[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 443-444]

 

                      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 444]]



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]