Railroad Retirement Board
2013 Railroad Retirement Benefit Increases
October 2012
Most
railroad retirement annuities, like social security benefits, are scheduled to
increase in January 2013 on the basis of the rise in the Consumer Price Index
(CPI) from the third quarter of 2011 to the corresponding period of the current
year.
Cost-of-living
increases are calculated in both the tier I and tier II benefits included in a
railroad retirement annuity. Tier I benefits, like social security
benefits, will increase by 1.7 percent, which is the percentage of the CPI
rise. Tier II benefits will increase by 0.6 percent, which is 32.5 percent
of the CPI rise. The vested dual benefit payments and supplemental
annuities also paid by the Railroad Retirement Board (RRB) are not adjusted for
the CPI rise.
In
January 2013, the average regular railroad retirement employee annuity will
increase $32 a month to $2,386 and the average of combined benefits for an
employee and spouse will increase $45 a month to $3,417. For those aged
widow(er)s eligible for an
increase, the average annuity will increase $19 a month to $1,249.
However, widow(er)s whose annuities are being paid
under the Railroad Retirement and Survivors’ Improvement Act of 2001 will not
receive annual cost-of-living adjustments until their annuity amount is
exceeded by the amount that would have been paid under prior law, counting all
interim cost-of-living increases otherwise payable. About 35 percent of
the widow(er)s on the RRB’s rolls are being paid under the 2001 law.
If a
railroad retirement or survivor annuitant also receives a social security or
other government benefit, such as a public service pension, the increased tier
I benefit is reduced by the increased government benefit. However, tier
II cost-of-living increases are not reduced by increases in other government
benefits. If a widow(er) whose annuity is being
paid under the 2001 law is also entitled to an increased government benefit,
her or his railroad retirement survivor annuity may decrease.
However,
the total amount of the combined railroad retirement widow(er)’s
annuity and other government benefits will not be less than the total payable
before the cost-of-living increase and before any increase in Medicare premium
deductions.
For
most beneficiaries covered by Medicare, the standard Part B premium generally
deducted from monthly benefits is likely to increase from the 2012 amount, with
the Centers for Medicare & Medicaid Services expected to announce the 2013
premium amounts in the coming weeks.
In late December the RRB will mail notices to
all annuitants providing a breakdown of the annuity rates payable to them in
January 2013.
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Public Affairs 312-751-4777
Posted: 10/21/12