[Code of Federal Regulations]
[Title 20, Volume 1]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR226.11]

[Page 458-459]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
                  CHAPTER II--RAILROAD RETIREMENT BOARD
 
PART 226_COMPUTING EMPLOYEE, SPOUSE, AND DIVORCED SPOUSE ANNUITIES--Table of 
 
                 Subpart B_Computing an Employee Annuity
 
Sec.  226.11  Employee tier II.

    The tier II of an employee annuity is based only on railroad 
service. For annuities awarded after September 1981, the tier II benefit 
is computed as follows:
    (a) The product obtained by multiplying the employee's creditable 
years of service by the average monthly compensation, determined as 
shown in subpart E of this part, is multiplied by seven-tenths of 1 
percent (.007).
    (b) If the employee is entitled to a vested dual benefit (see Sec.  
226.12 of this part), the result from paragraph (a) of this section is 
reduced by 25 percent of the vested dual benefit amount. This reduction 
is made before reduction of the tier II benefit for age. The result 
cannot be less than zero.
    (c) If the railroad retirement family maximum applies, as shown in 
Sec. Sec.  226.50-226.52 of this part, the amount from paragraph (a) or 
(b) of this section is reduced by the smaller of--
    (1) The difference between the total railroad retirement maximum 
reduction amount and the reductions in the spouse and supplemental 
annuities; or
    (2) The total tier II amount from paragraph (a) or (b) of this 
section.
    (d) If the employee is entitled to a reduced age annuity (see Sec.  
216.31 of this chapter), the rate from paragraph (a) through (c) of this 
section is reduced in the same manner as the tier I as provided for in 
Sec.  226.10 of this part. In the case of an employee with 30 years of 
service who is entitled to a reduced age annuity (see Sec.  216.31 of 
this chapter), the age reduction only applies to the

[[Page 459]]

tier I component; no age reduction applies to the tier II component.
    (e) The total tier II amount (paragraphs (a) through (d) of this 
section), is increased by 32.5 percent of the percentage increase in the 
cost-of-living increase to the tier I annuity component. Each cost-of-
living increase is paid only to an employee whose annuity begins on or 
before the effective date of the increase. The increases are effective 
on the same date as any cost-of-living increase to the tier I annuity 
component.