Basic Formula
Regular railroad retirement annuities are calculated under the following
two-tier formula:
Tier 1 Component
The first tier is based on railroad retirement credits and any social
security credits an employee has acquired. If the employee has at least 120
months of railroad service, or 60-119 months of railroad service with at least
60 months of railroad service after 1995, the amount of the first tier is
calculated using reductions to the social security formula.
Exception: If the employee has at least 360 months of railroad service or is
disabled and has at least 120 months of railroad service, the amount of the
first tier is calculated using social security formulas and railroad retirement
age and service requirements.
Tier 2 Component
The second tier is based on railroad retirement credits only, and may be
compared to the retirement benefits sometimes paid to workers in other
industries in addition to social security benefits. Reductions are based on the
Railroad Retirement Act.
Full Retirement Age For Spouse or
Divorced Spouse
The term "Full Retirement Age (FRA)" means the age at which the spouse of an
employee with less than 360 months of railroad service or a divorced spouse can
receive a full annuity (not reduced for early retirement). FRA for persons who
were born before January 2, 1938, is age 65. The FRA for persons born after
January 1, 1938, will gradually increase over a 20-year period to age 67, as
illustrated in the following chart:
Before 1-2-1938 |
65
|
1-2-1938 thru 1-1-1939 |
65 and 2 months |
1-2-1938 thru 1-1-1939 |
65 and 4 months |
1-2-1938 thru 1-1-1939 |
65 and 6 months |
1-2-1938 thru 1-1-1939 |
65 and 8 months |
1-2-1938 thru 1-1-1939 |
65 and 10 months |
1-2-1938 thru 1-1-1939 |
66 |
1-2-1938 thru 1-1-1939 |
66 and 2 months |
1-2-1938 thru 1-1-1939 |
66 and 4 months |
1-2-1938 thru 1-1-1939 |
66 and 6 months |
1-2-1938 thru 1-1-1939 |
66 and 8 months |
1-2-1938 thru 1-1-1939 |
66 and 10 months |
1-2-1960 and later |
67 |
(FRA also affects Tier 1 component work deductions, regardless of the number
of the employee's years of railroad service.)
Spouse Annuity Age Reduction When
Employee Has Less Than 360 Months of Railroad Service -
Please refer to the summary chart below to see if an age reduction applies to
your spouse annuity.
Tier 1 Component Age Reduction
Your spouse Tier 1 component age reduction depends on the employee's total
years of railroad service.
- Employee Has 60-119 Months of Railroad Service with at Least 60 Months of
Railroad Service After 1995 - Your Tier 1 is reduced by 1/144 for the first 36
months you are under FRA and by 1/240 for each additional month you are under
FRA on your RRA annuity beginning date (ABD), or if earlier, your social
security benefit date of entitlement.
- Employee Has 120-359 Months of Railroad Service - Your Tier 1 is reduced
by 1/144 for the first 36 months you are under FRA and by 1/240 for each
additional month you are under FRA on your annuity beginning date.
Tier 2 Component Age Reduction -
Your spouse Tier 2 component age reduction depends on whether or not the
employee had railroad service before August 12, 1983.
- Employee Does Not Have Railroad Service Before August 12, 1983 - Your Tier
2 is reduced by 1/144 for the first 36 months you are under FRA and by 1/240
for each additional month you are under FRA on your annuity beginning date.
- Employee Has Some Railroad Service Before August 12, 1983 - Your Tier 2 is
reduced by 1/144 for each month you are under age 65 on your annuity beginning
date.
If the employee retired with an annuity beginning date: |
and the employee has attained: |
your spouse annuity can begin the first full month you are
age 62.
Your Tier 1 will have an age reduction if you retire before
attaining:
|
Your Tier 2 will have an age reduction if you retire before
attaining: |
before 1975 based on at least 120 months of railroad service,
|
age 65,
|
your Full Retirement Age (FRA).
|
age 65 |
in 1975, or later, based on at least 120 months of railroad
service, including some railroad service before August 12, 1983,
|
age 62, |
your FRA. |
age 65. |
in 1975, or later, based on at least 120 months of railroad
service and no railroad service before August 12, 1983, |
age 62, |
your FRA. |
your FRA. |
in January 2002 or later, based on 60-119 months of railroad
service with at least 60 months of railroad service after 1995,
and had some railroad service before August 12, 1983, |
age 62, |
your FRA.
(The employee must have an SS Act Insured Status to qualify you
for a Tier 1 component.) |
age 65. |
in January 2002 or later, based on 60-119 months railroad with
at least 60 months of railroad service after 1995, and did not
have railroad service before August 12, 1983, |
age 62, |
your FRA.
(The employee must have an SS Act Insured Status to qualify you
for a Tier 1 component.) |
your FRA. |
Spouse Annuity When Employee Has At Least
360 Months of Railroad Service -
Please refer to the summary chart below to see if an age reduction applies to
your spouse annuity.
If the employee annuity is based on age and service, your spouse Tier 1 may
have an age reduction, depending on the employee's annuity beginning date.
If the employee annuity is based on disability, your spouse Tier 1 may have
an age reduction, depending on your spouse annuity beginning date.
Your spouse Tier 2 will not have an age reduction.
If the employee is retired
based on: |
and the employee:
|
your spouse annuity can
begin the first full month you are age 60. Your Tier 1 will: |
Your Tier 2 will: |
age with an annuity beginning date of July 1, 1974 or later, and
both attained age 60 and acquired 360 months of railroad service
before July 1984, |
retired at age 60 or later, |
not have an age reduction.
Note: For these cases, your spouse annuity cannot begin before
January 1, 1975. |
not have an age reduction. |
age and either attained age 60 or acquired 360 months of
railroad service in July 1984 through December 2001, |
retired at age 60 through age 61, with an employee annuity
beginning date before January 2002, |
have an age reduction based on the employee's age reduction
until both you and the employee have attained age 62. You will
then have an age reduction for the number of months you are
under Full Retirement Age (FRA) when both you and the employee
are age 62. |
not have an age reduction. |
age and either attained age 60 or acquired 360 months of
railroad service in July 1984 through December 2001, |
retired at age 62 or later, |
not have an age reduction. |
not have an age reduction. |
age with at least 360 months of railroad service and an annuity
beginning date of January 2002, or later, |
retired at age 60 or later, |
not have an age reduction. |
not have an age reduction. |
disability with at least 360 months of railroad service and an
employee annuity beginning date before July 1, 1984, |
has attained age 60, |
not have an age reduction. |
not have an age reduction. |
disability with at least 360 months of railroad service and an
employee annuity beginning date of July 1, 1984, or later, |
has attained age 60 |
have an age reduction depending on your spouse annuity beginning
date.
- If your spouse annuity begins before January 2002, and
begins before your FRA, your Tier 1 will have an age reduction.
(If you are age 60-61 on the date your spouse annuity begins,
you are deemed to be age 62.)
- If your spouse annuity begins January 1, 2002, or later, your
Tier 1 will not have an age reduction. |
not have an age reduction. |
Divorced Spouse Annuity -
A divorced spouse annuity is limited to Tier 1 component only. Regardless of
the employee's total years of railroad service, your annuity is reduced by 1/144
for the first 36 months you are under Full Retirement Age (FRA) and by 1/240 for
each additional month you are under FRA on your annuity beginning date. However,
if you were entitled to a spouse annuity before your final divorce from the
employee, any previous spouse annuity age reduction is applied to your divorced
spouse annuity.
If the employee is receiving
an RRA employee annuity and has: |
and the employee is at
least: |
your divorced spouse annuity
can begin the first full month you are: |
Your annuity will have an
age reduction if you retire before attaining: |
an SS Act Fully Insured Status based on combined railroad and
SSA earnings (40 Quarters of Coverage for those born after
1928),
|
age 62 for a full month,
|
age 62,
|
your FRA. |
an SS Act Disability Insured Status based on combined railroad
and SSA earnings (disability freeze),
|
age 62,
|
age 62,
|
your FRA. |
|