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315.1 Supplemental Annuity Background

315.1.1 General

In 1966 the Railroad Retirement Board (RRB) began paying supplemental annuities, in 

addition to regular age and service annuities, to railroad employees who met certain 

criteria. At that time, eligibility for the supplemental annuity was limited to those 

employees who were age 65 or older with 25 or more years of railroad service and who 

were first awarded regular retirement annuities after June 30, 1966.

The Railroad Retirement Act of 1974 (RRA) extended supplemental annuity eligibility to 

those employees who were age 60 or older with 30 or more years of service and who 

were first awarded regular age and service annuities after June 30, 1974.

The 1981 Amendments to the RRA began phasing out the supplemental annuity by 

adding the requirement that the employee must have at least one month of creditable 

railroad service before October 1, 1981 to be eligible for the supplemental annuity. 

Therefore, a supplemental annuity is not payable to an employee who does not have at 

least one month of service before October 1, 1981, even if they meet all other age and 

service requirements.

315.1.2 Earliest Supplemental Annuity Eligibility Dates Under 1937 and 1974 Acts

A. Earliest Eligibility Dates

The date an age and service annuity or disability annuity is awarded is the voucher date

of the award, i.e., the date the award is processed for payment.

Beginning in 1966, the employee’s age and service annuity had to be vouchered after 

June 1966 for them to be eligible for a supplemental annuity at age 65 with at least 25 

years of service.

Beginning in 1974, the employee’s age and service annuity had to be vouchered after 

June 1974 for them to be eligible for a supplemental annuity at age 60 with 30 years of 

service. In addition, the supplemental annuity could not begin to accrue before January 

1, 1975.

B. Partial Award Before Earliest Eligibility Date

An annuity is considered first awarded as of the date of the partial award. If the 

employee annuity was partially awarded before July 1, 1966, the annuitant did not 

qualify for a supplemental annuity.

If the employee annuity of an individual age 60-64 was partially awarded before July 1, 

1974, the annuitant did not qualify for a supplemental annuity until he attained age 65.
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C. Application Withdrawn Before Earliest Eligibility Date

An individual who withdrew an employee annuity application for an annuity awarded 

before July 1, 1966, then re-applied for the age and service annuity after June 1966, did 

not qualify for a supplemental annuity. 

An annuitant age 60-64 who withdrew an employee annuity application for an annuity 

awarded after July 1, 1966, but before July 1, 1974, then re-applied for the employee 

annuity after June 1974, did not qualify for a supplemental annuity until he attained age 

65.

D. Exceptions

Individuals were deemed to meet "date annuity awarded" requirement for supplemental 

annuities if they were awarded disability annuities before July 1966, or before July 1974, 

and they met all of the following conditions:

1. They recovered from disability before July 1, 1966 or before July 1, 1974;

2. They returned to the service of an employer before July 1, 1966, or before July 1, 

1974, regardless of the duration of such service;

3. They were awarded a new annuity after June 1966, or after July 1974; and

4. They had a current connection with the railroad industry at the time their later 

annuity began to accrue, disregarding, for this purpose, earlier entitlement to an 

annuity. This means that when their later annuity began, their current connection 

must have been determined as though there was no previous annuity awarded 

and no previous determination made.

315.2 Current Supplemental Annuity Eligibility Requirements

Under section 2(b) of the RRA, an employee is eligible for a supplemental annuity if 

they have: 

1. At least one month of creditable railroad service before October 1, 1981; and

2. Relinquished all rights to return to the service of employers under the Railroad

Retirement Act (as explained in FOM1 330.52); and

3. A current connection (or deemed current connection with the railroad industry, as 

explained in FOM1 225) on the annuity beginning date; and

4. Is either:

(a) Age 65 or older with 25 or more years of creditable railroad service; or
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(b) Age 60 and older and under age 65 with 30 or more years of creditable RRA 

service. 

315.3 Supplemental Annuity Rate

315.3.1 Gross Supplemental Annuity Rate

APPENDIX_D

The gross supplemental annuity rate is based on the employee’s years of creditable 

railroad service. A summary of supplemental annuity rates is in Appendix D. 

A. Current 1974 Railroad Retirement Act Rate 

Under the 1974 RR Act, the minimum gross rate is $23 for 25 years of railroad service. 

An additional $4 is added for each full year of railroad service over 25 and up to 30. 

The maximum is $43 for 30 or more years of railroad service. 

B. Previous 1937 Railroad Retirement Act Rate 

Under the 1937 RR Act, the minimum gross rate was $45 at 25 years of service. An 

additional $5 was added for each full year of railroad service over 25 and up to 30. A 

fraction of $5 was added for each fractional year of railroad service. The maximum full 

rate was $70 for 30 or more years of railroad service. 

315.3.2 Use of Military Service in Calculating Supplemental Annuity Rate

A. Military Service Used as Railroad Service Months in Tier 2 

Military service that is creditable as railroad service months in the employee's Tier 2 can 

be used to provide eligibility for, or increase the amount of, the supplemental annuity. 

B. Military Service Not Used as Railroad Service Months in Tier 2

Military service that is not creditable as railroad service months in the employee’s Tier 2 

cannot be used to provide eligibility for, or increase the amount of, the supplemental 

annuity. Using military service both as wages for a Vested Dual Benefit (VDB) and 

compensation for eligibility, or to increase the supplemental annuity is prohibited. 

Exception: For months before 9-1983, the military service creditable as railroad service 

months could be used in the computation of the supplemental annuity, even if the Tier 2 

computed without military service as railroad service months was used because it was 

higher after the reduction for a military service pension. The military service pension 

reduction no longer applies 9-1983 or later. Any reduction for a military service pension 

was removed by a mass adjustment. Cases that were missed in the mass adjustment 

can be adjusted back to 9-1983 if the proof of military service was previously submitted.
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315.4 Reductions to Supplemental Annuity

315.4.1 Reduction for Private Pension from Railroad Employer

The supplemental annuity is reduced by the amount of any private pension the 

employee is receiving from their railroad employer which is attributable to the 

employer’s contributions. The definition of a private pension that will cause a reduction 

to the supplemental annuity is in FOM1 315.12. 

315.4.2 Last Pre-Retirement Non-railroad Work Deductions

Effective 12/1/88, an employee's supplemental annuity is payable if the employee has 

Last Pre-retirement Non-railroad Employment (LPE) after the ABD. However, the 

supplemental annuity must be reduced for monthly LPE earnings. The maximum 

reduction is 50% of the supplemental annuity before any legal process partition. 

Instructions for handling LPE work deductions are in FOM1 1121. 

315.4.3 Legal Process Reductions

If the employee is subject to a garnishment or child support order, the supplemental 

annuity is reduced by the amount indicated on the legal document.

315.5 Effect of Supplemental Annuity on Other Benefits

A. Regular Annuity Under the 1974 Act or RRSIA of 2002 - The 1974 RR Act rate is not 

reduced because of an annuitant's entitlement to a supplemental annuity. 

B. Regular Annuity That Was Paid Under the 1937 Act

• Monthly Before February 1968 - A regular annuity was generally paid at the pre1966 formula rate for any month the annuitant was also entitled to payment of a 

SUP ANN. In a few cases when the SUP ANN rate was less than the 7 percent 

regular annuity increase under the 1966 amendments, the regular annuity rate 

was increased to an amount which added to the SUP ANN equaled the 1966 

amendment rate.

• Beginning February 1968 - The table and minimum increases provided by the 

1968 amendments were reduced because of an annuitant's entitlement to 

payment of a SUP ANN.

• Beginning January 1970 - The 15 percent increase provided by the 1970 

amendments was not reduced because of an annuitant's entitlement to payment 

of a SUP ANN. However, in a few cases the regular annuity rate was increased 

under the L-70-207 Guaranty to an amount which added to the SUP ANN 

equaled the regular annuity rate that would have been payable if there was no 

SUP ANN entitlement. The L-70-207 Guaranty applied in cases where there was 

no SS entitlement when the table increase in the 1968 COMP was reduced by:
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♦ The SUP ANN rate; or

♦ 6.55 percent of the basic annuity rate and the difference between that amount 

and the SUP ANN was less than 15 percent of the 6.55 reduction amount. 

(This usually occurred when the SUP ANN was less than $30.)

C. Spouse Annuity - The RR Act does not provide a supplemental annuity for the 

spouse nor is the employee's supplemental annuity amount used to determine the 

amount of the spouse annuity.

D. Retirement O/M - The supplemental annuity does not affect the computation of the 

Retirement O/M.

E. RUIA Benefits - The supplemental annuity does not cause a reduction in 

unemployment or sickness benefits. A supplemental annuity is not "an annuity 

payment" or "other social insurance payment" within the meaning of the RUIA Act.

F. Survivor Benefits - The employee's supplemental annuity does not carry over to the 

survivor benefit. There is no supplemental annuity for the survivor.

G. Residual Lump Sum - The amount paid to an employee as a supplemental annuity is 

not deducted from the gross RLS.

315.6 Supplemental Annuity Beginning Date

315.6.1 Age 65 Annuitants

A retired employee's supplemental annuity based on 300-359 months of railroad service 

begins to accrue on the latest of the following dates:

1. The first day of the month in which the employee attains age 65;

2. The day after completing 25 years of service (the day after acquiring 300th month of 

service); 

3. The employee's annuity beginning date; 

4. The first day of the twelfth month prior to the month in which the disabled employee's 

rights were relinquished; 

5. The employee’s designated supplemental annuity beginning date; 

6. October 1, 1981, if the supplemental annuity is based on a deemed current 

connection; or

7. November 1, 1966. 
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315.6.2 60/30 Annuitants

For 60/30 annuitants and disability annuitants whose regular annuity beginning date is 

July 1, 1974 or later, and who are at least age 60 and have 360 months of service, the 

supplemental annuity begins to accrue on the latest of the following dates:

1. The first day of the month in which the employee attains age 60;

2. The day after completing 30 years of service (the day after acquiring 360th month of 

service); 

3. The employee's annuity beginning date; 

4. The first day of the twelfth month prior to the month in which the disabled employee's 

rights were relinquished; 

5. The employee’s designated supplemental annuity beginning date; 

6. October 1, 1981, if the supplemental annuity is based on a deemed current 

connection; or

7. January 1, 1975. 

315.7 Months Supplemental Annuity Not Payable

The supplemental annuity is subject to the same nonpayment restrictions as the 

employee annuity, i.e., it is not payable for months in which the annuitant works for a 

railroad employer.

Before 12/1/88, the supplemental annuity was not payable for months the employee 

returned to Last Person Pre-retirement Employment (LPE). Effective December 1988 

or later, LPE earnings deductions apply to the supplemental annuity (see FOM1 1121).

315.8 When Entitlement to Supplemental Annuity Ends

Supplemental annuity payments terminate when the employee annuity terminates. This 

is usually the last day of the month before the month in which the annuitant dies. 

NOTE: If the employee attained age 65 before 9-1-81, the supplemental annuity ended 

the last day of the month before the month in which the employee returned to employer

service after his closing date (see FOM1 Art. 3 App. B for closing dates).

315.9 Accrued Supplemental Annuity Due at Death

The Survivor Benefits Division (SBD) handles cases in which a supplemental annuity 

accrual is due and payable at the time of the employee’s death (see FOM1 615). 
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315.10 Supplemental Annuity Denials

There are two types of supplemental annuity denials: "informal" and "formal."

315.10.1 Informal Denial

The field office makes an informal denial when it informs the employee that they are not 

entitled to a supplemental annuity because they apparently do not have railroad service 

before October 1981, have less than 25 years of service, or do not have either a regular 

or deemed C/C. 

315.10.2 Formal Denial For Insufficient Railroad Service

The Retirement Benefits Division (RBD) makes a formal denial if the supplemental 

annuity item on the employee annuity application is answered "yes", but the employee 

does not meet the railroad service requirement or the current connection requirement 

listed in FOM1 315.2. 

When paying the case Final, the examiner should include code paragraph 406A, to 

notify the employee of his ineligibility. 

315.10.3 Employee With Required Service Has Not Attained Required Age

When an employee has a current connection or deemed current connection on the 

ABD, make no denial if the employee has less than 30, but at least 25 years of service, 

and has not yet attained age 65; or the employee has at least 30 years of service and

has not yet attained age 60. These are “attainment” cases.

If such an employee inquires about the status of their supplemental annuity, this is not a 

formal denial. Prepare a letter stating the reason the employee is not eligible. Include

the month and year they will be eligible for the supplemental annuity. 

See FOM1 315.23 for RBD handling of “attainment” cases. 

315.10.4 Employee Does Not Meet Service Requirement For Employee Annuity 

Do not make a formal denial if the claim will be transferred to the Social Security 

Administration because the employee does not meet the railroad service requirement 

for an employee annuity. The employee will be informed on the transfer notice that they

are not eligible for a supplemental annuity. 

315.11 Evidence Requirements for Supplemental Annuity

Evidence When Required
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Employee Filed an Application AA-1 Always. Proof that the employee filed an 

Application AA-1 is in the APPLE 

database. The annuity paid based on 

that application may be verified by 

checking PREH. The Application AA-1 is 

imaged to the claim file. [NOTE: In some 

attainment cases, the AA-1 may have 

been filed prior to the conversion of AA-1 

applications to APPLE or the inception of

imaging. The actual paper folder may be 

needed in these cases to determine if an 

AA-1 was filed.]

Age Always. Proof of employee’s age is in 

the APPLE proofs database or in the 

claim file. Age may be verified by 

checking PREH. EDM cannot be used to 

verify the employee’s age.

Years of Service (30 years of railroad 

service at age 60, or 25 years of 

railroad service at age 65) 

Always. Total railroad service months 

(including military service creditable as 

railroad service) are on EDM. The EDM 

screen with the details of the railroad 

service months can be used to determine 

if the employee has at least one month of 

railroad service before 10-1-1981. 

However, PREH should be used to 

determine if the employee has enough 

credited service months to be eligible for 

a supplemental annuity. 

Current Connection or Deemed C/C Always. The EDM screen with the details 

of the railroad service months can be 

used to determine the employee’s 12/30 

for the current connection determination. 

It may be necessary to obtain a 

breakdown of SSA wages for the period 

starting with the day after the last day of 

the 12/30 period through the day before 

the ABD. The employee may claim a 

deemed current connection on the 

employee annuity application. This 

should be supported by proofs submitted 

with the application or already in the 

claim file.

Military Service Creditable as Railroad 

Service 

When military service increases the 

years of service for SUP ANN purposes. 

Periods of military service creditable as 
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railroad service are viewable on the EDM 

database.

Railroad Pension Information Always. The information provided on the 

employee annuity application is sufficient 

when there is no conflict with the 

information on the Railroad Employer 

Pension Table.

Form G-88p Whenever there is a conflict in the 

employee's statement on the annuity 

application and the information on the 

Railroad Employer Pension Table; or 

additional pension information is needed

to determine if the supplemental annuity 

should be reduced for a private railroad 

pension (see FOM1 315.15 for G-88p 

instructions).

315.12 Private Employer Pensions 

315.12.1 Definition of a Private Employer Pension 

Under section 2(h)(2) of the Railroad Retirement Act (RRA), the supplemental annuity is

reduced by the amount of a private pension the employee receives from a railroad 

employer which is attributable to the employer’s contributions. 

A plan must meet these criteria to qualify as a private pension plan:

1. It is a written plan or arrangement which is communicated to the employees to which 

it applies.

2. It is established and maintained by the railroad employer for a defined group of 

employees.

3. It provides for the payment of definitely determinable benefits to employees over a 

period of years, usually for life, after retirement or disability.

4. The employer is obligated to make fixed contributions to the plan regardless of 

profits.

The complete definition of a private railroad pension plan is in Section 216.42 of the 

RRB’s regulations (20 CFR §216.42). 
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315.12.2 Types of Private Employer Pension Plans

Two specific types of plans meet the definition of a private railroad pension under the 

RRB's regulations: defined benefit plan and money purchase plan. 

A. Defined Benefit Plan 

A defined benefit plan is a traditional pension plan, funded by the employer, under 

which the employee receives a recurring, normally monthly, pension benefit, usually 

for life. The pension benefit is calculated using a set formula that is stated in the 

plan, which typically includes factors such as age, earnings and years of service. 

Because the formula is stated in the plan, the employee can know the amount of 

their monthly pension benefit before retirement. 

B. Money Purchase Plan

A money purchase plan is a type of defined contribution plan. Unlike in a defined 

benefit plan, a set formula is not used to determine the amount of the employee's 

pension benefit. Instead, the employer establishes an account for the employee to 

which the employer (and sometimes also the employee) is obligated to contribute a 

fixed amount, usually a percentage of the employee's wages. The contributions are

then invested on the employee's behalf. The employee usually can choose the 

investments from investment options provided by the employer. At retirement, the 

employee receives the balance of their account, which is the total of all contributions, 

plus or minus investment earnings or losses. 

A money purchase plan provides for the payment of a monthly pension, although it is 

very common for a plan participant to elect to receive their account balance in a 

lump sum payment. The payment of a monthly pension is accomplished by the 

employer using the balance of the employee’s account to purchase an annuity on 

the employee’s behalf. Because the value of the account continually fluctuates due 

to changes in the value of investments, the employee cannot know the amount of 

their monthly benefit until they retire and the annuity is purchased.

NOTE: An employer may refer to its money purchase plan as a 401(a) plan or 

401(a) money purchase plan. A "401(a)" plan, as used in reference to a money 

purchase plan, is not the same as a 401(k) plan. 

315.12.3 General Counsel Determines If a Plan Is a Private Employer Pension

APPENDIX_A

The RRB’s General Counsel determines if a plan qualifies as a private employer 

pension plan. When RRB receives information that an employer has a pension plan

which they have not submitted, the RRB requests the employer to submit a copy of the 

plan. When the RRB receives the plan, it is forwarded to the General Counsel. If the 

General Counsel rules that the plan qualifies as a private pension plan, the plan and the

General Counsel's ruling date are added to the Pension Table (FOM1 Art 3 App. A). 
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The ruling date also is added when a new plan is approved because the supplemental 

annuity cannot be reduced until the month following the month the General Counsel

approves the plan.

315.12.4 Plans That Do Not Cause a Reduction in the Supplemental Annuity

The following types of plans do not cause a reduction to the supplemental annuity: 

A. Plans Not Approved by the General Counsel

The supplemental annuity cannot be reduced by a private employer pension until the 

plan is approved by the RRB's General Counsel, even if it meets all of the 

requirements listed in FOM1 315.12.1. 

B. Pensions Paid by Railway Labor Organizations

A pension paid by a labor organization (union) to its office employees or employee 

representatives is excluded by the legislation that established the reduction to the 

supplemental annuity and is not considered to be a "private pension plan." These 

pensions do not cause a reduction in the RRB supplemental annuity. 

C. 401(k) Plans

Prior to January 1, 2014, a 401(k) plan to which the employer was obligated to 

contribute a fixed amount regardless of profits, e.g., match a percentage of the 

employee's contributions, qualified as a private railroad pension plan. A distribution 

from the plan caused a reduction to the supplemental annuity. On January 13, 2014, 

the RRB's General Counsel issued Legal Opinion L-2014-2 which states that, 

effective January 1, 2014, 401(k) plans should not be considered private pension 

plans and distributions from 401(k) plans should not cause a reduction to the 

supplemental annuity. 

D. Monthly Pensions Reduced for Supplemental Annuity 

Under some pension plans, the monthly pension benefit is reduced for the 

supplemental annuity. The RRB's regulations guarantee that the sum of the reduced 

pension plus the supplemental annuity cannot be less than the full pension amount 

(20 CFR 227.4(b)). If the monthly pension benefit is reduced for the supplemental 

annuity, it will not cause a reduction to the supplemental annuity. 

In very rare cases, the monthly pension is reduced by a percentage of the 

supplemental annuity rather than the full supplemental annuity. In these cases, the 

supplemental annuity is reduced by the difference between the amount the monthly 

pension is reduced and the full supplemental annuity. 

If the employee is entitled to two private pensions and one is reduced for the 

supplemental annuity, the supplemental annuity is not reduced for either pension. 

This is because if the supplemental annuity is reduced to zero by one private 
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pension, the second pension would then be reduced for a supplemental annuity the 

employee is not, in fact, receiving (see FOM1 315.22.2 for an example). 

E. Monthly Pensions Based 100% on Employee Contributions

Contributions an employee makes to a pension plan are considered to be the 

employee’s own funds. Since the supplemental annuity is reduced only by the 

amount of a pension attributable to employer contributions by law, pensions based 

100% on employee contributions will not reduce the employee's supplemental 

annuity. For example, if the amount an employer contributes to a pension fund is 

withheld from the employee's salary, the pension is based entirely on the employee’s

contributions and will not cause a reduction to the supplemental annuity. 

F. Pensions Based Entirely on Non-Creditable Service 

Pensions that are based entirely on non-creditable service do not affect the 

supplemental annuity. For example, if the employee receives a pension that is 100% 

based on his service for a trucking subsidiary of the railroad employer, that pension 

will not affect the supplemental annuity. 

G. When Part of Pension Is Based on Non-Railroad Service

If the pension is based on both "creditable" and "non-creditable" service, only that 

part of the pension based on "creditable" railroad service can be used to reduce the 

supplemental annuity. 

315.13 Job Categories

Some employers have a single pension plan covering all of its employees. However,

most employer pension plans cover only a specific group of employees. The group of 

employees covered under a particular plan is identified by a job category. The RRB 

uses three job categories to identify employees covered under an employer pension 

plan: salaried, non-agreement and agreement. 

• SALARIED (also referred to as exempt, non-contract or non-scheduled) 

The employee is paid a fixed salary, typically stated as an annual amount, but also 

may be a fixed monthly or bi-weekly amount. This employee usually works in a 

management, professional or administrative position. 

• NON-AGREEMENT

The employee is paid an hourly wage and not covered under a collective bargaining 

agreement, i.e., union contract. 

Note: An employer may use the term "non-agreement" to identify all of its employees 

who are not covered by a union contract, including "salaried" employees. The RRB 
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makes a clear distinction between the two job categories. "Non-agreement" is not

interchangeable with "salaried" under the RRB's definitions of these terms.

• AGREEMENT (also referred to as contract or scheduled) 

The employee is covered by a collective bargaining agreement (union contract). 

Their job normally is directly related to the daily operation and movement of trains, 

track and equipment maintenance, etc. Examples are: locomotive engineer, 

conductor, switchman, track inspector, yardmaster, clerk, electrician, signalman, etc. 

315.14 Railroad Employer Pension Table 

315.14.1 Purpose of the Railroad Employer Pension Table

The Railroad Employer Pension Table (Pension Table) lists employers with pension 

plans approved by the General Counsel and the job categories covered by those plans. 

It is used to cross-reference the pension information the employee provides on their

application with the pension information the RRB has in file. If the information conflicts, 

further investigation and development may be necessary, normally by releasing Form 

G-88p to the employer. 

The Pension Table also is used to provide special handling instructions or additional 

information about a particular plan that might be helpful to the user. 

The Pension Table is in FOM1 Art. 3 App. A. 

315.14.2 Description of the Railroad Employer Pension Table

The Pension Table has five columns:

• BA NO – The RRB identification number assigned to the employer. 

• Railroad Name – The name of the railroad employer.

• Employees Covered by Pension – Identifies the job category of the employees

covered by the employer's pension plan(s). See FOM1 315.14.3 for a further

explanation of the entries in this column. 

• Send G-88p to the “300” Contact Official for: – Indicates the contact official to 

whom Form G-88p should be sent. The name and address of the contact official 

are in the employer’s Contact Official Directory in EDM.

If "PBGC" is entered in this column, the pension is administered by the Pension 

Benefit Guarantee Corporation (PBGC). Release Form G-88p, with a Form RL88p cover letter, to the PBGC plan administrator listed in the Employer's Contact 

Official Directory in EDM (see FOM1 1720 G-88p Instructions).
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• Comments – Special handling instructions or additional information about the

plan are entered here. 

315.14.3 “Employees Covered by Pension” Column of Pension Table

The entry in the Employees Covered by Pension column identifies the job category, or 

categories, of the employees covered under the employer's pension plan(s). It also 

identifies pension plans which do not reduce the supplemental annuity because the 

pension is either reduced for the supplemental annuity or paid by a labor organization to 

its employees. 

These are the possible entries in this column: 

• ALL – All employees are covered by a pension plan.

• SALARIED – Only "salaried" employees are covered by a pension plan.

• NON-AGREEMENT – Only "non-agreement" employees are covered by a 

pension plan.

• AGREEMENT – Only "agreement" employees are covered by a pension plan. 

• RED FOR SUP ANN: NO G-88P – The employer has a private pension plan, but 

the monthly pension benefit is reduced for the full supplemental annuity. Do not

reduce the supplemental annuity or release a G-88p.

• UNION: NO G-88p – The pension is paid by a labor organization to its office 

employees or employee representatives. Do not reduce the supplemental annuity 

or release a G-88p. 

315.15 Form G-88p, Employer’s Supplemental Pension Report

315.15.1 General 

Form G-88p, Employer’s Supplemental Pension Report, is released to the railroad 

employer when there is a conflict in the pension information the employee provides on 

their application and the information on the Private Employer Pension Table, or if other 

pension information is needed to determine if the supplemental annuity should be 

reduced for a private railroad pension. The form is released either electronically through 

ERSNet or manually by paper.

The form is released by either the field office or RBD, depending on whether the case is 

a "current" or an "attainment" case (see FOM1 315.16.1 for the definitions of "current" 

and "attainment" cases). 

• The field office releases the paper Form G-88p in “current” cases. If a duplicate G88p is needed to trace on a G-88p the field office originally released, the field office 

also releases the paper duplicate. 
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• RBD releases the paper G-88p in "attainment" and all other cases. 

• The G-88p is released electronically if the employer is part of the ERSNet system. 

An "E" will be entered in the G-88p field of the APPLE Summary screen if a G-88p 

has been released electronically (see FOM1 1720 G-88p under Purpose of the 

Form).

REMINDER: For paper forms, the office releasing the G-88p should image the form 

before releasing it.

315.15.2 When Form G-88p Should Be Released 

A. Employee Claims No Pension – Employer and Job Category on Pension Table

There is a conflict when the employee states on their application that they were not

covered and have no entitlement to pension benefits under a pension plan with their 

last or any previous employer, and the last or previous employer and the employee's 

job category are on the Pension Table.

B. Employee Claims Pension – Employer Not on Pension Table

There is a conflict when the employee states on their application that they were

covered and entitled to pension benefits under a pension plan with their last or any 

previous employer, and the employer and employee's job category are not on the 

Pension Table. 

In addition to releasing a G-88p in these cases, send an email to Policy and 

Systems advising that the employee indicates they are entitled to pension benefits,

but the employer is not on the Pension Table. Include the employee's name, claim 

number and employer's BA number in the email. 

C. Other Pension Information Needed

Form G-88p also may be released when any other type of pension information is 

needed to determine the reduction to the supplemental annuity, e.g., to verify a 

pension beginning date. 

315.15.3 When Form G-88p Should Not Be Released

A. No Conflict

Do not release Form G-88p when there is no conflict in the pension information the 

employee provides on their application and the information on the Pension Table. 

There is no conflict when:

• The employee claims entitlement to a railroad pension benefit, and the employer

and employee's job category are on the Pension Table. 
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• The employee claims no entitlement to a railroad pension benefit, and the 

employer and employee's job category are not on the Pension Table. 

B. Do Not Release Paper Form G-88p If Released Electronically

Do not release a paper Form G-88p if a G-88p was already released electronically. 

APPLE determines if Form G-88p should be released based on the supplemental 

annuity and pension information entered on the APPLE application. If APPLE 

determines that a G-88p should be released and the employer is part of the ERSNet 

system, the form is released electronically to that employer. If G-88p was released 

electronically, an "E" will automatically be entered in the G-88p field of the APPLE 

Summary screen. Releasing a paper G-88p in these cases would be a duplicate 

request. 

315.15.4 Completing Form G-88p

Refer to FOM1 1720 G-88p Instructions. 

315.15.5 G-88p Tracing Schedule

Refer to FOM1_1720 Tracing Schedule for Form G-88p.

• 

• 

315.15.6 Acceptable Documents That May Be Used In Lieu of G-88p

If an acceptable document is submitted that contains all of the pension information

required to determine the reduction to the supplemental annuity, such as a statement of 

benefits, a G-88p does not need to be released (also see FOM1 1720 G-88p

Instructions). A document is acceptable for this purpose when:

• It is clearly from the employer or plan administrator (if the employer contracted with 

an outside firm to administer the plan).

• It is addressed to the employee.

• It contains all of the information necessary to make the reduction determination. This 

includes:

 The pension beginning date.

 The amount of the monthly pension or, if the employee also contributed, the 

amount of the monthly pension attributable to the employer's contributions.

 If the employee elected a lump sum, the date the pension would have begun and 

the monthly pension amount, or amount attributable to the employer's 
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contributions, the employee would have received if they had not elected the lump 

sum. 

 If the employee had to take a lump sum because his pension account balance 

was under the minimum required for a monthly benefit, the date the lump sum 

was paid and the amount of the lump sum attributable to the employer's 

contributions. 

315.16 Field Office Handling When Employee Files Application

315.16.1 Determine If “Current” or “Attainment” Case 

There are two types of cases when the employee is eligible for a supplemental annuity: 

"current" and "attainment." 

Current Case – The applicant is currently eligible for the supplemental annuity, or will 

attain the age requirement for the supplemental annuity, within three months after the 

annuity beginning date. 

Attainment Case – The applicant will attain the age requirement for the supplemental 

annuity more than three months after the annuity beginning date (see FOM1 315.23 for 

RBD handling of "attainment" cases). 

315.16.2 When Supplemental Annuity Will Pay Without Examiner Handling 

Both “current” and “attainment” supplemental annuity cases usually will pay without 

examiner handling on the earliest date the supplemental annuity is payable when:

• the APPLE Supplemental Annuity screen does not indicate entitlement to an 

employer pension; and

• the field office does not enter any code in the Form G-88p status code on the 

APPLE Summary Screen.

NOTE: Always complete the Form G-88p field on the APPLE Summary screen when 

the employee indicates an employer pension, even if the supplemental annuity can be 

adjusted without a G-88p.

RBD examiner handling is required in all other supplemental annuity cases.

315.16.3 Always Request Pension Information From Employee

Always request the employee to provide information about their entitlement to a pension 

benefit from any railroad employer. Request the information in both “current” and 

“attainment” cases. This information is used for the APPLE Supplemental Annuity 

screen entries (see FOM1 315.17.1).
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Following is a general guide that may be used when requesting pension information

from the employee. 

1. Was the employee covered by a pension plan with their last or any previous railroad 

employer from which they either:

• are receiving, or will receive, a monthly pension benefit; or

• received, or will receive, a lump sum pension payment? 

2. Employee claims no monthly pension or lump sum pension payment from any 

railroad pension plan. 

a) If the employee's last or any previous employer is not on the Pension Table, 

there is no conflict. No G-88p is needed.

b) If the employee's last or any previous employer and job category are on the 

Pension Table, there is a conflict. A G-88p should be released to the last or 

previous employer. 

3. Employee claims a monthly pension or lump sum pension payment from a pension 

plan with their last or a previous employer.

a) If the employer and employee's job category are on the Pension Table, there is 

no conflict. No G-88p is needed. 

b) If the last or previous employer is not on the Pension Table, there is a conflict. A 

G-88p should be released to the last or previous employer. 

315.17 Entering Supplemental Annuity Information On APPLE

315.17.1 APPLE Supplemental Annuity Screen

Complete the APPLE Supplemental Annuity screen (APMU245) using the pension 

information the employee provides. 

IMPORTANT: If the employee worked for more than one railroad employer and the 

pension benefit is from a previous employer, enter the previous employer's information. 

Similarly, if the pension is from the last employer, but based on previous service in a 

different job category, enter the job category on which the pension is based. 

Example 1: The employee worked for two railroad employers in his career: the first 25 

years for Railroad X and the last 10 years for Railroad Y. He was covered under a

private pension plan with Railroad X, but not with Railroad Y. On the APPLE 

Supplemental Annuity screen, enter the information for Railroad X, the employer with 

which he was covered under the pension plan. Do not enter the information for Railroad 

Y.
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Example 2: The employee worked for the same railroad for 33 years. He was a salaried 

employee for the first 30 years and an agreement employee for the last 3 years. The 

employer has a pension plan that covers salaried employees, but does not have a 

pension plan for agreement employees. Because the employee was covered under the 

salaried pension plan while he was a salaried employee and not covered while he was 

an agreement employee, enter "salaried", not "agreement" as the employee's job 

category on the APPLE Supplemental Annuity screen.

Complete the APPLE Supplemental Annuity screen fields as follows:

• SUP ANN ELIGIBILITY 

Enter “Y” if the employee is, or in the future will be, eligible for a supplemental 

annuity; or “N” if the employee is not, or will not be, eligible for a supplemental 

annuity. If you enter “Y”, complete the remaining fields on this screen. If you enter 

“N”, continue to the next APPLE screen.

• RR PENSION 

Enter “1” if the employee states they are receiving, or will receive, a monthly pension 

benefit.

Enter “2” if the employee states they received, or will receive, a lump sum in lieu of a 

monthly pension benefit.

Enter "3" if the employee states they received, or will receive, a "small benefit" lump 

sum. 

Enter “4” if the employee states they are not entitled to any type of pension benefit 

from any railroad employer.

• ER NUMBER

Enter the ER (BA) number of the railroad employer from which the employee is 

entitled to a pension benefit. [Reminder: If the pension is from a previous employer, 

enter the previous employer’s BA number.] 

• RR EMPLOYER NAME

Enter the name of the railroad employer that corresponds to the BA number entered

in the ER NUMBER field. 

• JOB CATEGORY (see FOM1 315.13 for job category definitions)

Enter “1” if the employee was a "salaried" employee. 

Enter “2” if the employee was a "non-agreement" employee.
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Enter “3” if the employee was an "agreement" employee.

Enter “4” if the employee’s job description does not fit into any of the above 

categories.

• PENSION BEGINNING DATE

If RR PENSION entered is:

“1” – Enter the date the monthly pension began, or will begin.

“2” – Enter the date the monthly pension would have begun if the lump sum had not 

been elected.

“3” – Enter the date the employee received, or will receive, the "small benefit" lump 

sum. 

"4" – Leave blank. 

The date entered can be a future date. If the employee does not know when they

will receive the monthly pension or lump sum payment, enter an estimated date. 

• PENSION LESS THAN $43

Enter “N”. 

315.17.2 APPLE Summary Screen

Refer to FOM1 315.15 for determining when Form G-88p should be released. The 

following are the entries for the Form G-88p field on the APPLE Summary Screen 

(APMU0005):

H = Headquarters Releases G-88p ("Attainment" cases) 

Enter “H” in "attainment" cases when the employee was covered under a railroad 

pension plan and the Retirement Benefits Division (RBD) must determine if Form G-88p 

must be released at the time the employee attains the age requirement for the 

supplemental annuity. If Form G-88p is needed, RBD releases the form.

R = Required – Field Office Releases G-88p 

Enter "R" when Form G-88p is required for the RASI SUP ANN award. The field office 

should release the G-88p when there is a conflict in the pension information the 

employee provided and the information on the Pension Table, as explained in 

FOM1 315.15.2. 

N = Not Required
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Enter "N" when Form G-88p is not required. Either the employee is not covered under a 

railroad pension plan or the pension information the employee provides is sufficient for 

the RASI SUP ANN award. 

E = Form G-88p Was Released Electronically

Form G-88p was released electronically. APPLE determined that Form G-88p was 

required and the employer is part of the ERSNet system (see FOM1 1720 G-88p

Instructions). 

315.18 RBD Tickler Call-ups 

A. Pension Beginning Date More Than Three Months In Future

RBD should set tickler call-ups in these situations when the pension beginning date will 

be more than three months in the future: 

• If the pension beginning date is known and will be more than three months in the 

future, set a call-up for two months prior to the month the monthly pension will begin. 

• If the pension beginning date is not known, but will be more than three months in the 

future, set a call-up to release Form G-88p as follows: 

 If the employee is age 60 – 62, set a call-up for the month they attain age 62.

 If the employee is age 62 – 65, set a call-up for the month they attain age 65.

B. No Call-up If Pension Beginning Date Within Three Months

Do not set a call-up if the pension beginning date is within three months. Pend the case 

until the reduction to the supplemental annuity can be made.

C. Call-up to Remove Reduction for "Small Benefit" Lump Sum

If the supplemental annuity is reduced for a "small benefit" lump sum, enter a call-up for 

two months before the month the reduction should be removed.

315.19 Reducing SUP ANN for Employer Pension 

315.19.1 Reducing for a Monthly Pension 

A. Reduction Is Permanent

The reduction to the supplemental annuity for a monthly pension is permanent and 

remains in effect until entitlement to the supplemental annuity ends, usually with the 

death of the employee. 

B. Assume Monthly Pension Benefit Greater Than $43
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When initially reducing the supplemental annuity for a monthly pension, assume the 

monthly pension amount, or the amount attributable to employer contributions, is 

greater than $43. This assumption is made because monthly pension benefits have 

increased significantly enough through the years that they rarely are less than $43. 

Use 77.77 for the employer pension reduction amount to reduce the supplemental 

annuity to zero. However, if the employee claims, and the RRB verifies, that their

monthly pension is less than $43, reduce the supplemental annuity by the actual 

amount of the monthly pension. 

C. Effective Dates and Retroactivity of Reduction 

1. First Report of Monthly Pension

When the monthly pension is first reported, either by the employee when they file 

or by the employer when it returns or submits a G-88p, reduce the supplemental 

annuity effective the later of the supplemental annuity beginning date or the 

pension beginning date. This is regardless of when the report is received.

2. Adjustment Report – Change In Pension Beginning Date

When an adjustment report is received showing a change in the monthly pension 

beginning date, change the reduction effective date to the later of the date shown 

on the report or the supplemental annuity beginning date. This is regardless of 

when the report is received.

3. Adjustment Report – Change In Monthly Rate

When an adjustment report is received showing a change in the monthly benefit

amount, no action is necessary if the new amount does not affect the 

supplemental annuity. If the change in rate affects the supplemental annuity, 

adjust the reduction for the new rate effective the month following the month the 

report is received. 

315.19.2 Reducing for a Lump Sum In Lieu of a Monthly Pension

A. Definition of a Lump Sum In Lieu of a Monthly Pension

A lump sum in lieu of a monthly pension is when an employee covered under a private 

pension plan (either a defined benefit plan or a money purchase plan) elects to receive 

the balance of their pension account in a lump sum payment instead of receiving a 

monthly pension. This applies even if most participants elect a lump sum under the 

plan. As long as the payment of a monthly pension benefit is provided as an option 

under a plan, if the employee elects to receive their pension account in a lump sum 

payment, it is a lump sum in lieu of a monthly pension. 

B. Making the Reduction to the Supplemental Annuity 
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When an employee elects a lump sum in lieu of a monthly pension, they are treated for 

the purpose of reducing the supplemental annuity as receiving the monthly benefit. In 

other words, the supplemental annuity is reduced for the monthly pension the employee

would have received if they had not elected the lump sum.

1. The reduction is permanent and remains in effect until entitlement to the 

supplemental annuity ends.

2. Assume the monthly pension the employee would have received is greater than 

$43. 

3. The reduction is effective the later of:

• The supplemental annuity beginning date.

• The date the monthly pension would have begun if the employee had not 

elected the lump sum.

Example: 

An employee attains age 60 on 11/22/2013 and is entitled to a 60/30 and a 

supplemental annuity beginning 12/1/2013. He also is eligible for a monthly railroad 

pension beginning 12/1/2013. When inquiring about his pension, the employee learns 

the value of his pension account is $125,000.00. He decides to take that amount in a 

lump sum payment instead of receiving a monthly pension. In this case, the

supplemental annuity is permanently reduced to zero effective 12/1/2013, the 

supplemental annuity beginning date. 

C. Lump Sum Elected Before SUP ANN Eligibility

If an employee terminates employment with a railroad before they are eligible for the 

supplemental annuity, and elects to receive a lump sum instead of receiving a reduced 

monthly pension immediately or an unreduced monthly pension in the future, the 

supplemental annuity is reduced effective with the supplemental annuity beginning date.

Example: 

An employee with 26 years of service attains age 65 on 6/12/2014. He terminated 

railroad employment at age 57. The railroad pension plan under which the employee 

was covered provided these options at termination: receive a reduced monthly pension 

at age 60; receive an unreduced monthly pension at age 65; immediately receive the 

balance of his pension account in a lump sum. He elected to receive the lump sum. In 

this case, the supplemental annuity is permanently reduced to zero effective 7/1/2014, 

the supplemental annuity beginning date. 

D. Lump Sum Paid In Installments
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If the lump sum is paid in installments, the installment payments are not considered 

periodic pension payments, but part of a single, lump-sum payment. The supplemental 

annuity is reduced permanently, not just for the months installment payments are made.

E. Employee Rolls Over Pension Account Balance

When an employee rolls over the balance of their railroad pension account to another 

account, such as and Individual Retirement Account (IRA), the rollover is considered a 

lump sum distribution. Therefore, an employee who rolls over their pension account 

instead of receiving a monthly pension is considered to have elected a lump sum in lieu 

of a monthly pension. The supplemental annuity is permanently reduced effective with 

the supplemental annuity date.

315.19.3 "Small Benefit" Lump Sum Payment

Most pension plans do not pay a monthly pension if the value of the employee's pension 

account is less than a minimum amount specified in the pension plan. The amount 

typically is $5,000.00, but may be less under some plans. This is sometimes referred to 

as a plan's "small benefit" provision. Under a "small benefit" provision, if the value of a 

plan participant's account is less than the minimum amount stated in the plan, the 

employee is required to receive the account in a lump sum payment, with no option of 

receiving a monthly pension.

Because a monthly pension is not payable in these cases, the reduction to the 

supplemental annuity is not permanent. Instead, the lump sum, or amount of the lump 

sum attributable to the employer's contributions, is divided by the supplemental annuity. 

The total is the number of months the supplemental annuity should be withheld to 

recover the amount of the employer's contributions. The effective date of the reduction

is the month following the month the RRB receives the G-88p with the lump sum 

information from the employer.

Example: 

The employee attains age 60 on 3/22/2014 and is entitled to a 60/30 and a 

supplemental annuity beginning 4/1/2014. He states on his application that he was 

covered under a railroad pension plan for a short time and received a small lump sum 

from the period he was covered. A G-88p is released to the employer. The completed 

G-88p is received by the RRB on 6/7/2014. It shows that the employee was paid a 

"small benefit" lump sum of $2,222.20 on 4/5/2014. The reduction to the supplemental 

annuity is calculated as follows:

2220.20 ÷ 43 = 51.68; the supplemental annuity is reduced to zero for 51 months 

effective 7/1/2014 (month after month G-88p received), a partially supplemental annuity 

is payable in the 52nd month, and the full supplemental annuity is again payable 

beginning with the 53rd month.
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Note: An employee may elect to have their supplemental annuity permanently reduced 

by a small amount rather than have it reduced to zero for a number of months. If the 

employer can provide an actual or estimated monthly benefit amount, that amount may

be used to permanently reduce the supplemental annuity. 

315.20 Reducing Sup Ann Pending Return of G-88p 

Reduce the supplemental annuity to zero from the supplemental annuity beginning date

when a G-88p has been released and one of these conflict situations exists: 

• The employee states on their application that they are not receiving, or will not 

receive a monthly pension, or did not, or will not, receive a lump sum pension 

payment from their last or any previous employer, and the last or previous 

employer and the employee's job category are on the Pension Table.

• The employee states on their application that they are receiving, or will receive, a 

monthly pension or received, or will receive, a lump sum pension payment from 

their last or any previous employer, and the employer is not on the Pension 

Table.

When the G-88p is returned, make any necessary adjustments based on the 

information the employer provided, e.g., remove the reduction if the G-88p shows that 

the employee is not entitled to a monthly pension.

315.21 Reopening When Reduction Previously Not Applied

Use the following guidelines to handle cases in which RRB discovers that the reduction 

to the supplemental annuity was not made timely.

A. Within Four Years 

• If the employee stated on the application that they are receiving a monthly 

pension benefit, reduce the supplemental annuity retroactively to the date the 

reduction should have begun and assess the corresponding overpayment if the 

date of the correction award and the date the overpayment is posted is within 

four years of the date the supplemental annuity was paid. The four year limit can 

be extended six months if a G-88p was released before the four year limit 

expired.

• If the employee stated on the application that they are not , and will not be, 

entitled to an employer pension, reduce the supplemental annuity retroactively to 

the date the reduction should have begun and assess the corresponding 

overpayment. The four year limit does not apply in these cases. 

B. After Four Years
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• If the employee stated on the application that they are receiving an employer

pension, reduce the supplemental annuity prospectively. Do not assess an 

overpayment.

• If the employee stated on the application that they are not, and will not be, 

entitled to an employer pension, reduce the supplemental annuity retroactively to 

the date the reduction should have begun and assess the corresponding

overpayment. The four year limit does not apply in these cases. 

315.22 Special Employer Pension Situations

315.22.1 Burlington Northern Santa Fe (BNSF) 

Pension Payments to UTU Members Who Formerly Worked for ATSF.

Retiring BNSF employees who are members of the United Transportation Union (UTU) 

and formerly worked for the Atchison, Topeka and Santa Fe (ATSF) before its merger 

with Burlington Northern (BN) may receive a lump sum payment of around $65,000 from 

one of these two pension plans: 

• "The BNSF Railway Company Pension Plan for Conductors, Trainmen and Yardmen 

on the Western Region (Coast Lines) and Texas Division"

• "The BNSF Railway Company Pension Plan for Conductors, Trainmen and Yardmen 

on the Former Eastern and Western Lines (Excluding Northern and Southern 

Divisions)" 

The plans were established as part of collective bargaining agreements between UTU 

and ATSF in 1989 and 1992, respectively. 

Most employees covered under these plans take the pension in a lump sum payment 

because that is more advantageous for them. However, because these are defined 

benefit plans, the lump sum is in lieu of a monthly pension. Permanently reduce the 

supplemental annuity to zero effective with the supplemental annuity beginning date.

Note: Because both plans are nearly identical, the BNSF Contact Official does not 

differentiate between the two and identifies both as "UTU $65,000.00" on the G-88p. 

315.22.2 Pension for Long Island Railroad Locomotive Engineers (BLE-DIV 269)

Most Long Island Railroad (LIRR) agreement employees are covered under one of 

three pension plans which cause a reduction to the supplemental annuity: 

• The LIRR Company Pension Plan, which covers all LIRR employees hired before 

January 1, 1988.

• The LIRR Money Purchase Plan, which covers all LIRR employees hired January 

1, 1988 or later.
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• The Metro-North Defined Benefit Plan for Agreement Employees, which covers 

LIRR agreement employees who were hired January 1, 1988 or later and were 

on the payroll December 31, 2003 or later. 

LIRR also funds an additional pension plan which is only for members of Division 269 of 

the Brotherhood of Locomotive Engineers (BLE 269). Under this plan, the monthly 

pension is reduced for the supplemental annuity. Because the monthly pension is 

reduced for the supplemental annuity under the BLE 269 plan, the supplemental 

annuities of BLE 269 locomotive engineers are not reduced for any LIRR pension (see 

FOM1 315.12.4).

315.22.3 CSX-UTU Agreement Pension Plan 

CSX agreement employees who are members of UTU and previously worked for one of

the CSX predecessor railroads listed below may be covered under the "Retirement Plan 

for Certain Hourly Employees of CSX Transportation, Inc., under CSXT Labor 

Agreements with the United Transportation Union (UTU) 4-064-93, 4-086-93, 4-087-93 

and 4-134-93". 

• Effective 07/01/1993: Employees of the former Baltimore and Ohio Railroad (BA 

1302); Pere Marquette or Hocking Valley Railroads; and Three Rivers Railway 

(BA 3291).

• Effective 08/01/1993: Employees of the former Chesapeake and Ohio Railroad 

(BA 1401).

This pension benefit usually is paid in a lump sum. However, because this is a defined 

benefit plan, the lump sum is in lieu of a monthly pension. Permanently reduce the 

supplemental annuity to zero effective with the supplemental annuity beginning date.

Note: All of the railroads listed above ceased to be covered employers when they 

became part of CSX.

315.22.4 Canadian National Railway 

A. Employee States Last Employer Was Canadian National 

If an employee states they last worked for Canadian National Railway (CN), do not 

enter BA 1103 Canadian National as the employer on the APPLE Supplemental 

Annuity screen until you have verified the railroad under which the employee's 

service and earnings were reported. This is important because CN is divided into 

two, separate business entities: CN's Canada Operations (CN-Canada) and CN's

U.S. Operations (CN-US). The CN-Canada headquarters are in Montreal, Canada 

and the CN-US headquarters are in Homewood, IL. All records for the employees of 

CN-US railroads are maintained in the Homewood, IL headquarters. If BA 1103 

Canadian National is entered as the employer on the APPLE Supplemental Annuity 

screen, the G-88p would be released to CN's Montreal headquarters. Because the 
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records of CN-US employees are not maintained there, releasing the G-88p to the 

Montreal headquarters could cause a significant delay in handling if the employee 

actually worked for a CN-US railroad. 

The following are the CN-US railroads:

• BA 1303 – Bessemer and Lake Erie

• BA 1516 – Illinois Central

• BA 1607 – Duluth Winnipeg and Pacific (Merged into Wisconsin Central 12/2011)

• BA 1617 – Duluth Missabe and Iron Range (Merged into Wisconsin Central 

12/2011)

• BA 2630 – Chicago Central and Pacific

• BA 2633 – Wisconsin Central

• BA 3397 – Elgin Joliet and Eastern

• BA 4227 – Grand Trunk Western (Previously BA 1208)

• BA 4249 – Pittsburgh and Conneaut

B. CN-US Agreement Employees Who Are Covered By an Employer Pension Plan

In 2004, CN acquired these three railroads:

• BA 1303 – Bessemer and Lake Erie 

• BA 1617 – Duluth, Missabe and Iron Range

• BA 4249 – Pittsburgh and Conneaut

In 2009, it also acquired the following railroad:

• BA 3397 (previously BA 1309) – Elgin, Joliet and Eastern. 

All four railroads were subsidiaries of United States Steel (USS) and the employees of 

these railroads were covered under the USS pension plan. Because CN was obligated 

to honor the contracts that the various unions had previously negotiated with USS, the

agreement employees of these four railroads remained covered under the pension plan

after CN acquired them.

Many of the agreements have since expired. Under most of the newly negotiated

agreements, the pension plan that covered the agreement employees of these four 

railroads is closed to new employees hired after a specific date. However, this does not 

affect the employees who were covered under the plan prior to the new agreements. 

They are still covered under the pension plan. 

C. Former Duluth, Missabe & Iron Range Employees of Wisconsin Central

In December 2011, BA 1607 Duluth, Winnipeg and Pacific (DW&P) and BA 1617

Duluth, Missabe and Iron Range (DM&IR), were merged into BA 2633 Wisconsin 

Central (WC). Both DW&P and DM&IR ceased to be covered employers effective with 
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the merger. Service and compensation of the employees who worked for these railroads 

are now reported under BA 2633 Wisconsin Central. 

At the time of the merger, DW&P and WC agreement employees were not covered 

under a railroad pension plan. However, the employees of DM&IR were covered. If a 

current WC employee worked for DM&IR before the merger, enter the information for 

DM&IR on the APPLE Supplemental Annuity screen, not the information for WC (see 

FOM1 315.17.1). 

315.22.5 Canadian Pacific Railroad

This is the same situation described in FOM1 315.22.4.A for Canadian National 

Railway. If an employee states they last worked for Canadian Pacific Railroad (CP), do 

not enter BA 1104 Canadian Pacific as the employer on the APPLE Supplemental 

Annuity screen until you have verified the railroad under which the employee's service 

and earnings were reported. The records of employees of CP's U.S. railroads are

maintained in the CP-US headquarters in Minneapolis, MN. If BA 1104 Canadian Pacific

is entered on the APPLE Supplemental Annuity screen, the G-88p will be released to 

the CP-Canada headquarters in Toronto, Canada. This could cause a significant delay 

in handling if the employee actually worked for a CP-US railroad. 

The CP-US railroads are:

• BA 1606 – Soo Line

• BA 2252 – Delaware and Hudson

• BA 2632 – Dakota, Minnesota and Eastern

• BA 2661 – Iowa, Chicago and Eastern (merged into Dakota, Minnesota and 

Eastern)

315.22.6 Union Pacific Pension Plan – "Level Income" Option

The Union Pacific (UP) Pension Plan for Salaried Employees includes a “Level Income” 

option. The “Level Income” option allows an individual to receive an increased monthly 

pension until the attainment of either age 60, 62 or 65, whichever age the individual 

expects to receive social security benefits or an annuity payable under the RRA. Upon 

attainment of that predetermined age, the monthly pension decreases, regardless of 

whether or not the employee has actually started to receive the expected SSA or RRA 

benefits.

EXAMPLE: The employee retires from UP at age 55 with over 30 years of service. He is 

entitled to a monthly pension of $500.00. He elects the “Level Income” option, which 

allows him to receive a monthly pension of $2000.00 until he becomes entitled to his 

railroad retirement annuity at age 60. When he becomes entitled to the annuity, his 

monthly pension benefit is reduced to $30.00.

The RRB’s General Counsel ruled in Legal Opinion L-99-8, dated August 11, 1999, that 

when the employee elects the “Level Income” option, the supplemental annuity should 
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be reduced by the amount of the monthly benefit he would have received had he not 

elected that option. In the above example, because the employee would have received 

a monthly pension benefit of $500.00 had he not elected the “Level Income” option, the 

supplemental annuity is reduced by $500.00, i.e., it is reduced to zero. It is not reduced 

by $30.00, the actual monthly amount he receives when he becomes entitled to the 

retirement annuity.

315.22.7 Conrail

On August 22, 1998, Norfolk Southern and CSX purchased 58% and 42% of Conrail 

stock, respectively. When this occurred, some Conrail employees left Conrail (early 

retirement, severance, etc.), others remained with Conrail, and others transferred to

either NS or CSX. Those who transferred to NS or CSX eventually were covered under 

the respective railroad's pension plan, with credit given for Conrail service. Current

Conrail employees or former Conrail employees who did not transfer to NS or CSX and 

were vested under the Conrail Pension Plan prior to August 22, 1998 may be eligible for 

a Conrail pension benefit 

315.23 RBD Handling of Attainment Cases

315.23.1 RASI Awards

RASI was replaced by ARP. 

315.23.2 ROC Awards

In final ROC employee annuity awards, no referral will be produced for any case in 

which the employee is entitled to a SUP ANN and attains the age requirement within 

three months after the employee annuity is paid. MAP, the Monthly Attainment Program, 

scans PREH three months prior to and every month after the attainment month. A MAP 

referral will be downloaded to STAR and referred to examiners to enter the pension 

information where pension rights information is indicated on PREH.

315.23.3 Relinquishment of Rights for Disability Annuitants

RBD will examine the folder to see if the employee has authorized the RRB to 

automatically relinquish rights when a SUP ANN becomes payable. Form AA-1d 

authorizes the RRB to relinquish rights when the annuitant becomes entitled to a SUP 

ANN. In addition, Form G-346, Employee's Certification, includes a statement 

authorizing the RRB to relinquish rights when the employee's spouse becomes entitled 

to a spouse annuity.

If such authorization is not in file, RBD will request the field office to obtain Form G-88, 

Employee's Certificate of Termination of Service and Relinquishment of Rights, from the 

employee. RBD will not pay the SUP ANN.until the G-88 is received from the field office. 

If the G-88 is not received within 30 days, RBD will trace for it through the field office.
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If the employee does not want to relinquish rights, RBD will not process the case as a 

SUP ANN denial, and will not release a denial letter to the annuitant.

If the annuitant later relinquishes rights, RBD will award the SUP ANN on ROC. The 

SUP ANN may retroact up to 12 months prior to the date the employee's rights are 

relinquished if the employee was otherwise entitled to a SUP ANN for that entire period.

315.24 Reduction to SUP ANN When Employer Coverage Terminates

In most cases, retired employees continue to receive their employer pensions after an 

employer’s coverage terminates. The pension payments might continue to be made by 

a successor railroad, an insurance company contracted by the railroad to pay benefits, 

or the Pension Benefit Guaranty Corporation. Legal Opinion L-76-97 states that the 

supplemental annuity continues to be reduced by the employer pension and no

adjustment is required. 

However, the reduction to the supplemental annuity for the employer pension should be 

removed after the employer coverage terminates if the retired employee either:

• Does not continue to receive the employer pension; or

• Does not receive a lump sum in lieu of continued monthly pension payments.

315.25 Income Taxes on SUP ANN

315.25.1 Federal Income Tax

The RR Act specifies that supplemental annuities are not exempt from Federal income 

tax laws. Supplemental annuities are included in income taxable under Federal income 

tax laws because they are considered to be in the same category as other employerfinanced private retirement programs. Refer to TOM1.120.05.10 for information about 

how supplemental annuities are taxed under federal laws.

315.25.2 State Income Tax

The RRA excludes both regular and supplemental annuities from state income tax laws 

(see TOM1.130).

315.26 Additional Historical Background

Additional historical background on supplemental annuities is in FOM1 Art. 3 App. E. 

The appendix includes the legislative history of supplemental annuities, the 

supplemental annuity cutbacks from 1987 through 1990, how the Railroad Retirement 

and Survivors Improvement Act of 2001 (RRSIA) affected supplemental annuities, and a 

brief description of the TACAL program, which was used prior to RRSIA to calculate 

employers’ supplemental annuity taxes.