning July 1, 1980 or later, the family 

maximum is still determined under the 1980 amendment method. Effective for 

PIA increases 1-1982 or later, if the result is not a multiple of $.10, it is rounded 

to the next lower multiple of $.10. 

The DIB O/M MAX may be combined with other maximums as explained in RCM 

8.3.115. 

The computation of disability auxiliary benefits is explained in RCM 8.3.82. 

The DIB O/M MAX will apply for eligible family groups until the employee dies or 

becomes entitled to an age and service O/M. At that time, the regular family 

maximums described in RCM 8.3.76 - 8.3.79 can apply.

In the case of an employee who is entitled to either a reduced age and service 

O/M or DIB O/M which begins July 1, 1980 or later based on first eligibility after 

1978, the possibility of electing the reduced age and service O/M must be 

explored to determine if the age and service monthly family maximum would 

provide a higher rate. If the RIB is elected, entitlement to the disability freeze is 

still applicable for Medicare purposes.

EXAMPLE 1: Benefits are based on the AIME PIA with eligibility year 1980. If 

the AIME is $1175.00, the raw AIME PIA would be $487.90, and the raw DIB 

O/M MAX on the DIB O/M effective date of 7-1-80 would be the smaller of:

• 85% of the AIME $1175 = $998.75; or

• 150% of PIA 487.90 = 731.85

Therefore, 731.90 (rounded) would be the raw DIB O/M MAX in this case.

The AIME PIA and DIB O/M MAX are increased by 14.3% to $557.70 and 

$836.60, respectively, on the DIB O/M effective date of 9-1-80 due to the 1980 

COL.
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EXAMPLE 2: Benefits are based on the AIME PIA with eligibility year 1980. If 

the AIME is 190.00, the raw AIME PIA would be 171.00, and 85% of the AIME 

would only be 161.50. The SPC MIN PIA does not apply. The DIB O/M MAX 

would be the smaller of:

• The AIME PIA $171.00 (exceeds 85% of AIME); or

• 150% of 171.00 = $256.50.

Therefore, the amount of the AIME PIA (171.00) would be the DIB O/M MAX in 

this case.

The PIA and DIB O/M MAX are increased for cost-of-living by 14.3% to $195.50 

on the DIB O/M effective date of 7-1-80. 

EXAMPLE 3: Benefits are based on the Raw Old Start Guarantee PIA of 

$193.60 with eligibility year 1980. The AIME is $190.00 and the AIME PIA is 

171.00. The SPC MIN PIA does not apply. The DIB O/M MAX would be the 

smaller of:

• The O.S PIA 193.60 (exceeds 85% of AIME); or,

• 150% of 193.60.

Therefore, the amount of the O.S PIA (193.60) would be the DIB O/M MAX in this 

case.

The PIA and DIB O/M MAX are increased for cost-of-living by 14.3% to $221.30 

on the DIB O/M effective date of 8-1-80.

EXAMPLE 4: Benefits are based on the SPC MIN PIA. The DIB O/M effective 

date is 9-1-80. If the AIME is $311.00 with a 1980 eligibility year, the raw AIME 

PIA would be $212.10, increased by 14.3% (COL) to $242.50 effective 9-1-80. 

The O.S. Guarantee PIA 9-1-80 is $236.30. The SPC MIN PIA effective 9-1-80 is 

245.70 and is therefore higher than both the AIME PIA and O.S PIA. The DIB 

O/M MAX effective 9-1-80 would be the smaller of:

• 85% of 311.00 x 14.3% = 302.30 (rounded)

• 150% of SPC MIN PIA 245.70 = 368.60 (rounded)

Therefore, 302.30 rounded is the DIB O/M MAX effective 9-1-80.

8.11.90 Automatic Cost-of-Living Increases for Cases with Eligibility 

Year Before 1979

The PIA computations in effect under the SS Act before 1979 are increased for cost-ofliving as explained in this section. Only the RR Act PIA 1, PIA 3, PIA 9, and PIA 17 are 
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increased for cost-of-living under SS Act rules. The remaining RR Act PIA's are frozen 

at the 6-1974 PIA Table amount. Effective 1-1-86, the SSEB PIA is also automatically 

increased for cost-of-living under SS Act rules.

A. Cost-of-Living Increase for PIA Based On "New Start" AMW or "Old Start" 

Converted PIB - The 1972 Amendments to the Social Security Act provided a 

general automatic cost-of-living increase in the PIA (based on the "New Start" 

AMW or "Old Start" converted PIB) whenever the average monthly consumer 

price index for a specific calendar quarter of the year exceeds the average 

consumer price index for a similar quarter in a prior year by 3%. The first 

automatic cost-of-living increase was effective 6-1-75. This provision still applies 

for employee's who attained (or are deemed) age 62 before 1-1-79 or who have 

a disability onset date before 1-1-79.

The amount of the increased PIA's, Table Maximums, and effective dates will 

continue to be calculated by SSA (see Appendix A and Appendix B).

B. Cost-of-Living Increase for Special Minimum PIA - Prior to 1979, the Special 

Minimum PIA was not subject to automatic cost-of-living increases. Effective 

June 1979, regardless of the "eligibility year," the SPC MIN PIA and family 

maximum is subject to automatic cost-of-living increases to be published by SSA 

based on an increase in the consumer price index. The revised SPC MIN PIA's 

and corresponding family maximums are indicated in the on-line Appendix C of 

this chapter.

8.11.91 Cost-of-Living Increases for Cases with Eligibility Year 1979 or 

Later

The PIA computations under the Social Security Act based on an eligibility year of 1979 

or later are increased for the cost-of-living as explained in this section. The Railroad 

Retirement Act PIA 1, PIA 3, PIA 9, PIA 17, and SSEB PIA are increased for 

cost-of-living under SS Act rules. The remaining RR Act PIA's are frozen at the 6-1974 

PIA Table amount.

A. Decoupling Provision of 1977 SS Act Amendments - Under the decoupling 

provisions of the 1977 Social Security Act Amendments, benefits, other than the 

SPC MIN PIA and corresponding auxiliary benefits, for wage earners who attain 

age 62 or have disability onset 1-1-79 or later are not automatically increased for 

the cost-of-living. The initial PIA is either derived from the 6-1978 PIA Table 

based on the AMW "New Start" for the TRANS PIA or converted PIB for the 

"1977 Old Start," or is computed by applying the formula based on the "eligibility 

year" to the amount of the AIME for the AIME PIA. A cost-of-living increase can 

be added to this PIA as follows:

1. 1977 Simplified "Old Start" Guarantee - The cost-of-living increase 

percentages beginning with the year of first eligibility are applied to the 6-

1978 PIA (converted from PIB) and to the "1977 Old Start" Family 
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Maximum (see 8.11.86). Eligibility does not have to exist prior to the June 

1 general benefit increase for the PIA and family maximum to be subject 

to the cost-of-living increase. As long as eligibility exists by December 31 

of the calendar year, the PIA and family maximum effective June 1 or later 

can be increased by the cost-of-living percentage for that year.

EXAMPLE 1: The employee (DOB 5-27-21) has a date of entitlement of 

5-1-83. Assume (for illustration) the following: general cost-of-living 

increases were possible: 9.9% - 6-1-79, 6.2% - 6-1-80, 7.5% - 6-1-81, 

3.2% - 6-1-82 and 5.9% - 6-1-83. The cost-of-living increases cannot 

begin until 1983, the year of eligibility in this case. The 6-1978 "Old Start" 

PIA of $248.70 with a family maximum benefit of $395.90 will apply 

5-1-83. It increases by 5.9% to $263.40 with a family maximum benefit of 

$419.30 effective 6-1-83.

EXAMPLE 2: The employee whose disability onset date is 9-17-83 has an 

SS Act date of entitlement of 3-1-84. Assuming (for illustration) the same 

percentage increases as in Example 1, the 6-1-1978 Old Start PIA of 

$251.80 and family maximum benefit of $404.30 is increased by 5.9% only 

payable on the PIA effective date. The resulting Old Start PIA effective 

3-1-84 is $266.70 with a family maximum benefit of $428.20.

EXAMPLE 3: The wage earner died 8-10-81 before eligibility to life 

benefits. Her eligibility year is 1981. Assuming (for illustration) the same 

percentage increases as in Example 1, the 6-1978 Old Start PIA of 244.00 

would be increased by 7.5% for widowers benefits payable 8-1-81, and 

later increased for the 3.2% and 5.9% cost-of-living increases.

2. New Start Transitional Guarantee PIA - The cost-of-living percentage 

beginning with the eligibility year are applied to the 6-1978 AMW PIA 

(based on New Start AMW) and TRANS PIA Family Maximum Benefit 

(see 8.11.86) similar to item 1 above. Eligibility does not have to exist prior 

to the effective date of the general benefit increase for the TRANS PIA to 

be subject to the cost-of-living increase. As long as eligibility exists by 

December 31 of the calendar year, the TRANS PIA can be increased by 

the cost-of-living percentage for that year. However, the increased amount 

is not payable until the effective date of the increase for that year.

3. AIME PIA - In general, the bend points (portions of AIME to which the 

percentages are applied) are adjusted each year if the national average 

wages increase. The bend points which apply to the individual wage 

record, on the other hand, are established in the employee's eligibility year

and do not change. Once established, the AIME PIA and family maximum

benefit is subject to percentage cost-of-living increases from the eligibility 

year. Eligibility does not have to exist prior to the effective date of the 

general benefit increase for the AIME PIA to be subject to the 

cost-of-living increase. As long as eligibility exists by December 31 of the 
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calendar year, the AIME PIA and family maximum benefit can be 

increased by the cost-of-living percentage for that year. However, the 

increased amount is not payable until the effective date of the increase for 

that year. 

Click here for a table of the AIME cost-of-living percentage increases that have been 

paid to date.

4. Frozen Minimum PIA - The 1981 Social Security Act Amendments 

eliminated the Frozen Minimum PIA for earnings based on an eligibility 

year of 1982 or later. However, the computation remains in effect for 

earnings records based on an eligibility year before 1982 and for "vow of 

poverty" cases payable before 1992.

A number of factors affect the applicability of cost-of-living increases under 

the Social Security Act when the frozen minimum PIA is involved.

(a) No cost-of-living increase is applicable to the frozen minimum PIA 

on an earnings record for any year during which no individual was 

entitled to a RSDI benefit on that earnings record for any month of 

that year.

(b) In employee disability cases and survivor cases other than that of a 

widow(er), no one has to be actually paid a benefit. COLs are 

applicable for years in which those individuals are actually entitled

for one or more months.

In the case where an individual is entitled, terminates and later 

becomes reentitled (e.g., a student), cost-of-living increases are 

only applicable for year in which the individual is actually entitled for 

one or more months.

Therefore, when there is a break in entitlement, the FRZN MIN PIA 

may be exceeded by the TRANS PIA, regular AIME PIA or SPC 

MIN PIA due to the cost-of-living increases in those computations 

that cannot be added to the FRZN MIN PIA. 

EXAMPLE: A student becomes entitled to a benefit based upon 

the frozen minimum PIA in June 1979. He ceases full-time 

attendance in March 1980 and is terminated. He reenrolls in 

February 1982 and is re-entitled. He is entitled to cost-of-living 

increases in 1979, 1980 and 1982. However, since he was not 

entitled to a benefit in 1981, the cost-of-living percentage increase 

for 1981 cannot be applied.

A deemed DF for a retirement annuitant is not continued in 

computing the survivor annuity. The survivor FRZN MIN PIA cannot 
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be increased for COL increases payable during the employee's 

lifetime before the earlier of actual attainment of age 62 or the year 

an actual DF begins.

(c) In the case of a wage earner entitled to an RIB, cost-of-living 

increase will be applicable beginning with the earlier of:

• The year in which at least a partial month's RIB is payable. (An 

employee paid for any given month in the year, including 

Jan-May, is entitled to the COL increase in the FRZN MIN PIA 

for that year. However, the increase amount is not payable until 

the effective date of the COL increase); or,

• The year in which the worker reaches age 65.

When applying this provision to the Railroad Retirement age and 

service annuity, if the employee is age 60-64 and the Tier I work 

deduction component is completely withheld all year, (s)he is not 

entitled to the percentage cost-of-living increase in the Frozen 

Minimum PIA for that year.

In 60/30 cases, the retirement annuitant is deemed to be age 62 on 

the ABD for purposes of determining the "eligibility year" and 

applying COL increases to the FRZN MIN PIA. This deeming 

provision is not continued in computing the survivor annuity. The 

survivor FRZN MIN PIA cannot be increased for COL increases 

payable during the employee's lifetime for years before the 

employee actually attains age 62.

(d) In the case of a widow(er) cost-of-living increases are also 

applicable beginning with the earlier of:

• The year in which at least a partial month's WIB is payable. (A 

widow(er) paid for any given month in the year, including JanMay, is entitled to the COL increase in the FRZN MIN PIA for 

that year. However, the increase amount is not payable until the 

effective date of the COL increase); or

• The year the widow(er) reaches age 65. However, if a surviving 

child, mother, father or parent is also entitled on that same 

earnings record for any month during the year in which the 

cost-of-living increase occurs, whether or not in current payment 

status, a cost-of-living increase will be payable for that year to 

the widow(er).

The widow(er) is also entitled to previous COL increases to the 

FRZN MIN PIA during the employee's lifetime provided these COL 
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increases are based on the actual attainment of age 62 or an actual 

D/F.

EXAMPLE: The employee retired at age 62 in 1979. He died in 

2-1984. The FRZN MIN PIA of 122.00 was increased for the 1979, 

1980, 1981, 1982 and 1983 COL increases. The widow filed for a 

WIA at age 62 to begin effective 2-1984 but she is not paid benefits 

in 1984 and 1985 due to work deductions. When she is entitled to a 

partial payment in 1986, the FRZN MIN PIA is increased for the 

1979-1984 COLs and the 1986 COL.

B. Cost-of-Living Increase for Special Minimum PIA - The Special Minimum PIA is 

not "decoupled." Effective June, 1979, the SPC MIN PIA and corresponding 

monthly maximum is subject to automatic cost-of-living increases to be published 

by SSA based on an increase in the consumer price index. The revised SPC MIN 

PIA's and corresponding monthly maximums will be indicated in tables separate 

from the AMW PIA Tables.

The employee is entitled to the current SPC MIN PIA that corresponds to his 

"years of coverage" (see RCM 8.11.73). The year of eligibility is not a factor.

8.11.100 Railroad Retirement Act Deeming Provisions

The 1974 Railroad Retirement Act deems certain groups of employees to be entitled to 

PIA computations even though they could not qualify for a PIA under SSA rules 

because they have not attained the required age, do not have a disability freeze in 

disability cases, or do not have an insured status under the Social Security Act.

A. 60/30 Annuitants - A 60/30 annuitant (age 60-64) is deemed to be age 65 on the 

ABD (except for the purpose of recomputation) to determine the elapsed years 

and benefit computation years for PIA #1 (Retirement Cases), PIA #3, PIA #10, 

PIA #17 and the Pass-thru PIA.

A 60/30 annuitant (age 60-64) is deemed to be age 62 on the ABD to determine 

the "eligibility year" for PIA #1 (Retirement Cases), PIA #3, or PIA #17.

An employee (age 60-64), regardless of the type of annuity, is deemed to be age 

65 on the ABD to determine the benefit computation years and divisor months for 

PIA #5 and PIA #15.

B. 2(a) 3 Annuitant Under 1937 RR Act With ABD Before July 1, 1974 - A 2(a) 3 

annuitant with an ABD before July 1, 1974 who is age 60-61 in 1974 is deemed 

to be age 62 in 1974 in the computation of the Pass-thru PIA.

C. Disability Annuitant - Under Section 3(a)(6) of the 1937 RRA, if a disability 

annuitant does not have a D/F onset prior to the ABD, (s)he is deemed to have a 

D/F on the ABD in the computation of the Pass-thru PIA.
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Under Section 3(a)(2) of the 1974 RR Act, a 2a(I)(IV) or 2a(I)(V) annuitant is 

deemed to be entitled to a DIB under section 223 of the Social Security Act as of 

the RR disability onset date for the purpose of computing PIA #1 (Retirement 

Cases), PIA #3 and PIA #10. The employee is deemed age 62 on the RR 

disability onset date unless an actual DF is earlier in which case the actual DF is 

used. This provision applies even if the actual DF period terminates after the RR 

disability onset date.

NOTE: If an actual DF terminated prior to the RR disability onset date, the RR 

disability onset date is the deemed DF onset date.

An employee under age 65 is deemed to be age 65 on the ABD to determine the 

benefit computation years and divisor months for PIA #5 and PIA #15. 

D. No Insured Status - An insured status is not required in the computation of the 

1974 RR Act PIA #1, PIA #3, PIA #5 and PIA #6 where the filing date, original 

beginning date, or date of death is after 12-31-74. An insured status is not 

required in the computation of the Pass-thru PIA.

8.11.101 PIA Computations for Retirement Benefits

A. Railroad Retirement Formula - The 1974 RRA provides an employee RR formula 

annuity computation which is the sum of several parts (see Form G-354.1 

Instructions). Several variations of the PIA computation are used in the RR 

formula. If the employee meets all eligibility requirements before 8-13-81, PIA 

#21, used in the computation of the WIFE/WIDOW WF, is based on a wage 

record other than the RR employee. An RR formula age reduction is applied to 

each employee tier rate.

The spouse RR Formula benefit is basically based on the employee's PIA 

computation (see Form G-355.1 Instructions). If the spouse meets eligibility 

requirements before 8-13-81, PIA #21, used to compute the spouse windfall, is 

based on the spouse's own wage record. An RR formula age reduction is applied 

to each spouse tier rate.

B. O/M Computation - Cases paid under the 1937 Act O/M computation in 12-1974 

were converted to the 1974 RR Act tier rates effective 1-1975. Two variations of 

the SS Act PIA computation are used - the 6-1974 pass-thru PIA in tier I and PIA 

#11 in the O/M rate for tier II. These PIA's are not subject to age reduction under 

SSA rules. The age reduction applied to the total tier rate prior to the 1981 RR 

amendments is explained in RCM 8.3 Appendix B6. 

Cases paid under the 1974 RR Act 100% O/M (effective 1-1975 or later) are 

based on PIA #9 which is computed under the SSA formula. An age reduction is 

applied under current SSA rules (see RCM 8.3).
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Cases paid under the 1974 RR Act 110% Grandfather O/M (effective 1-1975 or 

later) are based on PIA #11, which restricts earnings after 1974 to the 1974 

earnings maximum. An age reduction is applied under the SSA rules in effect in 

12-1074 (see RCM 8.3).

8.11.102 PIA Computations for Survivor Benefits

The 1974 RRA provides a survivor annuity computation which is the sum of up to three 

parts (see Forms G-364.1, G-364.2 and G-364.3 Instructions).

The gross tier I amount is based on the Social Security PIA formula, without any RR Act 

deeming provisions, using the employee's combined compensation and social security 

credits. Refer to RCM 8.9, Form G-364.1 Instructions to determine whether PIA #1 or 

PIA #9 should be used. PIA #1 is subject to age reduction for widow(er)s under age 65. 

PIA #9 is used to compute the deemed PIA or RIB limitation under SSA rules.

The survivor tier II computation under the 1981 RR Act Amendments is based on a 

percentage applied to the employee tier II before reduction for age and after reduction 

for windfall if the employee was vested. The computation of PIA 4, PIA 7 and PIA 8 are 

necessary to compute the employee's windfall in initial "D" cases. Additional amounts 

may be payable as the restored amount or spouse minimum guaranty. If the widow(er) 

meets all eligibility requirements before 8-13-81, the survivor windfall computation may 

require either PIA #8 or PIA #21 (see Form G-364.3 Instructions).

Refer to RCM 8.9 for exceptions and an explanation of computations prior to 1981 RR 

Act Amendments.

8.11.103 Computation of PIA #1

A. PIA #1 in Retirement Cases - PIA #1 is used in the computation of the retirement 

annuity tier I. This PIA is computed under current SSA rules except that:

• An insured status is not required; and,

• A 60/30 annuitant (age 60-64) is deemed to be age 65 on the ABD (except for 

the purposes of recomputation) to determine the elapsed years and benefit 

computation years; and

• A 60/30 annuitant (age 60-61) is deemed to be age 62 on the ABD to 

determine the "eligibility year"; and

• A disability annuitant, other than one who filed a disability application January 

1, 2008 or later and whose disability was granted on the basis of drug or 

alcohol abuse, is deemed to have a DF beginning on his (her) ABD unless an 

actual DF is earlier, in which case the actual DF is used; and,
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• Prior to the 1981 Amendments, an age reduction is not applied to the PIA 

amount. Instead, for RR Act 2 (a)(I)(iii) cases, an RR formula age reduction is 

applied to the total tier rate. Effective 10-1-81, an RR formula age reduction is 

applied to the gross tier I rate which may also be the PIA amount.

PIA #1 uses combined wages, compensation and SEI through the last 

computation base year (see RCM 8.11.12) and is subject to recomputation when 

the employee actually attains SS Act retirement age in age and service cases or 

when the disabled employee is deemed age 65 or, if earlier, attains age 65 in 

cases where there is actually a DF. No PIA #1 is computed if there are no wages 

or compensation after 1936.

The current AMW PIA #1, TRANS PIA #1, 1977 Old Start PIA #1 or AIME PIA #1 

computation is used based on the employee's "eligibility year." However, the 

SPC MIN PIA #1 will apply if it is higher than these alternate PIA #1 

computations.

The 1981 Social Security Act Amendments eliminated the minimum AMW, PIB 

and AIME for PIA #1 for eligibility years 1982 or later as explained in RCM 

8.11.23, 8.11.35 and 8.11.47. 

Delayed Retirement Credits are added to all PIA #1 computations except the 

SPC MIN PIA, as explained in Form G-354 Instructions.

B. PIA #1 in Survivor Cases - The survivor annuity PIA #1 is used in the 

computation of the survivor annuity tier I amount. This PIA #1 is computed under 

current SSA rules except that an SS Act insured status is not required if filing 

date, original beginning date or date of death is after 12-31-74. There are no 

other RR Act deeming provisions.

The survivor annuity PIA #1 uses the employee's combined wages, 

compensation and SEI through the date of death. No PIA #1 is computed if there 

are no wages or compensation after 1936.

The current AMW survivor PIA #1, TRANS Survivor PIA #1, 1977 Old Start 

survivor PIA #1, or AIME survivor PIA #1 computation is used based on the 

employee's "eligibility year." However, the SPC MIN Survivor PIA #1 will apply if 

it is higher than these alternate survivor PIA #1 computations.

The 1981 Social Security Act Amendments eliminated the minimum AMW, PIB 

and AIME for PIA #1 for eligibility years 1982 or later as explained in RCM 

8.11.23, 8.11.35 and 8.11.47. 

An age reduction is applied to the widow(er)'s or divorced widow(er)'s share of 

the survivor annuity PIA # 1 as explained in RCM 8.9. 
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8.11.104 Computation of Retirement Work Deduction Components - 

(PIA #2 and PIA #17)

The amount of the employee tier I annuity that is subject to work deductions (called PIA 

#2) is the difference between the Gross Tier I PIA (PIA #1 or PT PIA) and PIA #17. 

Where the employee tier I has an age reduction, this difference should be reduced for 

age.

The amount of the spouse tier I annuity that is subject to work deductions is the 

difference between the wife's benefit based on the employee's PIA #1 or the PT PIA 

and 50% of PIA #17 rounded to end in zero. Where the spouse tier I has an age 

reduction, this difference should be reduced for age.

PIA #17 is basically based on one of three compensation-only PIA's (PIA #5, PIA #7 or 

PIA #15 as indicated in the chart located in Exhibit 6). With the exception of 1974 Act 

disability cases, if an RR Act deeming provision was applied to the Gross Tier I PIA, the 

same deeming provision is used to compute the elapsed years and benefit computation 

years for the PIA #5, PIA #7 or PIA #15 used for the PIA #17 computation. The 

appropriate PIA amount is increased by the percentage of any COL increase added to 

the Gross Tier I PIA.

Where the employee's "eligibility year" is 1979 or later and (s)he has a W/D Insured 

Status and the AIME PIA #1 is used in the employee's Tier I computation, the 

decoupling provisions of the 1977 Social Security Act Amendments apply to the PIA #17 

computation. In these cases, it will be necessary to calculate the AIME PIA #17 as 

follows:

1. Index the compensation prior to 1975. Use the same indexing year used to index 

the earnings for AIME PIA #1;

and

2. Set the elapsed years and benefit computation years (BCY) the same as those 

set for AIME PIA #1

Exception: The elapsed years and benefit computation years (BCY) for PIA #5 

are always based on deemed age 65 on the ABD regardless of his (her) age:

and

3. Calculate the AIME selecting earnings for the appropriate number of BCY from 

the indexed compensation years prior to 1975; and

4. Calculate the PIA using the same AIME bend points used to calculate the AIME 

PIA #1; and

5. Multiply this PIA by the percentage of any COL increase added to the AIME PIA 

#1.
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When applicable the AIME PIA #17 is computed by DP&A and furnished on Form G-90. 

(See RCM 8.11.121).

If the employee's Tier I is based on his TRANS PIA #1, 1977 old start PIA #1, or SPC 

MIN PIA #1, then his PIA #17 would be computed under the same formula as the PIA 

#1 amount (i.e., TRANS PIA #1 - TRANS PIA #17). However, since both the REG PIA 

#5 and REG PIA #7 contain RR compensation thru 12-1974 only, computations under 

the TRANS or 1977 OS formula will result in the same amount as the "REG PIA #5 or 

REG PIA #7 updated to the 6-1978 Table PIA amount.

If the eligibility year for PIA #1 is 1982 or later, the AMW, PIB or AIME will be based on 

the actual amount of earnings. It will be necessary to compute the corresponding PIA #5 

or PIA #7 based on actual earnings. The minimum PIA will not apply in these cases.

The appropriate PIA amount, once computed, is then updated by the same cost-of-living 

percentage increases applied to the Tier I PIA. The resulting PIA is PIA #17.

The chart in Exhibit 6 indicates the compensation only PIA that is to be used to 

determine PIA #17.

8.11.105 Computation of PIA #3

PIA #3 is used in the computation of the residual lump sum amount. This PIA is 

computed under current SSA rules, except that under the 1974 RRA.

• An insured status is not required if the filing date, original beginning date or date of 

death is after 12-31-74; and,

• If the deceased employee had been a 60/30 annuitant and was deemed age 65 on 

the retirement annuity ABD (except for the purposes of recomputation) this deeming 

provision applies to the elapsed years and benefit computation years for PIA #3; 

and,

• If the deceased employee had been a 60/30 annuitant and was deemed age 62 on 

the ABD to determine the "eligibility year," this eligibility year is used for PIA #3; and,

• If the deceased employee had been a disability annuitant, (s)he is deemed entitled 

to a DIB under section 223 of the Social Security Act on the RR annuity ABD for the 

purpose of computing a PIA only. The employee is deemed age 62 on the ABD, 

unless an actual D F is earlier, in which case the actual DF is used; and

• Compensation only through the last benefit computation year is used. PIA #3 is 

computed in the same way as PIA #1 except that SS earnings are not included.

The current AMW PIA #3, TRANS PIA #3, 1977 Old Start PIA #3, or AIME PIA #3 

computation is used based on the employee's "eligibility year". However, the SPC MIN 

PIA #3 will apply if it is higher than these alternate PIA #3 computations.
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The 1981 SS Act Amendments eliminated the minimum AMW, PIB and AIME for PIA #3 

for eligibility years after 1982 as explained in RCM 8.11.23, 8.11.35 and 8.11.47.

PIA #3 could be subject to recomputation if the employee's compensation only in the 

retirement annuity ABD year is not within a period of disability and is sufficient to create 

a recomputation effective January 1, of the following year or if the employee had 

returned to RR service after the retirement annuity ABD and this compensation only is 

sufficient to create a PIA #3 recomputation.

Delayed Retirement Credit are added to all of the PIA #3 computations (except the SPC 

MIN PIA) as explained in RCM 8.10, Form G-63b instructions.

8.11.106 Computation of PIA #4

PIA #4 is used to compute the windfall reduction in the retirement annuity tier II for 

vested employees and to compute the windfall benefit payable to vested employees. It 

is also used to compute the survivor tier II in 1981 Amendment cases. This PIA is 

computed under SSA rules in effect in 12-1974 using the 6-1974 PIA Table except:

• The employee must be vested under the RR Act (see RCM 1.1 for age and service 

cases and RCM 1.2 for disability cases); and

• The AMW dividend uses only wages and SEI through 12-31-74 or, if earlier, through 

the vesting year. The AMW divisor is based on the earlier of the wage earner's 

disability onset or attainment of SS Act retirement age; and,

• In survivor initial "D" cases, the employee is deemed to be age 65 in the month of 

the employee's death. (However, the number of QC's required for an insured status 

is based on the employee's real age and not on deeming provisions.); and,

• An age reduction is not applied to the PIA amount. Instead, for RRA 2 (a)(1) (iii) 

cases, an RR formula age reduction is applied to each tier and,

• Delayed retirement credits are not added to this PIA.

Only the SS Act PIAs in effect in 12-1974 ("New Start" AMW PIA #4 "Old Start" AMW 

PIA #4 or SPC MIN PIA #4) are computed. Only regular PIA #4 is used in determining 

the TIER II WF reduction. The SPC MIN PIA #4 can be used in determining the WF 

amount if it is higher than the other computations.

This PIA is not affected by the elimination of the minimum social security benefit. For 

PIA #4, the lowest AMW is $76.00 and the lowest PIB is $16.20 with a corresponding 

PIA of $93.80.

If the employee is entitled to a windfall based on a transitionally insured status on 

12-31-74 , PIA #4 would be the 12-1974 transitional RIB of $64.40.

In a disability freeze conflict case, PIA #4 is computed based on SSA's DF date.
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8.11.107 Computation of PIA #5

PIA #5 is used in 1974 act cases only to determine the pass-thru increase in the 

computation of the employee annuity tier II. It is also used in the computation of PIA #17 

for the tier I work deduction in 1974 Act 60/30 cases or occupational disability cases 

with no freeze or a freeze after the ABD year. This PIA is computed under SSA rules in 

effect in 12-1974 using the 6-1974 PIA Table except:

• An insured status is not required; and,

• An annuitant is deemed to be age 65 on the ABD regardless of his (her) age or the 

type of annuity. Correspondingly (s)he is deemed age 22 43 years before the ABD; 

and,

• The AMW dividend uses only compensation through 12-31-74. If there is no 

compensation after 1936, the AMC is treated as an AMW for purposes of 

determining the PIA. The AMW divisor is based on deemed age 65 on ABD; and

• An age reduction is not applied to the PIA amount. Instead, for RR Act 2 (a)(1) (iii) 

cases, an RR formula age reduction is applied to each tier; and

• Delayed retirement credits are not added to this PIA; and

• An actual or deemed DF for PIA #1, PIA #3 or PIA #10 does not affect the 

computation of PIA #5.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #5, "Old Start" AMW 

PIA #5 or SPC MIN PIA #5) are computed.

In the computation of the employee annuity tier II for pre-1981 amendment cases, this 

PIA is not affected by the elimination of the minimum social security benefit. For the PIA 

#5 used in tier II, the lowest AMW is $76.00 and the lowest PIB is $16.20 with a 

corresponding PIA of $93.80.

When PIA #5 is used in the computation of PIA #17, the same type of computation used 

to compute PIA #1 is used to compute PIA #17. This may result in an amount of less 

than $93.80 for work deduction purposes.

8.11.108 Computation of PIA #6

PIA #6 is used for the 110% O/M and imputed SS benefit reduction in the computation 

of tier II in 1974 Act cases only. This PIA is computed under SSA rules in effect in 

12-1974 using the 6-1974 PIA Table except:

• An insured status is not required; and,
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• The AMW divisor months are fixed at 384 - "Old Start" or 216 "New Start". This 

precludes the need to determine the year age 22 was attained; and,

• The AMW dividend includes the compensation from the 32 high years after 1936 

thru 1974 ("Old Start"), or the compensation from the 18 high years after 1950 thru 

1974 ("New Start"); and,

• An age reduction is not applied to the PIA amount. Instead, for RR Act 2 (a)(I) (iii) 

cases, an RR formula age reduction is applied to each tier rate; and,

• Delayed retirement credits are not added to this PIA.

• If there is no compensation after 1936, no PIA 6 is computed.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #6, "Old Start" AMW 

PIA #6 or SPC MIN PIA #6) are computed.

This PIA is not affected by the elimination of the minimum social security benefit. For 

PIA #6, the lowest AMW is $76.00 and the lowest PIB is $16.20 with a corresponding 

PIA of $93.80.

8.11.109 Computation of PIA #7

PIA #7 is used in the computation of the employee's windfall benefit. It is also used in 

the computation of PIA #17 for the tier I work deduction amount in 1974 Act retirement 

cases other than 60/30 cases and in 1974 Act disability cases where the DF is prior to 

the ABD year. It is also used to compute the survivor tier II in 1981 Amendment cases. 

This PIA is computed under SSA rules in effect in 12-1974 using the 6-1974 PIA Table 

except:

• The AMW dividend uses only compensation thru 12-31-74 or, if earlier, thru the 

vesting year. The AMW divisor is based on the earlier of the wage earner's disability 

onset, or attainment of SS Act retirement age; and

• In survivor initial "D" cases, the employee is deemed to be age 65 in the month of 

the employee's death. (However, the number of QCs required for an insured status 

is based on the employee's real age and not on deeming provisions.); and,

• An age reduction is not applied to the PIA amount. Instead, for RRA 2 (a)(I) (iii) 

cases, an RR formula age reduction is applied to each tier rate; and

• Delayed retirement credits are not added to this PIA.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #7, "Old Start" AMW 

PIA #7 or SPC MIN PIA #7) are computed. If there is no compensation after 1936, PIA 

#7 is zero.
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PIA #7 is computed in all cases. However, the employee must be vested under the RR 

Act (see RCM 1.1 for age and service cases or RCM 1.2 for disability cases) for the PIA 

#7 to be used in the employee's windfall benefit.

If the spouse met all windfall eligibility requirements before 8-13-81, PIA #7 may be 

computed for this WF.

The female of dependent male spouse must be vested on (his) her own wage record 

(see RCM 1.3) to qualify for a windfall benefit based on the PIA #7 of a non-vested RR 

employee. A non-dependent male spouse cannot qualify for a windfall benefit if the RR 

employee is not vested.

In the computation of the windfall benefit, PIA #7 is not affected by the elimination of the 

minimum social security benefit. The lowest AMW for WF PIA #7 is $76.00 and the 

lowest PIB is $16.20 with a corresponding PIA of $93.80.

If the RR employee has a work deduction insured status (see RCM 5.6.10) PIA #7 may 

be used to determine the PIA #17 amount regardless of the employee's vested status. 

The same type of computation used to compute PIA #1 is used to compute PIA #17. 

This may result in an amount less than $93.80 for work deduction purposes.

8.11.110 Computation of PIA #8

A. PIA #8 in Retirement Cases - PIA #8 is used in the computation of the employee 

annuity windfall. This PIA is computed under SSA rules in effect in 12-1974 using 

the 6-1974 PIA Table except:

• The employee must be vested under the RR Act (see RCM 1.1 for age and 

service cases or RCM 1.2 for disability cases); and,

• The AMW uses only combined SS earnings and compensation through 

12-31-74 or, if earlier, though the vesting year. The AMW divisor is based on 

the earlier of the wage earner's disability onset, or attainment of SS Act 

retirement age; and,

• An age reduction is not applied to the PIA amount. Instead, for RR Act 2 (a)(I) 

(iii) cases, an RR formula age reduction is applied to each tier and,

• Delayed retirement credits are not added to this PIA.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #8 or "Old 

Start" AMW PIA #8 or SPC MIN PIA #8) are computed.

This PIA is not affected by the elimination of the minimum social security benefit. 

For PIA #8, the lowest AMW is $76.00 and the lowest PIB is $16.20 with a 

corresponding PIA of $93.80.
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B. PIA #8 in Survivor Cases - PIA #8 is used in the computation of the survivor 

annuity windfall for the eligibilities prior to 8-13-81 and in the survivor Tier II EE 

Annuity Restored Amount (see Form G-364.3 Instructions). It is also used to 

compute the survivor tier II in 1981 Amendment cases. This PIA is computed 

under SSA rules in effect in 12-1974 using the 6-1974 PIA Table except:

• The AMW dividend uses only combined SS earnings and compensation 

through 12-31-74. The AMW divisor is based on the earlier of the wage 

earner's disability onset, death or attainment of SS Act retirement age; and,

• In survivor initial "D" cases, the employee is deemed to be age 65 in the 

month of the employee's death. (However, the number of QC's required for an 

insured status is based on the employee's real age and not on deeming 

provisions.); and,

• If the deceased employee had no earnings after 1936 by his annuity began to 

accrue before 1948 based on at least 120 months of service and a current 

connection, use the AMC as the AMW to determine the 6-1974 PIA or, if 

available, use the employee's 6-1974 Pass-thru PIA as shown on a folder 

record, T-12 (12-74) or on a G-354 (3-74) award form in the claim file; and,

• An age reduction is not applied to the PIA amount; and,

• Delayed retirement credits are not added to this PIA.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #8, "Old Start" 

AMW PIA #8 or SPC MIN PIA #8) are computed.

This PIA is not affected by the elimination of the minimum social security benefit. 

For PIA #8, the lowest AMW is $76.00 and the lowest PIB is $16.20 with a 

corresponding PIA of $93.80.

8.11.111 Computation of PIA #9

PIA #9 is used in the computation of the Retirement 100% O/M benefit and the Survivor 

Employee Fictional RIB amount. This PIA is computed under current SSA rules for life 

cases. There are no RRA deeming provisions.

PIA #9 uses combined wages, compensation and SEI through the last computation 

base year (see RCM 8.11.13) and is subject to recomputation under SSA rules for life 

cases. 

In 60/30 cases, the AIME PIA #9 on the G-90, for the initial annuity award may be an 

estimated PIA (see RCM 7.4 Appendix A Form G-90 Instructions). An asterisk (*) will 

identify such calculations. If the O/M could apply in cases where an IPI spouse or child 

is involved, a subsequent G-90 with the actual PIA #9 amount is required. Since there 

are no deeming provisions for PIA #9, this PIA will be computed with an eligibility year 
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based on the employee's actual attainment of age 62. The resulting AIME PIA bend 

points for employees who attain 62 in 1979 or later will differ from the formula used to 

compute PIA #1.

In RRA survivor cases, the PIA #9 for the Fictional RIB PIA (see RCM 8.9, Form 

G-364.1 Instructions) will differ from the survivor PIA #1 if the employee has earnings in 

the year of death. In these cases, the earnings in the year of death will not be used in 

the initial fictional RIB PIA #9 that is effective in the month of death. These earnings 

may be considered to recompute the fictional RIB PIA #9 effective January 1 of the year 

after the employee's death under the recomputation procedure for age and service 

cases (see RCM 8.11.22 or RCM 8.11.33).

The current AMW PIA #9, TRANS PIA #9, 1977 Old Start PIA #9 or AIME PIA #9 

computation is used based on the employee's "eligibility year." However, the SPC MIN 

PIA #9 is still an alternate PIA computation and will apply if it exceeds the other PIA #9 

computations.

The 1981 Social Security Act Amendments eliminated the minimum AMW, PIB and 

AIME for PIA #9 for eligibility years 1982 or later as explained in RCM 8.11.23, 8.11.35

and 8.11.47. 

An age reduction is applied to this PIA as explained in RCM 8.3.85 - 8.3.91. Delayed 

retirement credits are added as explained in RCM 8.3.95 - 8.3.102. 

NOTE: Under the 1937 Railroad Retirement Act, the PIA computed at death for the 

survivor annuity was used to determine the EE RIB Limitation amount. This PIA was 

chosen because it was closer to the SSA PIA formula amount than the O/M PIA (see 

RCM 8.11.113) as limited by the 1972 Technical Amendments.

8.11.112 Computation of PIA #10

PIA #10 is used in the computation to test for the 1937 RR Formula guarantee amount. 

This PIA is computed for employees with an insured status under the SSA rules in effect 

in 12-1974 using the 6-1974 PIA Table except:

• A 60/30 annuitant (age 60-64) is deemed to be age 65 on the ABD; and

• A disability annuitant is deemed to be entitled to a DIB under section 223 of the 

Social Security Act as of the RR annuity ABD for the purpose of computing a PIA 

only. The employee is deemed age 62 on the ABD unless an actual DF is earlier in 

which case the actual DF is used; and

• The AMW dividend uses compensation through the DLW and wages through the 

year preceding the ABD year. The maximum creditable (wages and compensation) 

after 1974 is frozen at the 1974 maximum. The AMW divisor is based on the earlier 

of the wage earner's actual DF, deemed DF, attainment of retirement age or deemed 

age 65; and,
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• If a PIA could not be computed under SSA rules due to insufficient earnings after 

1936, the AMC is treated as an AMW for purposes of determining the PIA and,

• An age reduction is not applied to the PIA amount. Instead, for RR Act 2 (a)(1) (iii) 

cases, an RR formula age reduction is applied to the total tier rate; and,

• Delayed retirement credits can be added to this PIA as shown in the G-354.2 

instructions.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #10, "Old Start" AMW 

PIA #10 or SPC MIN PIA #10) are computed.

This PIA is not affected by the elimination of the minimum social security benefit. For 

PIA #10 the lowest AMW is $76.00 and the lowest PIB is $16.20 with a corresponding 

PIA of $93.80.

8.11.113 Computation of the O/M PIA under the 1937 RRA and PIA #11 

under the 1974 RRA

The over-all SSA minimum provision of section 3(e) of the 1937 RRA guarantees that 

the total annuities payable under the 1937 RRA effective 11-1-51 or later for a full 

month to an employee and his family will not be less than 100% of the monthly amount 

which would be payable under the Social Security Act if railroad service after 1936 were 

credited as "employment" under the Social Security Act. The O/M guarantee was 

increased to 110% of the monthly amount that would be payable under the SS Act 

effective 6-1-59 or later.

The O/M PIA was computed based on the employee's actual attainment of retirement 

age under SS Act rules or on an actual disability freeze. An insured status was required. 

There were no 1937 RRA deeming provisions for this PIA. Prior to 1-1972, it is based 

on the employee's combined wages, compensation and SEI through the last 

computation base year (see RCM 8.11.12). This includes SS earnings and 

compensation in and after the ABD year through 12-31-71 for the purpose of 

recomputation.

However, for AMW computations in retirement cases where the employee's ABD is in 

1972 or later, the 1972 Technical Amendments to the 1937 RR Act changed the base 

years which may be used to compute the initial PIA. For ABD years 1972 or later, 

creditable compensation earned in the ABD year may be included in the initial AMW 

computation. Only SS earnings up to the end of the year before an ABD year 1972 or 

later may be included in the AMW computation.

The only subsequent recomputations permitted under the amendments were for 1-1-73 

for cases where:

• The ABD is in 1972; and,
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• The employee has sufficient creditable compensation in 1972, which if 1972 were a 

computation year, would increase the PIA; and,

• The AMW was computed before the enactment date.

The amendments did not affect the O/M PIA computation in death cases.

EXAMPLE 1

An employee born 8-10-07 retires with an ABD of 8-1-72. His creditable compensation 

in 1972 was $5250. He also had SS earnings of $287.50.

Elapsed years - 21 (years after 1950 up to 1972)

Computation years - 16 (elapsed years minus 5)

Divisor - 192 (16 computation years x 12)

The earnings record and computations are shown in Exhibit 7, example 1.

NOTE: Under the amendments, 1972 can be used as a computation year. Before the 

amendments, 1958 would be a computation year for the initial computation; 1972 would 

be used as a computation year in a recomputation. In the amended method the 1972 

compensation is substituted for the 1958 earnings.

Amended Method Pre-Amend Method

Dividend - $86003.56 $84542.16

Divisor - 192 192

AMW - 447.00 440.00

1972 PIA - 250.60 247.40

EXAMPLE 2

A male employee is awarded an annuity at age 60 under section 2(a)3 of the 1937 

RRAbeginning in 3-1972. After that, he works in social security covered employment. 

The first point at which an O/M computation can be made is in 3-1974 when he attains 

age 62.

Elapsed Years - 24 (1951 through 1974)*

Computation Years - 19 (elapsed years minus 5)
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Divisor - 228 (19 computation years x 12)

*Age 62 computation transitional provision (see RCM 8.11.2).

The earnings record and computations are shown in Exhibit 7, example 2.

NOTE: Before the amendments both 1972 and 1973 are base years. Consequently, 

both can be used as computation years permitting the use of the SS earnings in those 

years. 

Under the amendments, only 1972 is a base year. However, since the compensation 

earned up to the ABD is less than other years, it is not used as a computation year. SS 

earnings in and after the ABD year are disregarded.

The computations are:

Amended Method Pre-Amend Method

Dividend - $101380 $113780

Divisor - 228 228

AMW - 444 499

3-1974 PIA - 266.40 288.60

PIA #11 is used in the computation of the Retirement 110% Grandfather O/M benefit of 

the 1974 Railroad Retirement Act. This PIA is computed under the 1937 RR Act rules in 

effect in 12-1974 for the O/M PIA based on the 6-1974 PIA Table. For years after 1971, 

only SS earnings through the year before the ABD year and compensation up to the 

ABD are used. PIA #11 is not subject to recomputation. SS earnings and compensation 

for 1974 or later year are subject to the 1974 earnings maximum.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #11, "Old Start" AMW 

PIA #11 or SPC MIN PIA #11) are computed.

This PIA is not affected by the elimination of the minimum social security benefit. For 

the O/M PIA and PIA #11, the lowest AMW is $76.00 and the lowest PIB is $16.20 with 

a corresponding PIA of $93.80.

An age reduction is applied to this PIA as explained in RCM 8.3.85 - 8.3.91. Delayed 

retirement credits are added as explained in RCM 8.3.95 - RCM 8.3.102. 
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8.11.114 Computation of PIA #15

PIA #15 is used only in conversion cases in the computation of the retirement annuity 

tier II and it is also used as PIA #17 for the tier I work deduction component. PIA 15 is 

computed similar to the 6-1974 Pass-thru PIA, but is based on railroad compensation 

only through 12-31-74. If there is no compensation after 1936, no PIA #15 is computed.

The following deeming provisions are applied to the computation of PIA #15:

A. Male 2(a)3 Annuitant under 1937 RR Act with ABD Before July 1, 1974

A 2(a)3 annuitant age 60-61 in 1974 is deemed to be age 62 in 1974. He is then 

subject to the SS Act transitional provision for setting the retirement age for 

males who attain 62 in 1974 (see RCM 8.11.2). Male 2(a)3 annuitants who 

attained age 62 in 1973 are also subject to the SS Act transitional provision. The 

new start EY (Elapsed years), BCY (Benefit Computation years), and DM (divisor 

months) for computing the AMW for the PIA #15 in these cases are as follows:

EY BCY DM

__ ___ __

1951-1974 19 228

If the 2(a)3 annuitant attained age 62 before 1973, the deeming provision is not 

applicable. Beginning 7-1974, an employee who has less than 30 years of 

service can qualify for a reduced annuity only if s(he) has attained age 62.

B. 2(a)2 Annuitant (with 7-1974 or later, if male,) Under 1937 RR Act - A 2(a)(2) 

60/30 annuitant age 60-64 in 1974 is deemed to be age 65 in 1974. The new 

start Elapsed Years (EY), Benefit Computation Years (BCY), and the divisor 

months (DM) for PIA #15 for 60/30 annuitants deemed to be age 65 in 1974 are 

as follows:

1. 60/30 Male Annuitants - (Based on SS Act Transitional Provision).

EY BCY DM

__ ___ __

1951-1973 18 216
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2. 60/30 Female Annuitants

EY BCY DM

__ ___ __

1951-1970 15 180

If the 2(a)2 annuitant is age 65 or over in 1974 this deeming provision is 

not applicable.

C. 2(a)4 or 2(a)5 Annuitant Under 1937 RRA - An RRA disability annuitant is 

deemed to have a DF beginning on his (her) ABD unless an actual DF is earlier, 

in which case the actual DF is used. This provision applies even if the actual DF 

terminates after the ABD.

NOTE: If an actual DF terminated prior to the ABD, the ABD is the deemed DF 

onset date.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #15, "Old Start" 

AMW PIA #15 or SPC MIN PIA #15) are computed. The AMW dividend is based 

on compensation only through 12-31-74. The AMW divisor is based on the earlier 

of an actual or deemed DF and the actual or deemed retirement age.

Since PIA #15 only applies in conversion cases, it is not affected by the 

elimination of the minimum social security benefit.

PIA #15 was computed for all conversion cases. However, the employee must be 

vested under the RR Act (see RCM 1.1 for age and service cases or RCM 1.2 for 

disability cases) for the PIA #15 to be used in the computation of the employee's 

tier II. The employee does not have to be vested for the computation of PIA #15 

to determine the work deduction components.

8.11.115 Computation of PIA #21

If the beneficiary met all windfall eligibility requirements before 8-13-81, PIA #21 is used 

in the computation of the employee, spouse or widow(er) windfall benefit and for the 

windfall reduction in Tier II of a spouse annuity. It is based on the wage record of 

someone other than the RR employee. This PIA is computed under SSA rules in effect 

in 12-1974 using the 6-1974 PIA Table except:
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• The annuitant must be vested (see RCM 1.1 for employee age and service cases, 

RCM 1.2 for employee disability cases, RCM 1.3 for spouse annuity cases, or RCM 

2.1 for widow(er)'s annuity cases); and,

• The AMW dividend uses only wages and SEI through 1974 or, if earlier, through the 

vesting year. (The spouse or widow(er) may have railroad service on their own wage 

record totaling less than 120 service months, including military service. The 

employee may be entitled to a widow's benefit at SSA on a wage record that 

includes RR compensation but for which a WIA is not payable due to less than 120 

railroad service months, including military service, or due to lack of an RR current 

connection. The RR compensation in these cases is used as wages). The AMW 

divisor is based on the earlier of the wage earner's disability onset, death or 

attainment of SS Act retirement age; and,

• An age reduction is not applied to the PIA amount; and,

• Delayed retirement credits are not added to the PIA amount.

Only the SS Act PIA's in effect in 12-1974 ("New Start" AMW PIA #21, "Old Start" AMW 

PIA #21 or SPC MIN PIA #21) are computed. Only regular PIA #21 is used in 

determining the SP tier II WF reduction. However, SPC MIN PIA #21 can be used in 

determining WF amounts.

NOTE: A date of death will not affect the computation of PIA #21 if it is in a year:

• After the onset of a current DF; or,

• After the year in which the wage earner attained SS Act retirement age.

This PIA is not affected by the elimination of the minimum social security benefit. For 

PIA #21, the lowest AMW is $76.00 and the lowest PIB is $16.20 with a corresponding 

PIA of $93.80.

AUX spouse and AUX widow paper G-90s produced prior to October, 1996 display the 

PIA #21 calculation if SEARCH determines that the widow is vested. If a PIA #21 

calculation is needed, a G-563 request to CCU should be made, with anything pertinent 

to the vesting determination attached. CCU will determine if the spouse/widow meets 

the vesting requirements, and if so, calculate a PIA #21.

8.11.116 Computation of the 6-1974 Pass-Thru PIA

The 6-1974 Pass-thru PIA is computed in conversion cases only. This PIA established 

under the 1973 RR Act amendments was originally computed to determine the dollar 

amount of the 3-1974 and 6-1974 cost-of-living increase (pass-thru increase) that would 
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have been payable under the Social Security Act if SSA had jurisdiction of the case. It is 

also used to establish the gross Tier I amount in 1974 RRA conversion cases.

The pass-thru PIA is based on combined wages, compensation and SEI through the 

last computation base year (see RCM 8.11.12).

A. 1937 RRA Deeming Provisions - Special deeming provisions were enacted 

because some employees who were entitled to annuities under the RRA formula 

would have insufficient quarters of coverage or would not be eligible for a PIA 

computation under the Social Security Act.

1. Employee Not Insured or Transitionally Insured Under SS Act - If a PIA 

could not be computed under SSA rules due to insufficient earnings after 

1936, the AMC (rounded to next lower dollar) in annuity cases or AME 

(rounded to next lower dollar) in pension cases is treated as an AMW for 

purposes of determining the PIA.

If the pensioner's AME is unknown, the AMW for the pass-thru PIA is 

imputed based on the table in Exhibit 8, chart 1.

NOTE: The tier I amount computed for persons converted from the 1937 

Act to the 1974 Act is not affected by the elimination of the minimum social 

security benefit.

In cases where the employee or pensioner is transitionally insured under 

the SS Act, there is no AMW computation. However, instead of deeming 

the AMC or AME to be the AMW, the special age 72 SS Act benefit is 

considered as the PIA for the pass-thru increase. That special age 72 

benefit must be used even though a deemed AMW based on the AMC or 

AME always produces a higher PIA and a higher pass-thru increase.

2. Employee Ineligible Under SS Act - The deeming provisions explained 

below must be applied for the purpose of computing the AMW for the 

pass-thru PIA.

(a) Male 2(a)3 Annuitant under 1937 RR Act with ABD Before July 1, 

1974 - A 2(a)3 annuitant age 60-61 in 1974 is deemed to be age 62 

in 1974. He is then subject to the transitional provision for setting 

the retirement age for males who attain 62 in 1974 (see RCM 

8.11.2). The new start EY (Elapsed years), BCY (Benefit 

Computation years) and DM (divisor months) for computing the 

AMW for the pass-thru PIA are as follows:

EY BCY DM

__ ___ __
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1951-1974 19 228

If the 2(a)3 annuitant attained age 62 before 1973, the deeming 

provision is not applicable. Beginning 7-1974, an employee who 

has less than 30 years of service can qualify for a reduced annuity 

only if (s)he has attained age 62.

(b) 2(a)2 Annuitant (Female or Male with (ABD 7-1974 or later) under 

1937 RRA - A 2(a)(2) 60/30 annuitant age 60-64 in 1974 is deemed 

to be age 65 in 1974. The Pass-thru PIA is used for pass-thru 

increase, even though the employee annuitant has attained age 62 

and is eligible for or is receiving a reduced annuity under the O/M. 

This is so because the deeming provisions produce a higher PIA 

than the regular O/M PIA.

Exhibit 8, chart 2 compares the new start Elapsed Years (EY), 

Benefit Computation Years (BCY), and divisor months (DM) for the 

pass-thru and 1937 RR Act O/M PIA computations in conversion 

cases for 60/30 annuitants deemed to be age 65 in 1974.

If the 2(a)2 annuitant is age 65 or over in 1974 this deeming 

provision is not applicable.

(c) 2(a)4 or 2(a)5 Annuitant Under 1937 RRA - An RR Act disability 

annuitant is deemed to have a DF beginning on his (her) ABD 

unless an actual DF is earlier, in which case the actual DF is used. 

This provision applies even if the actual DF terminates after the 

ABD.

NOTE: If an actual DF terminated prior to the ABD, the ABD is the 

deemed DF onset date.

B. Recalculation and Recomputation of the Pass-thru PIA - For certain cases, the 

mechanically computed Pass-Thru PIA used for the 1974 pass-thru increase and 

the tier conversion was computed under special rules that are no longer in our 

current PIA system. For instance, "special" closing dates are used in computing 

any P.T.-PIA RECOMP's in conversion cases where the employee was under 

age 62 in the ABD year and/or the employee attained age 65 (either actual or 

deemed age 65) before 1960. As a result, current G-90s and G-90as may 

produce a P.T.-PIA that is inconsistent with the original, mechanically computed 

P.T.-PIA. Therefore, do not recalculate the mechanically computed P.T.-PIA 

used for the 1974 increases unless a legitimate recalculation of the P.T.-PIA is 

required due to an error of facts in the previous calculation (e.g., DOB changes).
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 109 of 128

Although the P.T.-PIA may not be recalculated, as explained above, it is subject 

to recomputation under SS Act rules when the employee actually attains SS Act 

retirement age in age and service cases or when a disabled employee is deemed 

age 65 or, if earlier, attains age 65 in cases where there is actually a DF. The 

employee's earnings in 1974 or a later year must increase the PIA. When the 

P.T.-PIA was initially computed it included wages only through 1971 or, if later, to 

the ABD year and compensation up to the ABD. However, if the 1974 or later 

wages produce an increased PIA, we can go back and include the 1972 and 

1973 wages. The increased PIA is effective in January of the year following the 

year in which the wages triggered the recomputation (e.g., if 1974 wages 

triggered the recomputation, P.T.-PIA is effective January, 1975). If an 

adjustment is required for a conversion case, use the P.T.-PIA of record unless 

the P.T.-PIA can be recomputed under the above rules.

If the recomputed P.T.-PIA is less than the original, do not pay the RECOMP 

P.T.-PIA. Assume that the case involves the special rules and continue to use 

the original PIA with appropriate COL updating. 

C. Updating the 6-1974 Pass-thru PIA - The 6-1974 Pass-thru PIA is updated for 

cost of living increases in the same way as an "AMW PIA" in force before 1-1979. 

The updated PIA's and effective dates are indicated in Appendix B "AMW PIA 

Conversion Chart."

D. Minimum Pass-thru PIA - The Tier I amount computed for persons converted 

from the 1937 Act to the 1974 Act is not affected by the elimination of the 

minimum social security benefit.

8.11.117 Computation of the SSEB PIA

The SSEB (Social Security Equivalent Benefit) PIA is used to calculate the SSEB 

portion of tier I for tax accounting purposes. It is computed in the same way as PIA 9; 

the computation is based on the employee's combined wages and compensation under 

the current SSA rules for life cases. The SSEB PIA should be recomputed whenever 

PIA 1 or PIA 9 are recomputed. There are no RRA deeming provisions.

8.11.118 Computation of 1974 RRA PIAS

See Exhibit 9 for PIA comparison chart.

8.11.120 PIAs Obtained from Microfilms or Folder Records

The 6-1974 pass-thru PIA and PIA 15 for retirement conversion cases may be found on 

the "Employee/Spouse Annuity Conversion To Tier System" or "The 1974 Act 

Conversion PIA" microfilms or on a folder record of amendment adjustment or annuity 

award (see RCM 6.9).
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 110 of 128

The SSEB PIA that was first effective 1-1-86 can be found on the "11-86 SSEB Mass 

Adjustment" microfilm for annuitants on the rolls prior to 11-86. Effective 12-88, the 

SSEB PIA will also appear on cost-of-living microfilm and microfilm for tier 1 mass 

adjustments.

8.11.121 Requests for Mechanical PIA Computation for Retirement 

Annuities

The RASI program will attempt to obtain the required PIA calculations from DP to 

compute the initial employee or spouse award. Refer to RCM 9.3 for processing of RASI 

referrals.

When necessary, a mechanical computation of current PIA data is requested by the 

examiner using Form G-60 according to RCM 9.1. 

A mechanical computation of current PIA data for PIA 1 - PIA 9, PIA 17. 

PIA 21 (in pre-1981 amendment cases), or the SSEB PIA will be returned from DP on 

Form(s) G-90. The G-90 information will be forwarded by DP to Research as explained 

in RCM 8.1.38. Refer to RCM 7.4 for an explanation of the information on Form(s) G-90.

PIA 10 and PIA 11 were indicated on Form G-90 through 1978. If these PIAs are 

required after 1-1979, request a manual computation of the PIA.

8.11.122 Request for Manual PIA Computations for Retirement 

Annuities

Item 6 of Form G-563 (8-81) is used to request manual PIA computations (see RCM 

Part 11, Form G-563 Instructions). A manual computation will be needed as follows:

(a) A manual computation of the affected PIA's, including the SSEB PIA (see RCM 

8.11.15), is needed in a case in which there is a closed period of disability or two 

separate periods of disability. Show the period(s) of disability in item 8 of Form 

G-563 and indicate which PIA's are to be manually computed in item 6; or

(b) A manual computation of PIA 1, PIA 5, PIA 6, PIA 7, PIA 8, PIA 9, 

PIA 10, PIA 11, PIA 15, PIA 17, or the SSEB PIA may be needed if the case 

involves Red Cap service (see RCM 5.3.112); or,

(c) A manual recomputation of PIA 1, PIA 9 or the SSEB PIA will be needed if the 

employee has sufficient earnings after the previous PIA 1, 

PIA 9, or SSEB PIA computation to qualify for a recomputation and those 

earnings are not yet in DP records. Include the post ABD earnings amount on the 

G-563 request; or,
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(d) A manual computation of PIA 9 and the Family Maximum Benefit (FMB) under 

the 1980 SS Act Disability Amendments may be needed if the employee is 

initially entitled to the DIB O/M on 7-1-80 or later and his disability onset date is 

after 1978 but before the year he attains age 62. Place an "X" in the applicable 

box in item 6 of the G-563.

Also enter the month and year of the DIB O/M entitlement date (O/M effective 

date plus waiting period) on the line next to "eff."

(e) A manual computation of PIA 9 only with dropout years under the 1980 SS Act 

Disability Amendments may be needed if the employee is initially entitled to the 

DIB O/M on 7-1-80 or later but his disability onset date is prior to 1979 and 

before the year he attains age 62. Place an "X" in the applicable box in item 6 of 

the G-563.

Also enter the month and year of the DIB O/M entitlement date (O/M effective 

date plus waiting period) on the line next to "eff."

(f) A manual recomputation of PIA 1 or 9 (and the FMB, if applicable) under the 

1980 SS Act Disability Amendments may be needed if it is determined that the 

child care dropout years provision is applicable (per RCM 8.11.17 and RCM 

4.7.120ff). See Form G-563 instructions for applicable entries.

(g) A manual computation of PIA 1, PIA 9, or the SSEB PIA under the pre-1980

amendment formula may be needed if the employee is entitled to a disability 

annuity with an ABD of 7-1-80 or later and he was previously entitled to a 

disability annuity or DF prior to 7-1-80. (G-90 computations in this type of case 

will be under the 1980 Amendments, and therefore, are not correct.) Place an 

"X" in the box before "Compute PIA's" and request PIA 9 and the SSEB PIA.

(h) A manual computation of PIA 9 and the SSEB PIA under the pre-1980 

amendment formula is needed if the employee's disability onset date is 1-1-80 

and the employee is initially entitled to the DIB O/M prior to 7-1-80. (The G-90 

computation of PIA 9 in this type of case will be under the 1980 amendments, 

and therefore, is not correct.) Place an "X" in the box before "Compute PIA's" 

and request PIA 9 and the SSEB PIA.

(i) A manual computation of PIA 1, PIA 9 or the SSEB PIA under the pre 1980 

amendment formula is needed if the employee is entitled to a non-covered 

service pension and does not qualify for an exemption. The manual computation 

of PIA 17 is also required if the employee is subject to work deductions.

A manual DP&A computation of PIA #21 for retirement cases is required if:

• A spouse is eligible for a windfall before 8-13-81 based on his or her own 

earnings record and his or her DF at SSA affects the computation of PIA #21 
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 112 of 128

(see RCM 8.11.15D). Place an "X" in the box before "Compute PIA #21" in 

item 6(a) of Form G-563 and include the DF onset date in item 6(b); or,

• An employee is eligible for a WF before 8-13-81 on the earnings record of a 

spouse or deceased spouse and a DF for the spouse at SSA or the date of 

death of the spouse and a DF for the spouse at SSA or the date of death of 

the spouse affects the computation of PIA #21 (as shown in RCM 8.11.15D

and 8.11.115). Place an "X" in the box before "Compute EE PIA #21" in item 

6(a) of Form G-563 and include the DF onset date or DOD in item 6(b); or,

• An employee is vested for a WF on the earnings record of a deceased 

spouse who had some but less than 120 months RR service (including 

creditable military service) or who had 120 or more months of railroad service 

but did not qualify for RR survivor benefits due to lack of current connection 

or, if date of filing or date of death is before 1-1-75, due to lack of insured 

status. Place an "X" before "Compute PIA #21." Also place an "X" in the box 

before "use RR Comp as wages." If applicable include the DOD in item 6(b); 

or,

• The message "SSA Indicates Wrong Account Number" is printed on a 

pre-1981 amendment spouse G-90. Request a manual computation of PIA 

#21. Place an "X" in the box before "Compute PIA #21" in item 6(a) of Form 

G-563 and include any corrected data in item 6(b).

(j) A manual computation of the 6-1974 pass thru PIA may be needed if the 1937 

Act rate must be computed in order to convert the annuity to the tier formula (i.e., 

employee annuity was in suspense during PT-PIA computations). Show the 

following message in item 8 on Form G-563:

"Please furnish PT-PIA effective prior to 1-1975. Include compensation through 

ABD and wages through 1971 only."

(k) A manual disability non-exclusion computation of PIA's #1 and/or #9 and/or the 

SSEB PIA is needed if the employee has substantial earnings within the deemed 

or actual period of disability (see RCM 8.11.15). Enter the following message in 

item 8 of the G-563:

"Please calculate a disability non-exclusion computation for PIA #1, #9 and/or 

SSEB PIA."

(l) A manual recomputation of PIA's #1, #9 and/or the SSEB PIA based on earnings 

which have not yet been posted to SSA's earnings record file is needed if the 

unposted earnings are sufficient to cause a recomputation and either the 

employee has requested the PIA recomputation or work deductions must be 

assessed for the year in which the recomputation is first effective (see RCM 

8.11.130 - 134). Attach proof of the earnings to the G-563 and enter the following 

message in item 8 of the G-563:
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 113 of 128

"Attached is proof of unposted earnings for (year). Please recompute PIA (1, 9 

and/or SSEB PIA) effective (date) based on earnings of ($0.00) in (year)."

(m) A manual computation of PIA #1 or PIA #9 or SSEB PIA will be needed if the 

employee is in receipt of a "non-covered service pension" and does not qualify 

for one of the exemptions covered in RCM 1.1.15 - 1.1.18. 

NOTE: The special minimum PIA, if higher, should be used to compute the 

benefits. The special minimum is not reduced for a "non-covered service 

pension."

Attach the latest G-90 for the case to the G-563 and forward these forms to the 

Bureau of Compensation and Certification.

The manual PIA computation(s) will be returned by on Form G-90a. This form 

must be signed by the BCC claims examiner who computed the PIAs.

Form G-59R is required to enter manual PIA data into the Research record. (See 

RCM 9.4, Form G-59R instructions.)

8.11.123 Request for Mechanical PIA Computations at First Notice of 

Death

The development clerks release Form G-73a to DP&A at first notice of death to request 

a mechanical computation of PIA #1, PIA #8 and PIA #9. Information available in the 

claim folder indicating a disability freeze, creditable military service and lag earnings are 

included on the G-73a at this time.

A mechanical computation of the current PIA data for PIA #1, PIA #3, PIA #9 and PIA 

#21 (in pre-1981 amendment cases) will be returned by DP&A on Form(s) G-90. Refer 

to RCM 7.4 for an explanation of the information on Form G-90. Additional manual PIA 

computations based on information on the G-73a will be returned by DP&A on Form 

G-90a. The G-90a must be signed by the DP&A claims examiner who computed the 

PIA's.

8.11.124 Requests for Manual Computations of PIA #1, PIA #8 or PIA 

#9 in Survivor Cases

If the following information is received which was not included on the G-73a initial PIA 

computation request, the wage record is returned to DP&A by the examiner for a 

manual PIA computation.

(a) A manual computation of PIA #1, PIA #8 or PIA #9 is needed in a case in which a 

period of disability is established after the death of the employee (see RCM 

8.1.84) or in which an established DF period(s) was not included on the G-73a 

for the initial PIA computation(s) request. Show the period(s) of disability in item 

14 of Form G-73a; or,
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 114 of 128

(b) A manual DP&A computation is required if creditable M/S can be included in the 

PIA computation (see RCM 5.4). Show the date(s) of the creditable M/S in item 

10 of Form G-73a; or,

(c) A manual DP&A computation is required if the lag earnings in the year of death 

could increase PIA #1 effective in the month of death or could be used to 

recompute PIA #9 effective January 1 of the following year for the Employee's 

RIB Limitation amount.

(d) A manual computation of PIA #1, PIA #8 or PIA #9 is needed in a case in which

there is a closed period of disability or two separate periods of disability. This is 

because the mechanical G-90 program will not pick up a disability freeze ending 

date from Form G-73a.

Attach the latest G-90 for the applicable PIA on the deceased employee's wage 

record to the G-73a and forward these forms to the Bureau of Data Processing 

and Accounts.

The manual PIA computation(s) will be returned by DP&A on Form G-90a. This 

form must be signed by the DP&A claims examiner who computes the PIA's.

8.11.125 Requests for Manual PIA #3 or PIA #21 Computations in 

Survivor Cases

Form G-563 is used to request a DP&A computation will be needed in the following 

situations:

• Creditable M/S can be considered to be wages and excluded from the AIME PIA #3 

computation (see RCM 5.4); or,

• Compensation only after the previous PIA #3 computation could result in a 

recomputation of PIA #3 (see 8.11.105); or,

• A widow(er) is eligible for a windfall before 8-13-81 based on his or her own earnings 

record and his or her disability freeze at SSA affects the previous computation of PIA 

#21 as shown in RCM 8.11.15D; or,

• A widow(er) is eligible for a windfall before 8-13-81 based on his or her own wage 

record and this wage record includes some but less than 120 months railroad 

service (including creditable military service) show: "RR compensation on (General 

file number or Claim Number) insufficient for RR annuity. Use compensation as 

wages to compute PIA #21."

• A widow is entitled under the 1981 Amendments and a tier II restored amount is 

payable. The mechanical G-90 program will not provide PIA #21 for 1981 

Amendment cases.
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 115 of 128

• The child care dropout years provision applied to the employee disability annuity (as 

determined according to RCM 4.7.120ff and 8.11.17) and the RLS is payable. 

Request a recomputation of PIA #3 as explained in Form G-563 instructions.

• The employee's PIA #1 was computed under the disability non-exclusion 

computation provision and PIA #3 will be used to determine the employee's Tier I 

deductible amount from the residual. Request a disability non-exclusion computation 

by entering the following message in item 8 of the G-563: "Please calculate a 

disability non-exclusion computation for PIA #3."

Attach the latest G-90 with the PIA #3 or PIA #21 computation to the G-563 and forward 

these forms to the Bureau of Data Processing and Accounts.

The manual PIA computation will be returned by DP&A on Form G-90a. This form must 

be signed by the DP&A claims examiner who computed the PIA.

8.11.130 Requests For Manual PIA Recomputations

In most cases, SS earnings are posted to SSA's earnings record file 12 or more months 

after the end of the year in which they are earned. Recomputations of PIA 1, PIA 9, and 

the SSEB PIA which are due as a result of an employee's SS earnings are usually 

computed only after SSA has posted those earnings. However, employees who request 

an immediate recomputation and certain employees subject to work deductions may 

receive a recomputation prior to SSA's posting of earnings if the employee provides 

acceptable proof of those earnings.

8.11.131 Proof of Unposted SS Earnings

The type of evidence which is acceptable as proof of unposted SS earnings depends 

upon whether the earnings are wages or self-employment income (SEI).

A. Wages - Form W-2 is considered proof of unposted wages if the Form W-2 

meets certain requirements.

Form W-2 is a multiple copy form and only certain copies of the form are 

acceptable to establish proof of unposted wages. Copy C of Form W-2 (the 

employee's copy), Copy D (the employer's copy), or a photocopy of Copy C or D 

are acceptable copies.

Do not accept Copy A (SSA's copy), Copy B (the copy filed with the employee's 

Federal income tax return), or Copy 2 (the copy filed with the employee's state or 

local income tax return) as proof of unposted wages. Possession of Copy A, 

Copy B, or Copy 2 by the employee casts doubt upon the authenticity of the 

claimed wages. In addition, do not accept a Form W-2 with a checkmark in the 

"correction" block or a correctional Form W-2C.
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In order to establish proof of unposted wages, the Form W-2 must show the 

employee's name and SSA number, the employer's name, the Federal Insurance 

Contribution Act (FICA) taxes withheld, and the total wages paid for income tax 

purposes ("Wages, Tips, and Other Compensation") and for FICA purposes 

("Total FICA Wages"). In addition, the Form W-2 must also show two Employer 

Identification Numbers (EIN). The first EIN is assigned to the employer by the 

Internal Revenue Service (IRS) and is composed of nine digits. The second EIN 

is assigned by SSA and always begins with the digits "69."

If an unacceptable copy of Form W-2 is submitted or if any of the necessary 

information is missing from Form W-2, but a plausible explanation for the 

deficiency exists, refer the case to M&P-A for a determination regarding the 

acceptability of the proof.

B. SEI - Form W-2 is usually not completed for self-employed individuals. SEI is 

reported to the IRS on the following forms, which are filed as part of the income 

tax return:

(1) Schedule C - A self-employed individual, other than a farmer, reports his 

business income and expenses to the IRS on Schedule C (Profit (or Loss) 

from Business or Profession).

(2) Schedule F - A self-employed farmer reports his business income and 

expenses on Schedule F (Schedule of Farm Income and Expenses).

(3) Form 1065 - Partners who are considered self-employed are credited with 

their distributive share or ordinary income whether or not actually 

distributed. Such amounts are reported on Form 1065 (the partnership's 

informational return).

(4) Schedule SE - All self-employed individuals (including farmers and those 

individuals who are part of a partnership) compute their SEI on Schedule 

SE (Computation of Social Security Self-Employment Tax).

To establish proof of unposted SEI, the employee must furnish a copy of Form 

1040, a copy of Schedule SE, and a copy of either Schedule C, Schedule F, or 

Form 1065. In addition, the employee must also submit a signed statement that 

the tax return is a true and exact copy of the tax return filed with the IRS.

Once the proof of SEI has been obtained all SEI cases must be referred to 

M&P-A for a determination regarding the acceptability of the proof.

8.11.132 Requirements for Developing Lag SS Earnings

Initiate development action to obtain proof of unposted earnings if:

(1) A PIA recomputation is due based on the unposted earnings (i.e., the unposted 

earnings are higher than the earnings from a previous benefit computation year). 
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In cases where an employee has no earnings in one of his benefit computation 

years, any earnings will be sufficient to cause a recomputation;

AND

(2) The unposted earnings were earned in SSA's lag period, which usually includes 

the current year and the two previous years;

AND

(3) Either:

a. The employee has submitted a written request for a PIA recomputation. 

This request should not be solicited from the employee. However, if an 

employee submits a recomputation request on his own initiative, we will 

act on that request. Consider statements such as "Include these earnings 

in my annuity computation" and "Increase my annuity for these earnings" 

as a request for a PIA recomputation;

OR

b. Permanent work deductions must be assessed (or reassessed) for the 

year in which the PIA recomputation based on the unposted earnings is 

first effective. For example, if permanent work deductions are being 

assessed for 1982, and 1981 unposted earnings are sufficient to cause a 

recomputation effective 1-1-82, take action to develop proof of 1981 

earnings.

8.11.133 Field Development

If the employee meets the development requirements in Section 8.11.132, release a 

memorandum to the district office requesting them to develop proof of earnings. In the 

memorandum, explain why the proof is needed (i.e., the employee has requested a 

recomputation or the employee has work deductions) and specify which type of proof is 

required (either Form W-2 or the appropriate forms from the employee's tax return along 

with the employee's signed statement). In addition, if the PIA recomputation is being 

developed because the employee requested it, also request the district office to inform 

the employee that no action will be taken regarding his recomputation request until 

proof of earnings is submitted.

If multiple recomputations are due based on unposted earnings, request proof of each 

year's earnings which trigger a recomputation after the last year for which SSA has 

posted earnings. In order to recompute a PIA based on unposted earnings, proof must 

be obtained of all unposted earnings which should be included in the recomputation of 

the PIA. For example, if an employee has requested a PIA recomputation, and his 1981 

and 1982 unposted earnings are high enough to cause a recomputation effective 1-1-82 
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and 1-1-83, proof of the 1981 and 1982 earnings must be obtained to compute the 1-1-

83 recomputation.

If the district office obtains proof of wages, request a manual PIA recomputation per the 

instructions in Section 8.11.134. If the district office obtains proof of SEI, refer the case 

to M&P-A for a determination regarding the acceptability of the proof.

If the district office cannot obtain proof of the earnings, no further development action 

regarding the recomputation should be made at that point. A mechanical AERO 

recomputation will eventually be made once SSA has posted the earnings.

8.11.134 Obtaining the Recomputed PIA

Manual PIA recomputations based on unposted earnings should only be requested if 

the requirements in Section 8.11.132 have been met and the employee has submitted 

proof of the unposted earnings.

To request a PIA recomputation based on unposted earnings, attach the proof of the 

earnings and the latest G-90 to Form G-563 and send to BCC. In item 8 of the G-563 

enter the following message: "Attached is proof of unposted earnings for (year). Please 

recompute PIA (1, 9, and/or SSEB PIA) effective (date) based on earnings of ($0.00) in 

(year)."

BCC has been instructed not to provide a recomputed PIA based on unposted earnings 

unless proof of the unposted earnings is attached to the Form G-563.

After BCC recomputes the PIA's, adjust the case accordingly.

Appendices

Appendix A - PIB/PIA conversion chart 1958-1978 (paper)

Appendix B - AMW PIA conversion chart (SSA Web Site)

Appendix C - Special Minimum PIA Conversion Chart

No. Yrs. 

Creditable 

Coverage

Dec. 1992 

SPC MIN 

PIA 3% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1992 

SPC MIN 

PIA3% Inc.

Family 

Maximum

11 24.50 36.90 21 270.90 406.60
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12 48.90 73.80 22 295.40 443.40

13 73.70 111.00 23 320.20 480.90

14 98.30 147.70 24 344.80 517.70

15 122.90 184.40 25 369.30 554.30

16 147.60 221.80 26 394.20 591.90

17 172.20 258.70 27 418.90 628.70

18 196.90 295.60 28 443.30 665.40

19 221.50 332.60 29 467.90 702.60

20 246.00 369.30 30 492.50 739.30

Special Minimum PIA Conversion Chart

No. Yrs. 

Creditable 

Coverage

Dec. 1993 

SPC MIN 

PIA 2.6% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1993 

SPC MIN 

PIA 2.6 Inc.

Family 

Maximum

11 25.10 37.80 21 277.90 417.10

12 50.10 75.70 22 303.00 454.90

13 75.60 113.80 23 328.50 493.40

14 100.80 151.50 24 353.70 531.10

15 126.00 189.10 25 378.90 568.70

16 151.40 227.50 26 404.40 607.20

17 176.60 265.40 27 420.70 645.00

18 202.00 303.20 28 454.80 682.70

19 227.20 341.20 29 480.90 720.80

20 253.30 378.90 30 505.30 758.50
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 120 of 128

Special Minimum PIA Conversion Chart

No. Yrs. 

Creditable 

Coverage

Dec. 1994 

SPC MIN 

PIA 2.8% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1994 

SPC MIN 

PIA2.8% 

Inc.

Family 

Maximum

11 25.80 38.80 21 285.60 417.10

12 51.50 77.80 22 311.40 454.90

13 77.70 116.90 23 337.60 493.40

14 103.60 155.70 24 363.60 531.10

15 129.50 194.30 25 389.50 568.70

16 155.60 233.80 26 415.70 607.20

17 181.50 272.80 27 441.70 645.00

18 207.60 311.60 28 467.50 682.70

19 233.50 350.70 29 493.40 720.80

20 259.30 389.50 30 519.40 758.50 

Special Minimum PIA Conversion Chart

No. Yrs. 

Creditable 

Coverage

Dec. 1995 

SPC MIN 

PIA2.6% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1995 

SPC MIN 

PIA2.6% 

Inc.

Family 

Maximum

11 26.40 39.80 21 293.00 439.80

12 52.50 79.80 22 319.40 479.70

13 79.70 119.90 23 346.30 520.30
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14 106.20 159.70 24 373.00 560.00

15 132.80 199.30 25 399.60 599.70

16 159.60 239.80 26 426.50 640.40

17 186.20 279.80 27 453.10 680.20

18 212.90 319.70 28 479.60 720.00

19 239.50 359.80 29 506.20 760.10

20 266.00 399.60 30 532.90 799.90

Special Minimum PIA Conversion Chart

No. Yrs. 

Creditable 

Coverage

Dec. 1996 

SPC MIN 

PIA2.9% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1996 

SPC MIN 

PIA 2.9% 

Inc.

Family 

Maximum

11 27.10 40.90 21 301.50 452.50

12 54.30 82.10 22 328.60 493.60

13 82.00 123.30 23 356.30 535.30

14 109.20 164.30 24 383.80 576.20

15 136.60 205.00 25 411.10 599.70

16 164.20 246.70 26 438.80 617.00

17 191.60 287.90 27 466.20 699.90

18 219.00 328.90 28 493.50 740.80

19 246.40 370.20 29 520.80 782.10

20 273.70 411.10 30 548.30 823.10

Special Minimum PIA Conversion Chart
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 122 of 128

No. Yrs. 

Creditable 

Coverage

Dec. 1997 

SPC MIN 

PIA 2.1% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1997 

SPC MIN 

PIA 2.1% 

Inc.

Family 

Maximum

11 27.60 41.70 21 307.80 462.00

12 55.40 83.80 22 335.50 503.90

13 83.70 125.80 23 363.70 546.50

14 111.40 167.70 24 391.80 588.30

15 139.40 209.30 25 419.70 629.90

16 167.60 251.80 26 448.00 672.70

17 195.60 293.90 27 475.90 714.50

18 223.50 335.80 28 503.80 756.30

19 251.50 377.90 29 531.70 798.50

20 279.40 417.70 30 559.80 840.30

Special Minimum PIA Conversion Chart

No. Yrs. 

Creditable 

Coverage

Dec. 1998 

SPC MIN 

PIA 1.3% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1998 

SPC MIN 

PIA 1.3% 

Inc.

Family 

Maximum

11 27.90 42.20 21 311.70 468.00

12 56.10 84.80 22 339.80 510.40

13 84.70 127.40 23 368.40 553.60

14 112.80 169.80 24 396.80 595.90

15 141.20 212.00 25 425.10 638.00
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16 169.60 255.00 26 453.80 681.40

17 198.00 297.70 27 482.00 723.70

18 226.40 340.10 28 510.30 766.10

19 254.70 382.70 29 538.60 808.80

20 283.00 425.10 30 567.00 851.10

Special Minimum PIA Conversion Chart

No. Yrs. 

Creditable 

Coverage

Dec. 1999 

SPC MIN 

PIA 2.4% 

Increase

Family 

Maximum

No. Yrs. 

Creditable 

Coverage

Dec. 1999 

SPC MIN 

PIA 2.4% 

Inc.

Family 

Maximum

11 28.50 43.20 21 319.40 479.70

12 57.50 86.90 22 348.20 523.10

13 86.80 130.50 23 377.60 567.40

14 115.60 174.00 24 406.70 610.70

15 144.70 217.30 25 435.70 653.90

16 173.80 261.30 26 465.10 698.40

17 202.90 305.10 27 494.00 741.70

18 232.00 348.60 28 523.00 785.20

19 261.00 392.20 29 552.00 829.00

20 290.00 435.70 30 581.10 872.30

Special Minimum PIA Table

Effective for December 2000
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Number of 

Years of 

Coverage PIA

Maximum 

Family 

Benefit

Number 

Years of 

Coverage PIA

Maximum 

Family 

Benefit

11 $ 29.40 44.70 21 330.50 496.40

12 59.50 89.90 22 360.30 541.40

13 89.80 135.00 23 390.80 587.20

14 119.60 180.00 24 420.90 632.00

15 149.70 224.90 25 450.90 676.70

16 179.80 270.40 26 481.30 722.80

17 210.00 315.70 27 511.20 767.60

18 240.10 360.80 28 541.30 812.60

19 270.10 405.90 29 571.30 858.00

20 300.10 450.90 30 601.40 902.80

Special Minimum PIA Table

Effective for December 2001

Number of 

Years of 

Coverage PIA

Maximum 

Family 

Benefit

Number 

Years of 

Coverage PIA

Maximum 

Family 

Benefit

11 $ 30.10 45.80 21 339.00 509.30

12 61.00 92.20 22 369.60 555.40

13 92.10 138.50 23 400.90 602.40

14 122.70 184.60 24 431.80 648.40

15 153.50 230.70 25 462.60 694.20

16 184.40 277.40 26 493.80 741.50
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17 215.40 323.90 27 524.40 787.50

18 246.30 370.10 28 555.30 833.70

19 277.10 416.40 29 586.10 880.30

20 307.90 462.60 30 617.00 926.20

NOTE

Tables preceding 1992 and tables following December 2001 can be found on 

http://www.ssa.gov/OACT/ProgData/tableForm.html.

Appendix D - Trans & 77 O/S - Bnchmk 1979 (paper)

Appendix E - Trans & 77 O/S - Bnchmk 1980 (paper)

Appendix F - Dis Maximums for Bnchmk 1980 (paper)

Appendix G - Trans & 77 O/S - Bnchmk 1981 (paper)

Appendix H - Trans & 77 O/S - Bnchmk 1982 (paper)

Appendix I - PIA Max Fam Benefits at 6/78 (paper)

Appendix J - Trans & 77 O/S - Bnchmk 1983 (paper)

Appendix K - 77 O/S PIA - Bnchmk 1984 (paper)

Appendix L - 77 O/S PIA - Bnchmk 1984 (paper)
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Appendix_M – Determining Years of Coverage for the Non Covered Service 

Pension

This appendix should be used to compute the years of coverage when determining the 

PIA reduction for a non-covered service pension (NCSP) offset. The years of coverage 

are the base years since 1937 in which the wage earner is credited with the amount of 

earnings indicated in this section. 

All raw compensation and wages on the earnings record, including SEI, military service 

(MS) wages and deemed M/S credits, from 1937 to present are used to determine the 

total number of YOCs for NCSP offset purposes.

Note: Deemed M/S credits, while applicable from 1957-2001, began appearing 

in the wages totals on EDM beginning with 1968 forward. Therefore, when 

determining years of coverage, be sure to manually add in $300 per quarter of 

coverage for those employees having M/S in the 1957-1967 period.

Example: The employee had M/S from 8/1/60 through 7/16/1963 with the 

following wages posted: 

Year Wages QC Pattern Deemed 

MS

Wage 

totals

YOC 

earned

1960 $540.29 NNCC $600.00 $1140.29 No

1961 $1134.26 CCCC $1200.00 $2334.26 Yes

1962 $1315.59 CCCC $1200.00 $2515.59 Yes

1963 $696.47 CCCN $900.00 $1596.47 Yes

The deemed MS credits provide for 1961 and 1963 to be years where a YOC is 

earned, which wouldn’t otherwise have earnings totals high enough ($1200.00 

needed to earn a YOC for 1959-1965) to earn a YOC. 

A. For 1937-1950 Period - Divide the total earnings (wages and compensation) 

credited to the individual in the 1937-1950 period by $900 (disregarding any 

fraction). The result (up to a maximum of 14 years) is the number of years of 

coverage in the 1937-1950 period (wages and compensation of $12,600 or more 

will give 14 years of coverage).

The chart below displays the number of coverage years that can be creditable for 

years between 1937-1950. 

YEARS OF COVERAGE CHART
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EARNINGS BETWEEN

1937-1950

COVERAGE YEARS

900.00 - 1,799.99 1

1,800.00 - 2,699.99 2

2,700.00 - 3,599.99 3

3,600.00 - 4,499.99 4

4,500.00 - 5,399.99 5

5,400.00 - 6,299.99 6

6,300.00 - 7,199.99 7

7,200.00 - 8,099.99 8

8,100.00 - 8,999.99 9

9,000.00 - 9,899.99 10

9,900.00 - 10,799.99 11

10,800.00 - 11,699.99 12

11,700.00 - 12,599.99 13

12,600.00 - and over 14

B. For Years After 1950 – Click here for a chart of the years and amounts 

necessary to establish a year of coverage.

An RRB misinterpretation of Social Security procedure caused an incorrect NCSP offset 

calculation for some cases where the employee had earnings for years 1991 through 

2002. The CCU program which makes these calculations was corrected in November, 

2002. We are applying administrative finality prospectively to those rates incorrectly 

paid based on our misinterpretation. But a rate correction should only be made if the 

annuity is being adjusted for a reason other than the rate correction. (Use code 

paragraph 435.5 for these rate corrections.) Examiners, who need to recalculate the 

NCSP-reduced PIA for periods prior to the month of the rate correction, should denote 

on their G-563 request that they need “old rule” NCSP calculations and for what period. 
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RCM_8.11 PIA Determinations Revised December 15, 2021 Page 128 of 128

Example: The employee’s NCSP PIA reduced annuity rate was corrected on an April 1, 

2003 voucher. In August 2003, it was discovered that the employee had earnings in

2002, which would result in a PIA recomputation effective January 1, 2003. The 

employee’s NCSP-reduced PIA should be recomputed for the period January 2003 

through March 2003 using the “old rule” NCSP PIA calculation. The “new rule”

NCSP-reduced PIA calculation should be used to recompute the annuity effective April 

1, 2003 with the 2002 earnings.