Introduction
This publication describes the different events that can affect your annuity
under the
Railroad Retirement Act (RRA).
Whether you are receiving your own annuity, or you receive payments on behalf
of another person, it is your responsibility to be aware of these events and to
notify the Railroad Retirement Board (RRB) immediately when any apply to you.
Any new circumstances may cause changes in your entitlement or in the amount
of your annuity. Keep this publication handy and refer to it to see if you need
to report an event.
If you are not sure if your report is necessary, call or write to the nearest RRB office
for assistance. Most RRB offices are open to the public from 9:00 a.m. to 3:30
p.m., Monday through Friday . You can also call the toll-free
RRB HelpLine at
1-800-808-0772.
Wherever possible, we have provided hyperlinks to other RRB Publications as
they are mentioned below.
Failure to promptly notify the RRB usually constitutes "fault" on your part
that requires you to repay any resulting overpayment. This could cause your
benefits to be suspended, and may result in the assessment of interest and
penalties.
Even if an overpayment may not result, some of the events described in this
publication must be reported to assure that the RRB provides you with timely
information about your annuity and with the maximum benefits payable to you.
Other Booklets and Forms of Interest
- AB-31 - How Work Affects Your Disability Annuity
- G-77a - How Work Affects Your Railroad Retirement Benefits
- G-179 - Special Guaranty in Employee and Spouse Annuities
- RB-1 - Age and Service Employee Annuities
- RB-30 - Spouse/Divorced Spouse Annuity
How to Report
You may call, visit, or write to any RRB
field ffice. In most cases, your
reporting can be completely handled by telephone. If you plan to personally
visit one of the RRB field offices, please call for an appointment. You will not
be refused service if you do not make an appointment, but the RRB staff may be
better able to assist you when an appointment is made.
Always provide the following when you call, visit or write to the RRB:
- Your name;
- Your RRB claim number;
- The railroad employee's name, if you are not the employee;
- Your daytime telephone number;
- A clear explanation of what you are reporting; and,
- The exact month, day and year that the event occurred or will occur.
What to Report
and Why
Your annuity entitlement and the amount payable to you each month is
determined according to law and by the circumstances that exist on the date your
annuity begins. Any later changes in those circumstances are very important. To
guarantee correct payment of the benefits you are due, you must notify the RRB
about all of the events that are described in this publication.
Social Security Benefits
The Tier 1 Benefit
component amount of your employee, spouse or divorced spouse annuity already
includes credit for the railroad worker's earnings covered by social security
taxes. When you file for social security benefits (SS benefits), the RRB must
reduce your Tier 1 component by the amount of SS benefits you receive.
If you are awarded SS benefits, the RRB usually will pay them combined with
your annuity. We will adjust your Tier 1 and send you a letter to explain the
two benefits. If SSA notifies you that they, not the RRB, will pay your SS
benefit payments, notify the nearest RRB field office
at once. It is your responsibility to notify us.
Do not expect the Social Security
Administration (SSA) to tell the RRB that you are being paid SS benefits.
Any delay could cause your annuity to be overpaid. In many cases, filing for SS
benefits will not increase your total benefit rate, because of the reduction in
your Tier 1 component.
If your annuity is increased under the Special Guaranty provision (see
booklet G-179,
"Special Guaranty in Employee and Spouse Annuities"), you must notify the RRB if
any spouse, minor child, disabled child or student child included in that
computation begins to receive SS benefits, on any account number.
Non-covered Service
Pensions and Public Service Pensions
A Non-covered Service Pension can reduce your employee Tier 1 component and
the Tier 1 component of your spouse, as explained in booklet RB-1,
"Age and Service Employee Annuity".
A Public Service Pension can reduce your spouse Tier 1 component, as
explained in booklet RB-30,
"Spouse/Divorced Spouse Annuity".
If you begin to receive a Non-covered Service Pension or Public Service
Pension, report it to the RRB so we can make timely adjustment of your annuity.
If your tier 1 after reduction for your pension is greater than zero, also
notify us when the pension rate increases.
Exception: You do not need to
report increases in your Civil Service Retirement System (CSRS) pension. The RRB
receives your pension rates from the Office of Personnel Management after each
cost-of-living increase.
Railroad Work
You must notify the RRB immediately if you go to work in the railroad
industry. Do not wait for your employer to
notify the RRB.
If you are the employee annuitant, your regular annuity, or any supplemental
annuity cannot be paid for any month in which you work for a railroad employer.
This law applies no matter how old you are or how much money you earn from that
work.
If you are the spouse annuitant, your annuity is not payable for any month
you work for a railroad or for any month the employee annuitant returns to
railroad work.
Non-railroad Earnings
After You Attain Full Retirement Age
This section applies to annuities based on age and service and disability
annuities. For months after you have attained Full Retirement Age
(FRA), your Tier 1 component is not subject to reductions because of your
nonrailroad earnings.
Determining Your Full Retirement Age |
Before 1-2-1938 |
65 |
1-2-1938 thru 1-1-1939 |
65 and 2 months |
1-2-1939 thru 1-1-1940 |
65 and 4 months |
1-2-1940 thru 1-1-1941 |
65 and 6 months |
1-2-1941 thru 1-1-1942 |
65 and 8 months |
1-2-1942 thru 1-1-1943 |
65 and 10 months |
1-2-1943 thru 1-1-1955 |
66 |
1-2-1955 thru 1-1-1956 |
66 and 2 months |
1-2-1956 thru 1-1-1957 |
66 and 4 months |
1-2-1957 thru 1-1-1958 |
66 and 6 months |
1-2-1958 thru 1-1-1959 |
66 and 8 months |
1-2-1959 thru 1-1-1960 |
66 and 10 months |
1-2-1960 and later |
67 |
However, Last Pre-retirement Nonrailroad Employer
(LPE) work deductions can still apply.
Tier 1 Reductions for
Nonrailroad Earnings Before You Attain Full Retirement Age
This section only concerns Tier 1 component, vested dual benefit (VDB) or
Special Guaranty reductions for age and service annuitants and their families.
Tier 2 reductions for Last Pre-retirement Nonrailroad Employer
(LPE) and the rules for disability annuitants
are explained in other sections of this publication.
Your Tier 1 components are not reduced for your nonrailroad earnings if you
are receiving social security benefits.
Otherwise, your nonrailroad earnings over the Annual Earnings Exempt Amount
could reduce your employee or spouse annuity Tier 1, any VDB, or your Special
Guaranty computation rate if you have not attained Full Retirement Age (FRA).
The employee’s nonrailroad earnings also can cause a reduction to the spouse
tier 1 component. The employee’s nonrailroad earnings also cause a reduction to
the divorced spouse annuity within two years of the date of the final divorce
decree.
What Earnings Count for
Tier 1 Reductions
Tier 1 earnings restrictions apply to gross earnings from your employment for
others, plus any net earnings from self-employment. Your net self-employment
amount is the earnings amount after business expenses that you report to the
Internal Revenue Service (IRS).
Do not include as earnings, any money you received for reasons other than for
work you performed. Gifts, interest earned, inheritance, pensions, and
investment income do not count as earnings for this purpose.
When to Report Earnings
You should report your earnings when you begin or end nonrailroad employment
and expect to earn more than the Annual Earnings Exempt Amount to allow timely
adjustment or your annuity. Also report if you will earn substantially more or
less than you earned in the previous year.
When you tell us that you have begun non-railroad employment or changed your
earnings from the previous year, we apply temporary deductions to your annuity
based on the amount you expect to earn.
Later, if your non-railroad earnings are covered by the Social Security
Administration (SSA) (Federal Insurance Contributions Act (FICA) or
Self-Employment Contributions Act (SECA) tax withheld), the RRB will receive an
annual report of those earnings from a tape match with the SSA.
It sometimes takes longer for the RRB to receive information about
nonrailroad earnings that are not covered by FICA or SECA. If you receive such
earnings, you should report your final earnings for the year by April 15, of the
following year.
Refer to Form G-77a,
"How Work Affects Payment of Retirement Annuities", for the current Annual
Earnings Exempt Amounts for your age group and refer to the following chart:
How Earnings Deductions are Assessed |
employees are entitled based on age and are under FRA for the full calendar year, |
$1.00 for every $2.00 which they earn over their Annual Earnings Exempt Amount, |
in the full calendar year, |
employee and spouse Tier 1, any employee VDB, or all family member shares in the calculation of the Special Guaranty computation |
employees are entitled based on age and attain FRA during the calendar year, |
$1.00 for every $3.00 which they earn over their Annual Earnings Exempt Amount, |
up to the month the employees attain FRA, |
employee and spouse Tier 1, any employee VDB, or all family member shares in the calculation of the Special Guaranty computation |
spouses are under FRA for the full calendar year, |
$1.00 for every $2.00 which spouses earn over their Annual Earning Exempt Amount, |
in the full calendar year, |
their spouse Tier 1 or their shares in the calculation of the Special Guaranty increase. |
spouses attain FRA during the calendar year, |
$1.00 for every $3.00 which spouses earn over their Annual Earnings Exempt Amount, |
up to the month the spouses attain FRA. |
their spouse Tier 1 or their shares in the calculation of the Special Guaranty increase. |
your minor or student children work, |
$1.00 for every $2.00 which they earn over their Annual Earnings Exempt Amount, |
in the full calendar year. |
their shares in the calculation of the Special Guaranty increase. |
Last Pre-Retirement Nonrailroad Employment
Your Last Pre-Retirement Nonrailroad Employer (LPE) is defined as any
nonrailroad individual, company or institution for whom you are working on your
annuity beginning date (ABD) or for whom you stopped working in order to receive
an annuity. This includes work for a Canadian railroad that is not covered under
the Railroad Retirement Act and work as an elected or appointed public official.
The nonrailroad employer is always your LPE if you are working in nonrailroad
employment on your ABD or, if you have stopped working, you still hold rights to
return to service of the nonrailroad employer on your ABD.
The nonrailroad employer would be presumed to be your LPE if:
- You are the employee annuitant, and stopped working for the nonrailroad
employer within six months immediately before your employee ABD, whether or not
you also had been working for a railroad employer at the same time, or,
- You are a spouse annuitant, who may have never worked for a railroad, and
stopped working for the nonrailroad employer within the six months immediately
before your ABD.
When applicants were working for two or more persons, companies, or
institutions within the six months preceding their ABD, all such employers are
presumed to be LPE.
When you applied for your annuity, we asked for the names of your most recent
nonrailroad employers, if any. That information established your LPE for RRB
records. Any work for your LPE that continues or is resumed after your annuity
beginning date must be reported to the RRB at once. Be sure to provide the name
and address of your employer and your estimated monthly earnings.
If you stop LPE, or you expect a change in your estimated monthly earnings,
contact the nearest RRB office to have your payments adjusted.
LPE Exceptions
Some types of nonrailroad employment are not counted as LPE. These types of
work do not affect payment of your Tier 2 component or supplemental annuity.
These exceptions are:
- Military service;
- Jury duty;
- Mail handling by contract with the U.S. Postal Service;
- Volunteer work;
- Work for which you only receive payment of expenses;
- Work as member (owner) of a Limited Liability Corporation (LLC); or,
- Self-employment.
Note 1: If you claim an LPE exception as a member of a LLC, you must submit
proof, including your statement, the name of any license, and copies of articles
of organization, operating agreement, and contracts with various clients.
Note 2: Work as an LLC employee, hired by the members who own an LLC, is
counted as LPE.
Note 3: If you begin self-employment that has any connection with railroad
employment or your LPE employer (such as consultant work), please report this to
the nearest RRB office. We may ask you to complete Form AA-4 Self-Employment and
Substantial Service Questionnaire that will help the RRB determine whether to
consider your work self-employment or a continuation of railroad service or LPE.
Annuity Deductions for LPE
LPE earnings reductions occur at any age, even after attaining Full
Retirement Age. There is no Annual Earnings Exempt Amount for LPE. Even work for
minimum pay may be LPE.
Any LPE earnings received by an employee annuitant for service in or after
the month the annuity begins will reduce the amount of the employee’s Tier 2
component, the employee’s supplemental annuity, if any, and the spouse’s Tier 2
component. The LPE work deduction is $1.00 for every $2.00 earned, but not more
than 50% of the Tier 2 components and supplemental annuity.
Any LPE earnings received by a spouse annuitant for service in or after the
month a spouse annuity begins will reduce the amount of the spouse’s Tier 2
component (up to 50%).
A prompt report will allow timely adjustment to avoid overpayment of your
annuity.
Total and Permanent Disability after Retirement
Contact the RRB if you are receiving an age and service annuity or
occupational disability annuity and you become totally disabled before you reach
Full Retirement Age. You may be eligible for early Medicare coverage and other
benefits if you meet the requirements for total and permanent disability.
Disability and Medical Recovery
You must report ANY new employment. It is important that your report
includes:
- The kind of work you are doing;
- How much you expect to earn each month;
- The period of time you expect to be working;
- How many hours you expect to work; and,
- The amount of any disability-related work expenses.
Your work and earnings will be evaluated to see if you are able to perform
regular work. ANY work after your annuity begins, regardless of your amount of
earnings, may raise questions about medical recovery.
If you return to work, or your doctor tells you that you are able to work,
notify your local RRB field office. We will ask for more information about your
condition and possibly request new medical examinations. Failure to promptly
contact the RRB about changes in your disability status could result in large
annuity overpayments with penalties.
Disability Work Deductions
If you are less than Full Retirement Age and you receive a disability-based
annuity, the Annual Earnings Exempt Amount does not apply to your disability
tier 1 component.
Your disability annuity cannot be paid for any month you work and have earnings
over the disability earnings limit (refer to Form AB-31,
"How Work Affects Your
Disability"). Certain disability-related work expenses are subtracted from your
earnings, such as the costs of special transportation, medicine used to control
the impairment that caused the disability, attendant care, medical devices, and
prosthetic devices.
When you tell us that you will have earnings over the disability earnings
limit, we apply temporary
deductions to your annuity for the calendar year based on the amount you expect
to earn. We will send you a form after the end of that year to report your
actual monthly and total earnings for that year.
- If your total earnings are less than the disability earnings maximim for that calendar year, any
monthly benefits that we withheld will be paid to you.
- If your total earnings are greater than the disability earnings maximum during that year, you will not be
entitled to an annuity for some months in that year. How long your annuity is
not payable depends on how much you earn, but the number of months withheld will
not exceed the actual number of months that you worked in that year.
Workers Compensation or Other Disability-Based Public Benefits
Your disability annuity Tier 1 component is subject to a reduction if you
also receive worker’s compensation or another public, disability-based, benefit
before you reach Full Retirement Age. This reduction requirement may apply even
if you received a lump-sum or an amount divided and paid in several payments. If
you receive a public disability or worker’s compensation award, or if the amount
you receive changes, notify the RRB as soon as possible. Delay may cause a large
annuity overpayment of your annuity.
Marital Status Change
If your marriage ends by divorce or annulment, notify the RRB to have our
records corrected (including any name change) and to assure that any spouse
annuity is adjusted or terminated timely. Also report if a child included in the
Special Guaranty computation marries.
If a stepchild is included in your Special Guaranty computation, and your
marriage to the child’s natural parent ends by divorce or annulment, notify the
RRB. We are required to exclude the stepchild from the Special Guaranty
computation.
If you are receiving a divorced spouse annuity, your entitlement ends the
month that you remarry.
Qualifying Child Status Changes
If your spouse annuity is based on a child in your care, your benefit
eligibility ends if certain events occur before you qualify for an annuity based
on your age. If the child attains age 18 or is no longer disabled, or if the
child enters military service, marries, dies, or leaves your care before age 18,
your payments must stop.
Your spouse annuity termination is automatically processed when RRB records
show the child is age 18, but you must report events that could end your spouse
annuity eligibility earlier. You must also notify your local RRB field office if
you receive an annuity payment after your entitlement ends.
Conviction for a Criminal Offense
A prison sentence or confinement for a conviction for a criminal offense
changes the income tax liability for annuity payments and the reports required
by the RRB to the IRS.
If you are or your spouse is confined as a result of a conviction for a
criminal offense, report this to the RRB. The RRB will then determine if any
payment changes are required. Also report if you receive a spouse annuity based
on a child in your care or the Special Guaranty computation including a child
and that child is confined due to a conviction for a criminal offense.
Places of confinement include prisons, jails, hospitals, schools, halfway
houses, or other facilities in which a person is under the control and
jurisdiction of a penal system. The period of confinement ends when the prisoner
is paroled or released because the sentence has ended, been suspended, or
overturned.
Spouse or Employee Death
Promptly notify the RRB when an employee or spouse dies to avoid possible
overpayment. An annuity is not payable for the month in which an employee or
spouse dies. It is against the law to cash an annuity check issued to a person
who has died. If a payment by check is received after that person’s date of
death, it must be returned to the RRB or to the Treasury Department address
shown on the envelope.
It is also against the law to use direct deposit funds received by a
financial institution for a person who had died. If a direct deposit annuity
payment is received after that person’s date of death, your financial
institution is required to return it to the Treasury Department at once.
When an employee dies, survivor benefits may be payable.
Change of Address
Even though your payments may be sent by direct deposit, notify both the RRB
and the financial institution that receives your payment as soon as possible if
your home address changes.
We need your home address to mail important information about RRB benefit
increases, earnings allowances, Medicare, and your income tax statements. If you
do not report your address changes, the RRB is not responsible for information
you do not receive.
To report an address change, write or call the RRB and provide the following
information:
- Your RRB claim number;
- Your name;
- Your new address;
- Your old address;
- The date you will start receiving mail at the new address; and,
- If your spouse also receives an RRA annuity, a statement that your notice of
change of address applies for both you and your spouse or applies to you alone.
Direct Deposit
An address change report does not change your direct deposit information. If
you are changing bank accounts, or wish your payments to go to a different
financial institution, you must tell the RRB your new account number and the new
bank’s routing number. (The routing number appears at the bottom of your new
checks or the bank will give it to you.)
Do not close your old account until you receive the first RRB payment in your
new account.
Reminder
A prompt report of any of the events described in this publication will allow
the RRB to provide you with accurate and timely benefits and service. For your
convenience, most of this reporting may be handled completely by telephone
without a trip to the RRB field office. If additional action is required on your
part, our RRB field office staff will gladly provide instruction needed to
assist you.
Keep a record of the events that you report to the RRB, the method used to
report the event (i.e. telephone, mail), and the date that you reported the
event. When writing to the RRB, we recommend that you keep a copy of your
report.
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