[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 452-453]

 

                      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 453]]



    (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.