Railroad Retirement Spouse Benefits,
March 2012
In addition to the retirement annuities
payable to employees, the Railroad Retirement Act, like the Social Security
Act, also provides annuities for the spouses of retired employees.
Payment of a spouse annuity is made directly to the wife or husband of the
employee. Divorced spouses may also qualify for benefits.
The following questions and answers
describe the benefits payable to spouses and the eligibility requirements.
1. How are
railroad retirement spouse annuities computed?
Regular railroad retirement annuities are
computed under a two-tier formula. The spouse annuity formula is based on
certain percentages of the employee's tier I and tier II amounts.
The tier I portion of an employee’s
annuity is based on both railroad retirement credits and any social security
credits that the employee also earned. Computed using social security
benefit formulas, an employee’s tier I benefit approximates the social security
benefit that would be payable if all of the employee’s work were performed
under the Social Security Act.
The tier II portion of the employee’s
annuity is based on railroad retirement credits only, and may be compared to
the retirement benefits paid over and above social security benefits to workers
in other industries.
The first tier of a spouse annuity,
before any applicable reductions, is 50 percent of the railroad employee’s
unreduced tier I amount. The second tier amount, before any reductions,
is 45 percent of the employee’s unreduced tier II amount.
2. How does a
railroad retirement spouse annuity compare to a social security spouse
benefit?
The average annuity awarded to spouses in
fiscal year 2011, excluding divorced spouses, was $979 a month, while the
average monthly social security spouse benefit was about $425.
Annuities awarded in fiscal year 2011 to the spouses of
employees who were of full retirement age or over and who retired directly from
the rail industry with at least 25 years of service averaged $1,118 a month;
and the average award to the spouses of employees retiring at age 60 or over
with at least 30 years of service was $1,332 a month.
3.
What are the age requirements for a railroad retirement spouse annuity?
The age requirements for a spouse annuity
depend on the employee’s age and date of retirement and the employee’s years of
railroad service.
If a retired employee with 30 or more
years of service is age 60, the employee’s spouse is also eligible for an
annuity the first full month the spouse is age 60. Certain early
retirement reductions are applied if the employee first became eligible for a
60/30 annuity
If a retired employee with less than
30 years of service is age 62, the employee’s spouse is also eligible for
an annuity the first full month the spouse is age 62. Early retirement
reductions are applied to the spouse annuity if the spouse retires prior to
full retirement age. Full retirement age for a spouse is gradually rising
to age 67, just as for an employee, depending on the year of birth.
Reduced benefits are still payable at age 62, but the maximum reduction will be
35 percent rather than 25 percent by the year 2022. However, the tier II
portion of a spouse annuity will not be reduced beyond 25 percent if the
employee had any creditable railroad service before
4. What if the
spouse is caring for a child of the retired employee?
A spouse of an employee receiving an age
and service annuity (or a spouse of a disability annuitant who is otherwise
eligible for an age and service annuity) is eligible for a spouse annuity at
any age if caring for the employee’s unmarried child, and the child is under
age 18 or a disabled child of any age who became disabled before age 22.
5. What are
some of the other general eligibility requirements?
The employee must have been married to
the spouse for at least one year, unless the spouse is the natural parent of
their child, or the spouse was eligible or potentially eligible for a railroad
retirement widow(er)’s, parent’s or disabled child’s
annuity in the month before marrying the employee or the spouse was previously
married to the employee and received a spouse annuity. However,
entitlement to a surviving divorced spouse, surviving divorced young mother
(father), or remarried widow(er) annuity does not
waive the one-year marriage requirement.
6.
Are spouse annuities subject to offset for the receipt of other
benefits?
The tier I portion of a spouse annuity is reduced for any social security
entitlement, regardless of whether the social security benefit is based on the
spouse's own earnings, the employee's earnings or the earnings of
another person. This reduction follows principles of social security law
which, in effect, limit payment to the higher of any two or more benefits
payable to an individual at one time.
The tier I portion of a spouse annuity
may also be reduced for receipt of any Federal, State or local pension separately
payable to the spouse based on the spouse’s own earnings. The reduction
generally does not apply if the employment on which the public service pension
is based was covered under the Social Security Act throughout the last 60
months of public employment. Most military service pensions and payments
from the Department of Veterans Affairs will not cause a reduction.
Pensions paid by a foreign government or interstate instrumentality will not
cause a reduction. For spouses subject to a public service pension
reduction, the tier I reduction is equal to 2/3 of the amount of the public
service pension.
In addition, if the employee was first eligible for a
railroad retirement annuity and a Federal, State or local government pension
after 1985, there may be a reduction in the employee’s tier I amount for
receipt of a public pension based, in part or in whole, on employment not
covered by social security or railroad retirement after 1956. If the
employee’s tier I benefit is offset for a noncovered
service pension, the spouse tier I amount is 50 percent of the employee's tier
I amount after the offset.
The spouse tier I portion may also be reduced if the
employee is under age 65 and is receiving a disability annuity as well as
worker’s compensation or public disability benefits.
While these offsets can reduce or even completely
wipe out the tier I benefit otherwise payable to a spouse, they do not affect
the tier II benefit potentially payable to that spouse.
7. Under what
conditions can the divorced spouse of a rail employee receive a spouse annuity?
A spouse annuity may also be payable to the divorced
wife or husband of a retired employee if their marriage lasted for at least 10
consecutive years, both have attained age 62 for a full month, and the divorced
spouse is not currently married. A divorced spouse can receive an annuity
even if the employee has not retired, provided they have been divorced for a
period of not less than 2 years, the employee and former spouse are at least
age 62, and the employee is fully insured under the Social Security Act using
combined railroad and social security earnings. Also, a court-ordered
partition payment may be paid even if the employee is not entitled to an
annuity provided that the employee has 10 years of railroad service or 5 years
after 1995 and both the employee and former spouse are 62.
The amount of a divorced spouse’s annuity is, in
effect, equal to what social security would pay in the same situation and
therefore less than the amount of the spouse annuity otherwise payable (tier I
only). The average divorced spouse annuity awarded in fiscal year 2011
was $567.
8. Would the
award of an annuity to a divorced spouse affect the monthly annuity rate
payable to a retired employee and/or the current spouse?
No. If a divorced spouse becomes entitled to an annuity based on
the employee’s railroad service, the award of the divorced spouse’s benefit
would not affect the amount of the employee’s annuity, nor would it affect the
amount of the railroad retirement annuity that may be payable to the current
spouse.
9.
What if a husband and wife are both railroad employees?
If both the husband and wife are qualified railroad
employees and either had some railroad service before 1975, both can receive
separate railroad retirement employee and spouse annuities, without a full dual
benefit reduction. If both the husband and wife started railroad
employment after 1974, the amount of any spouse or divorced spouse annuity is
reduced by the amount of the employee annuity to which the spouse is also
entitled.
10. Are railroad retirement
annuities subject to garnishment or property settlements?
Certain
percentages of any railroad retirement annuity (employee, spouse or survivor)
may be subject to legal process (i.e., garnishment) to enforce an obligation
for child support and/or alimony payments.
Employee tier II benefits, vested dual benefits and
supplemental annuities are subject to court-ordered property settlements in
proceedings related to divorce, annulment or legal separation. Tier I
benefits are not subject to property settlements.
11. How can a person get more
information about railroad retirement spouse annuities?
For more information and/or a benefit estimate, a
person should contact an office of the Railroad Retirement Board (RRB) by
calling toll free at 1-877-772-5772. Most RRB offices are open to the
public from
.
Office of Public Affairs 312-751-4777
Posted: 03/03/12