January 8, 2025
DISCLAIMER:
The Social Security Fairness Act (SSFA), concerning the Windfall Elimination Program and Government Pension Offset, was signed into law on January 5, 2025. Upon implementation, the SSFA eliminates the reduction applied to the tier I portion of railroad retirement annuities and social security benefits for those entitled to public pensions from work not covered by railroad retirement or social security. The Railroad Retirement Board is currently evaluating how to implement the SSFA. Monitor RRB.gov/SSFActFAQ for information on progress related to implementation.
The following Q&A is from the historical policy and does not reflect provisions of the SSFA.
The payment of a railroad retirement annuity can be affected by entitlement to social security benefits, as well as certain other government benefits. Such dual entitlement, if not reported to the Railroad Retirement Board (RRB), can result in annuity overpayments which have to be repaid, sometimes with interest and penalties. The following questions and answers describe how the RRB adjusts the railroad retirement annuities of individuals who are also eligible for social security benefits and/or other benefit payments.
1. How are dual benefits paid to a person entitled to both a railroad retirement annuity and a social security benefit?
If a railroad retirement annuitant is also awarded a social security benefit, the Social Security Administration determines the amount of the social security benefit due, but a combined monthly dual benefit payment should, in most cases, be issued by the RRB after the railroad retirement annuity has been reduced by the amount of the social security benefit.
2. Why is a railroad retirement annuity reduced when a social security benefit is also payable?
The tier I portion of a railroad retirement annuity is based on both the railroad retirement and social security earnings acquired by an employee and computed under social security formulas. It approximates what social security would pay if railroad work were covered by social security. The tier I portion is, therefore, reduced by the amount of any actual social security benefit paid on the basis of nonrailroad employment, in order to prevent a duplication of benefits based on social security-covered earnings.
In addition, following principles of social security law which limit payment to the higher of any two or more benefits payable to an individual at one time, the tier I social security benefit reduction applies to an annuity even if the social security benefit is based on the earnings record of someone other than the railroad employee, such as a spouse or former spouse. An annuitant is required to advise the RRB if any benefits are received directly from the Social Security Administration or if those benefits increase (other than for a cost-of-living increase) to avoid a railroad retirement annuity overpayment.
The tier II portion of a railroad retirement annuity is based on the railroad employee’s railroad service and earnings alone and is computed under a separate formula. It is not reduced for entitlement to a social security benefit.
3. Are there any exceptions to the railroad retirement annuity reduction for social security benefits?
No. There are no exceptions to the railroad retirement annuity reduction for social security benefits.
4. Can federal, state, or local government pensions also result in dual benefit reductions in an employee's railroad retirement annuity?
Yes. The tier I portion of a railroad retirement annuity for employees first eligible for a railroad retirement annuity and a federal, state, or local government pension after 1985 may be reduced for receipt of a public pension based, in part or in whole, on employment not covered by social security or railroad retirement after 1956. This may also apply to certain other payments not covered by railroad retirement or social security, such as payments from a non-profit organization or a foreign government or a foreign employer. Usually, the tier I portion of an employee’s annuity will not be reduced by more than 1/2 of his or her pension from noncovered employment. However, if the employee is under age 65 and receiving a railroad retirement disability annuity, the tier I portion may be reduced by an added amount if the pension from noncovered employment is a public disability benefit.
Military service pensions, payments by the Department of Veterans Affairs, or certain benefits payable by a foreign government as a result of a totalization agreement between that government and the United States will not cause a reduction.
5. Can the public service pension reduction apply to a railroad retirement spouse or widow(er)s’ annuity?
Yes. The tier I portion of a spouse’s or widow(er)’s railroad retirement annuity may be reduced for receipt of any federal, state, or local government pension separately payable to the spouse or widow(er) based on her or his own earnings. For spouses and widow(er)s subject to a public service pension reduction, the tier I reduction is equal to 2/3 of the amount of the public service pension.
The reduction generally does not apply if the employment on which the public service pension is based was covered under the Social Security Act throughout the last 60 months of public employment. Most military service pensions and payments from the Department of Veterans Affairs will not cause a reduction. Pensions paid by a foreign government or interstate instrumentality will also not cause a reduction.
6. What dual benefit restrictions apply when both persons in a marriage are railroad employees entitled to railroad retirement annuities?
If both parties started railroad employment after 1974, the amount of any spouse or divorced spouse annuity is reduced by the amount of the employee annuity to which the spouse or divorced spouse is also entitled.
If either party had some railroad service before 1975, the spouse or divorced spouse tier I amount is reduced by the amount of the railroad employee tier I to which the spouse or divorced spouse is entitled. The spouse or divorced spouse tier I amount cannot be reduced below zero. The initial reduction is restored in the spouse tier II amount. Divorced spouses are not entitled to a tier II component and are not eligible to have the reduction restored.
In survivor cases, if the widow(er) is entitled to a railroad retirement employee annuity and neither the widow(er) nor the deceased employee had any railroad service before 1975, the survivor annuity (tier I and tier II) payable to the widow(er) is reduced by the total amount of the widow(er)’s own employee annuity.
If either the deceased employee or the widow(er) had some railroad service before 1975 but less than 120 months of service, the widow(er)’s own employee annuity and the tier II portion of the survivor annuity would be payable to the widow(er). The tier I portion of the survivor annuity would be payable only to the extent that it exceeds the tier I portion of the widow(er)’s own employee annuity.
If a widow or dependent widower is also a railroad employee annuitant, and either the widow(er) or the deceased employee had 120 months of railroad service before 1975, the tier I reduction may be partially restored in the survivor tier II amount.
7. Can receipt of workers' compensation or public disability benefits affect railroad retirement annuities?
If an employee is receiving a railroad retirement disability annuity, the tier I portions of the employee and spouse annuities may, under certain circumstances, be reduced for receipt of workers’ compensation or public disability benefits.
8. How can an annuitant find out if the receipt of dual benefits affects his or her railroad retirement annuity?
If an annuitant becomes entitled to any of the dual benefit payments discussed above, or if there is any question as to whether a dual benefit payment requires a reduction in a railroad retirement annuity, he or she can call an RRB field office toll-free at 1-877-772-5772. Agency field offices also offer in-person service. While persons seeking in-office assistance are encouraged to schedule an appointment with their local field office by calling the agency’s toll-free number, individuals without appointments will not be refused service. However, those without an appointment may be asked to schedule an appointment for a later time if there is no immediate availability. Individuals should bring a photo ID when visiting a field office. Field office addresses can be found by clicking on Field Office Locator or by calling 1-877-772-5772. RRB field offices are generally open Monday through Friday from 9:00 a.m. to 3:00 p.m., except for federal holidays.
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