[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: 20CFR225.3]



[Page 444-445]

 

                      TITLE 20--EMPLOYEES' BENEFITS

 

                  CHAPTER II--RAILROAD RETIREMENT BOARD

 

PART 225_PRIMARY INSURANCE AMOUNT DETERMINATIONS--Table of Contents

 

                            Subpart A_General

 

Sec.  225.3  PIA computation formulas.



    (a) General. PIA's are generally computed under one of two normal 

formulas determined by the employee's eligibility year. In addition, 

there is a special PIA formula, based on an employee's years of 

coverage, that is used when it produces a PIA that is higher than the 

PIA computed under the appropriate PIA formula. The two most common PIA 

formulas are the Average Indexed Monthly Earnings PIA formula and the 

Average Monthly Earnings PIA formula. The special PIA formula is called 

the Special Minimum PIA formula.

    (b) Average Indexed Monthly Earnings PIA formula. When the 

employee's eligibility year is after 1978, the Tier I PIA, Overall 

Minimum PIA, Survivor



[[Page 445]]



Tier I PIA, Employee's Retirement Insurance Benefit PIA and Residual 

Lump-Sum PIA are computed under the Average Indexed Monthly Earnings PIA 

formula.

    (c) Average Monthly Earnings PIA formula. The Average Monthly 

Earnings PIA formula is used to compute a PIA for one of two reasons: 

either the employee's eligibility year is before 1979 or the type of PIA 

requires that it always be computed under the Average Monthly Earnings 

PIA formula.

    (1) Use of Average Monthly Earnings PIA formula based on the 

employee's eligibility year. The Average Monthly Earnings PIA formula is 

used in computing the Tier I PIA, the Overall Minimum PIA, the Employee 

Fictional Retirement Insurance Benefit PIA and the Residual Lump-Sum PIA 

when the employee's eligibility year is before 1979.

    (2) Types of PIA's always computed using the Average Monthly 

Earnings PIA formula. The following PIA's used by the Board are 

determined under the Social Security Act as in effect on December 31, 

1974, and are always computed using the Average Monthly Earnings PIA 

formula.

    (i) Combined Earnings Dual Benefit PIA described in Sec.  225.12.

    (ii) Social Security Earnings Dual Benefit PIA described in Sec.  

225.13.

    (iii) Railroad Earnings Dual Benefit PIA described in Sec.  225.14.

    (iv) Combined Earnings PIA described in Sec.  225.23.

    (v) Social Security Earnings PIA described in Sec.  225.24.

    (vi) Railroad Earnings PIA described in Sec.  225.25.

    (d) Special Minimum PIA formula. The Special Minimum PIA formula is 

based on the employee's years of coverage. The Special Minimum PIA 

formula usually applies when the employee had consistently low earnings 

during his or her working lifetime. The Special Minimum PIA formula is 

used when it is higher than the PIA calculated under the applicable 

Average Indexed Monthly Earnings formula or the Average Monthly Earnings 

formula.