[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: 20CFR225.53]

[Page 433-434]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
                  CHAPTER II--RAILROAD RETIREMENT BOARD
 
PART 225_PRIMARY INSURANCE AMOUNT DETERMINATIONS--Table of Contents
 
                       Subpart F_Recomputing PIA's
 
Sec. 225.53  Recomputation to consider additional earnings.

    (a) Additional earnings that cause a recomputation--(1) Earnings not 
included in earlier computation or recomputation. The most common reason 
for recomputing a PIA is to include earnings that were not used 
previously, as described in paragraphs (a)(2) through (a)(4) of this 
section. The inclusion of these earnings may result in a revised Average 
Monthly Earnings or revised Average Indexed Monthly Earnings amount and, 
consequently, cause recomputation of the PIA.
    (2) Earnings in the year an employee becomes entitled to an age 
annuity or becomes disabled. Earnings in the year an employee becomes 
entitled to an age annuity or becomes disabled are not used in the 
initial computation of the PIA. However, the Board does consider those 
earnings in a recomputation of the PIA and begins paying the higher 
benefits at the time described in paragraph (b) of this section.

[[Page 434]]

    (3) Earnings not reported in time to use them in the computation of 
the PIA. Because of the way reports of earnings are made, the earnings 
an employee has in the year before he or she becomes entitled to an 
annuity, becomes disabled, or dies, might not be reported in time to use 
them in computing the PIA. The Board recomputes the PIA with the new 
earnings information and begins paying annuitants the higher benefits 
based on the additional earnings at the time described in paragraph (b) 
of this section.
    (4) Earnings after entitlement that are used in a recomputation. 
Earnings for a year after an employee becomes entitled to an annuity are 
used in a recomputation of a PIA when the earnings are higher than those 
for a year used in the previous PIA computation.
    (b) Effective date of recomputation to consider additional earnings. 
A PIA that is recomputed to include additional earnings becomes payable 
at the latest of the following times:
    (1) Date the annuity begins.
    (2) January of the year following the year an employee receiving an 
age annuity attains age 62.
    (3) January of the year following the year an employee becomes 
disabled.
    (4) January of the year following the year in which the earnings are 
earned.

    Example: Mr. Jones, a railroad employee, becomes entitled to an age 
annuity in June 1986, at the age of 62. Although Mr. Jones has earnings 
of $23,000 in the first five months of 1986, those earnings cannot be 
used in the initial computation of the Tier I PIA. However, effective 
with January 1, 1987, the Tier I PIA is recomputed to include the 
earnings for 1986.