Employee Age and Service Annuities
RB-1 (05-09)
Age Reductions For Employees Who Have Less Than 360 Months Service
Basic Formula
Regular railroad retirement annuities are calculated under the following two-tier formula:
Tier 1 Component
The first tier is based on railroad retirement credits and any social security credits an employee has acquired. If 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.
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.
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 your year of birth is: | Then your Full Retirement Age is: |
| Before 1-2-1938 | 65 |
| 1-2-1938 thru 1-1-1939 | 65 and 2 months |
| 1-2-1939 thru 1-1-1940 | 65 and 4 months |
| 1-2-1940 thru 1-1-1941 | 65 and 6 months |
| 1-2-1941 thru 1-1-1942 | 65 and 8 months |
| 1-2-1942 thru 1-1-1943 | 65 and 10 months |
| 1-2-1943 thru 1-1-1955 | 66 |
| 1-2-1955 thru 1-1-1956 | 66 and 2 months |
| 1-2-1956 thru 1-1-1957 | 66 and 4 months |
| 1-2-1957 thru 1-1-1958 | 66 and 6 months |
| 1-2-1958 thru 1-1-1959 | 66 and 8 months |
| 1-2-1959 thru 1-1-1960 | 66 and 10 months |
| 1-2-1960 and later | 67 |
(FRA also affects Tier 1 component work deductions due to earnings, regardless of your total years of railroad service.)
Age Reductions For Employees Who Have Less Than 360 Months of Railroad Service
Tier 1 Component Age Reduction
Your employee annuity Tier 1 component age reduction depends on your total years of railroad service.
- 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.
- 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.
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.
- You Began Your Railroad Service Before August 12, 1983
- Your Tier 2 is reduced by 1/180 for each month you are under age 65 on your annuity beginning date.
- You Began Your Railroad Service After August 11, 1983 - Your Tier 2 is 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.
