Booklet RB-1 (05-09)

Age and Service
Employee Annuity

United States of America
Railroad Retirement Board
Visit our Web site at www.rrb.gov

Form RB-1 (05-09)

INTRODUCTION

This booklet contains important information regarding your employee annuity under
the Railroad Retirement Act (RRA). In order to receive a railroad retirement employee
annuity, you must file an application and meet the requirements explained in this
booklet. It includes information concerning the earliest date your annuity can begin
and reductions that might apply to your annuity. We recommend that you read this
booklet before you file your application.
If you file for an annuity based on disability, you must also file a Form AA-1D
Application for Determination of Employee's Disability. Refer to the booklet RB-1D
Employee Disability Benefits for an explanation of the disability requirements.
Part VII of this booklet explains what will happen after you file your application
and includes a discussion of how and when you will receive your monthly
payments.
Your spouse, or divorced spouse, must file a separate spouse annuity application to
qualify for an annuity on your earnings record. Booklet RB-30 Spouse/Divorced
Spouse Annuity explains the spouse/divorced spouse entitlement requirements.
Railroad Retirement Board (RRB) representatives will be happy to discuss and
explain the information included in this booklet. To locate the nearest office, visit
our Web site at www.rrb.gov or call 877-772-5772. When contacting the RRB by
telephone or mail, always provide your RRB claim number, your name, and your
daytime telephone number.
Your railroad retirement annuity is affected by certain events that may occur. The
booklet RB-9 Employee and Spouse Annuities - Events That Must Be Reported
provides a description of these events and an explanation of how you should report
them. Because these events can take place any time after you receive your annuity
payments, you should keep the RB-9 booklet for future reference.

Important Notices
Be sure to read the important notices at the end of this booklet.

Other Booklets of Interest
IB-2
RB-3
G-179

Railroad Retirement and Survivor Benefits
Furnishing Evidence to Support Your Claim
Special Guaranty in Employee and Spouse Annuities

RRB booklets are available on the Railroad Retirement Board's Web site at
www.rrb.gov.

TABLE OF CONTENTS
Page

PART I - APPLYING FOR YOUR ANNUITY
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter

1
2
3
4
5
6

Requirements to Receive an Age and Service Annuity
How Family Members Can Affect Your Annuity
Credit for Railroad Work
Credit for Military Service
Current Connection
Requirements for a Supplemental Annuity

1
3
3
4
5
7

PART II - WHEN YOUR ANNUITY CAN BEGIN
Chapter
Chapter
Chapter
Chapter
Chapter

7
8
9
10
11

Chapter 12

File an Application
Earliest Annuity Beginning Date Permitted By Law
Stop Railroad Work
The Effects of Unemployment or Sickness Benefits
The Effects of a Dismissal Allowance, Pay For Time Lost And Some Types
of Vacation Pay
The Effects of a Separation Allowance After Your Date Last Worked

7
7
8
8
9
9

PART III - REDUCTIONS FOR EARLY RETIREMENT
Chapter 13
Chapter 14
Chapter 15

Basic Formula
Full Retirement Age for Employees Who Have Less Than 360 Service Months
Age Reduction for Employees Who Have Less Than 360 Service Months

10
11
11

PART IV - DEDUCTIONS FOR EARNINGS
Chapter
Chapter
Chapter
Chapter

16
17
18
19

Self-Employment and Other Nonrailroad Work
Tier 1 Work Deductions
Last Pre-Retirement Nonrailroad Employment
Tier 2 and Supplemental Annuity Work Deductions

12
12
14
14

PART V - REDUCTIONS FOR OTHER BENEFITS
Chapter
Chapter
Chapter
Chapter

20
21
22
23

Social Security Benefits
Non-Covered Service Pensions
Other Railroad Retirement Annuities
Worker's Compensation and Public Disability Benefits

14
15
15
16

PART VI - REDUCTIONS FOR OTHER FEDERAL PROGRAMS
Chapter 24
Chapter 25

Medicare Coverage and You
Withholding for Income Tax

17
19

PART VII - AFTER YOU APPLY FOR YOUR ANNUITY
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter

26
27
28
29
30
31
32

Notice of Decision About Your Age and Service Application
How Payments Are Made
Direct Deposit to a Financial Institution
Change of Address
Receiving a Tax Refund of Excess Social Security Tax
Receiving a Railroad Separation Allowance Payment
Records You Should Keep

IMPORTANT NOTICES
Nondiscrimination on the Basis of Disability
Fraud and Abuse Hot Line
Computer Matching and Privacy Protection Act Notice
Paperwork Reduction Act and Privacy Act Notices

19
19
20
20
20
21
21

PART I - APPLYING FOR YOUR
ANNUITY
This section contains information that will help
you to complete your application correctly.
Included are the requirements you must meet to
receive an annuity. You may file your application
up to three months before your annuity
beginning date.
Booklet RB-3, Furnishing Evidence to Support
Your Claim explains acceptable evidence for
proofs required to process your annuity application. Shorten the processing time for your
annuity application by submitting proof of your
date of birth and military service to your local
Railroad Retirement Board (RRB) office now,
even if you will not file your application within
three months. Whenever sending documents to
the RRB, always include your name, social
security number, and daytime telephone number
where you can be reached.
We recommend that you read this booklet and
booklet RB-3 before you file your annuity
application.

Chapter 1 - Requirements to Receive an Age
and Service Annuity
You may qualify for a monthly age and service
employee annuity if you meet certain requirements. This section describes types of age and
service annuities and the different conditions
for each.
If you are filing for a disability annuity, you
should also refer to booklet RB-1D Employee
Disability Benefits which explains disability
annuity requirements. However, if your disability annuity is denied, and you indicate that you
would accept a reduced age annuity, if eligible,
read this section and Part III for information
about the reduced age and service annuity.

A. Age Requirement - The RRB considers you to
have attained your age on the day before
your birthday. The age at which you can
receive an age and service annuity is based
on your months of railroad service.

Determining Earliest Retirement Age
If you have at least:
360 months of
railroad service,
120-359 months of
railroad service,
60-119 months of
railroad service,

Your annuity can begin the
first full month you are
age 60.
age 62.
age 62.

Note - The age requirements for a supplemental annuity are in Chapter 6

B. Cessation of Railroad Service - Your age and
service annuity cannot begin until you stop
all railroad work for pay and relinquish
rights to railroad employment. Also note that,
after the annuity is awarded, payment cannot
be made for any month in which you return
to work for a railroad employer.
The RRB will release a Form G-88A.1 listing
Request for Verification of Date Last Carried
on Payroll to your last railroad employer if
your date last worked is within 15 months of
the date that you file your employee annuity
application. This will notify your employer of
your claimed date last worked and relinquishment of rights.

C. Relinquishment of Rights - Before an age and
service annuity can be paid, you must relinquish all seniority or other rights to return to
work for any railroad employer. While an age
and service annuity can begin to accrue as
early as the day after you stop working for
the railroad, it cannot be awarded until you
relinquish rights to railroad employment.
Example - A qualified age and service
applicant, who stops working on December 31,
but does not relinquish rights until March 15, is
entitled to an annuity from January 1.
Although benefits accrue from January 1, the
actual payment cannot be made before
March 15, the day relinquishment of rights is
accomplished.
The relinquishment of rights only affects the
benefits under the Railroad Retirement Act
(RRA). The relinquishment of rights does not
bind the railroad should the employer choose
to provide certain employee benefits (i.e.,
health insurance, an employee buyout) after
you stop working.

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1. How Relinquishment of Rights is
Accomplished - To relinquish your rights
to railroad employment, use your
employee annuity application. Indicate
that you either no longer have seniority
or other rights to work for a railroad
employer or, if you are filing in advance
of your annuity beginning date, that you
will give up those rights as of the date
indicated as your last day of railroad
employment.
Under advance filing procedure, you may
file for an age and service annuity up to
three months before your annuity
beginning date. If you are still working in
railroad service when you file, this means
that the date that you certify on your
annuity application as the date you will
stop railroad service and relinquish rights
is a date in the future. If your plans
change, you must promptly report any
change in your last day of railroad service
to the nearest RRB field office. Otherwise
your annuity beginning date could be
incorrect, resulting in erroneous
payments.
2. Relinquishment of Rights In Wrongful
Termination Cases - If you are prosecuting a claim before the National Railroad
Adjustment Board for reinstatement and
for time lost from the effective date of a
termination action that you believe is
wrongful, you must ask the RRB field
office to include the following statement
over your signature in the "Remarks"
section of your employee annuity application: "I do not at this time possess any
rights to return to the service of an
employer. This statement shall be without
prejudice to my claim that I was wrongfully deprived of such rights on (date of
termination)."
You must also request the RRB field office
to prepare an "Assignment of Claim"
statement for your signature. This states
that you will refund any annuity
payments you receive for any period for
which you may subsequently be awarded
pay for time lost.
3. Protest of Relinquishment of Rights Once effective, you cannot revoke the

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relinquishment of rights, even if you offer
to refund the amount of the RRA
annuities that were paid based on the
relinquishment of rights.

D. Additional Requirements for Employee
Annuities Based on 60-119 Months of
Railroad Service with at Least 60 Months of
Railroad Service after 1995 - If you file for an
employee disability annuity that is based on
60-119 months of railroad service with at least
60 months of railroad service after 1995, a
Tier 2 component is not payable to you before
the month in which you attain age 62. For age
and service and disability annuities, you
must have a Social Security (SS) Act Insured
Status based on combined railroad earnings,
creditable military service earnings, and
social security earnings to qualify yourself
and your spouse for Tier 1 components.
An SS Act Insured Status is based on Quarters
of Coverage (QC). In general, the SS Act
specifies an amount for each calendar year that
will qualify the wage earner for a QC for that
year. If you earn that amount (or a multiple of
that amount up to 4 QCs), your earnings
record will be credited with those QCs.
You have an SS Act Insured Status if:
1. Employee Annuities Based on Age - You
must have a Fully Insured Status as
defined in the SS Act, but using combined
railroad earnings, creditable military
service earnings, and social security
earnings. The SS Act QC requirement for
a Fully Insured Status for employees born
after 1928 is 40 QCs; or,
2. Employee Annuities Based on Disability You must have a Disability Freeze (D/F)
as defined in the SS Act, but using
combined railroad earnings, creditable
military service earnings, and social
security earnings. The SS Act requirements are:
a. You must be rated totally and permanently disabled;
b. You must have a Fully Insured Status.
(Generally, the QC requirement for a
Fully Insured Status is at least one QC
for each calendar year after the year

you attained age 21, through the year
you became disabled.); and,

3. age 18-19 and in full-time attendance at an
elementary or secondary school.

c. You must have at least 20 QCs in a
period of 40 consecutive calendar
quarters (10 years) ending with the
quarter of the disability onset date.
This is also referred to as the 20-in-40
QC test.

The RRB field office where you file your application will test your annuity rate to determine if the
Special Guaranty could apply. If it could apply,
our field office will contact you for further information. For more information on the Special
Guaranty computation, read booklet G-179
Special Guaranty in Employee and Spouse
Annuities.

Chapter 2 - How Family Members Can
Affect Your Annuity
Information concerning your marriage history is
requested on your employee annuity application
to determine the possible eligibility of any spouse
or divorced spouse on your earnings record. If
you are married when you apply for benefits, be
sure to ask the RRB representative whether your
spouse is eligible for an annuity. If you are, or
your spouse is, too young to qualify your spouse
for benefits at that time, ask when your spouse
will become eligible. Your spouse or divorced
spouse is required to file a separate application to
receive benefits on your earnings record. The eligibility requirements are explained in booklet RB-30
Spouse/Divorced Spouse Annuity.
You may also be eligible for an increase in your
annuity called the Special Guaranty computation,
if members of your family meet the requirements
under Social Security (SS) Act rules using your
railroad service as if it had been covered under
the SS Act. In most cases, your regular railroad
retirement annuity rate will exceed the amount
that the Social Security Administration (SSA)
would have paid. Therefore, your annuity application asks only for basic information, such as the
number of children you have who would qualify
under this provision. The term child includes
your unmarried natural child, or dependent and
unmarried adopted child, stepchild, or, under
certain conditions, your grandchild if both
parents are deceased or disabled.
Your child may be included in the Special
Guaranty computation if the child is:
1. under age 18;
2. age 18 or older with a permanent disability
that began before the child attained age 22
that makes the child unable to perform any
type of regular employment; or,

Chapter 3 - Credit for Railroad Work
As previously explained, you must stop all
railroad work in order to qualify for an employee
annuity. A railroad employer is any company or
labor organization covered under the RRA.
Covered railroad employers include railroads
that engage in interstate business, railroad associations, and national railway labor organizations.

A. Actual Railroad Service - Your employer
reports your railroad service and earnings
to the RRB under your social security
number. Shortly after each year in which
you have railroad earnings, the RRB mails
Form BA-6 Certificate of Service Months
and Compensation to you . This annual
statement has a record of your creditable
railroad service months and compensation
after 1936 and verified military service
credits.
You can also call the RRB at 877-772-5772, to
request Form G-90c Service and Compensation
History Statement for your earnings record.

B. Deemed Railroad Service - For years after
1984, you may be entitled to additional
railroad service months if you did not
actually work in every month of the year. For
additional service months to be deemed, your
compensation for the year must exceed an
amount equal to 1/12 of the Tier 2 maximum
multiplied by the number of railroad service
months you actually worked. The excess
amount is then divided by 1/12 of the Tier 2
maximum. The result, rounded up to a whole
number, is the number of deemed railroad
service months.
In order to qualify for these deemed railroad
service months, you must have had an

3

employment relation for the months you did
not perform actual railroad service. This
means that you were:
1. on bona fide leave of absence from the
employer;

receive credit for military service, you must
always meet one of the general railroad service
requirements of Item 1 below and must meet
one of the specific requirements in Item 2, Item
3, or Item 4, which follow.

3. out of service by reason of discharge later
determined to be wrongful; or,

1. General Requirements under the RRA - The
RRA allows credit for military service as
railroad service months only if, prior to the
beginning of your military service, either in
the same calendar year or in the next
preceding calendar year as the enlistment,
induction, or call from inactive duty, you:

4. an employee representative or employee
of an employee representative.

a. performed compensated service for
an employer under the RRA;

Deemed service months cannot be given for
months after the beginning date of your
annuity or after the date you relinquish rights
to railroad employment.

b. were entitled to Pay for Time Lost as
an employee for an employer under
the RRA; or,

2. not retired or discharged, but by reason of
continuous disability, unable to return to
service;

Chapter 4 - Credit for Military Service

c. were serving as an employee representative as defined in the RRA.

A. Proof of Military Service - If you ever served in
active duty in the United States Armed Forces,
the RRB may be able to use that military service
to increase your annuity. You must first submit
a copy of your latest Department of Defense
Form 214, or any official record that shows your
dates of federal military service. Shorten the
processing time of your future benefit application by submitting proof of your military
service now. When sending documents to the
RRB, always include your name, your social
security number, and a daytime telephone
number where you can be reached.

2. Involuntary Military Service and Periods
of Creditable Voluntary Military Service Involuntary military service is always
creditable under the RRA. In addition,
voluntary military service that began in
the following war periods or periods of
national emergency are creditable:

If your military service records were destroyed,
either in the 1973 fire at the National Records
Center in St. Louis, or in some other way, you
may request a new military service record from
your service branch with Form SF-180 Request
Pertaining to Military Records. This form is
available from the RRB or the NARA at
www.archives.gov.

b. June 15, 1948, through December 15,
1950, provided the additional requirements described in Item 3 are met;

B. Basic Requirements Under the Railroad
Retirement Act (RRA) - The Railroad
Retirement Act (RRA) allows credit for military
service that began in a war period or period of
national emergency and for involuntary (draft)
military service. This prevents career railroad
employees from losing retirement credits while
actively serving in the national defense. To

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a. September 8, 1939, through June 14,
1948 (if you voluntarily entered
military service January 1, 1947,
through June 14, 1948, you can only
receive credit through June 14, 1948);

c. December 16, 1950, through
September 14, 1978 (but any
voluntary active duty extending
beyond September 14, 1978, is not
creditable); and,
d. August 2, 1990, to a date not yet
determined.
In addition to these war periods or periods
of national emergency, some active duty in
the federal military reserve may be creditable as explained in Item 4.

3. Voluntary Military Service in the Period
June 15, 1948, through December 15,
1950 - Railroad workers who voluntarily
served in the Armed Forces between
June 15, 1948, and December 15, 1950,
can be given railroad service credit for
their military service. In addition to the
requirement of railroad service prior to
entering active military service described
in Item 1 above, the RRA allows credit
for voluntary active military service in
the period June 15, 1948, through
December 15, 1950, if you:
a. performed compensated service for
an employer under the RRA in the
year released from active military
service or in the next year; and,
b. did not work for a nonrailroad
employer after leaving military
service and before resuming railroad
employment.
4. Creditable Military Reserve Duty Members of a reserve component of the
uniformed services who are called to
active duty can receive railroad service
credits for any such active duty or active
duty for training, provided that one of the
requirements described in Item 1 above
was met as of the date called up.

C. Basic Requirements Under the Social Security
Act Rules - Since most military service
performed after 1956 is creditable under the
SS Act, the wage credits are posted to your SS Act
wage record. The few cases in which military
service is not creditable under the SS Act
involve military service performed before 1957
that was either less than 90 days or that had a
type of discharge other than honorable.
When military service is used as railroad
service months in your Tier 2 component, the
SS Act prohibits the use of the same military
service as wages.

D. Affect in Your Annuity Rate
1. Tier 1 Component - Military service creditable under the RRA or SS Act can be
used to increase the yearly earnings
amounts used in the computation of your

Tier 1 component, subject to the yearly
earnings maximum. This is true even
when the same military service is used as
railroad service months in your Tier 2
component.
If you qualified for an annuity based on 60119 months of railroad service with at least
60 months of railroad service after 1995,
military service creditable under the RRA or
SS Act can be used as compensation
Quarters of Coverage to meet the total
minimum 40 QCs necessary for the SSA
Insured Status requirement for a Tier 1
component that is explained in Chapter 1(C).
This is true even when the same military
service is used as railroad service months in
your Tier 2 component.
2. Tier 2 Component and Supplemental
Annuity - Military service creditable
under the RRA can be used as railroad
service months in the computation of
your Tier 2 component or supplemental
annuity. However, only one railroad
service credit is allowed for a calendar
month. If you have actual railroad service
in the same month as the military service,
only one railroad service credit is given
for that month.
3. Vested Dual Benefit (VDB) - If you have
at least 120 months of railroad service
before 1975 and acquired an SSA Insured
Status before 1975 (see Chapter 1), you
can receive an additional annuity
component called the Vested Dual Benefit
(VDB). Military service performed before
1975, creditable under SS Act rules, can be
used as wages and wage Quarters of
Coverage before 1975, to help meet the
"wages only" requirements for a VDB.
However, when military service is used
as railroad service months in your Tier 2
component, the SS Act prohibits the use
of military service as wage Quarters of
Coverage for a VDB.

Chapter 5 - Current Connection
You must have a Current Connection with the
railroad industry in order to receive a supplemental annuity or an occupational disability
annuity. Future survivor benefits can be paid by

5

the RRB only if you have a Current Connection.
The RRB will determine whether or not you have
a Current Connection when your annuity application is processed.

A. Requirements for a Regular Current
Connection - You have a regular Current
Connection with the railroad industry if you
meet either of the following conditions:

C. Deemed Current Connection - If you do not
have a regular Current Connection, you may
have a Deemed Current Connection for a
supplemental annuity or future benefits
payable to your survivors. Your Current
Connection is deemed to be maintained, even
if you have regular nonrailroad employment
before your annuity begins, if you:
1. have at least 25 years of railroad service; and,

1. you worked for a railroad in at least 12 of
the 30 consecutive months before the
month in which your annuity begins or
2. you worked in the railroad industry in
at least 12 months in any other period of
30 consecutive months before the month
your annuity begins without any intervening regular employment.

B. Work that will not Break a Current
Connection - The following types of work do
not break a Current Connection:
1. Work for the following government
agencies:
a. Alaska Railroad (as long as it is
owned by the State of Alaska);
b. U.S. Department of Transportation;
c. Surface Transportation Board (or its
predecessor the Interstate Commerce
Commission);
d. National Mediation Board;
e. National Transportation Safety Board;
or,
f. Railroad Retirement Board.
2. Service for a railroad whose principal
operation is in Canada and service by a
Canadian citizen in Canada for a railroad
whose principal operation is in the
United States.
3. Self-employment as defined under the
Railroad Retirement Act (see Chapter 16).
4. Nonrailroad work after your annuity
beginning date.

6

2. either stopped working in the railroad
industry "involuntarily and without fault"
for a non-medical reason on, or after,
October 1, 1975, or, were on furlough or
leave of absence or were absent because
of injury on or after October 1, 1975, and
were not called back to work; and,
3. did not decline an offer to return to railroad
employment in the same "class or craft" as
your most recent railroad service (regardless of the number of miles you would have
had to move to accept such job).
NOTE: An employee cannot be on
furlough, leave of absence, or absent
because of injury status after relinquishment of rights to railroad service.
If you meet all the above requirements, your
Current Connection would not be broken,
even if you work in regular employment after
your 30-month period and before retirement
or death.

D. Proof of Deemed Current Connection - RRB
records will confirm if you have 25 years of
service.
You must supply the proof that you did not
voluntarily end your railroad employment.
The best evidence is the letter from your
employer that describes the circumstances of
your separation. Other acceptable proofs are
personnel, payroll, and health insurance
records that show your employment status. If
none of these documents exist when your
application is filed, it will be necessary for
you to secure an affidavit from a railroad or
union official or from two of your former coworkers who can be identified by the RRB as
railroad employees.

Chapter 6 - Requirements for Supplemental
Annuity
Some retired railroad employees may be eligible
to receive a supplemental annuity from the RRB.
This is in addition to the regular age and service
or disability annuity.

A. Requirements for a Supplemental Annuity To be eligible for a supplemental annuity, you
must meet all of the following requirements:
1. Age and Railroad Service - You must be
at least age 65 with at least 300 months
(25 years) of creditable railroad service,
or at least age 60 with at least 360 months
(30 years) of creditable railroad service.
(Note that the age requirement for the supplemental annuity is not affected by the
definition of Full Retirement Age (FRA)
explained in Chapter 14.);
2. Qualified for Annuity - You must be eligible
for, and have filed for, an age and service or
disability annuity. The supplemental
annuity can never begin before the regular
age and service or disability annuity;
3. Railroad Service Before October 1, 1981 - You
must have railroad service creditable to at
least one month before October 1, 1981; and,
4. Current Connection - You must have a
Current Connection with the railroad
industry as explained in Chapter 5.

B. Reduction for Employer Pension - The
amount of your supplemental annuity is
reduced if you are receiving a monthly
pension from your railroad employer that is
based in whole or in part on railroad
employer contributions. It is also reduced for
any lump-sum distribution of the employer
contributions that you receive from your
pension plan, in lieu of a monthly rate. The
lump-sum distribution is considered to be
paid, even if you roll-over the funds to
another pension account. Your own contributions to your pension account do not affect
your supplemental annuity.
On your annuity application, you will be
asked to include the name of the railroad
employer(s) with whom you still hold pension

rights (other than railroad retirement). Indicate
the category (choose one only) that most accurately applies to the job position that vested
you for the employer monthly pension or
lump-sum pension payment.
The RRB will forward Form G-88p
Employer's Supplemental Pension Report to
your railroad employer when you:
1. are retiring from a job position that is
covered by an employer monthly pension
or lump-sum pension plan that could
cause a reduction to your RRB supplemental annuity or
2. indicate that you are receiving, or will
receive, an employer monthly pension or
lump-sum pension payment.

PART II - WHEN YOUR ANNUITY CAN
BEGIN
Refer to booklet RB-1D Employee Disability
Benefits if you are applying for a disability
annuity.

Chapter 7 - File an Application
You must file an application for an employee
annuity to receive railroad retirement benefits
based on your age and service. When you file an
application for an age and service annuity, you may
select the day you want your annuity to begin. You
have two choices: the earliest date permitted by
law, or a later date designated by you.

Chapter 8 - Earliest Annuity Beginning Date
Permitted By Law
A. General - Most applicants select the earliest
date permitted by law. This means the RRB
will set your annuity beginning date as the
very first day it could legally begin. If you
choose to select a beginning date yourself,
your annuity will begin on that date.
However, the date you choose cannot be
before the earliest date permitted by law.
The earliest age and service annuity
beginning date permitted by law is the latest
of the following:

7

1. The day after the actual day you last
worked in the railroad industry.
2. The day after the last day of a period of
Dismissal Allowance, Pay for Time Lost,
or some types of Vacation Pay from the
railroad industry.
3. The first day of the first full month you
meet the age requirement, as described in
Chapter 1.
4. The first day of the month in which your
application is filed if your annuity is
reduced for early retirement, as described
in Chapter 15.
5. The first day of the sixth month before the
month in which you file your annuity
application if your annuity is not reduced
for early retirement.

B. Advance Filing - If items 1-3 above apply,
you can file your age and service application
up to three months before the earliest annuity
beginning date permitted by law. This will
shorten the processing time of your annuity
application.
C. Delayed Filing - Note that when you delay
filing for benefits, when Items 4-5 above
apply, you may lose benefits for some or all
of the period before the month in which
you file.

Chapter 9 - Stop Railroad Work
Your age and service annuity cannot begin until
you stop all railroad work for pay. Also note that,
after the annuity is awarded, payment cannot be
made for any month in which you return to work
for a railroad employer.
Under advance filing procedure, you may file for
an age and service annuity up to three months
before your annuity beginning date. If you are
still working in railroad service when you file,
this means that the date that you certify on your
annuity application as the date you will stop
railroad service and relinquish rights is a date in
the future. If your plans change, you must
promptly report any change in your last day of

8

railroad service to the nearest RRB field office.
Otherwise, your annuity beginning date could be
incorrect, resulting in erroneous payments.
The RRB will release a Form G-88A.1 listing
Request for Verification of Date Last Carried on
Payroll to your last railroad employer if your
date last worked is within 15 months of the date
that you file your employee annuity application.
This will notify your employer of your claimed
date last worked and relinquishment of rights.

Chapter 10 - The Effects of Unemployment or
Sickness Benefits After Your Date Last Worked
A. Benefits Under the Railroad Unemployment
Insurance Act - Provided you meet the eligibility requirements, you may receive benefits
under the Railroad Unemployment Insurance
Act (RUIA) after your actual date last
worked. These benefits have no effect on
your annuity beginning date. Your annuity
can begin as early as the day after your actual
date last worked. However, any RUIA
benefits paid to you after your annuity
beginning date will be recovered from your
annuity accrual.
B. Sick Pay Under Certain Wage Continuation
Plans - Any railroad sick pay, for months
after your actual date last worked, that you
received under certain wage continuation
plans, other than being carried on the payroll
at all or part of your regular pay, can be
credited to your Tier 1 component for up to
six months after your actual date last worked.
But, this type of sick pay is not creditable as
railroad service months to your Tier 2
component. The sick pay agreement must be
established through a company policy or
labor agreement.
Check your pay receipt for the period of
sickness to determine if this provision applies
to you. If the payment was subject to Tier 1,
and not Tier 2 tax, the payment is sick pay
and has no effect on your annuity beginning
date. Your annuity can begin as early as the
day after your actual date last worked.
Examples of this type of payment are the
Trustmark or Provident sick pay plans
provided by some railroads.

Chapter 11 - The Effects of Dismissal
Allowance, Pay For Time Lost, and Some
Types of Vacation Pay
This section concerns payments that you may
receive from your employer after the actual date
you last performed service for the railroad, but
while you were still carried on their payroll.
These payments can have an effect on your
annuity beginning date.

A. Dismissal Allowance - Under the Railroad
Retirement Act, a Dismissal Allowance
consists of monthly compensation payments
for a specific period made to an employee
who retains an employment relation. This is
also often called Wage Continuation or
Guaranty Payments. The following, though
not exhaustive, is evidence of an employment
relation:
1. For these payments, your resignation and
relinquishment of rights are not effective
until the end of the period for which the
payments are made.
2. You may be recalled during the period of
the allowance. This can apply even if the
agreement between you and the railroad
is silent on the question of recall.
3. You remain covered under various
employee plans.
4. You continue to receive employee
benefits.

B. Pay For Time Lost - Pay For Time Lost
includes:
1. Personal Injury Settlements which
allocate a portion of the damage as lost
compensation for a specific period
following the injury and
2. Short Term Disability for a specific period
for which you are carried on the payroll
and receive all or part of your regular pay
while absent from work due to sickness.

C. Vacation Pay - Some types of Vacation Pay
affect your annuity if you are carried on the
payroll after your actual date last worked
and retain an employment relation.

When you file your annuity application, the
payments described in Section A-C above
should be entered as Pay for Time Lost to
prevent an incorrect annuity beginning date
from being established. Your annuity cannot
begin until the day after the last day for which
the Dismissal Allowance, Pay for Time Lost, or
Vacation Pay is paid.
When possible, it is sometimes to your
advantage to accept the payments in a lumpsum. You will not receive as many railroad
service months, but this allows your annuity to
begin at an earlier date. If you need help in
making this decision, the RRB field office will
provide you with the necessary annuity
estimates.
If you accept a Dismissal Allowance, Pay for
Time Lost, or Vacation Pay, you cannot receive
RUIA benefits for the period of time for which
you receive these benefits. This is true regardless
of whether you leave railroad employment voluntarily or involuntarily.
If you receive an injury settlement or Dismissal
Allowance, bring any documentation (i.e., a copy
of your settlement) with you when you file your
employee annuity application. If your case is still
pending at that time, advise the RRB field office
that you intend to claim a period of Pay for Time
Lost after your actual date last worked. They will
indicate the type of payment in "Remarks" on
your application so the RRB can correctly
determine your annuity beginning date.

Chapter 12 - The Effects of a Separation
Allowance After Your Date Last Worked
This section concerns payments that you may
receive from your employer after the actual date
you last performed service for the railroad, but
after you resigned and relinquished your rights
to railroad employment. These payments do not
have an effect on your annuity beginning date.
Under the Railroad Retirement Act, a Separation
Allowance is compensation paid, from railroad
operating funds, to an employee who agrees to
relinquish job rights to obtain the payment. The
payment can be made in a lump-sum or in
periodic installment payments.
The entire amount of the Separation Allowance is
creditable to your Tier 1 component, as of the

9

date you relinquish your rights, up to the annual
Tier 1 maximum for that year. However, only the
amount up to the Tier 2 monthly maximum times
the number of creditable railroad service months
for the year in which you relinquish your rights
is creditable to your Tier 2 component. No
railroad service months are credited to any
month after the month in which you relinquish
your rights, even if the Separation Allowance is
paid in monthly installments.
However, you may be entitled to a Separation
Allowance Lump-Sum Payment (SALSA) as
explained in Chapter 31 of this booklet. This
amount is a refund of any Tier 2 taxes withheld
from Separation Allowance payments when they do
not result in railroad service months or Tier 2 credit.
In cases where an employee, with at least 25
years of railroad service, has no option to remain
in the service of the railroad employer, the acceptance of a Separation Allowance does not mean
that the termination is voluntary. The employee
can still qualify for a Deemed Current
Connection, as explained in Chapter 5.
However, if you are offered a job of equal class
and craft, regardless of the distance you would
have to travel, and you chose a Separation
Allowance instead of keeping your seniority
rights to railroad employment, you would be
considered to have voluntarily terminated
railroad employment and would not be protected
by the Deemed Current Connection.
If you accept a Separation Allowance, you cannot
receive RUIA benefits for roughly the period of
time (called the disqualification period) it would
have taken to earn the amount of the Separation
Allowance, whether the Separation Allowance is
paid in a lump-sum or installments.
If you have not obtained new employment by the
end of the disqualification period and are still
actively seeking work, you may be eligible for
unemployment benefits at that time. You must
meet all the usual eligibility requirements,
including the availability for work requirement.
An employee can establish availability for work
by demonstrating a willingness to work and
making significant efforts to obtain work. In
judging your willingness to work, the RRB
considers, among other factors, the reason you
accepted the Separation Allowance and the

10

extent of your work-seeking efforts during the
disqualification period. Therefore, if you are
offered a job of equal class and craft and you
chose a Separation Allowance instead of keeping
your seniority rights to railroad employment,
you would be considered to have voluntarily terminated railroad employment and may not
qualify for RUIA benefits.

Example - If your salary was $3,000 a month
without overtime pay, and your Separation
Allowance was $12,000, you would be disqualified
from receiving RUIA benefits for approximately
four months. You could receive RUIA benefits for
the months after the end of the four-month
disqualification period only if you meet the
availability for work requirement.
Note that lump-sum payments from a pension
trust fund are not considered to be Separation
Allowances under the RRA, even if the railroad
or the RUIA refers to them as Separation
Allowances. These payments are not subject to
Tier 1 or Tier 2 taxes and do not increase the Tier
1 component. However, they can create a disqualification period for benefits under the RUIA
and can cause a reduction to supplemental
annuity benefits, as explained in Chapter 6.

PART III - BASIC FORMULA AND
REDUCTIONS FOR EARLY RETIREMENT
Chapter 13 - Basic Formula
Regular railroad retirement annuities are calculated under the following two-tier formula:

A. Tier 1 component - The first tier is based on
railroad retirement credits and any social
security credits an employee has acquired. If
you have 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 social security formulas and age
requirements. Exception: If you have at least
360 months of railroad service or are disabled
and have 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.

B. 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.

Chapter 14 - Full Retirement Age for
Employees Who Have Less Than 360 Months
of Railroad Service
The term Full Retirement Age (FRA) means the
age at which an employee with less than 360
months of railroad service can receive a full
annuity (not reduced for early retirement).
If you have less than 360 months of railroad
service, this applies to you. FRA for your Tier 1
age reduction is age 65 if you were born before
January 2, 1938. 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.
DETERMINING YOUR FULL RETIREMENT AGE

If you were born:

then your Full
Retirement Age 3.
is:

Before 1-2-1938
1-2-1938 thru 1-1-1939
1-2-1939 thru 1-1-1940
1-2-1940 thru 1-1-1941
1-2-1941 thru 1-1-1942
1-2-1942 thru 1-1-1943
1-2-1943 thru 1-1-1955
1-2-1955 thru 1-1-1956
1-2-1956 thru 1-1-1957
1-2-1957 thru 1-1-1958
1-2-1958 thru 1-1-1959
1-2-1959 thru 1-1-1960
1-2-1960 and later

65
65 and 2 months
65 and 4 months
65 and 6 months
65 and 8 months
65 and 10 months
66
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
67

( Full Retirement Age also affects Tier 1
component work deductions due to earnings as
described in Chapter 17, regardless of your total
years of railroad service.)

Chapter 15 - Age Reductions for Employees
Who Have Less than 360 Months of Railroad
Service
A. Tier 1 Component Age Reduction - Your
employee annuity Tier 1 component age
reduction depends on your total years of
railroad service.

1. You Have 60-119 Months of Railroad
Service with at Least 60 Months of
Railroad Service After 1995 - Your Tier 1
is reduced by 1/180 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; or,
2. You Have 120-359 Months of Railroad
Service - Your Tier 1 is reduced by 1/180
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.

B. Tier 2 Component Age Reduction - Your
employee annuity Tier 2 component age
reduction depends on whether or not you
have railroad service before August 12, 1983.
1. You Began Your Railroad Service Before
August 12, 1983 - Your Tier 2 age reduction is
1/180 for each month you are under age 65
on your annuity beginning date; or
2. You Began Your Railroad Service After
August 11, 1983 - Your Tier 2 will be
reduced by 1/180 for each of the first 36
months you are under FRA and 1/240 for
each additional month you are under
FRA on your annuity beginning date.
NOTE: If you receive a disability annuity
based on 60-119 months of railroad service
with at least 60 months of railroad service after
1995, your Tier 2 component is not payable
until the first full month you are age 62. Then
it will be reduced in the same manner as a Tier
2 component for an age and service employee.

PART IV - DEDUCTIONS FOR EARNINGS
Your annuity is not payable for any month in
which you are in railroad service. In addition,
nonrailroad earnings after your annuity beginning
date may affect your annuity computation.
If you are filing for a disability annuity, refer to
the earnings restrictions in booklet RB-1D,
Employee Disability Benefits.

11

Otherwise, the age and service annuity Tier 1 and
Tier 2 deductions for earnings are explained
below.

Chapter 16 - Self-Employment and Other
Nonrailroad Work
Earnings from nonrailroad employment,
including self-employment, may affect your
annuity computation. Nonrailroad work is any
job that is not in the railroad industry. 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.
We ask for information regarding your nonrailroad work, any government jobs you may have
had, and any self-employment to determine
whether or not you have a current connection
with the railroad industry (as explained in
Chapter 5). Earnings after your annuity beginning
date from any nonrailroad employment or selfemployment may also cause work deductions.
If you are claiming self-employment, the RRB
determines whether or not you are performing
"substantial services" as an independent contractor. The payment of self-employment taxes may be
evidence of an independent contractor status, but
is not conclusive. If you are working for an incorporated business that you own, the RRB does not
consider that work self-employment. If you are
self-employed as a consultant, the RRB considers
how your self-employment compares to the
work you did for your former railroad or nonrailroad employer before you applied for your
annuity. You should complete and return Form AA-4
Self-Employment and Substantial Service
Questionnaire to provide the RRB with the
necessary information to make that determination.
For more information about self-employment,
see Form G-177L General Information about
Continuing in or Returning to Nonrailroad
Employment after Retirement under the Railroad
Retirement Act.

Chapter 17 - Tier 1 Work Deductions
Tier 1, Vested Dual Benefit, or Special Guaranty
Computation work deductions do not apply for
any months you are Full Retirement Age (FRA)
(see Chapter 14) or older. If you are FRA, or older,

12

on your annuity beginning date, you may skip to
Chapter 18. If you are under FRA, earnings from
any nonrailroad employment (including selfemployment) over the Annual Earnings Exempt
Amount cause work deductions to your Tier 1,
any Vested Dual Benefit payable, and to any
Special Guaranty computation.
The term Annual Earnings Exempt Amount
means the amount of money you can earn in nonrailroad employment in a year without losing part
of your annuity or the annuities of others entitled
on your earnings record. There are separate
Annual Earnings Exempt Amounts for persons
under FRA, and for the year in which the person
attains FRA, as explained in the following chart.
When you have earnings over the Annual
Earnings Exempt Amount for your age group,
the excess is charged against your annuity and
the annuities of all others entitled on your
earnings record. However, if a divorced spouse is
entitled on your earnings record, effective from
the second anniversary of the divorce, your
earnings have no effect on the divorced spouse
annuity.
DETERMINING AMOUNT OF YOUR WORK DEDUCTION

For a year in
which you:

You may lose up to $1 in Tier 1
The
components for every:
reduction:

attain FRA,

$3.00 of earnings over the
Annual Earnings Exempt
Amount for your age group.
However, your earnings are
only counted for months
before the month in which you
attain FRA.

is removed
effective the
month in
which you
attain FRA

are under
FRAge for the
entire year,

$2.00 of earnings over the
Annual Earnings Exempt
Amount for your age group.

applies for
the full year.

work outside
the U.S. for 45 or
more hours per
month,

$2.00 of earnings. There is no
Annual Earnings Exempt
Amount for work outside the
U.S. However, your earnings
are only counted for months
before the month in which you
attain FRA.

is removed
effective the
month in
which you
attain FRA.

Refer to Form G-77a How Work Affects Your
Railroad Retirement Benefit s for the Annual
Earnings Exempt Amount to use when completing
the earnings items on your annuity application.

A. Definition of Earnings for Tier 1, Vested Dual
Benefit, or Special Guaranty Computation In general, earnings restrictions apply to
gross earnings from employment and net

earnings from self-employment. Gross
earnings are all salaries (including amounts
deferred to a 401(k) pension account), commissions, bonuses, retroactive wage
increases, or any allowances for room or
board earned in the calendar year. If these
earnings are from an employer covered
under the SS Act, the amount of the gross
earnings is the amount reported for social
security tax under the Federal Insurance
Contributions Act (FICA). Net earnings
from self-employment equals the amount of
gross income minus expenses that were
reported for social security tax under the
Self-Employment Contributions Act
(SECA). Add your earnings from employment and self-employment together to
determine the total earnings for the
calendar year for the purpose of Tier 1,
Vested Dual Benefit , or Special Guaranty
Computation work deductions.
Do not include as earnings any money that
you received for any reason other than work,
such as interest from savings, income from
investments, gifts, inheritances, pensions or
other retirement benefits.

B. Exception for First Year of Entitlement - In
the year your annuity begins, deductions for
your own earnings are based on your
earnings for the entire year, not just the
earnings after you retire. However, a special
rule may be used to apply work deductions
in the first year you are entitled to an annuity
and have a Non-Work Month.
A Non-Work Month is a month in which you
earn less than the Monthly Earnings Exempt
Amount for your age (the Annual Earnings
Exempt Amount for your age divided by 12)
or, if self-employed, render no substantial
services. (The RRB uses Form AA-4 SelfEmployment and Substantial Service
Questionnaire to determine months in which
you rendered no substantial services.)
1. Special Rule Applies - In the year the
special rule is applied, deductions for
your own earnings are not applied to any
Non-Work Month. If you have high
earnings before your annuity begins but
do not earn more than the Monthly
Earnings Exempt Amount in any month

after your annuity begins, Tier 1, Vested
Dual Benefit or Special Guaranty
Computation work deductions for your
own earnings will not be required.
2. Special Rule does not Apply - If you earn
more than the Monthly Earnings Exempt
Amount in one or more months after your
annuity begins, deductions are assessed to
those months up to the amount required
based on your total earnings for the year.
Also, after the first year in which you have
a Non-Work Month, this monthly test
does not apply. If your earnings are high
enough, Tier 1, Vested Dual Benefit or
Special Guaranty Computation work
deductions will be assessed to your
annuity for the entire year, even if you
only work part of the year.

C. Exception for Social Security Benefit
Entitlement - No earnings deductions are
made by the RRB to your Tier 1 component if
you are receiving social security benefits.
Earnings deductions may be made by the
Social Security Administration in your social
security benefit. If your annuity includes
aVested Dual Benefit, however, the RRB will
assess earnings deductions to that part of
your annuity.
D. Exception for Those Who do not have a Work
Deduction Insured Status - Ask your RRB
field office if this exception applies to you.
Most employees currently retiring are not
eligible for this exception because they do
have a Work Deduction Insured Status.
However, there are a few employees who
may not have accumulated the number of
wage Quarters of Coverage, or compensation
Quarters of Coverage after 1974, to have a
Work Deduction Insured Status. For
example, employees working for Canadian
railroads have not accumulated Quarters of
Coverage since 1983.
This exception only affects the Tier 1 and
Vested Dual Benefit work deductions. A
Work Deduction Insured Status is not
required for work deductions under the
Special Guaranty computation.

13

Chapter 18 - Last Pre-Retirement Nonrailroad
Employment

6. work as a member (owner) of a Limited
Liability Corporation; or,

A. Definition - Your Last Pre-Retirement
Nonrailroad Employer (LPE) is defined as
any nonrailroad individual, company or
institution for whom you are working on the
date your employee annuity begins or for
whom you stopped working in order to
receive an annuity. A few exceptions for types
of nonrailroad work are listed in Section B.

7. self-employment as defined under the
Railroad Retirement Act.

The nonrailroad employer is always your
LPE if you are working in nonrailroad
employment on the date your employee
annuity begins or, if you have stopped
working, you still hold rights to return to
service of the nonrailroad employer on the
date your employee annuity begins.
The nonrailroad employer is presumed to be
your LPE if you stopped working within the
six months preceding your annuity beginning
date. When you were working for two or
more persons, companies, or institutions
within the six months preceding your
annuity beginning date, all such employers
are presumed to be your LPE.

B. Work That is not Considered Last PreRetirement Nonrailroad Employment Nonrailroad employment after the date your
annuity begins is not LPE unless you worked
for that employer before the date your
annuity begins. Also, some types of nonrailroad work are not considered LPE, no matter
when they are done.
The following types of work are not LPE:
1. military service;
2. mail handling under contract for the U.S.
Post Office;
3. jury duty;
4. employment for which you are reimbursed only for your expenses;
5. certain seasonal employment where you
do not have rights to return to the
employment (such as working in a department store during the Christmas season);

14

Even though earnings from employment
described above are not from LPE, they can
cause Tier 1 work deductions, as explained in
Chapter 17.

Chapter 19 - Tier 2 and Supplemental
Annuity Work Deductions
Any earnings from your Last Pre-Retirement
Nonrailroad Employer (LPE) in or after the month
your annuity begins will reduce your Tier 2
component, your spouse's Tier 2 component, and
any supplemental annuity. Your LPE is explained
in Chapter 18. The reduction is $1 for each $2
earned (subject to a maximum reduction of 50
percent of the Tier 2 and supplemental annuity).
The reduction to Tier 2 and the supplemental
annuity occurs at any age, even after you attain
Full Retirement Age (FRA). There is no Annual
Earnings Exempt Amount, or Monthly Earnings
Exempt Amount for the first year of entitlement,
for LPE work deductions. Work deductions for
LPE apply no matter how much money you earn
in LPE.
Earnings from self-employment or other nonrailroad employment are not added to your LPE
earnings when computing Tier 2 or supplemental
annuity work deductions.

PART V - REDUCTIONS FOR OTHER
BENEFITS
Chapter 20 - Social Security Benefits
If you are entitled to Social Security (SS) benefits
based on any wage record, your Tier 1
component will be offset for those SS benefits
(before any withholding under the SS Act for
your earnings over the Annual Earnings Exempt
Amount). This is why your SS benefits may be
certified to the RRB for payment. If you have
already filed for your SS benefits, it is important
to include the SS benefit information on your
annuity application. This will help to prevent an
overpayment of your annuity.

A. Annuity Based on at Least 120 Months of
Railroad Service - Your railroad retirement
application may be used to protect your filing
date for SS benefits if you have not yet filed
at the Social Security Administration (SSA)
and will be entitled to the SS benefits within
three months. This means the date you file
your railroad retirement application can be
used as the date you file for SS benefits. If
you want to use your railroad retirement
application to protect your filing date, the
RRB representative will prepare Form RR-8
Notice of Protection of Filing Date for Social
Security Benefits and send a copy to your
local SSA office. The SSA office will contact
you to secure an application for SS benefits.
Your railroad retirement application may
protect your filing date, but it is not an application for SS benefits. You must file a separate
application for those benefits at SSA.
In many cases, filing for SS benefits will not
affect your total benefit rate, because of the
deduction in your Tier 1 component. It is
usually not to your advantage to apply for
benefits at both agencies. It is a good idea to
discuss this matter with an RRB representative before deciding to file for SS benefits.
Contact your local RRB office for information
about your situation before filing at SSA.

B. Annuity Based on 60-119 Months of Railroad
Service With at Least 60 Months of Railroad
Service After 1995 - Your railroad retirement
application is also deemed to be an application for any SS benefits that you may be
entitled to on your own earnings record or
the earnings record of your spouse.

Chapter 21 - Non-Covered Service Pensions
A Non-Covered Service Pension (NCSP) is any
payment based on earnings for services
performed after 1956 that are not covered as
employment under the Social Security (SS) Act or
the Railroad Retirement Act (RRA). This
payment may either be a monthly check or a
lump-sum payment. This information is
important because it may reduce the amount of
your Tier 1 component.

covered service pension reduction if your
date of birth is before January 2, 1924, or if
you have at least 30 Years of Coverage .
Approximately 1 Year of Coverage is credited
for each year in which you have wages, compensation, or self-employment earnings equal
to or more than the following: 25 percent of
the SSA maximum creditable earnings for
years before 1979, 25 percent of the Tier 2
maximum creditable earnings for years 19791990, and 15 percent of the Tier 2 maximum
creditable earnings for years after 1990. Ask
your RRB representative if this exception
applies to you.
Also note that the following monthly benefits
are not considered to be non-covered service
pensions:
1. A private pension from your railroad
employer.
2. Payment from the Department of
Veterans Affairs.
3. Pensions based on military service active duty.
4. Pensions based on the earnings of another
person.

B. When Non-Covered Service Pension
Reduction May Apply - If none of the exceptions above apply, your date of birth is
January 2, 1924, or later, and you are receiving
or expect to receive a pension or annuity (or a
lump-sum payment in excess of your own
contributions to the pension plan) that is
based on any work performed after 1956 not
covered by the SS Act or the RRA, the RRB
will use Form G-209 Employee Non-Covered
Service Pension Questionnaire to obtain the
information necessary to compute any offset
for your non-covered service pension.

Chapter 22 - Other Railroad Retirement
Annuities
If you are entitled to more than one railroad
retirement annuity, your employee annuity is not
reduced for the other railroad retirement annuity.
But your employee annuity can have an effect on
the other railroad retirement annuity.

A. Exceptions for Non-Covered Service Pension
Reduction - You are not subject to the non-

15

A. Spouse Annuity - If you are entitled to both a
Railroad Retirement Act (RRA) employee
annuity based on your own earnings record
and an RRA spouse annuity based on a
different earnings record, the reduction to
your RRA spouse annuity depends on
whether or not there is railroad service before
January 1, 1975, on either earnings record:
1. If either earnings record has railroad
service before January 1, 1975, your RRA
spouse annuity Tier 1 is reduced by your
RRA employee annuity Tier 1. The
reduction may be restored to your RRA
spouse annuity Tier 2.
2. If neither earnings record has railroad
service before January 1, 1975, your RRA
spouse annuity Tier 1 and Tier 2 is reduced
by your own RRA employee annuity Tier 1
and Tier 2. The reduction is not restored to
your RRA spouse annuity Tier 2.

B. Widow(er) Annuity - If you are entitled to
both an RRA employee annuity based on
your own earnings record and an RRA
widow(er) annuity based on a different
earnings record, the reduction to your RRA
widow(er) annuity depends on railroad
service before January 1, 1975.
1. If either earnings record has at least 120
months of railroad service before
January 1, 1975, your RRA widow(er)
annuity Tier 1 is reduced by your own
RRA employee annuity Tier 1. If you are
a widow, the reduction may be partially
restored to your RRA widow annuity
Tier 2. If you are a widower, you may be
eligible for the restored amount if you
were dependent on your deceased
spouse for 1/2 of your support.
2. If either earnings record has some railroad
service before January 1, 1975, but neither
earnings record has 120 months of
railroad service before January 1, 1975,
your RRA widow(er) annuity Tier 1 is
reduced by your own RRA employee
annuity Tier 1. The reduction is not
restored to your widow(er) annuity Tier 2.
3. If neither earnings record has any railroad
service before January 1, 1975, your RRA
widow(er) annuity Tier 1 and Tier 2 is

16

reduced by your RRA employee annuity Tier
1 and Tier 2. The reduction is not restored to
your RRA widow(er) annuity Tier 2.

C. Divorced Spouse Annuity - If you are entitled to
both an RRA employee annuity based on your
own earnings record and an RRA divorced
spouse annuity based on a different earnings
record, your RRA divorced spouse annuity is
reduced by your RRA employee annuity.
D. Surviving Divorced Spouse Annuity or
Remarried Widow Annuity - If you are
entitled to both an RRA employee annuity,
based on your own earnings record, and an
RRA surviving divorced spouse annuity or
RRA remarried widow(er) annuity, based
on a different earnings record, the
reduction depends on railroad service
before January 1, 1975.
1. If there is railroad service before
January 1, 1975, on either earnings
record, your RRA surviving divorced
spouse annuity or RRA remarried
widow(er) annuity will be reduced by
your RRA employee annuity Tier 1.
2. If neither earnings record has railroad
service before January 1, 1975, your RRA
surviving divorced spouse annuity or
RRA remarried widow(er) annuity is
reduced by your RRA employee annuity
Tier 1 and Tier 2.

Chapter 23 - Worker's Compensation and
Public Disability Benefits
The Worker's Compensation and Public
Disability Benefit (WC/PDB) provision only
applies to disability annuitants. If you are not
filing for a disability annuity, you can skip this
chapter.
The Tier 1 component of your disability annuity
may be reduced if you are receiving WC benefits
or certain PDBs. The WC benefits that affect your
annuity are those payments made to you by a
Federal or State worker's compensation
insurance law for a work-related injury or
disease you may have. The PDBs that may affect
your annuity are those payments made to you by
a Federal, State, or local government based on
employment that is not entirely covered by the
Social Security (SS) Act.

Generally, when 85 percent or more of the period
of service for a Federal, State, or local government is covered under the SS Act, a PDB based
on that service paid by Federal, State, or local
plan will not cause a reduction. Also, payments
from the Department of Veterans Affairs will not
cause a reduction.
Military service disability pensions based
entirely on active duty before 1957 will cause a
PDB reduction.
If you receive WC or a PDB based on any
employment from a Federal, State, or local government that was not covered under the SS Act,
you must submit proof of the amounts and
effective dates of your WC or PDB.

c. care in your home by a home health
agency; and,
d. hospice care.
As soon as you are determined to be eligible
for Medicare, you will automatically be
enrolled for Hospital Insurance (Part A).
You do not pay a monthly premium for
your Hospital Insurance (Part A).
2. Medical Insurance (Part B) can help pay
for additional kinds of medically
necessary care:
a. doctors' services;
b. outpatient hospital services; and,

PART VI - REDUCTIONS FOR OTHER
FEDERAL PROGRAMS
Chapter 24 - Medicare Coverage and You
A. General Information About Medicare Medicare is a two-part Federal health
insurance program, administered by the
Centers for Medicare & Medicaid Services
(CMS), for people who are age 65 or older,
who are totally and permanently disabled, or
who have permanent kidney failure. One
part of Medicare is Hospital Insurance (also
known as Part A). The other part is Medical
Insurance (also known as Part B).
If you are eligible for Medicare because of
permanent kidney failure (End Stage Renal
Disease), you must call or visit your local
Social Security Administration office or call
the Social Security Administration at 1-800772-1213 to enroll in Medicare Part A and
Part B. For all other Medicare eligibility, the
RRB can help you enroll in Medicare Part A
and Part B.
1. Hospital Insurance (Part A) can help pay
for four kinds of care:
a. inpatient hospital care;
b. inpatient care in a skilled nursing
facility following a hospital stay;

c. a number of other medical services
and supplies that are not covered by
Hospital Insurance (Part A).

B. Medical Insurance (Part B) at Age 65 or Older Enrollment for Medical Insurance (Part B)
depends on your age when you file your
annuity application.
1. If you are under age 64 years and 5
months when you file your annuity application, you will be automatically enrolled
in Medical Insurance (Part B) at age 65,
unless you decline this coverage.
2. If you are at least age 64 years and 5
months, when you file your annuity
application, you can use your employee
annuity application to enroll for Medical
Insurance (Part B).
If you want Medical Insurance (Part B) at
age 65, you must pay a premium for each
month you have this insurance. If you
receive an annuity, the premium will usually
be deducted from your monthly annuity.
If you do not want Medical Insurance (Part B) at
age 65, and then later decide that you do want
to sign up, your protection may be delayed and
your premiums may be more expensive.
If at any time, you wish to cancel the election
that you make on your annuity application,
you must contact the nearest office of the RRB.

17

C. Special Enrollment Period - You may delay
enrolling in Medical Insurance (Part B)
coverage without penalty if you are covered
under a Group Health Plan (GHP) at age 65.
The GHP must be based on your own
employment or your spouse's employment.
You may enroll in Medical Insurance (Part B)
at any time while you are covered under the
GHP; or, you can enroll during a Special
Enrollment Period (SEP). Your SEP begins
when the employment on which the GHP is
based ends or the first month you are no
longer covered under the GHP, whichever
comes first. The SEP lasts for 8 months.

SEP, your Medical Insurance (Part B) will
begin the first day of the month after the
month you file. The beginning date can be
no later than the ninth month after the
start of your SEP.

The beginning date of your Medical
Insurance (Part B) coverage depends on the
status of your GHP coverage when you file
for the Medical Insurance (Part B).

If you are already enrolled in Medical
Insurance (Part B) and are paying higher
premiums due to late enrollment, and you
had GHP coverage at age 65, you may use
your annuity application to request a review
of the Medical Insurance (Part B) premium
rate you are paying.

1. If you file for Medical Insurance (Part B)
during any month in which you are
enrolled in a GHP, or in the first month of
your SEP, you can choose the effective
date of your Medical Insurance (Part B).
The effective date can be the first day of
the month you file or the first day of any
of the following three months after the
month of filing.
Example 1 - If your GHP coverage based
on current employment has not ended and
you file for Medical Insurance (Part B) in
May, you can chose May 1, June 1, July 1,
or August 1 for your Medical Insurance
(Part B) effective date.
Example 2 - If your GHP coverage based
on current employment ends on March 19,
and you file for Medical Insurance (Part B),
the following applies:
a. If you file anytime after March 19, but
before April 1, you can choose the
effective date of March 1, April 1, May 1,
or June 1 for your Medical Insurance
(Part B).
b. If you file anytime in April, you can
choose the effective date of April 1,
May 1, June 1, or July 1 for your
Medical Insurance (Part B).
2. If you file for Medical Insurance (Part B)
during the other seven months of your

18

Example - If your GHP coverage based on
employment ends on March 19, and you
file for Medical Insurance (Part B) anytime
during the period May 1 through
November 30, your Medical Insurance
(Part B) will begin the month after the
month in which you file your annuity
application.

D. Prescription Drugs - In 2003, new Medicare
legislation was enacted. Among other things,
the legislation provides for a prescription
drug benefit for Medicare beneficiaries. Until
that benefit goes into effect in 2006, Medicare
beneficiaries will be able to purchase a prescription drug discount card. Individuals
with incomes below certain levels may
qualify for a $600 credit to be added to the
discount card that can be used to help pay for
prescription drugs.
E. Early Medicare Based on Disability - You can
also be covered by Medicare before age 65 if
you are eligible for a monthly railroad retirement annuity and are totally disabled for all
employment. If you are filing for an age and
service annuity before the month you will
attain age 63, and you are totally disabled,
you may use your annuity application to
request a disability determination for early
Medicare coverage only. Also complete and
return Form AA-1D Application for
Determination of Employee's Disability .
Refer to booklet RB-1D Employee Disability
Benefits for an explanation of the disability
requirements.
If you are filing for a disability annuity, the
RRB will automatically do a disability determination for an RRA annuity and early
Medicare coverage.

F. More Information About Medicare - You
may find answers to your Medicare
questions by contacting the nearest RRB
office; going to www.medicare.gov; or
calling 1-800-MEDICARE (1-800-633-4227).

first payment within 35 days of the date your
annuity can begin. However, note that no
payment is due until the first day of the
month after the first month of annuity entitlement, as explained in Chapter 27.

Chapter 25 - Federal Income Tax Withholding

B. Other Than Advance Filing Cases - If you do
not file your annuity application in advance
of the earliest date in which your annuity can
begin, you should receive your annuity award
letter and first payment within 65 days from
the date you file your annuity application.

Withholding for Federal Income Tax may occur,
either based on your election filed on Form W-4P
Withholding Election Form, or, if you do not file
a Form W-4P, based on a status of "Married with
three dependents."

The chapters in this part of the booklet explain
what the Railroad Retirement Board (RRB) does
after you file your annuity application. Included
is important information about how soon you
can expect a decision on your application.

C. Annuity Denial - If you cannot be paid an
annuity, the RRB will send you a decision
within 35 days of the beginning date that you
requested, if you filed in advance, or within
65 days of the date you filed, if you did not
file in advance. The letter will explain why
you cannot be paid and what you can do if
you disagree with the reason you cannot be
paid. If you think we made the wrong
decision about your benefits, you have the

Chapter 26 - Notice of Decision About Your
Age and Service Application

right to ask for a review and to appeal
within the required time limit shown in
the denial letter.

PART VII - AFTER YOU APPLY FOR
YOUR ANNUITY

When you are ready to retire, contact your RRB
field office to file your employee annuity application. Our goal is to process your application as
quickly as possible. Claims for some benefits
may take longer to handle than others if they are
more complex, or if we have to get information
from other people or organizations. If this
happens, we will give you an explanation and
an estimate of the time required to make a
decision.
Sometimes we will not be able to make a
decision on your application for benefits without
some additional information from you. If so, we
will contact you by telephone or mail and ask
you to send us the required forms, proofs, or
statements.
If you do not receive a notice that additional
information is needed, you should receive the
decision on your annuity application as follows:

A. Advance Filing Cases - When you file up to
three months before the earliest date your
annuity can begin (see Chapter 8), you
should receive your annuity award letter and

Chapter 27 - How Payments Are Made
The first payment you receive from the RRB will
be separate from your annuity award letter.
Annuities are payable at the beginning of the
month following the month for which the
annuity accrued. The payment that you receive at
the beginning of the month actually represents
the annuity that accrued for the previous month.

A. Advance Filing Cases - When you file up to
three months before the earliest date your
annuity can begin (see Chapter 8), no payment
is due until the first day of the month after the
first month of annuity entitlement.
B. Other Than Advance Filing Cases - If you are
not filing in advance of your annuity
beginning date, the initial payment may be a
partial payment, with an estimated monthly
rate, representing payment due through the
end of the preceding month. You will continue
to receive this partial amount until your final
rate can be determined and awarded. Once
your final rate has been certified, you will
receive any increase due from your annuity

19

beginning date. You may receive this payment
at any time during the month.
Remember: The payment that you receive
after your initial payment will be made
once a month on the first day of the
month. If the first day of the month falls
on a Sunday or a holiday, you will receive
the payment on the next business day.
The payment that you receive at the
beginning of each month actually represents the annuity that accrued for the
previous month.

Chapter 28 - Direct Deposit to a Financial
Institution
The Federal Government now requires that most
government payments be sent directly to a
savings or checking account at a financial institution instead of being sent to the recipient's home.
Under the RRB's Direct Deposit program, your
monthly annuity payment will be made directly
to your savings or checking account at the
financial institution that you indicate on your
annuity application. You will find that this is
both safe and convenient.

Even though your payments are on direct
deposit, be sure to keep your home address on
our records current as explained in Chapter 29.

Chapter 29 - Change of Address
Notify the nearest RRB office immediately if you
change your address, even when your monthly
annuity payments are going directly to your
savings or checking account. All correspondence
from the RRB is sent to your home mailing
address on record. This mailing address is used
to send any material other than your payments
to you (such as notices of cost-of-living increases,
Medicare information, new Annual Earnings
Exempt Amounts, and tax statements). If you do
not report your change of address, the RRB
cannot be responsible for any important information that you do not receive.
A notice of change of address must always
include:
G
G
G
G
G

If you decline direct deposit based on hardship,
you can still change your mind at a later date.
Telephone or visit your RRB field office. Have
one of your personal checks handy because it
contains the information needed to start direct
deposit. The field office personnel will enter the
information into our payment system and tell
you when the direct deposit will take effect.
You may also take one of your annuity checks to
your financial institution and ask them to
complete an automated Quick$tart enrollment or
a Form SF-1199A Authorization for Deposit of
Federal Recurring Benefits. Your financial institution will have this form on hand. Your financial
institution will submit your enrollment to the
RRB. Shortly after the RRB receives your direct
deposit information, your monthly annuity
payment will start going directly to your savings
or checking account.
If you later change your account or financial institution, follow the steps indicated above for direct
deposit to your new account. Keep your old
account open until the direct deposit of payments
to your new account begins.

20

G

your RRB claim number;
your name;
your new address;
your old address; and
the date you will start receiving mail at
the new address.
If you have a spouse who is also receiving
an RRA annuity, state whether the change
of address applies to both of you or to
you alone.

Chapter 30 - Receiving a Tax Refund of
Excess Social Security Tax
If, in any year before you retired, you worked for
more than one railroad employer or worked in
both railroad employment and social securitycovered employment, your combined gross
earnings from employment or net earnings from
self-employment may have exceeded the Tier 1
yearly earnings maximum for that year. You may
qualify for a refund of any excess taxes that were
withheld from your earnings under the Federal
Insurance Contributions Act (FICA) or the
Railroad Retirement Tax Act (RRTA) or that you
paid under the Self-Employment Contributions
Act (SECA).

A. Earnings After Year 1974 - Your combined
railroad and social security-covered earnings

may exceed the Tier 1 yearly earnings
maximum in any year after 1974, if you
either:
1. work in both railroad employment
(RRTA) and social security-covered
employment (FICA) or
2. work for two railroad employers (RRTA).
You can obtain a refund of the FICA or RRTA
tax for the earnings in excess of the Tier 1
yearly earnings maximum. Claim the amount
of the excess FICA or RRTA tax on your
income tax return (U.S. Individual Income
Tax Form 1040 or Form 1040A, under Excess
FICA or RRTA Tax Withheld). This is how
people who have never worked in the
railroad industry get refunds for their excess
social security taxes. There is a three year
statute of limitations on such claims.

B. Earnings 1951 through 1974 - If your
combined railroad and social securitycovered earnings exceeded the yearly
earnings maximum in any year from 1951
through 1974, you qualify for the refund of
excess tax if you have at least 120 months (10
years) of railroad service and are not entitled
to a Vested Dual Benefit. The refund is the
amount of the RRTA, FICA, or SECA tax
based on the amount of your yearly earnings
that exceeded the yearly earnings maximum
for that year. If you qualify for this refund,
you do not have to apply for it. The RRB will
automatically pay it to you when you retire.
If you die before receiving this refund, it will
be paid to your survivors.

Chapter 31 - Receiving a Railroad Separation
Allowance Payment

Step 1 -Subtract the amount of the
Separation Allowance used in the total
railroad service credits from the total
amount of the Separation Allowance
subject to Tier 2 taxation.
Step 2 - If the result of Step 1 is greater than
zero, multiply the result of step 1 by the
amount of the employee Tier 2 contribution
rate(s) under the Railroad Retirement Tax
Act (26 USC 3221) for the year(s) the
Separation Allowance was paid.

B. Eligibility Requirements - To be eligible for a
Separation Allowance lump-sum payment,
you must have completed at least 120 months
of railroad service, or 60-119 months of
railroad service with at least 60 months of
railroad service after 1995. If you qualify for
the payment, you do not have to apply for it.
The RRB will automatically pay it to you
when you retire. If you die before receiving
this payment, it will be paid to your
survivors.

Chapter 32 - Records You Should Keep
We recommend that you keep this booklet after
you file your annuity application. It contains
important information concerning your entitlement to benefits.
You should also keep your:
1. annuity award notice or denial notice;
2. notes from the RRB representatives who
helped you file your annuity application. The
notes should detail any special aspects of
your claim (such as why a certain employer
was or was not your LPE);

You may be entitled to an additional lump-sum
payment if you received a Separation Allowance
after 1984 and such payment did not provide
additional railroad retirement service credits, as
explained in Chapter 12.

3. copy of the Form AA-1, Receipt for Your
Claim;

A. Computation of Lump Sum - The Separation
Allowance lump-sum payment for the year(s)
the Separation Allowance was paid is
computed as follows:

5. booklet RB-9 Employee and Spouse
Annuities - Events That Must Be Reported to
help you comply with the RRB's reporting
requirements.

4. copy of Federal Income Tax Form W-4P
Withholding Election Form; and,

21

Nondiscrimination on the Basis of Disability
Under Section 504 of the Rehabilitation Act of 1973 and Railroad Retirement Board (RRB) regulations, no
qualified person may be discriminated against on the basis of disability. RRB programs and activities
must be accessible to all qualified applicants and beneficiaries, including those with impaired vision or
hearing. Disabled persons needing assistance (including auxiliary aids or program information in accessible formats) should contact the nearest RRB office. Complaints of alleged discrimination by the RRB on
the basis of disability must be filed within 90 days in writing with the Director of Administration,
Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois, 60611-2092. Questions about individual rights under this regulation may be directed to the RRB's Director of Equal Opportunity at the
same address.

Fraud and Abuse Hot Line
Call the toll-free Fraud and Abuse Hot Line if you have reason to believe that someone is receiving
railroad retirement or unemployment-sickness benefits to which (s)he is not entitled; that persons
responsible for the financial affairs of minors or incompetent beneficiaries are misappropriating benefits;
or that a doctor, hospital, or other provider of health care services is performing unnecessary or inappropriate services or is billing Medicare for services not received. You may also use the Hot Line to report
any suspected misconduct by a Railroad Retirement Board (RRB) employee. The Hot Line has been
installed by the RRB's Inspector General to receive any evidence of fraud or abuse of the RRB's benefit
programs.
Call (toll-free) 1-800-772-4258. Or you may send your complaints in writing to the Railroad Retirement
Board, OIG, Hot Line Officer, 844 North Rush Street, Chicago, Illinois, 60611-2092. Please do not call the
Hot Line with questions about eligibility requirements, delayed claims, or similar problems. Such
matters should be directed to the nearest RRB field office.

Computer Matching and Privacy Protection Act Notice
The Computer Matching and Privacy Protection Act of 1988 requires the Railroad Retirement Board
(RRB) to advise you that information you have provided may be used, without your consent, in
automated matching programs. These matching programs are a computer comparison of RRB records
with records kept by other Federal, State, or local government agencies. Information from these matching
programs can be used to establish or verify a person's eligibility for Federally funded or administered
benefit programs and for repayment of payments or delinquent debts under these programs.

Burden Statement
We estimate the application process takes an average of 30 to 62 minutes per response to complete,
including the time for reviewing the instructions, getting the needed data, and reviewing the completed
application. Federal agencies may not conduct or sponsor, and respondents are not required to respond
to, a collection of information unless it displays a valid OMB number. If you wish, send any comments
regarding the accuracy of our estimates or any other aspect of this process, including suggestions for
reducing completion time, to the Chief of Information Resources Management, Railroad Retirement
Board, 844 N. Rush Street, Chicago, Illinois 60611-2092.

Paperwork Reduction Act and Privacy Act Notices
This notice is given under the Paperwork Reduction Act of 1995 and the Privacy Act of 1974.
The Privacy Act requires that the Railroad Retirement Board (RRB) tell you the following whenever we ask
you for information:
1.
2.
3.
4.

The law which allows us to ask for the information;
whether that law requires you to give us that information and what, if anything, might happen to you
if you do not give it to us;
the reason why the information is requested; and
the persons, organizations, and agencies to which we may release the information without your
permission.

The RRB's authority for requesting this information is Section 7(b) of the Railroad Retirement Act (RRA) of
1974. Providing us with this information is voluntary on your part. However, if you fail to provide us with the
requested information, we may be unable to pay you any benefits. The RRB needs this information to
determine whether or not you are eligible to receive such benefits, and, if so, the amount you are entitled to
receive. If your annuity application is approved and we begin to pay you benefits, information that we may
request from you in the future will be used to determine whether you are entitled to continue to receive such
benefits.
Although the information we request is almost never used for any purpose other than the payment of benefits
under the RRA, the RRB does have the authority to release information to the indicated individuals, organizations, and/or agencies listed below without your approval:
1.
2.
3.

4.
5.
6.

7.

8.
9.
10.
11.
12.
13.
14.
15.

An attorney, the Office of the President, a Congressional office, a labor union or the Department of
State's embassy or consular office if they allege to be representing you at your request.
Other people who are receiving benefits based on the same railroad retirement account as you are, if
the information affects their payments from the RRB.
A person who will receive benefits on your behalf if the RRB decided that some medical condition
keeps you from receiving your own benefits; such information may also be released in determining
whether such a medical condition exists and who is suitable to receive such benefits for you.
People or organizations who are working for the RRB. Such information may include medical
records.
The U.S. Treasury Department or U.S. Postal Service to issue payments and to investigate lost, forged,
or stolen checks.
Your last employer to make sure that you are eligible to receive railroad retirement benefits and you
continue to receive any available medical benefits, and any railroad industry employer (or its
insurance company) to make sure that you can receive any private retirement or insurance benefits
which may be offered by the employer.
The Social Security Administration, Centers for Medicare & Medicaid Services, Pension Benefit
Guaranty Corporation, Office of Personnel Management, Department of Veterans Affairs, or Federal,
state, or local welfare or public aid agencies to determine if you can receive benefits for these organizations and if any previous benefits were paid incorrectly.
The Internal Revenue Service or state and local taxing authorities for figuring your taxes and for use
in audits.
Your last address and the name of your last employer may be released to the Department of Health
and Human Services to be used in the Parent Locator Service.
The General Accounting Office for audits and collecting overpayments owed to the RRB or the Social
Security Administration.
The U.S. Department of Labor as required by the Federal Coal Mine and Safety Act.
Information can be released, in certain cases, for law enforcement purposes and for court proceedings
Information about the determination and recovery of an overpayment made to you may be released to
any other person from whom any portion of the overpayment is being recovered.
Your name and address may be released to a Member of Congress to inform you about current or
proposed legislation, which could affect the railroad retirement system.
Professional Standard Review Organizations and State Licensing Boards when services provided by
physicians or practitioners suggest unethical or unprofessional conduct.