Annuities are payable to surviving widow(er)s, children and certain other dependents. Lump-sum benefits are payable after the death of a railroad employee only if there are no qualified survivors of the employee immediately eligible for monthly annuities. With the exception of a residual lump-sum death benefit, eligibility for survivor benefits depends on whether or not the employee was insured under the Railroad Retirement Act at the time of death.
An employee is insured if he or she has at least 10 years (120 months) of railroad service, or 5 years (60 months) performed after 1995, and a current connection with the railroad industry as of the month the annuity begins or the month of death, whichever occurs first. The current connection requirement is described earlier in this chapter.
If a deceased employee was not so insured, jurisdiction of any survivor benefits payable is transferred to the Social Security Administration and any survivor benefits are paid by that agency instead of the RRB. Regardless of which agency has jurisdiction, the deceased employee's railroad retirement and social security credits will be combined for the purpose of benefit computations.
Types of Survivor Benefits
WIDOW(ER)S' ANNUITIES are payable at:
- Age 60; age reductions are applied to annuities awarded before full retirement age. The eligibility age for unreduced annuities is gradually rising from 65 to 67, depending on the year of birth.
- Ages 50-59 if the widow(er) is totally and permanently disabledand unable to work in any regular employment. The disability must have begun within 7 years after the employee's death or within 7 years after the termination of an annuity based on caring for a child of the deceased employee. In most cases, a 5-month waiting period is required after the onset of disability before a disability annuity can begin.
- Any age if the widow(er) is caring for an unmarried child of the deceased employee under age 18 or a disabled child of any age who became disabled before age 22.
Generally, the widow(er) must have been married to the employee for at least 9 months prior to death, unless she or he was the natural parent of their child, the employee's death was accidental or while on active duty in the U.S. Armed Forces, the widow(er) was potentially entitled to certain railroad retirement or social security benefits in the month before the month of marriage, or the marriage was postponed due to State restrictions on the employee's prior marriage and divorce due to mental incompetence or similar incapacity.
Survivor annuities may also be payable to a surviving divorced spouse or remarried widow(er). Benefits are limited to the amount social security would pay and therefore are less than the amount of the survivor annuity otherwise payable. However, a former spouse may be paid a court-ordered partition amount.
A surviving divorced spouse may qualify if she or he was married to the employee for a period of at least 10 years, is unmarried or remarried under the conditions described in the next paragraph, and is age 60 or older (50 if disabled). A surviving divorced spouse who is unmarried can qualify at any age if caring for the employee's child and the child is under age 16 or disabled, in which case the 10-year marriage requirement does not apply.
The portion of a survivor annuity equivalent to a social security benefit (tier I) may be paid to a widow(er) or surviving divorced spouse who remarries after age 60, or to a disabled widow(er) or disabled surviving divorced spouse who remarries after age 50; however, remarriage prior to age 60 (or age 50 if disabled) would not prevent eligibility if such remarriage ends. Such social security level benefits may also be paid to a younger widow(er) or surviving divorced spouse caring for the employee's child who is under age 16 or disabled, if the remarriage is to a person entitled to railroad retirement or social security benefits or the remarriage ends.
OTHER SURVIVOR ANNUITIES are payable to:
- An unmarried child under age 18.
- An unmarried child age 18 in full-time attendance at an elementary or secondary school or in approved homeschooling until the student attains age 19 or the end of the school term in progress when the student attains age 19. In most cases where a student attains age 19 during the school term, benefits are limited to the 2 months following the month age 19 is attained. These benefits will be terminated earlier if the student marries, graduates, or ceases full-time attendance.
- An unmarried disabled child over age 18 if the child became totally and permanently disabled before age 22.
- An unmarried dependent grandchild meeting any of the requirements described above for a child, if both the grandchild's parents are deceased or disabled.
- A parent at age 60 who was dependent on the employee for at least half of the parent's support. If the employee was also survived by a widow(er), surviving divorced spouse or child who could ever qualify for an annuity, the parent's annuity is limited to the amount that social security would pay (tier I).
Survivor Annuity Estimates
The best way for survivors to obtain an annuity estimate is to visit an RRB field office or contact the agency toll-free at 1-877-772-5772. Active or retired employees who are concerned about the amount of benefits which would be payable to their survivors may also receive estimates from an RRB field office.
The following information may be helpful in providing an idea of the amount of potential survivor benefits:
The average annuity awarded to widow(er)s in fiscal year 2014, excluding remarried widow(er)s and surviving divorced spouses, was $1,974 a month. Children received $1,294 a month, on the average. Total family benefits for widow(er)s with children averaged $3,771 a month. The average annuity awarded to remarried widow(er)s or surviving divorced spouses in fiscal year 2014 was $1,104 a month.
Survivor Annuity Tiers
Survivor annuities, like retirement annuities, consist of tier I and tier II components.
- Tier I 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.
- Tier II amounts are percentages of the deceased employee's tier II amount, as described later in this chapter.
Survivor annuity amounts may also be 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.
Survivors with Dual Benefits
Social Security Benefits
The tier I portion is reduced by the amount of any social security benefits received by a survivor annuitant, whether the social security benefits are based on the survivor's own earnings or those of another individual. This reduction follows the principles of social security law which, in effect, limit payment to the higher of any two or more benefits payable to an individual at one time. When both railroad retirement annuities and social security benefits are payable, they are generally combined into a single payment issued through the RRB. A survivor annuitant must notify 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).
The tier I portion of a widow(er)'s annuity may be reduced for receipt of any Federal, State, or local government pension based on the widow(er)'s own earnings. The reduction generally does not apply if the employment on which the 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. For those subject to a public pension reduction, the tier I reduction is equal to 2/3 of the amount of the public pension.
If a widow(er) is entitled to a railroad retirement employee annuity as well as a survivor annuity, a special guaranty applies in some cases. If either the deceased employee or the survivor annuitant completed 120 months of railroad service before 1975, the widow or dependent widower may receive both an employee annuity and a survivor annuity, without a full dual benefit reduction.
If either the deceased employee or the survivor annuitant had some service before 1975 but had not completed 120 months of railroad service before 1975, the 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 employee annuity.
If both the widow(er) and the deceased employee started railroad employment after 1974, the survivor annuity (tier I and tier II) payable to the widow(er) is reduced by the amount of the employee annuity.
Cost-of-Living Increases in Survivor Annuities
Cost-of-living increases, effective December 1 and included in the January payment, are made on the basis of increases in national prices or, in some circumstances, average national wages, and calculated the same way as cost-of-living increases in employee and spouse annuities.
However, in the case of widow(er)s' annuities computed on the basis of the initial minimum amount provided under 2001 legislation, the monthly payment will not increase until the amount payable under previous law plus subsequent cost-of-living increases is higher than the initial minimum amount.
Work and Earnings Limitations
A survivor annuity is not payable for any month the survivor works for an employer covered under the Railroad Retirement Act, regardless of the survivor's age.
Survivors who are receiving social security benefits have their railroad retirement annuity and social security benefit combined for earnings limitations purposes. Prior to the calendar year in which full retirement age is attained, there is a deduction of $1 in benefits for every $2 earned over an exempt amount ($15,720 in 2015). The deduction is $1 for every $3 earned over an exempt amount ($41,880 in 2015) for the months in the calendar year in which the individual attains full retirement age, up to the month of attainment. Work deductions stop effective with the month full retirement age is attained. In the first year in which a survivor is both entitled to an annuity and has a non-work month, a full annuity can be paid for those months in which the survivor had low earnings or did not have substantial self-employment, no matter what total earnings for the year were.
As work and earnings may affect the payment of an annuity, they must be reported promptly to the RRB in order to prevent potential overpayments.
These earnings restrictions do not apply to disabled widow(er)s under age 60 or to disabled children. However, any work or earnings by a disability annuitant must be reported and are reviewed to determine whether they indicate recovery from the disability.
When Survivor Payments Stop
All survivor payments stop upon death; no annuity is payable for the month of death.
A widow(er)'s annuity will be reduced upon remarriage and in some cases payment will be prevented. A widow(er)'s, surviving divorced spouse's, and remarried widow(er)'s annuity could also end upon entitlement to another survivor or spouse annuity under the Railroad Retirement Act which is greater than the widow(er)'s annuity.
A surviving divorced spouse's or remarried widow(er)'s annuity could stop when entitled to a social security benefit which equals or exceeds the deceased employee's basic tier I amount and reduces the annuity amount to zero.
A widow(er)'s or surviving divorced spouse's annuity which is based on a child in care will end if the child is no longer in the person's care, the child's eligibility ceases, or remarriage occurs.
A child's or grandchild's annuity will stop if he or she marries, reaches age 18 or recovers from the disability upon which his or her annuity was based. If the child is 18 and a full-time elementary or high school student, the annuity stops when full-time attendance ceases, at graduation, or upon attainment of age 19. In most cases, when a student attains age 19 during the school term, benefits are extended to the 2 months following the month age 19 is attained.
An annuity will stop if it was based on disability and the beneficiary recovers from the disability before age 60. A disability annuity can be reinstated if the disability recurs within 7 years and the widow(er) is still under age 60.
A parent's survivor annuity may stop upon remarriage; in certain cases a remarried parent is entitled to a tier I benefit.
Any of the above occurrences must be reported promptly to the RRB in order to prevent an overpayment.
Lump-Sum Death Benefits
A lump-sum death benefit is payable to certain survivors of an employee with 10 or more years of railroad service, or less than 10 years if at least 5 years were after 1995, and a current connection with the railroad industry if there is no survivor immediately eligible for a monthly annuity upon the employee's death.
If the employee did not have 10 years of service before 1975, the lump-sum is limited to $255 and is payable only to the widow(er) living in the same household as the employee at the time of the employee's death.
If the employee had less than 10 years of service but had 5 years after 1995, he or she must have met social security's insured status requirement for the lump sum to be payable.
If the employee had 10 years of service before 1975, the lump sum is payable to the living-with widow(er). If there is no such widow(er), the lump sum may be paid to the funeral home or the payer of the funeral expenses. These lump sums averaged $1,013 in fiscal year 2014.
If a widow(er) is eligible for monthly benefits at the time of the employee's death, but the widow(er) had excess earnings deductions which prevented annuity payments or for any other reason did not receive monthly benefits in the 12-month period beginning with the month of the employee's death totaling at least as much as the lump sum, the difference between the lump-sum benefit and monthly benefits actually paid, if any, is payable in the form of a deferred lump-sum benefit.
The average for all types of lump sums was $925 in fiscal year 2014.
Residual lump-sum payment.--The railroad retirement system also provides, under certain conditions, a residual lump-sum death benefit which ensures that a railroad family receives at least as much in benefits as the employee paid in railroad retirement taxes before 1975. This benefit is, in effect, a refund of an employee's pre-1975 railroad retirement taxes, after subtraction of any benefits previously paid on the basis of the employee's service. This benefit is seldom payable.