[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: 20CFR226.71]

[Page 466]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
                  CHAPTER II--RAILROAD RETIREMENT BOARD
 
PART 226_COMPUTING EMPLOYEE, SPOUSE, AND DIVORCED SPOUSE ANNUITIES--Table of 
 
 Subpart F_Reduction for Workers' Compensation and Disability Benefits 
              Under a Federal, State, or Local Law or Plan
 
Sec.  226.71  Initial reduction.

    (a) When reduction is effective. A reduction for other disability 
benefits begins with the first month the employee is receiving both a 
disability annuity and workers' compensation or a public disability 
benefit. The reduction ends with the month before the month in which the 
employee becomes 65 years old or with the month in which the workers 
compensation or public disability benefit ends.
    (b) Amount of reduction. The reduction for other disability benefits 
equals the difference between--
    (1) The total tier I rates of the employee, spouse, and divorced 
spouse, before any reductions (age, public pension, social security 
benefits, etc.) plus the monthly amount of the workers' compensation of 
public disability benefit; and
    (2) The higher of--
    (i) Eighty percent of the employee's average current earnings, as 
defined in this section; or
    (ii) The total tier I rates, as described in paragraph (b)(1) of 
this section.

    Example 1: Harold is entitled to a monthly disability annuity with a 
tier I component of $507 and a monthly public disability benefit of $410 
from the state. Eighty percent of Harold's average current earnings is 
$800. Because this amount is higher than Harold's tier I component, to 
determine the reduction for other disability benefits the Board 
subtracts this amount ($800) from the total of Harold's tier I component 
($507) and public disability benefit ($410) which results in a reduction 
amount of $117 ($917-$800). This leaves Harold with a reduced tier I 
amount of $390 ($507-$117).
    Example 2: Tom is entitled to a disability annuity with a tier I 
component of $560. His wife and divorced wife are both entitled to 
annuities with tier I components of $280 each. Total benefits are 
$1,120. Tom is receiving a monthly workers' compensation benefit of $500 
from the state. Eighty percent of Tom's average current earnings is 
$820. Because the total benefit ($1,120) is higher than Tom's average 
current earnings, to determine the reduction for other disability 
benefits the Board subtracts this amount from $1,620 ($1,120 plus $500) 
which results in a reduction amount of $500. This means that the tier I 
of the spouse and divorced spouse annuity are each reduced by $250.

    (c) Average current earnings, defined. An employee's ``average 
current earnings'' is the highest of--
    (1) The average monthly wage (AMW) used to compute the tier I AMW 
PIA. (The earnings are not indexed, even if the tier I PIA which is 
being paid is based on average indexed monthly earnings. See part 225 of 
this chapter.); or
    (2) One-sixtieth of the employee's total earnings covered under 
either the Social Security or Railroad Retirement Acts (including 
earnings that exceed the maximum earnings used in computing social 
security benefits) for the five consecutive years after 1950 in which 
the employee had the highest earnings. The result, if not a multiple of 
$1, is rounded to the next lower multiple of $1; or
    (3) One-twelfth of the employee's total earnings covered under 
either the Social Security or Railroad Retirement Acts (including 
earnings that exceed the maximum earnings used in computing social 
security benefits) for the year of highest earnings in the period which 
includes the year in which the employee became disabled and the five 
preceding years. The result, if not a multiple of $1, is rounded to the 
next lower multiple of $1.