Program Operations Manual System (POMS)
TN 6 (05-02)
RS 01601.140 Effect of Employment on the Railroad Annuity
A. POLICY – LIFE ANNUITANTS
Neither a regular annuity nor a supplemental annuity is payable for any month in which a retired employee works for a RR employer, including labor organizations. The tier I and vested dual benefit components of employee and spouse retirement annuities may be subject to certain limitations based on any earnings outside the RR industry.
In the first year in which an employer is both entitled to an annuity and has a nonwork month, a full annuity is payable for those months the employee had low earnings or did not have substantial self-employment regardless of the total yearly earnings.
A spouse annuity is not payable for any month in which the employee's annuity is not payable, or for any month in which the spouse returns to work for a RR or for the last nonrailroad employer.
By law, the RRB applies the Social Security Act earnings restrictions to RR retirement annuities, in addition to certain other work restrictions specified by the Railroad Retirement Act. These work restrictions specified in the RRA are not changed by the Social Security Act amendments which eliminated the earnings restrictions affecting Social Security beneficiaries working after FRA.
Tier I and vested dual benefit components of retirement annuities are subject to deductions if earnings exceed the amount applicable to Social Security beneficiaries. Under the two tier RR retirement system, tier I RR retirement benefits and vested dual benefits paid by the RRB to employees, spouses and survivors, as well as the tier II benefits paid to survivors, are subject to earnings deductions just like social security benefits, if post-retirement earnings exceed certain exempt amounts.
Retired employees and spouses who work for their last pre-retirement nonrailroad employer are subject to an additional earnings deduction. This employment reduces tier II benefits and supplemental annuity payments, which are not subject to earnings deductions, by $1 for each $2 of compensation received, subject to a maximum reduction of 50%. These restrictions apply regardless of age or the amount of earnings.
Work can affect payment and continuing entitlement to a disability annuity.
B. POLICY - SURVIVOR ANNUITANTS
An annuity is not payable for any month that the survivor works for a RR or a RR union.
Benefits are reduced $1 for every $2 earned over the annual exempt amount while under FRA.
Beginning January 1, 2000, annuities are no longer subject to regular work deductions effective with the month the annuitant attains FRA. Work deductions in the FRA attainment year will apply through the month before the month FRA is attained. The upper earnings ceiling and the $1 for $3 offset applies in the FRA attainment year. ONLY THE EARNINGS THROUGH THE MONTH BEFORE AGE 65 SHOULD BE COUNTED AS EARNINGS.
Disabled widow(er)s under age 60 or disabled children over age 18 are not subject to an earnings test, but work may indicate recovery from their disability.