Survivor annuities can be made up of one or two parts, depending on the type of annuity. The first part, tier I, is included in all annuities. It is based on the deceased employee's combined railroad retirement and social security credits, and is generally equivalent to the amount that would have been payable under social security. The second part, tier II, is based on railroad retirement credits only.
The percentage of entitlement to tier 1 is based on the following:
100% share for widow type annuitants. This share is subject to increases for employee credits and reductions based on the employee’s retirement age reduction.
75% share for the young mother, young father and all children. Employee credits nor reductions for age are applied for this type of annuity.
82.5% share for a dependent parent.
Tier I is generally increased for the deceased employee's delayed retirement credits (DRC's).
Tier I is generally reduced for the following:
- the amount of any social security benefit;
- Certain Federal, State, or local government pensions which are based on the annuitant’s own earnings (only two/thirds of the amount);
- Dual RR benefits - the full amount or a percentage of the railroad retirement annuity that you are receiving, if you also worked for the Railroad Industry.
- There's a limit to the amount that family members can receive each month. Generally, when there are three or more qualified family members, an amount called the family maximum applies to the tier I amount.
The second part, tier II, is not included in the annuity computation if you are a remarried widow(er), surviving divorced spouse, divorced mother/father, or possibly a parent. If a parent and other survivor annuitants are entitled or potentially entitled to a widow(er), surviving divorced spouse, or child benefit, the tier II portion is not payable.
The tier II entitlement amounts are based on the following percentages of the deceased employee’s tier II amount:
50% for the widow type annuitants
15% for the child
35% for the parent
35% is the minimum amount payable to a family.
130% is the maximum amount payable to a family.
Tier II is generally reduced for the following:
Take back – a permanent reduction that may be applicable if the deceased employee retired or died before 1984.
Dual RR benefits – when the full amount of the railroad retirement annuity that you are receiving exceeds the survivor tier I amount, if you also worked for the railroad industry.
Reductions to both tier I and tier II may occur:
If you retire before your full retirement age. Full retirement age (FRA) means the age at which the widow(er), remarried widow(er), or surviving divorced spouse can receive a full annuity under the RRA unreduced for early retirement.
The FRA for age reductions for applicants for a survivor annuity who were born before January 2, 1940, is age 65. The FRA for applicants for survivor annuities who were born after January 1, 1940, will gradually increase over a 20-year period to age 67. If you are entitled to a tier II benefit, the FRA for your tier II age reduction will be the same as the FRA for your tier I age reduction.
You may lose months of your full annuity rate, if you earn more that the annual earnings exempt amount in a year. This applies to all annuity types except disabled annuitants. The disabled annuitant’s earnings is handled differently.
(For additional information on earnings, please refer to the RRB Form G-77 )
The survivor annuity amounts payable to a widow that is entitled to tier I and tier II is currently determined under certain minimum provisions which guarantee that a widow(er)'s annuity will be at least equal to the two-tier benefit the deceased employee would have received at the time of the award of the widow(er)'s annuity, minus certain reductions including those for age and receipt of social security benefits, and no less than the spouse annuity she or he was receiving just prior to the employee's death. The spouse minimum guarantee and the widow's initial minimum amount (WIMA) is explained further in RRB publication IB-2.