Most railroad retirement annuities, like social security benefits, are scheduled
to increase in January 2014 on the basis of the rise in the Consumer Price Index
(CPI) from the third quarter of 2012 to the corresponding period of the current
Cost-of-living increases are calculated in both the tier I and tier II benefits
included in a railroad retirement annuity. Tier I benefits, like social security
benefits, will increase by 1.5 percent, which is the percentage of the CPI rise.
Tier II benefits will increase by 0.5 percent, which is 32.5 percent of the CPI
rise. The vested dual benefit payments and supplemental annuities also paid by
the Railroad Retirement Board (RRB) are not adjusted for the CPI rise.
In January 2014, the average regular railroad retirement employee annuity will
increase $29 a month to $2,459 and the average of combined benefits for an
employee and spouse will increase $41 a month to $3,540. For those aged widow(er)s
eligible for an increase, the average annuity will increase $17 a month to
$1,279. However, widow(er)s whose annuities are being paid under the Railroad
Retirement and Survivors' Improvement Act of 2001 will not receive annual
cost-of-living adjustments until their annuity amount is exceeded by the amount
that would have been paid under prior law, counting all interim cost-of-living
increases otherwise payable. Almost 37 percent of the widow(er)s on the RRB's
rolls are being paid under the 2001 law.
If a railroad retirement or survivor annuitant also receives a social security
or other government benefit, such as a public service pension, the increased
tier I benefit is reduced by the increased government benefit. However, tier II
cost-of-living increases are not reduced by increases in other government
benefits. If a widow(er) whose annuity is being paid under the 2001 law is also
entitled to an increased government benefit, her or his railroad retirement
survivor annuity may decrease.
However, the total amount of the combined railroad retirement widow(er)'s
annuity and other government benefits will not be less than the total payable
before the cost-of-living increase and before any increase in Medicare premium
In late December the RRB will mail notices to all annuitants providing a
breakdown of the annuity rates payable to them in January 2014.
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