105 Railroad Retirement Annuity Components
An employee's railroad retirement annuity is a monthly benefit comprised of
several components. As described below, there are restrictions as to which
components a court may characterize as property and subsequently distribute
between the parties.
105.01 Non-divisible Tier I component
The Tier I component of an employee's annuity is calculated by applying the
benefit formula in section 215 of the Social Security Act (42 U.S.C. § 415) to
the employee's earnings record. For this purpose, an employee's earnings record
includes both rail industry earnings and any earnings from employment covered by
the Social Security Act. Tier I is the same benefit amount that the Social
Security Act would provide if the employee's railroad employment had been
covered under that Act.
Important: Section 14 of the RRA (45
U.S.C. § 231m) specifically exempts the Tier I component from property division
and the RRB will not honor a property division that attempts to divide the Tier
I component.
105.02 Divisible annuity components
In addition to the non-divisible Tier I component, an employee's annuity
includes a Tier II component and may also include certain other components, as
described below. The RRA does not prohibit allocation as property the following
annuity components:
- Tier II component. An
employee's Tier II component is based solely upon rail industry service and
earnings. It is calculated under section 3(b) of the RRA. Note: The employee's
Tier II component is the only divisible annuity component that may continue to
be paid to a former spouse after the death of the employee. See 109-G
- Supplemental annuity. An
employee who completes 25 years of railroad service and who had railroad
service before 1981 may receive a supplemental annuity under section 2(b) of
the RRA. If payable, the amount of a supplemental annuity ranges from $23 to a
maximum of $43 per month.
- Vested dual benefit. The vested
dual benefit is an additional amount available to railroad employees who meet
certain vesting requirements and are fully insured under both the RRA and the
Social Security Act prior to 1975.
- Overall minimum increase. In
some cases, an employee's annuity under the RRA may be less than the amount he
or she could receive under the Social Security Act if rail industry employment
were covered by that Act. The annuity may be increased so that the employee
receives at least as much as he or she would receive under the Social Security
Act. The amount of this increase is divisible.
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