Introduction
This publication describes the
different events that can affect your annuity under
the
Railroad Retirement Act (RRA).
Whether you are receiving your
own annuity, or you receive payments on behalf of another
person, it is your responsibility to be aware of these
events and to notify the Railroad Retirement Board (RRB)
immediately when any apply to you.
Any new circumstances may cause
changes in your entitlement or in the amount of your
annuity. Keep this publication handy and refer to it
to see if you need to report an event.
If you are not sure if your
report is necessary, call or write to the nearest RRB
office for assistance. Most RRB offices are open
to the public from 9:00 a.m. to 3:30 p.m., Monday through
Friday . You can also call the toll-free RRB
HelpLine at 1-800-808-0772.
Wherever possible, we have
provided hyperlinks to other RRB Publications as they
are mentioned below.
Failure to promptly notify the
RRB usually constitutes "fault" on your part
that requires you to repay any resulting overpayment.
This could cause your benefits to be suspended, and
may result in the assessment of interest and penalties.
Even if an overpayment may not
result, some of the events described in this publication
must be reported to assure that the RRB provides you
with timely information about your annuity and with
the maximum benefits payable to you.
How
to Report
You may call, visit, or write
to any RRB
field office. In most cases, your reporting
can be completely handled by telephone. If you plan
to personally visit one of the RRB field offices, please
call for an appointment. You will not be refused service
if you do not make an appointment, but the RRB staff
may be better able to assist you when an appointment
is made.
Always provide the following
when you call, visit or write to the RRB:
- Your name;
- Your RRB claim number;
- The railroad employee's
name, if you are not the employee;
- Your daytime telephone
number;
- A clear explanation
of what you are reporting; and,
- The exact month, day
and year that the event occurred or will occur.
What to Report and Why
Your annuity entitlement and
the amount payable to you each month is determined according
to law and by the circumstances that exist on the date
your annuity begins. Any later changes in those circumstances
are very important. To guarantee correct payment of
the benefits you are due, you must notify the RRB about
all of the events that are described in this publication.
Social
Security Benefits
The Tier
1 Benefit component amount of your employee, spouse
or divorced spouse annuity already includes credit for
the railroad worker's earnings covered by social security
taxes. When you file for social security benefits (SS
benefits), the RRB must reduce your Tier 1 component
by the amount of SS benefits you receive.
If you are awarded SS benefits,
the RRB usually will pay them combined with your annuity.
We will adjust your Tier 1 and send you a letter to
explain the two benefits. If SSA notifies you that they,
not the RRB, will pay your SS benefit payments, notify
the nearest RRB
field office at once. It is your responsibility
to notify us. Do not
expect the Social Security Administration (SSA) to tell
the RRB that you are being paid SS benefits. Any delay
could cause your annuity to be overpaid. In many
cases, filing for SS benefits will not increase your
total benefit rate, because of the reduction in your
Tier 1 component.
If your annuity is increased
under the Special Guaranty provision (see booklet
G-179 Special
Guaranty in Employee and Spouse Annuities), you
must notify the RRB if any spouse, minor child, disabled
child or student child included in that computation
begins to receive SS benefits, on any account number.
Non-covered
Service Pensions and Public Service Pensions
A Non-covered Service Pension
can reduce your employee Tier 1 component and the Tier
1 component of your spouse, as explained in booklet
RB-1
Age and Service
Employee Annuity.
A Public Service Pension can
reduce your spouse Tier 1 component, as explained in
booklet RB-30
Spouse/Divorced
Spouse Annuity.
If you begin to receive a Non-covered
Service Pension or Public Service Pension, report it
to the RRB so we can make timely adjustment of your
annuity.
If your tier 1 after reduction
for your pension is greater than zero, also notify us
when the pension rate increases.
Exception: You do not
need to report increases in your Civil Service Retirement
System (CSRS) pension. The RRB receives your pension
rates from the Office of Personnel Management after
each cost-of-living increase.
Railroad
Work
You must notify the RRB immediately
if you go to work in the railroad industry. Do
not wait for your employer to notify the RRB.
If you are the employee annuitant,
your regular annuity, or any supplemental annuity cannot
be paid for any month in which you work for a railroad
employer. This law applies no matter how old you are
or how much money you earn from that work.
If you are the spouse
annuitant, your annuity is not payable for any month
you work for a railroad or for any month the employee
annuitant returns to railroad work.
Non-railroad
Earnings After You Attain Full Retirement Age
This section applies to annuities
based on age and service and disability annuities. For
months after you have attained Full
Retirement Age (FRA), your Tier 1 component
is not subject to reductions because of your nonrailroad
earnings.
Determining
Your Full Retirement Age |
If you were born: |
then
your FRA is: |
Before 1-2-1938 |
65 |
1-2-1938 thru 1-1-1939 |
65 and 2 months |
1-2-1939 thru 1-1-1940 |
65
and 4 months |
1-2-1940 thru 1-1-1941 |
65
and 6 months |
1-2-1941 thru 1-1-1942 |
65
and 8 months |
1-2-1942 thru 1-1-1943 |
65 and 10 months |
1-2-1943 thru 1-1-1955 |
66 |
1-2-1955 thru 1-1-1956 |
66 and 2 months |
1-2-1956 thru 1-1-1957 |
66 and 4 months |
1-2-1957 thru 1-1-1958 |
66 and 6 months |
1-2-1958 thru 1-1-1959 |
66 and 8 months |
1-2-1959 thru 1-1-1960 |
66 and 10 months |
1-2-1960 and later |
67 |
However, Last
Pre-retirement Nonrailroad Employer (LPE) work deductions
can still apply.
Tier
1 Reductions for Nonrailroad Earnings Before You Attain
Full Retirement Age
This section only
concerns Tier 1 component, vested dual benefit (VDB)
or Special Guaranty reductions for age and service annuitants
and their families. Tier 2 reductions for Last
Pre-retirement Nonrailroad Employment (LPE)
and the rules for disability
annuitants are explained in other sections of this
publication.
Your Tier 1 components are not
reduced for your nonrailroad earnings if you are receiving
social security benefits.
Otherwise, your nonrailroad
earnings over the Annual
Earnings Exempt Amount could reduce your
employee or spouse annuity Tier 1, any VDB, or your
Special Guaranty computation rate if you have not attained
Full Retirement Age (FRA).
The employee’s nonrailroad
earnings also can cause a reduction to the spouse tier
1 component. The employee’s nonrailroad earnings also
cause a reduction to the divorced spouse annuity within
two years of the date of the final divorce decree.
What
Earnings Count for Tier 1 Reductions
Tier 1 earnings
restrictions apply to gross earnings from your employment
for others, plus any net earnings from self-employment.
Your net self-employment amount is the earnings amount
after business expenses that you report to the Internal
Revenue Service (IRS).
Do not include as earnings,
any money you received for reasons other than for work
you performed. Gifts, interest earned, inheritance,
pensions, and investment income do not count as earnings
for this purpose.
When
to Report Earnings
You should report your earnings
when you begin or end nonrailroad employment and expect
to earn more than the Annual
Earnings Exempt Amount to allow timely adjustment
or your annuity. Also report if you will earn substantially
more or less than you earned in the previous year.
When
you tell us that you have begun non-railroad employment
or changed your earnings from the previous year, we
apply temporary deductions to your annuity based
on the amount you expect to earn.
Later, if your non-railroad
earnings are covered by the Social Security Administration
(SSA) (Federal Insurance
Contributions Act (FICA) or Self-Employment
Contributions Act (SECA) tax withheld), the RRB
will receive an annual report of those earnings from
a tape match with the SSA.
It sometimes takes longer for
the RRB to receive information about nonrailroad earnings
that are not covered by FICA or SECA. If you receive
such earnings, you should report your final earnings
for the year by April 15, of the following year.
Refer to Form
G-77a, How
Work Affects Payment of Retirement Annuities,
for the current Annual
Earnings Exempt Amounts
for your age group and refer to the following chart:
How
Earnings Deductions are Assessed |
If: |
Then
the amount of: |
For
months : |
Is
deducted from: |
employees
are entitled based on age and are under FRA for
the full calendar year, |
$1.00
for every $2.00 which they earn over their Annual
Earnings Exempt Amount, |
in
the full calendar year, |
employee
and spouse Tier 1, any employee VDB, or all family
member shares in the calculation of the Special
Guaranty computation |
employees
are entitled based on age and attain FRA during
the calendar year, |
$1.00
for every $3.00 which they earn over their
Annual Earnings
Exempt Amount, |
up
to the month the employees attain FRA, |
employee
and spouse Tier 1, any employee VDB, or all family
member shares in the calculation of the Special
Guaranty computation |
spouses
are under FRA for the full calendar year, |
$1.00
for every $2.00 which spouses earn over their Annual
Earning Exempt Amount, |
in
the full calendar year, |
their
spouse Tier 1 or their shares in the calculation
of the Special
Guaranty increase. |
spouses
attain FRA during the calendar year, |
$1.00
for every $3.00 which spouses earn over their Annual
Earnings Exempt Amount, |
up
to the month the spouses attain FRA. |
their
spouse Tier 1 or their shares in the calculation
of the Special
Guaranty increase. |
your minor or student children work, |
$1.00
for every $2.00 which they earn over their Annual
Earnings Exempt Amount, |
in
the full calendar year. |
their
shares in the calculation of the Special
Guaranty increase. |
Last Pre-Retirement Nonrailroad
Employment
Your Last Pre-Retirement Nonrailroad
Employer (LPE) is defined as any nonrailroad individual,
company or institution for whom you are working on your
annuity beginning date (ABD) or for whom you stopped
working in order to receive an annuity. This includes
work for a Canadian railroad that is not covered under
the Railroad Retirement Act and work as an elected or
appointed public official.
The nonrailroad employer is
always your LPE if you are working in nonrailroad employment
on your ABD or, if you have stopped working, you still
hold rights to return to service of the nonrailroad
employer on your ABD.
The nonrailroad employer would
be presumed to be your LPE if:
- You are the employee
annuitant, and stopped working for the nonrailroad
employer within six months immediately before your
employee ABD, whether or not you also had been working
for a railroad employer at the same time, or,
- You are a spouse annuitant,
who may have never worked for a railroad, and stopped
working for the nonrailroad employer within the six
months immediately before your ABD.
When applicants were working
for two or more persons, companies, or institutions
within the six months preceding their ABD, all such
employers are presumed to be LPE.
When you applied for your annuity,
we asked for the names of your most recent nonrailroad
employers, if any. That information established your
LPE for RRB records. Any work for your LPE that continues
or is resumed after your annuity beginning date must
be reported to the RRB at once. Be sure to provide the
name and address of your employer and your estimated
monthly earnings.
If you stop LPE, or you
expect a change in your estimated monthly earnings,
contact the nearest RRB office to have your payments
adjusted.
LPE
Exceptions
Some types of nonrailroad employment
are not counted as LPE. These types of work do not affect
payment of your Tier 2 component or supplemental annuity.
These exceptions are:
- Military service;
- Jury duty;
- Mail handling by contract
with the U.S. Postal Service;
- Volunteer work;
- Work for which you
only receive payment of expenses;
- Work as member (owner)
of a Limited Liability Corporation (LLC); or,
- Self-employment.
NOTE
1: If you claim an LPE exception as a member
of a LLC, you must submit proof, including your statement,
the name of any license, and copies of articles of organization,
operating agreement, and contracts with various clients.
NOTE 2:
Work as an LLC employee,
hired by the members who own an LLC, is counted as LPE.
NOTE 3:
If you begin self-employment that has any connection
with railroad employment or your LPE employer (such
as consultant work), please report this to the nearest
RRB office. We may ask you to complete Form AA-4 Self-Employment
and Substantial Service Questionnaire that will help
the RRB determine whether to consider your work self-employment
or a continuation of railroad service or LPE.
Annuity
Deductions for LPE
LPE earnings reductions occur
at any age, even after attaining Full
Retirement Age. There is no Annual
Earnings Exempt Amount for LPE. Even work for
minimum pay may be LPE.
Any LPE earnings received by
an employee annuitant for service in or after the month
the annuity begins will reduce the amount of the employee’s
Tier 2 component, the employee’s supplemental annuity,
if any, and the spouse’s Tier
2 component. The LPE work deduction is $1.00 for
every $2.00 earned, but not more than 50% of the Tier
2 components and supplemental annuity.
Any LPE earnings received by
a spouse annuitant for service in or after the month
a spouse annuity begins will reduce the amount of the
spouse’s Tier 2 component (up to 50%).
A prompt report will allow
timely adjustment to avoid overpayment of your annuity.
Total
and Permanent Disability after Retirement
Contact the RRB if you are receiving
an age and service annuity or occupational disability
annuity and you become totally disabled before you reach
Full Retirement
Age. You may be eligible for early Medicare coverage
and other benefits if you meet the requirements for
total and permanent disability.
Disability
and Medical Recovery
You must report ANY new employment.
It is important that your report includes:
- The kind of work you
are doing;
- How much you expect
to earn each month;
- The period of time
you expect to be working;
- How many hours you
expect to work; and,
- The amount of any
disability-related work expenses.
Your work and earnings will
be evaluated to see if you are able to perform regular
work. ANY work after your annuity begins, regardless
of your amount of earnings, may raise questions about
medical recovery.
If you return to work, or your
doctor tells you that you are able to work, notify your
local RRB field office. We will ask for more information
about your condition and possibly request new medical
examinations. Failure to promptly contact the RRB about
changes in your disability status could result in large
annuity overpayments with penalties.
Disability
Work Deductions
If you are less than Full
Retirement Age and you receive a disability-based
annuity, the Annual
Earnings Exempt Amount does not apply to your
disability tier 1 component.
Your disability annuity cannot
be paid for any month you work and have earnings
over $400. Certain disability-related work expenses
are subtracted from your earnings, such as the costs
of special transportation, medicine used to control
the impairment that caused the disability, attendant
care, medical devices, and prosthetic devices.
When you tell us that you will
have earnings over $400, we apply temporary deductions
to your annuity for the calendar year based on the amount
you expect to earn. We will send you a form after the
end of that year to report your actual monthly and total
earnings for that year.
- If your total earnings
are less than $5,000 for that calendar year, any monthly
benefits that we withheld will be paid to you.
- If your total earnings
are $5,000 or more during that year, you will not
be entitled to an annuity for some months in that
year. How long your annuity is not payable depends
on how much you earn, but the number of months withheld
will not exceed the actual number of months that you
worked in that year.
Workers
Compensation or Other Disability-Based Public Benefits
Your disability annuity Tier
1 component is subject to a reduction if you also receive
worker’s compensation or another public, disability-based,
benefit before you reach Full
Retirement Age. This reduction requirement may
apply even if you received a lump-sum or an amount divided
and paid in several payments. If you receive a public
disability or worker’s compensation award, or if the
amount you receive changes, notify the RRB as soon as
possible. Delay may cause a large annuity overpayment
of your annuity.
Marital
Status Change
If your marriage ends by divorce
or annulment, notify the RRB to have our records corrected
(including any name change) and to assure that any spouse
annuity is adjusted or terminated timely. Also report
if a child included in the Special Guaranty computation
marries.
If a stepchild is included in
your Special Guaranty
computation, and your marriage to the child’s natural
parent ends by divorce or annulment, notify the RRB.
We are required to exclude the stepchild from the Special
Guaranty computation.
If you are receiving a
divorced spouse annuity, your entitlement ends the month
that you remarry.
Qualifying
Child Status Changes
If your spouse annuity is based
on a child in your care, your benefit eligibility ends
if certain events occur before you qualify for an annuity
based on your age. If the child attains age 18 or is
no longer disabled, or if the child enters military
service, marries, dies, or leaves your care before age
18, your payments must stop.
Your spouse annuity termination
is automatically processed when RRB records show the
child is age 18, but you must report events that could
end your spouse annuity eligibility earlier. You must
also notify your local RRB field office if you receive
an annuity payment after your entitlement ends.
Conviction
for a Criminal Offense
A prison sentence or confinement
for a conviction for a criminal offense changes the
income tax liability for annuity payments and the reports
required by the RRB to the IRS.
If you are or your spouse is
confined as a result of a conviction for a criminal
offense, report this to the RRB. The RRB will then determine
if any payment changes are required. Also report if
you receive a spouse annuity based on a child in your
care or the Special
Guaranty computation including a child and that
child is confined due to a conviction for a criminal
offense.
Places of confinement include
prisons, jails, hospitals, schools, halfway houses,
or other facilities in which a person is under the control
and jurisdiction of a penal system. The period of confinement
ends when the prisoner is paroled or released because
the sentence has ended, been suspended, or overturned.
Spouse
or Employee Death
Promptly notify the RRB when
an employee or spouse dies to avoid possible overpayment.
An annuity is not payable for the month in which an
employee or spouse dies. It is against the law to cash
an annuity check issued to a person who has died. If
a payment by check is received after that person’s date
of death, it must be returned to the RRB or to the Treasury
Department address shown on the envelope.
It is also against the law to
use direct deposit funds received by a financial institution
for a person who had died. If a direct deposit annuity
payment is received after that person’s date of death,
your financial institution is required to return it
to the Treasury Department at once.
When an employee dies,
survivor benefits may be payable.
Change
of Address
Even though your payments may
be sent by direct deposit, notify both the RRB and the
financial institution that receives your payment as
soon as possible if your home address changes.
We need your home address to
mail important information about RRB benefit increases,
earnings allowances, Medicare, and your income tax statements.
If you do not report your address changes, the RRB is
not responsible for information you do not receive.
To report an address change,
write or call the RRB and provide the following information:
- Your RRB claim number;
- Your name;
- Your new address;
- Your old address;
- The date you will
start receiving mail at the new address; and,
- If your spouse also
receives an RRA annuity, a statement that your notice
of change of address applies for both you and your
spouse or applies to you alone.
Direct
Deposit
An address change report does
not change your direct deposit information. If you are
changing bank accounts, or wish your payments to go
to a different financial institution, you must tell
the RRB your new account number and the new bank’s routing
number. (The routing number appears at the bottom of
your new checks or the bank will give it to you.)
Do not close your old account
until you receive the first RRB payment in your new
account.
Reminder
A prompt report of any of the
events described in this publication will allow the
RRB to provide you with accurate and timely benefits
and service. For your convenience, most of this reporting
may be handled completely by telephone without a trip
to the RRB field office. If additional action is required
on your part, our RRB field office staff will gladly
provide instruction needed to assist you.
Keep a record of the events
that you report to the RRB, the method used to report
the event (i.e. telephone, mail), and the date that
you reported the event. When writing to the RRB, we
recommend that you keep a copy of your report.
|