Railroad Retirement Spouse and
Widow(er)s’
Annuities
and Public Service Pensions
October 2006
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.
Since a social security spouse or
widow(er)’s benefit is reduced if the spouse or widow(er) is also entitled to a
social security benefit based on her or his own earnings, it was considered equitable
that a social security spouse or widow(er)’s benefit also be reduced for a
public service pension based on the spouse’s or widow(er)’s own non-social
security earnings.
The exemption requirements were
subsequently tightened by legislation enacted in March 2004. That legislation
required that State and local government workers be covered by social security
throughout their last 60 months of employment with the pension-paying
government entity in order to be exempt from a reduction. This 60-month requirement is being phased in
over a 5-year period ending
4. How does the public pension reduction law
provide a transition or phase-in period for those who will not be retiring for
a few years?
The law provides a transition for
workers whose last day of government employment occurs within 5 years after
5. Are there any other provisions that would
exempt railroad retirement spouse or widow(er) annuitants from the public
pension offsets?
The public pension reduction 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.
Annuities payable for any months
after November 1977 to spouses and widow(er)s may also be exempt from the
public pension reduction at the time of filing if both of the following two
requirements are met.
The first requirement is that they
began to receive or were eligible to receive their Federal, State or local
government pension before December 1982.
This means they must have met the age and service requirements for their
pensions before December 1982, even though they did not apply for their pensions
before then.
The second is that they meet all
requirements for spouse and widow(er)s’ benefits in effect under social
security law in January 1977. At that
time, for example, a divorced woman's marriage must have lasted at least 20
years, rather than 10 years as required today.
Also, a husband or widower must have received at least one-half support
from his wife.
Even if spouses and widow(er)s do
not meet these criteria, they still may be exempt from the reduction beginning
with railroad retirement benefits payable December 1982 if they received or
were eligible to receive their Federal, State, or local government pensions
before July 1, 1983 , and they were receiving at least one-half support from
their spouses at the time their spouses retired or died. This provision applies to men and women.
6. Where can more specific information on how
these pension offsets affect railroad retirement benefits be obtained?
Individuals should contact the
nearest field office of the RRB for information as to how their public service
pensions could affect their railroad retirement benefits.
They can find the address and phone
number of the RRB office serving their area by calling the automated toll-free
RRB Help Line at 1-800-808-0772 or by visiting www.rrb.gov. RRB field offices are open to the public from
Public
Affairs
312-751-4777
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