Policy and Systems

Self-Employment and Other Nonrailroad Work

Earnings from nonrailroad employment, including self-employment, after you annuity beginning date may cause work deductions. Nonrailroad work is any job that is not in the railroad industry. This includes work for a Canadian railroad, which is not covered under the Railroad Retirement Act, and work as an elected or appointed public official.

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Deductions For Earnings

A spouse annuity is not payable for any month in which you are or the employee is in railroad service. In addition, nonrailroad earnings after your Annuity Beginning Date can have an effect on your annuity computation.

A divorced spouse annuity is not payable for any month in which you are in railroad service.

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Divorced Spouse Annuity

A divorced spouse annuity is limited to Tier I component only. Regardless of the employee's total years of railroad service, your annuity is reduced by 1/144 for the first 36 months you are under Full Retirement Age (FRA) and by 1/240 for each additional month you are under FRA on your annuity beginning date. However, if you were entitled to a spouse annuity before your final divorce from the employee, any previous spouse annuity age reduction is applied to your divorced spouse annuity.

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Spouse Annuity When Employee Has At Least 360 Months of Railroad Service

Please refer to the summary chart below to see if an age reduction applies to your spouse Tier I component.

Your spouse Tier II will not have an age reduction.

Spouse Age Requirements when Employee has at Least 360 Months Railroad Service

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Spouse Annuity Age Reduction When Employee Has Less Than 360 Months of Railroad Service

Please refer to the summary chart below to see if an age reduction applies to your spouse annuity.

Tier I Component Age Reduction

Your spouse Tier I component age reduction depends on the employee's total years of railroad service.

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Full Retirement Age For Spouse or Divorced Spouse

The term "Full Retirement Age (FRA)" means the age at which the spouse of an employee with less than 360 months of railroad service or a divorced spouse can receive a full annuity (not reduced for early retirement). FRA for persons who were born before January 2, 1938, is age 65. 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

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Basic Formula

Regular railroad retirement annuities are calculated under the following two-tier formula:

Tier I Component

The first tier is based on railroad retirement credits and any social security credits an employee has acquired. If the employee has 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 reductions to the social security formula.