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6.2.1 Effective Date and Definitions

A. Effective Date - The effective date of this procedure is September 29, 1997. This 

means that any decision (initial, final, and decisions under reconsideration or 

appeal at any level) considered or adjudicated on or after September 29, 1997, is 

subject to this procedure. The Reconsideration Section will use the new 

regulations in determining whether a reopening decision made after September 

29, 1997 is correct. Reopening decisions can be reversed if they are incorrectly 

made under these rules.

If the decision being reconsidered is a reopening decision made before 

September 29, 1997, handle the reconsideration in accordance with legal opinion 

L-97-50 as follows: If the rate correction was correctly handled under Board 

Order 75-5 and is otherwise correct, do not change it. If an overpayment is being 

reconsidered, apply the new regulations to determine whether it should be 

recovered. If recovery of an overpayment has begun, further recovery action 

should cease (i.e., the withholding amount should be removed and the rate 

corrected). If the annuitant requested waiver and part of the overpayment has 

been recovered or an accrual has been used to reduce the overpayment, forward 

the file to DRD for a waiver determination regarding the withheld or recovered 

amount.

B. Administrative Finality Principle - The principle of "administrative finality" is used 

in the payment of annuities and lump sums under the RR Act. Under this 

principle, the Office of Programs - Operations adjudicates claims and makes 

decisions as to the rights of persons to benefits under the RR Act. After the 

expiration of the time for filing an appeal, such initial decisions become final and 

binding upon the parties to it. This means that once a decision is final, it can be 

reopened only when the conditions described in this chapter are met. If the 

conditions for reopening are not met, we apply administrative finality to the 

decision and consider it to be accurate.

The administrative finality principle is also applied in Medicare decisions involving 

HI benefits in Canada and DOB determinations.

C. Restriction On Review - When reviewing a case for application of amendments, 

deductions, reductions, etc., that review should not go any further than is 

necessary to complete the current action. Unless the current action implies that 

previous actions in the case are incorrect (such as a PREH referral or cost-ofliving reject/review code which indicates a discrepancy in the annuity 

computations), assume that previous actions on the claim are correct. If, 

however, an error comes to your attention in the normal course of examining the 

folder, determine if the previous action can be reopened per RCM 6.2.2. If 

reopening is allowed, correct the previous action.
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Examiners should be alert to all factors related to the current action. For 

example, when the current action establishes an overpayment, examiners should 

make sure all related actions that might adjust the net overpayment have been 

considered, i.e., if an overpayment is caused by excess earnings, the examiner 

should make sure all recomputations (such as an ARF adjustment) and/or 

delayed retirement credits payable based on those earnings have been 

considered.

The guidelines in these sections apply for post-adjudication actions. The 

guidelines for reconsideration actions are described in RCM 6.1.9 through 6.1.14.

D. Initial Decision - An initial decision is an appealable determination affecting 

monthly benefits or lump-sum payments in a case. The decision becomes “final” 

only after formal notice of the determination has been sent in writing to the 

applicant(s), annuitant(s), or authorized representative(s) and the reconsideration 

period has expired.

1. Types of determinations included are:

a. Awards (including O/M and additional service or deemed service 

month recomputation awards):

b. Denials (including an ER denial);

c. Increases in the amount of the annuity because of amendment, 

yearly RRB cost-of-living adjustments;

d. Reductions in the amount of annuities under the O/M because of 

entitlement to other benefits; or because of entitlement of other 

beneficiaries;

e. Disability ratings (approval or denial of an alleged disability);

f. Deductions (including deduction because of employer or "last 

person" service, for excess earnings, or for failure of spouse or 

widow(er) to have a child in his/her care);

g. Termination of annuities (including finding that a disability has 

ceased);

h. Determination that underpayment or overpayment has been made 

and will be adjusted;

i. Denial of waiver of recovery of overpayment (this decision may be 

part of an initial decision made in correcting an earlier decision and 

adjudicating an overpayment);
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j. Tier I offsets due to the payment of or adjustment in SS (LAF E or 

C), worker’s compensation/public disability or PSP benefits where 

the effective date of the benefits is later than the date of our final 

decision;

k. Transfer of claims to SSA (we have determined that the employee 

does not have 120 months of service or the employee does not 

have an insured status in a death case);

l. Determination of entitlement to HI and SMI Medicare benefits;

m. Adjudication of alien non-payment provision; and

n. Adjustments to supplemental annuities for the receipt of private 

pensions (RCM 1.4.60-65).

2. Types of actions not included are:

a. Abandonment for failure to prosecute; and

b. Temporary withholding of annuity payments if deductions may 

apply.

E. Final Decision - An initial decision becomes final when the applicant or annuitant 

has failed to take the next step in the appellate process and the following periods 

have expired:

1. Initial Decision - Sixty days from the date notice of the initial decision was 

mailed to the applicant or annuitant at the address (s)he furnished.

2 Reconsideration Decision - Sixty days from the date notice of the 

reconsideration decision was mailed to the applicant at the address (s)he 

furnished.

3. Hearings and Appeals Decision - Sixty days from the date notice of the 

decision by the Bureau of Hearings and Appeals was mailed to the 

applicant at the address (s)he furnished

4. The Board - One year after the decision will have been entered upon the 

records of the Board and communicated to the claimant.

F. Reopening - For the purpose of these instructions, reopening is the revision of a 

final decision to correct an error or to change one or more of the factors on which 

the award or denial was based. Instructions on reopening are based on 

guidelines established in Part 261- ADMINISTRATIVE FINALITY of Title 20 of 

the Code of Federal Regulations.
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1. A factor on which an award or denial is based is any one of the elements 

which must be considered in determining eligibility for, and the amount of, 

the award. For example, in a retirement annuity case the factors may 

include age, employment relation, years of service, average monthly 

compensation, current connection, cessation of service, disability, and for 

the purpose of the O/M, insured status, etc.

2. A decision is not reopened and, therefore, the rules on reopening do not 

apply if a decision on the claim has not been made, or if subsequent to the 

decision, an event occurs which affects the award but was not a factor at 

the time the decision was made. See §D.1, above, for examples of events 

subsequent to the decision. These situations are called “no decision” 

cases. Please refer cases falling into this category to Policy and Systems, 

RRA Application and Calculation Section (RAC) prior to any award action. 

Some situations in which “no decision” has been made are:

• A claim which has been lost, overlooked or abandoned (rather than denied) is 

found and reactivation suggests that reopening must be considered because 4 

years has elapsed since it should have been handled.

• An event occurs which because of the law requires an adjustment of the 

annuity, the annuity is not adjusted and no action has been taken until the case 

is later rediscovered. Examples of this situation are as follows:

• a child attains age 18 and the O/M is no longer payable,

• a work deduction or reduction because of entitlement to another benefit is 

required,

• an adjustment is required because of the enactment of a new law,

• receipt of SS or PSP benefits, or

• a widow has been awarded an annuity, we find that she is also entitled to an 

LSDP or that she remarries.

3. When a decision is reopened and revised, notice of the revision must be 

provided to the parties to the decision. The notice must state the basis for 

the revised decision and the effect of the revised decision. The notice 

must inform the parties of their right to further review.

NOTE: This notice requirement also applies to decisions made by the 

Reconsideration Section, Hearings and Appeals and the three-member 

Board. If a revised decision is issued by a reconsideration specialist, any 

party may request that it be reviewed by Hearings and Appeals. If a 

revised decision is issued by a hearings officer, any party may request 
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that it be reviewed by the three-member Board, or the three-member 

Board may review the decision on its own initiative.

4. A reopened decision is binding (i.e., it becomes a final decision) unless a 

timely request for reconsideration is filed, the three-member Board 

decides to review the decision, or the reopened decision is subject to 

further revision required in this procedure. 

5. The procedures governing the appropriate time and place for requesting 

review of a reopened decision are found in RCM 6.1. 

G. New And Material Evidence - Evidence that may reasonably be expected to 

affect a final decision, which was unavailable to the agency at the time the 

decision was made, and which the claimant could not reasonably be expected to 

have submitted at that time.

6.2.2 Conditions For Reopening

A final decision may be reopened:

A. Within 12 months of the date of the notice of such decision for any reason.

NOTE: This is not a mandate to reexamine our own work for a 12-month period. 

Rather, if new information is brought to our attention either by the annuitant or an 

outside agency which calls a final decision into question, then we can make the 

necessary changes.

B. Within 4 years of the date of the notice of such decision, if:

1. There is new and material evidence (6.2.1.G.), or

2. There was adjudicative error not consistent with the evidence of record at 

the time of adjudication.

The evidence submitted must be new to the claimant as well as material to the 

claim or it must be the discovery of our error; or

C. At any time if:

1. The decision was obtained by fraud or similar fault. Fraud is when a 

person makes or causes to be made any false statement or claim for the 

purpose of causing an award or payment to be made. Similar fault means 

an act or failure to act which approximates fraud. Similar fault is a 

knowing failure to inform the RRB of the receipt of benefits (from SSA, 

PSP, etc.) where a person has been put on notice of a duty to inform us of 

the benefit and doesn't do so. See section 6.2.20; 
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2. Another person files a claim on the same record of compensation and 

allowance of the claim adversely affects the first claim;

3. A person previously determined to be dead on whose earnings record 

survivor annuity is based is found to be alive;

4. A claim was denied because of the absence of proof of death of the 

employee, and the death is later established;

a. By reason of an unexplained absence from his or her residence for 

a period of 7 years, or

b. By location or identification of his or her body;

5. SSA has awarded duplicate benefits on the same record of compensation;

6. The decision was that the claimant did not have an insured status, and 

compensation has been credited to the employee's record of 

compensation in accordance with RCM 5.3; 

a. To enter items transferred by SSA which were credited under the 

SS Act when they should have been credited to the employee's 

railroad retirement compensation record; or 

b. To correct an error made in the allocation of earnings to an 

individual which, if properly allocated would have given him or her 

an insured status at the time of the decision and the evidence of 

these earnings was in the possession of the RRB or SSA at the 

time of the decision;

7. The original decision was incorrect because of a clerical or obvious 

adjudicative error and reopening the decision to correct the error would be 

favorable to the annuitant. In general, this means that reopening would 

result in additional money due;

8. The decision found the claimant entitled to an annuity or a lump sum, 

payment based on the earnings record of a deceased person, and it is 

later established that:

a. The claimant was convicted of a felony or an act in the nature of a 

felony for intentionally causing that person's death; or

b. The claimant was subject to the juvenile justice system and was 

found by a court of competent jurisdiction to have intentionally 

caused that person's death by committing an act which, if 

committed by an adult would have been considered a felony or an 

act in the nature of a felony;
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9. The claimant shows that it is to his or her advantage to select a later ABD 

and agrees to refund past payments by cash payment, set-off, full or 

partial withholding;

10. The decision is incorrect because the RRB failed to apply a reduction, or 

the proper reduction, to the tier 1 component of an annuity. For example, 

evidence in the file shows that the annuitant reported the receipt of a 

public service pension on his/her application but we failed to make the offset when we paid the case and an overpayment resulted. In this situation, 

the RRB may apply the reduction retroactively if the error is discovered 

within 4 years. Otherwise, it shall apply the reduction only for the months 

following the month the RRB first takes corrective action.

NOTE: Where the failure to reduce the tier 1 was the result of fraud or 

similar fault on the part of the annuitant, C.10 does not apply. See Section 

C.1. C.10 applies when the error was based on RRB failure to make the 

appropriate, timely tier 1 reduction and 4 years have passed since the 

error occurred.

6.2.3 Effect Of A Change Of Legal Interpretation, Or Administrative 

Ruling, Or Interpretation

A change in legal interpretation or administrative ruling on which a decision is based 

does not render the decision erroneous and does not provide a basis for reopening.

Cases should not be reopened after a final decision has been made solely due to 

another interpretation of the same evidence. For example, in a disability case, after a 

denial determination becomes final, the case may not be reopened because another 

doctor or disability claims examiner interprets the same medical evidence differently.

6.2.4 Decisions Which Shall Not Be Reopened

This section should only be used if you have already determined the case should be 

reopened based on section 6.2.2. If any of the following sections prohibit reopening, 

then you cannot reopen the case even though sections 6.2.2 allows you to reopen.

The following decisions should not be reopened:

A. An award of an annuity beginning date (ABD) to an applicant later found to have 

been in compensated service to a RR employer on that ABD and who is found 

not at fault in causing the erroneous award. 

Use the chart below to determine whether to adjust the ABD and recover the 

overpayment:

 
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Time Since 

Award

Fault Exists? Actions

Within 1 year Yes or No Move ABD and collect O/P.

Note: If low RR earnings, see RCM 

6.6.75 on CBW. If good faith can be 

established, send the case to BFODRD.

>1<4 years No Don’t Move ABD; treat as return to RR 

service & collect O/P.

Note: If an employee requests a later 

ABD or moving an ABD is to the 

employee’s advantage (for example the 

ABD could be set in the middle of a 

month, allowing us to pay the annuity for 

part of the month) then the ABD can be 

moved. 

>1<4 years Yes Move ABD and collect O/P.

If low RR earnings, see RCM 6.6.75 on 

CBW. If good faith can be established, 

send the case to BFO-DRD.

> 4 years No Not Reopenable; Earmark PREH and 

EDM

> 4 years Yes Move ABD and collect O/P.

If low RR earnings, see RCM 6.6.75 on 

CBW. If good faith can be established, 

send the case to BFO-DRD.

Examples:

1. EE is being paid based on original ABD (03-01-94), with Tier 2 

computation based on service and compensation through 1993. The 

annuitant reported on his/her application that a settlement was pending. 

The settlement gave him service in the first 8 months of 1994, but we did 

not adjust the ABD for the settlement.

Time since award: > 4 years

At fault: No
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Decision: Not reopenable since none of the criteria listed in RCM 6.2.2.C 

are met. Apply finality to the original award in all respects. The annuity 

beginning date and annuity computations are considered correct and no 

overpayment should be established for the months covered by the 

settlement.

2. The employee is being paid based on original ABD (02-01-88), with Tier 2 

computation based on service and compensation through 1987. A 

settlement was awarded in 1989 which gave him service through 12-89. 

The applicant never reported the settlement was pending on his 

application or when it was awarded in 1989. We are reviewing the case in 

2005. 

Time since award: > 4 years

At fault: Yes

Decision: Since the employee is at fault (RCM 6.2.2.C.1), reopen and 

move ABD to 01-01-90. 

Note: When fault is in doubt or questionable, please send the case to Policy and 

Systems – RAC.

B. An award of an annuity based on subsequently discovered erroneous crediting of 

months of service and compensation to an individual where:

1. The loss of the months of service and compensation would cause the 

individual to lose his or her eligibility to the annuity; and

2. The erroneously credited months of service do not exceed 6 months; and

NOTE: The erroneous months of service may be greater than 6 but only 

up to 6 months can be used to establish 120 months of service. Cases 

can be reopened to remove erroneously credited months of service over 

the 120 months required for eligibility.

3. The annuitant is not at fault in causing the erroneous crediting of service 

and compensation.

C. An erroneous award of a monthly annuity where the error is $1.00 or less.

D. An erroneous award of a lump sum or accrued annuity where the error is $25.00 

or less.

E. Revision of the amount or payment of a separation allowance lump sum amount 

pursuant to Sec. 6(e) of the RR Act, due to RRB error whether clerical or 

adjudicative, is limited to 60 days from the date of notification of the award of the 

separation allowance lump sum payment.
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NOTE: This provision applies to RRB error. Revision of the amount or payment 

of a separation allowance lump sum amount due to adjustments made by the 

Employers, themselves, can be adjusted as post-adjudicative actions rather than 

reopening. For example, in handling a reject from the SALSA mass adjustment, 

it is discovered that the employer lowered the compensation on which the SALSA 

was based. The SALSA payment, which we made on the previous level of 

compensation reported by the employer, can now be adjusted because there 

was no RRB error in the earlier payment.

6.2.5 Late Completion Of Timely Investigations

A decision may be revised after the 1 and 4 year time periods of Sections 6.2.2.A. and 

2.B. have expired if an investigation into whether to revise a decision began before the 

applicable time period expired and the RRB diligently pursued the investigation to its 

conclusion.

Diligently pursued means that in view of the facts and circumstances of a particular 

case, the investigation was undertaken and carried out as promptly as the 

circumstances permitted. Diligent pursuit will be presumed to be met if the investigation 

is concluded and the decision revised within 6 months from the date the investigation 

began.

An investigation is diligently pursued if we make every attempt to secure needed 

information or tests but a delay is caused by another party (i.e., the annuitant does not 

respond or the delay is caused by the inability to complete a medical test timely).

If the investigation is not diligently pursued to its conclusion:

• The decision will be revised if it is favorable to the annuitant, or

• The decision will not be revised if it is unfavorable to the annuitant.

6.2.6 Claims Filed On The Same Earnings Record

If two claims for benefits are filed on the same record of compensation, findings of fact 

made in a decision in the first claim may be revised in determining or deciding the 

second claim even though the time limit for revising the findings made in the first claim 

has passed. However, a finding that:

• A person was fully or currently insured at the time of filing an application,

• A person was fully or currently insured at the time of death, or

• A person was fully or currently insured at any other time,

may be revised only under the conditions set forth in RCM 6.2.2., above.
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6.2.7 Additional Situations Where Reopening Is Allowed When New 

Evidence Is Received After 4-Year Limit Has Expired

If new evidence is received after the 4-year limit has expired and it establishes:

• A new date of birth, or

• A valid change, for any reason or in any circumstance, in the annuitant's record 

of compensation, and

• The adjustment would result in an increase in benefits, 

pay the annuity increase but only for the months following the month the new evidence 

is received. 

6.2.8 Discretion Of The Three-Member Board And Referral To Board

A. In any case in which the three-member Board shall deem proper, the Board may 

direct that any decision, which is otherwise subject to this procedure, shall not be 

reopened or direct that any decision, which is not otherwise subject to this 

procedure, shall be reopened.

B. Refer to the Board any claim which should be reopened on which a decision was 

made by the Board. When referring the case to the Board, prepare the 

accompanying memorandum and Board Recommendation, G-20a. 

1. Include in the memorandum the following information:

a. In the first paragraph, a brief statement of the recommendation;

b. In the second paragraph, a statement of the facts in the case; for 

example, if the claim was denied, a statement of the requirements 

which the applicant did not meet, or if the claim was certified, 

statement of the basis for award;

c. In the following paragraph(s), the reason the claim was not certified 

originally in the amount now contemplated, and the extent, if any, to 

which fault or neglect on the part of the applicant was involved in 

the failure to make the award in the amount now contemplated;

d. In the last paragraph, the amount of the increase, if any, and the 

amount of the accrual.

2. Prepare the G-20a as follows:
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"REOPENING THE ANNUITY CLAIM OF (NAME OF APPLICANT OR 

ANNUITANT), (DECEASED, IF EMPLOYEE HAS DIED), (CLAIM 

NUMBER)

In the claim of (name of applicant or annuitant or survivor of employee, 

applicant or annuitant, and claim number), the facts relating to (the 

element which is the basis for request to reopen) are such as to warrant 

the reopening of the claim, the claim is reopened pursuant to 20 CFR Part 

261".

6.2.9 Administrative Finality And Legal Partition Awards

In Legal Opinion 99-1, the Bureau of Law stated that the new Administrative Finality 

regulations apply to legal partition, garnishment and assignment decisions on RRB 

annuitants. These regulations provide that a final decision may be reopened within a 

year for any reason; within 4 years if there is new and material evidence or there was 

adjudicative error not consistent with the evidence of record at the time of the 

adjudication; and at any time if the decision was obtained by fraud or similar fault.

Note: The partition amounts deducted from annuities and paid to spouses or former 

spouses are not annuity payments, and they are not subject to the reopening and 

administrative finality provisions. Any underpayments of those amounts should be paid 

out and any overpayment of those amounts should be recovered.

If the legal partition order, garnishment, or assignment request is still in force, adjust the 

monthly annuity rates according to the respective orders. This action is not a 

reopening; it is an initial decision in its own right. The reopening decisions regarding 

overpayments and underpayments made to the RRB annuitant should be handled as 

follows:

• Within 1 Year: Pay any underpayment/ collect any overpayment

• Within 4 years: Pay any underpayment/ collect any overpayment

• Over 4 years and fraud involved: Pay any underpayment/ collect any 

overpayment

• Over 4 years and no fraud involved: Pay any underpayment/ apply 

administrative finality to any overpayment; adjust monthly rate prospectively 

Documenting your decision should be handled as explained in RCM 6.2.10.F.1, 

Documenting Reopening and Administrative Finality Decisions.

6.2.10 Making Reopening Decisions

The intent of the new regulations is to provide a sequential approach to reopening 

based on the time that has passed since the initial decision became a final decision.
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A. Determine whether a final decision is correct:

Usually, new information comes in which questions a specific decision we made. 

This information can come from the annuitant, from another unit with oversight 

responsibilities within the RRB, or from another governmental agency or employer 

which calls into question a decision. The new information indicates either that the 

decision was incorrect based on facts and procedures controlling at the time the 

decision was made or that if we had the new and material information at the time we 

made the decision, we would have done it differently.

We do not reopen because of a change in legal or administrative ruling or 

interpretation (see RCM 6.2.3.) We utilize the reopening procedures to correct 

errors or adjust decisions based on new and material evidence.

B. Determine the time elapsed since the decision became final.

Calculate this period by starting with the date of the notice of the decision and 

ending with the date we can make a corrective award.

1. If it is not possible to establish the date of notice in a payment situation, use 

the voucher date of the award in question. Automated Award Letters to 

Annuitants System (ALTA) uses the voucher date as the date of the letter. If 

it is not possible to establish the date of notice in a non-payment situation, 

use the date the decision was authorized if a letter cannot be secured from 

the field office or annuitant.

2. If the date of the notice of decision is February 1, 1998, we can correct the 

rate through January 31, 1999, for any reason. We can correct the rate 

through January 31, 2002, if there is new and material evidence or 

adjudicative error involved. We can correct the rate at any time if one of the 

situations in 6.2.2.C. applies.

3. The rate correction may be made after the 1 and 4 year periods expire if an 

investigation into whether to revise a decision began before the applicable 

time period and the RRB diligently pursued the investigation to its conclusion 

(see RCM 6.2.5.)

C. Determine whether reopening is permissible based on the appropriate 

reopening rule:

• If the period was 1 year or less, RCM 6.2.2.A. applies.

• If the period was 4 years or less, RCM 6.2.2.B. may apply.

• If the period was more than 4 years, RCM 6.2.2.C. may apply.
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NOTE: Cases properly appealed within the 60-day period for reconsideration 

are not re-openings. The decisions in this situation are not considered final. 

These cases can be corrected based on the decision of the reconsideration 

examiner.

D. Consider exception and special rule situations:

• If we gave an incorrect ABD to an applicant in compensated RR service, review 

section 6.2.4.A;

• If we credit 6 months of service to an applicant, and later we consider the credit 

erroneous, consider section 6.2.4.B;

• If the error is within tolerance, consider sections 6.2.4.C and/or D;

• If we began an investigation within the 1 or 4 year rules of section 6.2.2.A or B. 

and the investigation was not completed within those periods, consider whether 

section 6.2.5, Late Completion of Timely Investigations, would allow you to 

extend the period in question;

• If two claims for benefits are filed on the same record of compensation, 

consider section 6.2.6;

• If a new date of birth or a correction in an annuitant's record of compensation is 

received after the 4-year time limit has expired, consider section 6.2.7.

E. Reopening the case

1. Adjust the annuity - When you reopen a decision, reopen the whole decision. 

Make sure that the annuity is adjusted correctly. That is, if a decision is 

reopened to correct the tier 1, correct any other errors made in the reopened 

decision.

2. Apply the appropriate period of retroactivity. The reopening provision used in 

the decision to reopen determines the appropriate period of retroactivity for 

the subsequent adjustment. However, when we reopen a decision, we 

reopen an entire decision. A decision may contain multiple errors. If we 

reopen a decision and discover additional errors in correcting the decision, 

these should be corrected.

Example 1: A decision is being reopened to correct an error in the tier 2 

which results in a $10.00 per month underpayment and an error in the tier 1 

offset which results in a $150.00 per month overpayment. By itself, the tier 2 

error would normally be reopened retroactively under RCM 6.2.2.C.7 to pay 

the increase due; by itself, the tier 1 error would normally be reopened only 

from the current month under RCM 6.2.2.C.10. The errors were made in the 

same decision, and must be treated consistently. In this example, correcting 
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both errors retroactively would produce a net overpayment, so both errors are 

corrected from the current month under the provisions of RCM 6.2.2.C.10.

Example 2: If 4 or more years have gone by and we discover a tier 1 offset 

error made, for example, in January of 1975, that would be corrected from the 

current month. A tier 2 overpayment error, for example, made in January 

1990, that would not be reopened at all, reopen the tier 1 overpayment 

correcting it from the current month; apply administrative finality to the tier 2 

rate and overpayment.

Example 3: If 4 or more years have gone by and we discover a tier 1 offset 

error made, for example, in January of 1975, that would be corrected from the 

current month. A tier 2 underpayment error, for example, made in January 

1990, that would be reopened, reopen the tier 1 overpayment and the tier 2 

underpayment correcting the errors from the current month.

3. Reopening decisions are generally specific to a decision made in an award to 

an individual claimant. Since spouse and survivor annuities are based on 

employee annuities, however, reopening an employee award under these 

rules can result in reopening the spouse or survivor award.

NOTE: If we review a decision made on an employee award and determine 

that the decision cannot be reopened under this procedure, we apply 

administrative finality to the decision in question. Any spouse or survivor 

annuity made correctly on the basis of the employee annuity will not be 

reopened even if the spouse or survivor awards fall within the time periods 

reopening would normally be allowed. It is not even an issue of applying 

administrative finality to the spouse or survivor awards. If administrative 

finality has been applied to the employee award, the rates are deemed 

correct and reopening the spouse or survivor awards is not even in question.

F. Documenting reopening and administration finality decisions:

1. Documenting Reopening and Administrative Finality decisions in the folder -

Put a note in file (e.g., G-115 memorandum format) stating the facts about the 

case and the specific reason(s) the case will or will not be reopened. The 

note must be signed and dated, and a copy forwarded to BIS-SSS (3rd Floor) 

on a G-59R as well as sent to imaging. Use RRAILS to prepare and image 

note when possible.

2. Viewing and Setting Administrative Finality Codes in PRE:

a. General:

Two fields on the PREH system have been updated to help identify 

administrative finality cases. The two fields are: the Administrative 

Finality Applies Code (3200-ADMIN-FIN-FLG-N); and the 
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Administrative Finality Effective Date (3200-ADMIN-FIN-EFF-DT). The 

Administrative Finality Applies Code indicates with a number (1 

through 4, as explained below) whether administrative finality has been 

applied in a given case. The Administrative Finality Effective Date field 

represents only the effective date of the rate correction when the 

annuity is re-opened or the effective date of the DOB change. It is not

the date of the administrative finality decision. Examiners with access 

to the correction system can correct these fields and all examiners can 

view them to secure the information they provide.

These fields are located on the Rate History Inquiry screen (RHRRID 

(3200) 2 of 6.) These fields should be checked whenever there is a 

question whether administrative finality has been applied in a case. 

For example, if you are computing a case without the claim folder and 

the calculated amount is much lower than that on DATA-Q, this could 

indicate that administrative annuity had been applied in the past. If this 

is the case, review these fields on PREH as explained below and 

handle the case accordingly. If there is an administrative finality code 

on PREH, secure the claim folder to resolve the discrepancy.

b. When to set administrative finality codes:

The purpose of these codes is to identify records whose data on EDM, 

SEARCH and PREH will not automatically produce correct 

computations. For example, when a case was erroneously reopened 

to correct a RRB error over 4 years old, it will have to be returned to its 

previous (i.e., "incorrect") computation. Often, this correction will be 

forced through ROC or SURPASS. This type of case will have records 

on PREH that will not match or update correctly with data coming from 

SEARCH using a current G-90. Setting an administrative finality code 

on PREH, can help future examiners identify these cases. 

For example, in cases where we must apply administrative finality to a 

decision (the decision is a RRB error and it is over 4 years old), the inforce PREH record is deemed correct and future prospective 

adjustments can be made. If EDM or SEARCH data does not support 

the current data on PREH (i.e., the PREH data is based on an old G90 dated 01/01/90 rather that the current G-90 dated 01/01/99), we 

must set an administrative finality code for these cases. This is 

because the administrative finality decision holds that the 01/01/90 G90 takes precedence over the 01/01/99 G-90. 

In reopening situations (for example, to pay a vested dual benefit that 

was not paid when it should have been), you are correcting an error by 

creating a new award that corrects the record on PREH. You do not 

have to set an administrative finality code in these cases. Here the 

EDM, SEARCH and PREH data match and support each other.
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NOTE: The administrative finality codes identify cases we did not

reopen because the administrative finality regulations did not allow it. 

The administrative finality codes do identify decisions in cases that 

ordinarily should never be readjusted except, of course, for the yearly 

cost-of-living adjustments. These codes do not, in themselves, tell you 

why administrative finality has been applied in a particular case; they 

tell you that it has been applied. Retroactive adjustments should not 

be made in these cases without an in-depth review of the claim folder.

c. Viewing and changing administrative finality codes:

To access these fields follow the following steps:

• Go to the ORIS MENU RATE HISTORY INQUIRY screen, enter the prefix and 

claim number of the annuitant, then press enter;

• On the FAMILY GROUP MENU, select the beneficiary and select record 3200, 

then press enter;

• You are now on the RATE HISTORY INQUIRY screen, press F8 to go to page 

2;

• The Administrative Finality Applies Code (3200-ADMIN-FIN-FLG-N) and the 

Administrative Finality Effective ate (3200-ADMIN-FIN-EFF-DT) are displayed 

here;

• To access the HELP screen, move the cursor to the Administrative Finality 

Applies Code and press F1. Three pages of HELP are available.

The fields are as follows:

0 Not applicable

1 Administrative finality applied to original date of birth determination. 3200-

ADMIN-FIN-DOB-DT is used for all annuity adjustments; future 

entitlement(s) should use 3200 DOB-DT-N.

2 Administrative finality applied to previous payments (claim corrected 

prospectively). 3200-ADMIN-FIN-EFF-DT is the effective date of the 

annuity rate correction or DOB correction. In retirement cases, G-90 data 

is not updated to PREH.

3 Administrative finality applied currently and claim is not reopened. An 

error (other than DOB or only supplemental annuity) has been detected, 

but administrative finality has been applied and the decision has not been 
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reopened. Code 3 is also used when more than one administrative finality 

code applies. In retirement cases, G-90 data is not updated to PREH.

4 Administrative finality applied to supplemental annuity only. Code 4 is 

valid for EE only.

5 Inclusion of deemed service months causes an annuity decrease.

6 An error has occurred involving the military service on record. 

Administrative finality has been applied currently and the claim is not 

reopened.

7 There has been a change in the compensation/wages but administrative 

finality has been applied currently and the claim is not reopened. 

8 There has been a change in either the service months, compensation, or 

wages but administrative finality has been applied currently and the claim 

is not reopened.

9 A calculation error has been detected but administrative finality has been 

applied and the claim is not reopened. 

To change these fields position the cursor under the field in question, type in the 

proper entry and press the ENTER key.

d. Administrative Finality Codes and Mass Adjustments:

All mass adjustments react to administrative finality on the DOB. 

Information on specific mass adjustments follows:

COLA - The cost of living mass adjustment adjusts the current rate. In 

code 2 and 3 situations, since the current rate is judged correct, the 

COLA can go ahead and adjust the rate based on the current record.

AERO/RAIL - These mass adjustments made retroactive payments. 

They rejected for manual handling cases where there was no match 

between the calculated amounts and the amounts on PREH.

RESCUE refers cases if PREH indicates administrative finality applies 

to the DOB but RHRRID-ADMIN-FIN-DOB-DT is empty. RESCUE 

also rejects cases if the administrative finality code in PREH is 2, 3, 5,

6, 7, 8 or 9.

6.2.11 Erroneous Decision - Defined

An erroneous decision is one based on:

• A clerical error; or
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• An adjudicative error not consistent with the evidence of record at the time of 

adjudication.

6.2.12 Clerical Errors

Clerical errors can be corrected under sections 6.2.2.A., 6.2.2.B, and 6.2.2.C of these 

procedures. Clerical errors are errors made in completing a form, copying or entering 

data into a computer, or transposing numbers in either situation.

• Under sections 6.2.2.A and 6.2.2.B, clerical errors can be corrected even if the 

corrected decision is adverse to the annuitant;

• Under section 6.2.2.C.7, clerical errors can be corrected at any time if 

reopening the decision in question would be favorable to the annuitant.

6.2.13 Adjudicative Errors

Adjudicative errors or errors on the face of the evidence exist where it is absolutely clear 

that the determination or decision was incorrect. Adjudicative errors are errors in 

applying the law (procedures) to the facts (evidence) of an individual case. A 

determination or decision which was reasonable on the basis of the facts and law 

existing at the time of the determination or decision was made will not be reopened 

merely because there was a shift in the weight of the evidence. A different rule of law 

would now be applied (unless a change in law specifically provides for retroactive 

effect), or a different inference is drawn from the evidence. 

• Under section 6.2.2.A, adjudicative errors can be corrected within 1 year of the 

date on notice of the decision;

• Under section 6.2.2.B, adjudicative errors can be corrected within 4 years of the 

date on notice of the decision;

• Under section 6.2.2.C.7, adjudicative errors can be corrected at any time if the 

decision in question was incorrect because of a clerical or obvious adjudicative 

error and reopening the decision to correct the error would be favorable to the 

annuitant.

The following examples illustrate these points.

Example 1: The examiner denies a claimant a divorced spouse annuity on the basis 

she has been married to the employee for less than 10 years. The claimant never 

appeals the decision. However, the proof of marriage and divorce decree in file 

indicates that they were married 15 years. This is an obvious adjudicative error and the 

denial; may be reopened with full retroactive effect at any time. See section 6.2.2(c)(7)

Example 2: The examiner denies the claimant a disability annuity citing a “medical 

vocational rule" which assumes the employee is under age 50. The claimant never 
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appeals the decision. The evidence of record at the time of the denial clearly shows 

that the claimant was age 55 and the applicable "medical vocational rule" would indicate 

a finding of disabled. Same result as in Example 1.

Example 3: The examiner denies a claimant a disability annuity on the basis that she 

can perform unskilled light work with the result that the appropriate "medical vocational 

rule" dictates a denial. The decision is not appealed. Five years later the claimant 

submits another application for a disability annuity. She submits no new evidence. A 

different examiner finds on the same evidence that the claimant can only perform 

unskilled sedentary work, which applying the "medical vocational rule" applicable at the 

time of the first application would have produced a finding of disabled. The fact that a 

different examiner reached a different conclusion based on the same evidence does not 

mean that the initial denial in this case was based on an obvious adjudicative error. The 

examiners merely weighed the evidence differently and exercised their appropriate 

discretion. The denial is not required to be re-opened. Note, however, that the denial 

could have been re-opened within 4 years under section 6.2.2.B if it was not consistent 

with the evidence at the time of the denial.

NOTE: A decision can be inconsistent with the evidence of a record at the time of a 

decision, but not based on an obvious adjudicative error.

Example 4: The examiner determines vested status for an annuitant and pays a VDB. 

An audit later determines that the vested status determination was incorrect. However, 

8 years have passed since the decision and the reopening would be unfavorable to the 

annuitant. Apply administrative finality to the vesting determination; set an 

administrative finality code on PREH following RCM 6.2.10.F.2.B.

6.2.20 Decisions Involving Fraud or Other Fault

A. Fraud is when a person makes or causes to be made any false statement or 

claim for the purpose of causing an award or payment under the Act. The 

elements of fraud are:

• That the person made or aided in making a statement or claim or caused a 

statement or claim to be made;

• That the statement or claim was false;

• That when the statement was made, the person knew it to be false or made it 

recklessly without any knowledge of its truth; or

• That the person made the statement or claim with the intention that it should be 

acted upon so as to cause benefits to be paid.

The term "with intent to defraud" means a conscious attempt at deception or 

misrepresentation for the purpose of obtaining an authorized benefit. Intent is a 

mental attitude which can seldom, if ever, be proven by direct evidence. "Intent 
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to commit a crime" is a state of mind existing when a person commits an offense 

and may be proven by the offender's acts and by reasonable inference there

from, as well as from other acts, declarations and circumstances.

B. Similar fault means an act which approximates fraud. Similar fault exists when 

person knowingly conceals information that is material to the determination. The 

main distinction is that fraudulent intent is not required. However, the incorrect or 

incomplete statement must have been made knowingly or material information 

concealed knowingly. 

C. Failure to report, without evidence that the annuitant had knowledge of the duty 

to report, does not constitute "similar fault". Knowledge can be established by 

evidence such as certification in the file that the annuitant was explained and 

understood the reporting requirement or where the circumstance indicate that it 

was a knowing failure to report.

Example: Mary believes that her prior husband secured a divorce and that her 

marriage to the employee is valid. However, as she does not know where such 

divorce was obtained and does not wish her first husband contacted, she fails to 

list the prior marriage on her application. We later establish that her prior 

marriage was not terminated. The award of wife's benefits must be reopened, 

since she knowingly concealed her prior marriage, even though she had no 

fraudulent intent.

D. The following elements are common to fraud and other fault:

• "Material" as applied to a false statement, false representation or deceitful 

withholding of information where there is a duty to disclose the truth means that 

the deceit must relate to a matter that is of significance and would tend to 

influence Operations to pay benefits not authorized by the RR Act; permit a 

beneficiary to keep benefits previously paid which were not authorized; or 

otherwise influence Operations in determining rights to payment. Courts have 

said that the test of whether a statement is material is the capability of the 

statement to mislead, rather than whether it was possible for the intended 

deception to attain its end.

For example, if a woman applies for a widow's insurance annuity and falsely states 

that she was married to the deceased employee, her statement is material even 

through no annuity could have been paid to her erroneously because of our 

requirement that she furnish proof of marriage. Examples of situations where a false 

statement or representation would not be material, because it does not tend to affect 

payment of benefits, are as follows:

• An applicant for a disability annuity falsely states that he is age 45 when in fact, 

he is only 40 years of age.
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• A widow falsely claims she married the employee a few months earlier than she 

actually did so that it will appear that her child was conceived after, instead of 

before, the marriage.

• "Knowingly" as used in a criminal statute generally means that state of mind 

which exists when the accused person is in possession of the facts under which 

(s)he is aware (s)he cannot lawfully do a particular act, but nevertheless 

proceeds to do it. It is intended to exclude unwitting or unconscious actions 

contrary to law, such as mistake of fact or accidents. The RRB should also 

consider any physical, mental, or linguistic (including lack of facility in English) 

disabilities which the claimant may possess. For example, an honest belief that 

a prior marriage has been dissolved is a good defense to a charge of 

"knowingly" making a false statement regarding termination of the marriage.

• "Willfully" means voluntarily, purposely, deliberately, and intentionally, as 

opposed to accidentally, inadvertently, or carelessly. It involves actual 

knowledge of the existence of a legal obligation and the intent to evade that 

obligation.

6.2.21 Examples Of Fraud And Similar Fault Determinations

A. Examples of Situations where Fraud may be an Issue:

Example 1: The claimant applies for a spouse benefit and informs the Board on 

her application that she is receiving a civil service pension. The RRB pays the 

spouse annuity without a public pension offset. In this case there is an initial 

determination which is incorrect. After 4 years from the notice of this 

determination, the tier 1 may only be adjusted in accordance with section 

6.2.2.C.10 (prospective application). Within 4 years, the tier 1 may be adjusted 

retroactively (RCM 6.2.2.B.)

Example 2: Same facts except the claimant incorrectly indicates on her 

application that she was not receiving a civil service pension. The RRB 

discovers the pension 5 years later. In this case, the tier 1 can be adjusted at 

any time retroactive to the annuity beginning date, since the initial decision, 

which was incorrect, was obtained by fraud or similar fault. 

Example 3: Same facts as example 2, except that the questions on the 

application concerning public pension are left blank. The RRB may only adjust 

the tier 1 prospectively as in example 1. There is insufficient evidence that the 

incorrect decision was obtained by fraud or similar fault.

Example 4: Same facts, except that the claimant becomes eligible for a civil 

service pension 1 year after her annuity beginning date, but fails to inform the 

RRB. The RRB learns of the pension 5 years after its initial decision. In this 

case the initial decision was correct, but a post-adjudicative event, of which the 

RRB was unaware, caused an incorrect rate to be paid. The RRB's failure to 
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adjust the rate at the time the pension was commenced was not a decision to 

which reopening applies. The RRB could adjust the tier 1 retroactive to the 

commencement of the pension and assess an overpayment. This is not a 

reopening, but a new initial decision.

Example 5: A widow is receiving a widow's annuity based upon her caring for the 

minor child of a deceased employee. She advises the RRB when the child turns 

18. The child is not disabled. This is noted in her claim file, but no action is 

taken. The payment continues for a period of 5 years before the error is 

discovered. The RRB may terminate the benefit retroactive to the month before 

the month the child attained age 18. The failure to take action in this case is not 

a decision subject to the reopening procedures.

B. Examples of Situations where Similar Fault may be an Issue:

Example 1: The claimant applies for an annuity and states that he intends to 

work for employer A, a non-railroad employer. Based upon his expected 

earnings work deductions are applied. The following year he reports that he will 

not earn over the exempt amount and work deductions are removed. Later in the 

year it is clear to the annuitant that he will earn considerably more than the 

exempt amount, but does not report this to the RRB. The RRB discovers the 

excess earnings 5 years later. Based on the circumstances, the RRB can 

presume in this case that the employee knowingly concealed his earnings and 

that the decision to remove work deductions was obtained by similar fault. 

Consequently, the RRB may apply work deductions in the year in question and 

assess an overpayment.

Example 2: Same as the above except that the employee had no intention of 

working at the time of his application but then later decides to return to work. He 

earns over the exempt amount but never reports his earnings. Since the RRB 

never made a decision with respect to the application of excess earnings, it may 

adjust the annuity rate for the period in question and assess an overpayment at 

any time. This is not a reopening but is a post-adjudicative action.

6.2.30 Decisions Involving New and Material Evidence

New and material evidence includes any evidence which was not a part of the claim file 

when the decision was made, which was unavailable to the agency when the decision 

was made, and which the claimant could not reasonably be expected to have submitted 

at that time. This evidence must relate to facts or circumstance existing at the time of 

adjudication although the evidence itself may have been acquired subsequently.

Within 4 years of the date of the notice of a decision, you may reopen a decision on the 

basis of new and material evidence if:

Additional service and/or compensation, regardless of when claimed, is verified by 

employer records, or, in the case of service, by affidavits; or
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• The evidence submitted is acceptable under the regulations of the Board, 

provided there is no conflicting evidence or a previous conflict is satisfactorily 

explained; or 

• The age evidence is of a higher probative value than the evidence previously 

relied upon.

6.2.31 Reopening Denials

Denials are subject to the same reopening rules as is any other decision we make. 

RCM 5.1.47 covers the reopening of denials.

6.2.40 Reopening A D/A Claim After Reduced A&SA Awarded

Reopen for certification under the disability provisions of the Act any case in which we 

awarded a reduced A&SA to an employee after he filed a claim for a disability annuity if:

• Before the annuitant appeals, we find that disability began as of a date before 

the expiration of the appeals period; and

• If the disability ABD is later than the ABD of the initial award, all payments 

made for the period before such later ABD are recovered.

If we reopen a prior decision under this section and we make a new award, the ABD of 

the new award is the first day we found the applicant to be disabled but not earlier than 

12 months before the filing date of the application.

6.2.41 Later ABD Or Cancellation Of Application Is Requested

When an employee, spouse, or survivor annuitant requests an ABD which is later than 

the ABD previously established, or he requests cancellation of his application, reopen 

the award if:

• The annuitant shows that it is to his advantage to select the later ABD or cancel 

the application (see NOTE); and

• Such person is alive at the time the request cancellation is filed; and

• All payments made for the period before the later ABD or on the basis of the 

cancelled application are recovered by cash refund or set-off. 

However, an employee awarded a reduced A&S or disability annuity with an ABD 

before July 1, 1974, may not cancel his application or request an ABD of July 1, 1974, 

or later to qualify himself for an unreduced A&S annuity on the basis of having attained 

age 60 and completed 30 years of service or to qualify his spouse for an annuity at age 

60.
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NOTE: Usually, Headquarters will become aware of a request to cancel an award or 

application when the field office sends in the applicant’s request to be imaged. No 

further action will be required when the request is received. If the initial request for 

cancellation is received in Headquarters, forward the request to the Retirement or 

Survivor Customer Service Group for handling.

Take special care when the applicant claims the rate will increase by postponing the 

annuity beginning date to eliminate age reduction. If social security benefits, public 

service pension, railroad retirement dual entitlement, etc. is involved, eliminating age 

reduction may not increase the net annuity. If the applicant’s net rate will not increase, 

contact the applicant to explain that age reduction is not the only factor reducing the 

annuity.

6.2.42 M/S Eliminated From Award

We may reopen an award when M/S had been included in the computation of an 

annuity and we later find that the elimination of the M/S will benefit the annuitant. That 

portion of past annuity payments attributable to M/S must be recovered.

NOTE: SSA will not allow credit for M/S if we used it in our award as compensation. 

SSA applies this restriction even if the M/S is later removed. If an annuitant requests us 

to remove the M/S as compensation in order to receive credit for it under the SS Act, 

explain fully to the annuitant that the removal will not benefit him

6.2.43 Finality Of DOB Established

Once a DOB has been established and it is material to an award (even though only a 

partial award has been made) or is the basis for a determination of entitlement to 

Medicare, the DOB is final for the purpose(s) for which it was established and may be 

changed only if the claim is reopened because:

• The determination was caused by fraud or other fault of the applicant (do not 

develop these factors if the claim folder does not indicate them), or

• There is a clear and obvious mistake of fact or a clear and obvious mistake of 

law, or

• New and material evidence received after the determination would result in a 

decision favorable to the applicant. Do not consider the decision favorable if 

establishing an earlier DOB changes an employee's closing date and 

disqualifies him from receiving a SUP ANN.

In those cases in which it is determined after the award of an employee annuity and/or 

the determination of entitlement to Medicare is made that new evidence, superior to the 

original birth-date evidence, established that the employee is younger than was 

previously believed, apply administrative finality to the existing award(s) and/or 

entitlement determination(s), unless the original determination was caused by fraud or 
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other fault of the annuitant. Use the DOB established by the superior evidence for 

determining any new entitlement to an annuity or Medicare.

For further discussion of finality of DOB established, see sec. 4.2.17.

6.2.44 Switching To An Employee D/A After A Reduced A & S Award

If an employee qualifies for both an age annuity and a disability annuity when an 

application for an age annuity is filed, the application may be reopened to award a 

disability annuity based on a notice from the Social Security Administration that a period 

of disability has been established. When the disability notice is received, an application 

for a disability annuity should be developed. However, the beginning date of the 

disability annuity is not restricted to twelve months before the disability application is 

filed. The disability annuity can be paid based on the filing date of the application for 

the age annuity, even if the disability notice is received more than one year after the age 

annuity is awarded. If notice of disability is received from another source, forward the 

file to P&S-RAC.

Notify DMG and BTRS of this change in annuity type using a G-59.

6.2.45 Re-opening A Disability Award to a Denial

Part of the definition of disability is that the claimant must have a severe and permanent 

medical condition. For total and permanent employee disability annuities and for 

survivor disability annuities, the condition must be severe enough to prevent substantial 

gainful activity (SGA). For employee occupational disability annuities, the condition 

must be severe enough to prevent the performance of occupational duties of the regular 

railroad occupation. “Permanent” is defined as lasting for at least 12 months or 

resulting in death.

There is a distinction between disability annuities that are terminated because the 

annuitant recovered from the disability and annuities that are re-opened and denied 

because the annuitant’s medical condition did not meet the 12-month duration 

requirement. When the claimant returns to work at the SGA level (or at regular railroad 

occupation in occupational disability cases) during the waiting period and after the final 

determination, and this work continues, the disability examiner will re-open the 

determination of allowance on the claim and revise it to a denial. 

See DCM 10.5.1.3 for actions that a disability adjudicator will take when a disability 

decision is reopened to deny.

6.2.50 Tolerance Rules

To eliminate the recertification of an award solely to pay or recover a negligible amount, 

the Board established rules of tolerance.
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6.2.51 Definition

Tolerance is considered to be a final decision to an annuitant’s rate (recurring, OPO, or 

for a closed period) if a letter is released containing appeal rights and:

• An award is vouchered; or

• A PREH update award is certified.

6.2.52 Overpayment Tolerance

The tolerance amount for a newly established overpayment is $25.00. Do not recover 

an overpayment that is $25.00 or less. Do not enter the overpayment on the Program 

Accounts Receivable (PAR) system. 

Once tolerance has been applied to an overpayment, the Railroad Retirement Board will 

not “seek” recovery. This means that the amount of the tolerance overpayment will not 

be added to future overpayment amounts or recovered from future accruals. 

Follow the instruction in 6.2.54 or 6.2.55 if the monthly rate is changing. This applies to 

the recurring rate and for a closed period.

6.2.53 Underpayment Tolerance

The tolerance amount for underpayments is $5.00. Do not issue an accrual payment or 

lump sum award when the accrual is $5.00 or less. This only applies to one payment 

only situations, i.e., tax refund, SALSA, LSDP, and residual payments. The 

underpayment will not be included on any future adjustment for a subsequent period 

being paid to either the underpaid annuitant or to the eligible survivor(s) of that 

annuitant.

Previously, when tolerance was applied to an underpayment, a form G-114 (3-94), 

Folder Record of Underpayment Tolerance, was completed to document the 

underpayment. Form G-114 is no longer necessary and is obsolete. Previous forms in 

file can be ignored.

If you are adjusting annuity components for reasons described in 6.2.54 or 6.2.55, issue 

the accrual payment even if the accrual is $5.00 or less.

Note: When the $5.00 tolerance is applied to a lump sum award, the amount not paid is 

still deductible from the gross residual. Place a note in the file of the amount payable 

should an eligible person request the payment.
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6.2.54 Monthly Rate Tolerance

Monthly rate tolerance refers to a change in the annuity rate at the effective date of the 

adjustment. This applies in a recurring situation or in a closed period, i.e., adjustment is 

needed from 1/1/99 then you consider tolerance as of 1/1/99. 

• If the change in the monthly annuity rate is $1.00 or less, do not reopen the 

case unless an exception applies as specified in 6.2.55.

• If the change in the monthly rate is more than $1.00, adjust the case as follows.

Monthly rate 

change is

And Then

More than $1.00 Overpayment $25.00 or 

less • Correct rate

• O/P is tolerance

• No PAR entry

• Use paragraph 444.1

• Do not complete tier 

summary - Complete 

payment summary only

More than $1.00 Overpayment more than 

$25.00 • Correct rate

• Recover O/P

• Enter onto PAR

• Complete tier summary

More than $1.00 Underpayment 

exists(any amount) • Correct rate

• Issue accrual

• Complete tier summary

Note: For a closed period adjustment, complete a PREH update award or OPO.
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RCM 6.2 Reopenings Revised Aug 28, 2017 Page 29 of 31

6.2.55 Exceptions To Tolerance

Monthly rate tolerance does not apply in the following situations. 

• An annuitant requests that his/her annuity be increased or a beneficiary 

requests payment of a lump sum amount. 

• A partial award was made and the annuitant died before a final award could be 

processed.

• For purposes of establishing the computation change in an O/M to RR or a RR 

to O/M switch, tolerance should not be considered when deciding to do an 

award. Examiners should always do an award to show when the RR or O/M 

rates became effective. Tolerance will be determined at the effective date of 

any potential change. For example, if the Tier 1 is due a recalculation from the 

ABD, tolerance is determined at the ABD. If the tier 1 is due a recomputation, 

tolerance is determined at the effective date of the recomputation. If tolerance 

applies the rates, pay the current RR rate on the record when doing an O/M to 

RR switch.

• A STAZA award can be made.

• A simultaneous RR/SS adjustment is required due to an increase in the SS 

benefit rate. (In such a case, the recurring rate tolerance will not apply. 

However, if an RR overpayment exists after the SS accrual has been used as 

an offset, overpayment tolerance should be considered.)

• Recovery of Medicare premium arrearages.

• Cost-of-living, RAIL, SSA COLA rejects 

• RESCUE rejects if the EDM activity is a railroad lag service/compensation 

posting

• Applying DRC’s (based on age or work)

The following chart only applies in exception cases as described above.

Monthly rate change is And Then

$1.00 or less Overpayment $25.00 or less • Correct rate 

• O/P is tolerance

• No PAR entry
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RCM 6.2 Reopenings Revised Aug 28, 2017 Page 30 of 31

• Use paragraph 444.1

• Do not complete tier 

summary - Complete 

payment summary only

$1.00 or less Overpayment more than 

$25.00 • Correct rate

• Recover O/P

• Enter onto PAR

• Complete tier summary

$1.00 or less Underpayment exists(any 

amount) • Correct rate

• Issue accrual

• Complete tier summary

Note: For a closed period adjustment, complete a PREH update award or OPO.