Railroad Retirement Act spouse and widow(er)s' annuities (including divorced
spouse, surviving divorced spouse and remarried widow(er)s' annuities) are
subject to reduction when social security benefits or dual railroad retirement
annuities are also payable. Such railroad retirement benefits may also be
reduced when a spouse or widow(er) is entitled to a public service pension
unless certain exemption requirements are met.
Since the payment of railroad retirement spouse or widow(er)s' annuities can be
affected by entitlement to certain other government benefits, such dual
entitlement, if not reported to the Railroad Retirement Board (RRB), can result
in benefit overpayments which have to be repaid, sometimes with interest and
penalties. The following questions and answers describe how payments are
adjusted by the RRB for spouse and widow(er) annuitants entitled to public
service pensions.
1. For social security or railroad
retirement purposes, what is considered a public service pension?
A public service pension is any periodic benefit payment, as well as lump-sum
payments made in lieu of periodic payments, based on an individual's own
employment with a Federal, State, or local government unit. Some examples are
pensions paid to teachers, police officers, and civil service personnel on the
basis of age or disability. Full salary benefits paid to a retired or resigned
judge under the Federal judiciary retirement system are also considered public
service pensions.
Most military service pensions and payments from the Department of Veterans
Affairs will not cause a reduction. A pension paid by a foreign government or an
interstate instrumentality also has no effect on a spouse or widow(er)'s
annuity.
2. How is the public service pension
reduction applied to railroad retirement spouse or widow(er)s' annuities?
For spouses and widow(er)s subject to the public service pension reduction, the
tier I reduction is, under current law, equal to 2/3 of the amount of the public
pension. The amount of the public service pension is the current gross amount,
before any deductions for income tax withholding, Medicare premiums, health
insurance or other benefits.
3. What is the background of the public
service reduction in spouse and widow(er)s' annuities and how does it affect
such payments?
The public service pension reduction in social security and railroad retirement
spouse and widow(er)s' benefits was brought about by 1977 social security
legislation which also applied to the tier I benefits of railroad retirement
spouses and widow(er)s. The tier I portion of a railroad retirement annuity is
based on railroad retirement credits and any social security credits an employee
has acquired. It is computed under social security formulas and approximates
what social security would pay if railroad work were also covered by that
system. Tier I benefits are, therefore, reduced in the same manner as social
security benefits when certain other benefits are also payable.
4. Are there any provisions that would
exempt railroad retirement spouse or widow(er) annuitants from the public
service pension offsets?
Generally, in order to be exempt from a public service pension reduction, State
and local government workers must be covered by social security throughout their
last 60 months of employment with the pension-paying government entity.
The public pension reduction also does not apply to a spouse or widow(er) who
filed for and became entitled to her or his railroad retirement annuity before
December 1977, or to a spouse or widow(er) whose public pension is
not based on her or his own earnings.
5. Where can more specific information on
how these pension offsets affect railroad retirement benefits be obtained?
Persons can contact an RRB field
office for information as to how their public service pensions could affect
their railroad retirement benefits via the agency's website, www.rrb.gov, or by
calling toll-free
at 1-877-772-5772. Most RRB offices are open to the public from 9:00 a.m. to
3:30 p.m., Monday through Friday, except on Federal holidays.
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