Railroad Retirement Act spouse and widow(er)
annuities (including divorced spouse, surviving divorced spouse and
remarried widow(er) annuities) are subject to dual benefit reductions when
social security benefits or dual railroad retirement annuities are also
payable; and, such railroad retirement benefits may be subject to
reduction when certain public service pension payments are also due a
spouse or widow(er).
Since the payment of a railroad retirement spouse or widow(er) annuity
can be affected by entitlement to certain other government benefits, such
dual entitlement, if not reported to the Railroad Retirement Board, 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 Railroad Retirement Board for spouse and
widow(er) annuitants entitled to public service pensions.
What is considered a public service pension?
A public service pension is any periodic benefit payments, as well as
lump-sum payments made in lieu of periodic pension 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.
However, the public service pension reduction law generally does not
apply to a railroad retirement spouse or widow(er) annuity if the
government job that the public pension is based on was covered under the
Social Security Act on the last day of public employment. (A special rule
applies to federal employees who switch from the Civil Service Retirement
System to the Federal Employees Retirement System.)
In addition, most military service pensions and payments from the
Department of Veterans Affairs will not cause a reduction; and a pension
paid by a foreign government or an interstate instrumentality also has no
effect on a spouse or widow(er) annuity.
What is the background of the public service reduction in spouse and
widow(er) annuities and how does it affect such payments?
The public service pension reduction in railroad retirement spouse and
widow(er) benefits was effected by 1977 social security legislation which
also applied to the tier I portion of railroad retirement spouse and
widow(er) annuities. Since a social security spouse or widow(er) 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) benefit also be
reduced for a public service pension based on the spouse’s or widow(er)’s
own non-social security earnings.
The tier I portion of a railroad retirement annuity is based on
railroad retirement and any non-railroad social security credits acquired
by an employee, 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.
How is the public service pension reduction applied to railroad
retirement spouse or widow(er)’s annuities?
For spouse 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.
Does the public service pension reduction law apply to all railroad
retirement spouse or widow(er) annuities?
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.
Are there any other provisions that would exempt railroad retirement
spouse or widow(er) annuitants from the public pension offsets?
Railroad retirement spouse and widow(er) annuitants may also be exempt
from the public pension reduction if both of 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)
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.
Where can more specific information on how these pensions offsets
affect railroad retirement benefits be obtained?
Individuals who may be affected should contact the nearest field office
of the Railroad Retirement Board for information as to how their public
service pensions could affect their railroad retirement benefits.
For the phone number or address of the nearest Board field office,
individuals should look in the telephone directory under "United
States Government," or check with their local union official, rail
employer, post office, or Federal Information Center. They can also find
the address and phone number of the Board office serving their area by
calling the automated toll-free RRB Help-Line at 1-800-808-0772 or by
checking the Board’s Web site at www.rrb.gov. Most Board field
offices are open to the public from 9:00 a.m. to 3:30 p.m., Monday through
Friday. |