Railroad Retirement Spouse and Widow(er)s’Benefits,
Annuities and
Public Service Pensions
December 2010
Railroad Retirement Act spouse and widow(er)s’ annuities (including divorced spouse, surviving divorced
spouse and remarried widow(er)s’ annuities) are
subject to reduction when social security benefits or dual railroad retirement
annuities are also payable. Such
railroad retirement benefits may also be reduced when a spouse or widow(er) is entitled to a public service pension unless certain
exemption requirements are met.
Since the payment of railroad retirement spouse or widow(er)s’ annuities can be affected by entitlement to certain
other government benefits, such dual entitlement, if not reported to the
Railroad Retirement Board (RRB), can result in benefit overpayments which have
to be repaid, sometimes with interest and penalties. The following questions and answers describe
how payments are adjusted by the RRB for spouse and widow(er)
annuitants entitled to public service pensions.
1.
For social security or railroad retirement
purposes, what is considered a public service pension?
A public service pension is any periodic benefit payment, as
well as lump-sum payments made in lieu of periodic payments, based on an
individual's own employment with a Federal, State, or local government
unit. Some examples are pensions paid to
teachers, police officers, and civil service personnel on the basis of age or
disability. Full salary benefits paid to
a retired or resigned judge under the Federal judiciary retirement system are
also considered public service pensions.
Most military service pensions and payments from the
Department of Veterans Affairs will not cause a reduction. A pension paid by a foreign government or an
interstate instrumentality also has no effect on a spouse or widow(er)’s annuity.
2. How is the public service
pension reduction applied to railroad retirement spouse or widow(er)s' annuities?
For spouses and widow(er)s subject to the public service pension reduction, the tier
I reduction is, under current law, equal to 2/3 of the amount of the public
pension. The amount of the public
service pension is the current gross amount, before any deductions for income
tax withholding, Medicare premiums, health insurance or other benefits.
3. What is the background of
the public service reduction in spouse and widow(er)s’ annuities and how does it affect such payments?
The public service pension reduction in social security and
railroad retirement spouse and widow(er)s’ benefits
was brought about by 1977 social security legislation which also applied to the
tier I benefits of railroad retirement spouses and widow(er)s. The tier I portion of a railroad retirement
annuity is based on railroad retirement credits and any social security credits
an employee has acquired. It is computed
under social security formulas and approximates what social security would pay
if railroad work were also covered by that system. Tier I benefits are, therefore, reduced in
the same manner as social security benefits when certain other benefits are
also payable.
4. Are there any provisions
that would exempt railroad retirement spouse or widow(er)
annuitants from the public service pension offsets?
Generally, in order to be exempt from a public service
pension reduction, State and local government workers must be covered by social
security throughout their last 60 months of employment with the pension-paying
government entity.
The public pension reduction also does not apply to a spouse
or widow(er) who filed for and became entitled to her
or his railroad retirement annuity before December 1977, or to a spouse or
widow(er) whose public pension is not based on her or
his own earnings.
5. Where can more specific
information on how these pension offsets affect railroad retirement benefits be obtained?
Persons can contact an RRB field office for information as
to how their public service pensions could affect their railroad retirement
benefits via the agency’s website, www.rrb.gov, or by calling toll-free at
1-877-772-5772. Most RRB offices are
open to the public from
Office of Public Affairs 312-751-4777
Posted: 12.03.10