[Code of Federal Regulations]
[Title 20, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR225.2]

[Page 424-425]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
                  CHAPTER II--RAILROAD RETIREMENT BOARD
 
PART 225_PRIMARY INSURANCE AMOUNT DETERMINATIONS--Table of Contents
 
                            Subpart A_General
 
Sec. 225.2  Definitions.

    As used in this part:
    Average Indexed Monthly Earnings means the result of dividing the 
total of the indexed earnings through the indexing year and the 
nonindexed earnings after the indexing year in the benefit computation 
years by the number of months in the benefit computation years. The 
indexing year for the Average Indexed Monthly Earnings PIA is the second 
year before the employee's eligibility year. Indexing of an employee's 
yearly earnings serves to put the earnings in proportion to the earnings 
level of all workers for the corresponding years, and to express the 
earnings in terms of a more recent dollar value. Indexed earnings are 
determined under section 215(b)(1) of the Social Security Act. The 
Average Indexed Monthly Earnings formula PIA is based on the Average 
Indexed Monthly Earnings amount.
    Average Monthly Earnings means the average determined by dividing 
the acutal earnings used in computing the PIA by the total months in the 
benefit computation years. The Average Monthly Earnings is determined 
under section 215(b)(4) of the Social Security Act. The Average Monthly 
Earnings formula PIA is based on the Average Monthly Earnings amount.
    Base Years means the years after 1950 (or 1936, if applicable) and 
up to the year in which the employee dies or is

[[Page 425]]

entitled to an annuity based on retirement or disability. When the 
employee's death occurs before he or she reaches retirement age as 
defined in section 216(l) of the Social Security Act, the Base Years 
include the year of the employee's death. Base Years are defined in 
sections 215(b)(2)(B)(ii) and 215(d) of the Social Security Act.
    Benefit Computation Years means the years with the highest earnings 
used in computing the Average Indexed Monthly Earnings or Average 
Monthly Earnings. The number of Benefit Computation Years is determined 
in accordance with section 215(b)(2)(B)(i) of the Social Security Act 
and is based on the employee's age or when the employee becomes disabled 
or dies.
    Compensation means railroad compensation which is the amount of 
creditable railroad earnings under the Railroad Retirement Act, as 
explained in part 211 of this chapter.
    Earnings means compensation creditable under the Railroad Retirement 
Act (other than compensation attributable to years of service prior to 
1937) or ``wages'' creditable under the Social Security Act or both.
    Eligible means that a person meets the necessary requirements and 
could qualify for payment if a valid application were filed.
    Eligibility Year means the earliest of: the employee's year of 
attainment of age 62; The year of disability onset; or the year of 
death. The Eligibility Year determines the formula used to compute a 
Primary Insurance Amount. Eligibility Year is defined in section 215(a) 
of the Social Security Act.
    Employee means any person who is working or has worked for a 
railroad employer who is eligible for a retirement annuity or on whose 
account a survivor is eligible for a survivor annuity, as explained in 
part 216 of this chapter. For a detailed discussion of Employees under 
the Railroad Retirement Act, see part 203 of this chapter.
    Entitled means that a person meets the necessary requirements, files 
a valid application and establishes his or her right to payment.
    Indexed Earnings means the employee's yearly earnings for the years 
after 1950 that have been adjusted to put the earnings in proportion to 
the earnings level of all workers for each of those years and to express 
the earnings in terms of a more recent dollar amount.
    Primary Insurance Amount (PIA) means the result obtained by applying 
one of three formulas in the Social Security Act to the employee's 
earnings as prescribed under that Act. A PIA can be based on the Average 
Indexed Monthly Earnings formula, the Average Monthly Earnings formula 
or, in the case of the Special Minimum PIA, on a special formula based 
on years of coverage. Averaging earnings and PIA formulas are prescribed 
in section 215 of the Social Security Act.
    Social Security Act means the Social Security Act as amended from 
time to time, unless the Act as in effect on a particular date is 
specified.
    Wages means creditable wages or self-employment under sections 209 
or 211, respectively, of the Social Security Act.
    Year of service means 12 months of railroad service credited in 
accordance with part 210 of this chapter.
    Years of coverage means years after 1936 as defined in section 
215(a)(1)(C)(ii) of the Social Security Act in which the employee had 
earnings over certain specified amounts. Years of Coverage is primarily 
a factor in determining the Special Minimum formula PIA amount.

[54 FR 12903, Mar. 29, 1989, as amended at 68 FR 39010, July 1, 2003]