Retirement and survivor benefits paid, including vested dual benefits and supplemental employee annuities, totaled $12.2 billion in fiscal year 2015, $278 million more than in fiscal year 2014. Benefits were paid to about 558,100 beneficiaries in fiscal year 2015, and 524,800 beneficiaries were being paid at the end of the year.
The table shown below presents retirement and survivor benefit payments for fiscal years 2015 and 2014, by type of benefit, and the percent changes in payments between the 2 years.
| Retirement benefits |
Employee annuities
Age
Disability
Supplemental |
$7,086.7
1,197.0
61.1 |
$6787.9
1,276.8
60.8 |
+4.4
-6.3
+0.6 |
| Spouse and divorced spouse annuities |
1,667.4 |
1,559.5 |
+4.2 |
|
Total
|
10,012.2 |
9,724.9 |
+3.0 |
| Survivor benefits |
Annuities
Lump-Sum benefits |
2,153.9
3.0 |
2,164.2
2.9 |
-0.5
+1.8 |
| Total |
2,156.9 |
2,167.2 |
-0.5 |
|
Partition payments3
|
5.0 |
4.3 |
+15.5 |
| Grand total |
$12,174.1 |
$11,896.4 |
+2.3 |
|
A disability annuity ends when the retiree attains full retirement age, at which time the annuity converts to an age and service annuity. FY 2015 and FY 2014 include $1,161.2 million and $1,076.1 million, respectively, in payments to annuitants full retirement age and over originally awarded a disability annuity.
Excludes partition payments to spouses and divorced spouses where the employee is deceased.
Limited to partition payments to spouses and divorced spouses where the employee is deceased or not otherwise entitled to an annuity. Partition payments from employees on the rolls are included with the employees' annuities.
Note.--Detail may not add to total due to rounding.
|
Under the two-tier railroad retirement formulas, the tier I annuity portion approximates a social security benefit and increases by the cost-of-living percentage applied to social security benefits. The tier II portion, which is comparable to retirement benefits paid over and above social security benefits to workers in other industries, increases by 32.5 percent of the social security percentage.
There was no cost-of-living increase effective December 2015. Increases of 1.7 percent for tier I and 0.6 percent for tier II were effective December 2014, with 1.5 percent for tier I and 0.5 percent for tier II in December 2013.
The December 2014 and December 2013 cost-of-living increases provided additional benefit payments of about $137 million in fiscal year 2015, compared to payments in fiscal year 2014.
Monthly retirement and survivor benefits being paid numbered more than 656,800 at the end of the 2015 fiscal year, some 4,200 less than at the end of the prior year. Monthly beneficiaries on the rolls declined by approximately 5,300 over the year, from 530,100 to 524,800. The number of monthly benefits paid is always greater than the number of beneficiaries on the rolls, since many annuitants receive more than one type of benefit. Although the second benefit is usually a supplemental employee annuity, some employees also receive a spouse or widow(er)'s annuity.
Regular employee annuities in payment status at the end of fiscal year 2015 numbered 267,800, 1,900 less than at the end of the previous fiscal year. The number of age annuities being paid, including 43,100 disability annuities converted to age, rose slightly from 231,800 to 233,300 over the year, while disability annuities decreased from 37,900, to 34,500. Supplemental annuities being paid to employees increased by nearly 1,000, numbering 123,000 at the end of the year. The number of divorced spouse annuities being paid rose approximately 200, to 4,700. Spouse and divorced spouse annuities together increased by almost 1,300, totaling 143,900 at year-end. More than 120,700 monthly survivor benefits were being paid at the end of fiscal year 2015, a decrease of 4,700 from the previous year. Approximately 1,400 partition payments to spouses and divorced spouses where the employee is deceased or not otherwise entitled to an annuity were being paid at the end of fiscal year 2015, an increase of over 100 from the prior year.
RETIREMENT
Regular employee annuities
Awards of regular employee annuities numbered 11,700 in fiscal year 2015, nearly 300 less than in fiscal year 2014. Data by type of annuity awarded during the year are given in the table below.
| Age |
Beginning at full retirement
age or over |
1,500 |
13 |
$2,551 |
22.0 |
67.4 |
Unreduced, beginning at age 60
to under full retirement age |
6,000 |
51 |
3,853 |
37.1 |
60.9 |
Reduced, beginning at age 62
to under full retirement age |
2,600 |
22 |
1,740 |
16.0 |
63.1 |
| Disability |
1,700 |
14 |
2,611 |
21.3 |
55.8 |
|
Total
|
11,700 |
100 |
$3,042 |
28.3 |
61.5 |
Note.-- Detail may not add to total due to rounding. |
Railroad employees with 10 to 29 years of creditable service, or 5 to 9 years of service if at least 5 years were after 1995, are eligible for regular annuities based on age and service at age 62. Early retirement annuity reductions are applied to annuities awarded before full retirement age (the age at which an employee can receive full benefits with no reduction for early retirement). This ranges from age 65 for those born before 1938 to age 67 for those born in 1960 or later, the same as under social security. If an employee had any creditable railroad service before August 12, 1983, the retirement age for tier II purposes will remain 65. The reduction for early retirement is 1/180 for each of the first 36 months the employee is under full retirement age when his or her annuity begins and 1/240 for each additional month.
Rail employees with 30 or more years of service are eligible for regular annuities based on age and service at age 60. Certain early retirement reductions are applied if the employee first became eligible for a 60/30 annuity July 1, 1984, or later and retired at ages 60 or 61 before 2002. Employees who retire at 60 or older with at least 30 years of railroad service are referred to as 60/30 retirees.
Disability awards are based either on total disability or on occupational disability. A total disability annuity is based on disability for all employment and is payable at any age to employees with at least 10 years of railroad service. Employees with 5-9 years of service, if at least 5 years were after 1995, may qualify for tier I only before retirement age on the basis of total disability if they also meet certain social security earnings requirements. An employee is considered totally disabled if medical evidence shows that a permanent physical or mental condition exists which prevents the performance of any regular work. A condition is considered to be permanent if it has lasted or may be expected to last for at least 12 months.
An occupational disability annuity is based on disability for the employee's regular railroad occupation and is payable to employees with a current connection with the rail industry at age 60 if the employee has 10 years of service, or at any age if the employee has at least 20 years of service. An employee is considered occupationally disabled if the physical or mental condition is such that the employee is permanently disabled for work in his or her regular railroad occupation, even though the employee may be able to perform other kinds of work.
Of the year's 1,700 disability awards, 800 averaging $1,893 per month were for total disability and 900 averaging $3,207 were for occupational disability. Many employees who are disabled for all employment but are otherwise qualified for an occupational disability annuity are initially awarded occupational disability annuities in order to expedite payment.
An estimated five-sixth of all employees recently awarded disability annuities will meet the medical criteria for a disability freeze determination. The standards for freeze determinations follow social security law and are comparable to the criteria for granting total disability. Also, an employee granted a disability freeze may qualify for early Medicare coverage and lower Federal income taxes on his or her annuity.
Number of monthly beneficiaries,
September 30, 2010, and 2015 (thousands)
Amount of benefits paid,
fiscal years 2010 and 2015 (millions)
| 1 |
Includes $60.3 million in fiscal year 2010 and $61.1 million in fiscal year 2015 for supplemental annuities. |
| 2 |
Includes divorced spouses. |
Average monthly amount, September 30, 2010, and 2015
| 2 |
Includes divorced spouses. |
| 1 |
Without supplemental annuity. |
Of the employees who were awarded regular annuities in fiscal year 2015, some 8,300, or 71 percent, last worked for a railroad either in the calendar year their annuity began or in the preceding year. Such retirements are termed immediate, while those that occur 2 or more calendar years after the year of last railroad employment are called deferred. As a group, immediate retirees represent career railroad employees who worked in the industry until retirement. Awards based on immediate retirement averaged $3,535 per month, compared to $1,849 for the 3,400 awards based on deferred retirement. Immediate retirees averaged 33 years of railroad service, almost twice the average of 17 years for deferred retirees. Of the year's awards, 52 percent of normal age retirements were immediate. While 95 percent of all 60/30 retirements were immediate, only 25 percent of the reduced age awards to employees with less than 30 years of service were immediate. Immediate retirements accounted for 71 percent of the year's disability awards.
The 267,800 retired employees on the rolls as of September 30, 2015, were being paid regular monthly annuities averaging $2,581. The table below presents data by type of annuity for these benefits.
| Age |
| Beginning at full retirement age or over |
20,400 |
8 |
$2,008 |
47 |
|
Unreduced, beginning at age 60 to under
full retirement age
|
104,800 |
39 |
3,374 |
92 |
Reduced, beginning at age 60 to under
full retirement age |
64,900 |
24 |
1,609 |
30 |
| Disability converted to age annuity |
43,100 |
16 |
2,322 |
81 |
| Disability |
34,500 |
13 |
2,663 |
80 |
|
Total
|
267,800 |
100 |
$2,581 |
70 |
|
A disability annuity ends when the retiree attains full retirement age, at which time the annuity converts to an age and service annuity. Consequently, these annuitants are receiving age and service annuities. Full retirement age is age 65 for those born before 1938 and gradually increases to age 67 for those born 1960 and later.
Note.-- Detail may not add to total due to rounding.
|
Of the 34,500 disability annuities being paid, 11,000 were for total disability and 23,500 for occupational disability. The two types of disability annuities averaged $1,892 and $3,025, respectively. In fiscal year 2015, payments totaled over $265 million for total disability annuities and $932 million for occupational disability annuities.
Almost 188,100 employees on the rolls at the end of fiscal year 2015 were immediate retirees and their regular annuities averaged $2,987 per month. Annuities of the 79,700 deferred retirees averaged $1,622. Although their average railroad retirement annuity was much lower, a greater proportion of the deferred annuitants also received social security benefits--25 percent compared to 5 percent for the immediate retirees. Moreover, the average social security benefit paid to deferred retirees was higher than that paid to immediate retirees. Combined railroad retirement and social security benefits to deferred retirees who were dual beneficiaries averaged $1,818, while combined benefits to immediate retirees averaged $2,721. The table below presents numbers of beneficiaries and average benefit amounts for employees on the rolls who were receiving social security benefits, and for those who were not, by type of retirement.
| Receiving social security benefit |
| Number |
28,600 |
8,500 |
20,000 |
Average monthly amount:
 Railroad retirement (regular)
Social security
Combined benefit |
$851
1,237
2,088 |
$1,655
1,066
2,721 |
$509
1,309
1,818 |
| Not receiving social security benefit |
| Number |
239,200 |
179,600 |
59,600 |
| Average monthly amount |
$2,787 |
$3,050 |
$1,996 |
Note.-- Detail may not add to total due to rounding. |
Regular employee annuities consist of as many as three components: tier I, tier II, and a vested dual benefit. Reductions for early age retirement are made in all components in cases where the employee retired before full retirement age with less than 30 years of railroad service. The tier I component is based on the employee's combined railroad and social security covered earnings, and is reduced by the amount of any social security benefit that the employee receives. The gross tier I amounts of employees on the rolls at the end of fiscal year 2015 averaged $1,971 per month. Tier I amounts of nearly 7,000 employees were completely offset by social security benefits. Tier I amounts being paid averaged $1,819.
The employee tier II component is based solely on railroad earnings. Tier II amounts being paid at the end of fiscal year 2015 averaged $821. Employees are eligible for vested dual benefits if, based on their own earnings, they met certain vesting requirements and qualified for both railroad retirement and social security benefits at the end of 1974, or, in some cases, at the end of an earlier year of last railroad service. Nearly 15,200 retirees were receiving vested dual benefits averaging $161 at the end of the fiscal year.
Supplemental employee annuities
A supplemental annuity is payable to employees with a current connection with the rail industry at age 60 if the employee has at least 30 years of service, or at age 65 if the employee has 25-29 years of service. The employee must also have had some rail service before October 1981.
About 6,200 supplemental annuities were awarded in fiscal year 2015, nearly 500 less than in fiscal year 2014. More than 4,700 of the awards (77 percent) began concurrently with the employee's regular annuity, while the remaining 1,500 were to employees already receiving a regular annuity. Supplemental annuity awards averaged over $41 per month after court-ordered partitions; 85 percent were at the current maximum rate of $43. Supplemental annuities are reduced for any part of a private railroad pension attributable to employer contributions. During the fiscal year, 1,700 supplemental annuities were not awarded because they were entirely offset by private pensions. In a few cases, the supplemental annuity was partially offset by the pension, or the supplemental annuity was not offset because the pension was reduced.
Supplemental annuities were being paid to some 123,100, or 46 percent, of the retired employees on the rolls at the end of the 2015 fiscal year. These annuities averaged $42 after court-ordered partitions; one was paid under 1937 Act amendments, which stipulated a maximum rate of $70.
Spouse and divorced spouse annuities
Annuity awards to spouses and divorced spouses of retired employees numbered 11,300 in fiscal year 2015, 200 less than in the previous year. The table below presents numbers and average amounts of spouse and divorced spouse annuities awarded during the year and being paid at the end of the year, by type of annuity and whether subject to age reduction.
|
Monthly spouse benefits
|
Awarded in
fiscal year 2015
|
In current-payment status
on September 30, 2015
|
|
Number
|
Average amount
|
Number
|
Average amount
|
|
Beginning at full retirement age or over
|
1,600
|
$625
|
16,400
|
$552
|
|
With minor or disabled child in care
|
300
|
1,154
|
1,800
|
1,273
|
|
Unreduced, beginning at age 60 to under full retirement age
|
5,900
|
1,466
|
73,600
|
1,376
|
|
Reduced rate
|
2,800
|
531
|
47,400
|
524
|
|
Total
|
10,600
|
1,083
|
139,200
|
987
|
|
Divorced spouse annuities
|
700
|
641
|
4,700
|
610
|
|
Grand total
|
11,300
|
$1,055
|
143,900
|
$975
|
|
Note.-- Detail may not add to total due to rounding.
|
If an employee is at least age 62 and retires with 10-29 years of railroad service, or has 5-9 years of service and at least 5 years were after 1995, the employee's spouse is eligible for an annuity at age 62. Full retirement age for a spouse is gradually rising from 65 to 67, depending on the year of birth. Early retirement reductions are applied to the spouse annuity if the spouse retires before full retirement age. The reduction for early retirement is 1/144 for each of the first 36 months the spouse is under full retirement age when her or his annuity begins and 1/240 for each month (if any) over 36.
If an employee retires with at least 30 years of service and is at least age 60, the employee's spouse is eligible for an annuity at age 60. Prior to 2002, certain early retirement reductions were applied to the tier I component of such a spouse annuity if the employee retired before age 62, unless the employee attained age 60 and completed 30 years of service prior to July 1, 1984. If a 30-year employee retired at age 62, no age reduction applied to the spouse annuity. December 2001 legislation liberalized early retirement benefits for 30-year employees retiring at ages 60 or 61 after 2001 and their spouses. A spouse of an employee qualified for an age and service annuity is eligible for a spouse annuity at any age if caring for the employee's unmarried child, and the child is under age 18 or the child became disabled before age 22.
Of the more than 2,800 reduced spouse annuities awarded in fiscal year 2015, fewer than 50 averaging $801 per month were to spouses of 30-year employees, and 2,800 averaging $528 were to spouses of employees with less than 30 years of service.
At the end of fiscal year 2015, over 139,200 spouse annuities averaging $987 per month were being paid. More than 4,700 divorced spouse annuities averaging $610 per month were also being paid. These included some 90, averaging $679, where the employee was not yet entitled to an annuity. Families with an employee and spouse on the rolls were paid combined railroad retirement benefits averaging $3,776. This included $2,788 in regular and supplemental employee annuities and $987 in spouse annuities.
Approximately 54,700, or 38 percent, of the spouses and divorced spouses on the rolls were also receiving social security benefits. Combined railroad retirement and social security benefits to these annuitants averaged $1,488 per month, including $379 in railroad retirement benefits and $1,109 in social security benefits. Railroad retirement annuities to the 86,500 spouses not receiving social security benefits averaged $1,358, while railroad retirement annuities to the 2,800 divorced spouses not receiving social security benefits averaged $813.
Like regular employee annuities, spouse annuities consist of up to three components. The tier I component equals one-half of the employee's tier I amount before any reduction for the employee's social security benefit. The spouse tier I amount is reduced for the spouse's receipt of a social security benefit and may be reduced for a spouse's public service pension. The tier I portion may also be reduced if the spouse receives a railroad retirement employee annuity, but this reduction is usually restored through an addition to the spouse tier II amount. Divorced spouses receive only a tier I benefit.
The spouse tier II component equals 45 percent of the employee's tier II amount. Railroad retirement amendments in 1981 precluded further awards of vested dual benefits to spouses.
Of the 139,200 spouses on the rolls at the end of fiscal year 2015, 93,600 were being paid tier I amounts averaging $869 per month. The tier I amounts of 45,600 spouses were completely offset by other benefits also due. Spouse tier II amounts averaged $439. Vested dual benefits averaging $126 were being paid to fewer than 50 spouses. The 4,700 divorced spouses on the rolls at the end of fiscal year 2015 were being paid tier I amounts averaging $629 per month, not reflecting all annuity adjustments.
Lump-Sum retirement benefits
A lump-sum benefit may be payable at retirement to employees who received separation or severance payments after 1984. This benefit approximates the tier II payroll taxes deducted from separation or severance payments that did not yield additional service credits for retirement. Some $0.4 million was paid in separation/severance lump-sum benefits during fiscal year 2015.
Employees who have at least 10 years of railroad service and are not entitled to a vested dual benefit may be eligible for a dual retirement tax refund if they had concurrent railroad retirement and social security earnings within the period 1951-74. The refund is equal to the social security taxes that the employee paid on the combined railroad and social security earnings in excess of the annual railroad retirement creditable earnings maximum. During the 2015 fiscal year, the RRB paid over 200 dual retirement tax refunds averaging $94. Most of the payments were to employees retiring during the year. Fewer than 50 refunds were to survivors, mostly widows, of employees who died before receiving the refund. Employees entitled to dual retirement tax refunds for years after 1974 may claim them on their Federal income tax returns.
SURVIVOR
Monthly benefits
Annuity awards to survivors of deceased railroad employees numbered 7,100 during fiscal year 2015, about 50 less than the previous year. Some 120,700 survivor annuities were being paid at the end of the fiscal year, including 300 temporarily paid at spouse or divorced spouse annuity rates pending recomputation to widow(er)s' rates. Approximately 94,300, or 78 percent, of the survivor annuities were to aged widows and widowers.
1Aged widower statistics in the Survivor section exclude benefits to disabled widow(er)s age 60 and over now payable as aged widow(er)'s annuities.
The table shown below presents numbers and average monthly amounts of survivor annuities, by type, for those awarded in the year and those being paid at the end of the year.
|
Monthly survivor benefits
|
Awarded in
fiscal year 2015
|
In current-payment status
on September 30, 2015
|
|
Number
|
Average amount
|
Number
|
Average amount
|
|
Aged widow(er)s
|
5,500
|
$2,031
|
94,300
|
$1,575
|
|
Disabled widow(er)s1
|
100
|
1,685
|
3,700
|
1,285
|
|
Widowed mothers (fathers)
|
100
|
1,728
|
700
|
1,835
|
|
Remarried widow(er)s
|
200
|
1,153
|
3,300
|
1,036
|
|
Divorced widow(er)s
|
700
|
1.175
|
9,700
|
1,040
|
|
Children:
Under age 18
Student
Disabled
|
300
*
100
|
1,312
1,576
1,241
|
1,700
100
7,200
|
1,361
1,454
979
|
|
Parents
|
*
|
542
|
*
|
935
|
|
Total
|
7,100
|
. . .
|
120,700
|
. . .
|
|
1Number and average in current-payment status include annuities to disabled widow(er) age 60 and over now payable as aged widow(er)s' annuities.
*Fewer than 50.
Note.-- Detail may not add to total due to rounding.
|
Survivor annuities, like regular employee and spouse annuities, consist of as many as three components: tier I, tier II and, for widows and widowers only, a vested dual benefit. As with spouses, legislation in 1981 precluded new awards of vested dual benefits to widow(er)s. The tier I component is computed according to social security formulas and is based on the deceased employee's combined railroad and social security earnings. A reduction is made for the survivor's receipt of a social security benefit. There may also be a tier I reduction if the survivor receives a railroad retirement employee annuity or public pension. Remarried and divorced widow(er)s receive a tier I benefit only. A dependent parent receives only a tier I amount if another family member is also receiving benefits or if the parent has remarried.
Survivor tier II amounts are figured as a percentage of an employee tier II benefit. Prior to 2002, the percentages were 50 percent for a widow(er), 15 percent for a child, and 35 percent for a parent. The total tier II amount for a survivor family was subject to a minimum of 35 percent and a maximum of 80 percent of the employee tier II benefit, and all survivor tier II amounts were proportionately adjusted when either limit applied. December 2001 legislation established an initial minimum amount for widow(er)s which provides a tier II benefit equal to 100 percent of the tier II amount of the deceased employee. The maximum tier II amount payable to a family rose to 130 percent of the employee's tier II amount. Widows and widowers are guaranteed a total tier I and tier II amount not less than what they were paid as a spouse, any necessary increase being added to tier II.
Aged widow(er)s, who are eligible for benefits at age 60, have their tier I and tier II amounts reduced if the annuity begins before full retirement age. The eligibility age for unreduced annuities is gradually rising from age 65 to age 67. The maximum age reductions range from 17.1 percent to 20.36 percent, depending on the widow(er)'s date of birth. Excluding some 200 annuities temporarily paid at spouse or divorced spouse rates, aged widow(er)s' annuities being paid at the end of the 2015 fiscal year included 47,500 which were reduced for age. Aged widow(er)s' tier I amounts being paid averaged $1,286 per month. In approximately 6,800 cases, the tier I amount was wholly offset by reductions for other benefits. Nearly 30,200 aged widow(er)s were also receiving social security benefits, and these averaged $1,016. Tier II amounts averaged $384. About 300 vested dual benefits, averaging $73, were being paid to aged widow(er)s.
The tier I and tier II amounts of disabled widow(er)s' annuities, which begin at ages 50-59, are reduced 28.5 percent for age. At the end of fiscal year 2015, tier I amounts being paid to disabled widow(er)s on the rolls averaged $1,065. (In about 200 cases, the tier I amount was wholly offset by reductions.) Social security benefits being paid to some 1,400 disabled widow(er)s averaged $927. Tier II amounts averaged $263, while the less than 50 vested dual benefits being paid averaged $101.
Tier I amounts paid to widowed mothers and fathers (widows and widowers caring for children) generally equal 75 percent of the full amount payable to an aged widow(er) before any reductions, similar to a social security mother's or father's benefit. Eligible children and grandchildren are paid this same tier I amount. However, if the sum of the tier I amounts of all members of a survivor family exceeds the social security family maximum, then tier I amounts are proportionately reduced so that the total equals the maximum. Reductions for the family maximum usually occur when the family includes three or more beneficiaries. Tier I amounts being paid as of the end of fiscal year 2015 averaged $1,347 for widowed mothers and fathers and $974 for children. Fewer than 50 mothers/fathers and nearly 2,200 children received social security benefits averaging $1,095 and $624, respectively. Tier II amounts paid mothers/fathers and children averaged, respectively, $528 and $109.
Lump-Sum survivor benefits
A lump-sum death benefit can be payable at the time of an employee's death only if there are no survivors immediately eligible for monthly benefits. For survivors of employees who had at least 10 years of railroad service before 1975, the lump-sum death benefit is based on the employee's earnings through 1974, with a maximum amount of approximately $1,200. If the employee completed the 10th year of service after 1974, the lump-sum death benefit is limited to $255, the maximum benefit payable under social security law, and only the widow or widower living in the same household is eligible for the benefit. Lump-sum benefits may also be payable to survivors of employees with less than 10 years of service, but at least 5 years after 1995, if the employee met the social security insured status requirements. More than 3,100 lump-sum death benefits averaging $927 were awarded during fiscal year 2015. Approximately 400 benefits were to widow(er)s, while almost 2,700 were to other individuals who paid the funeral expenses.
Another lump-sum survivor benefit, the residual payment, can be made if no other benefits based at least in part on an employee's railroad service will be payable in the future, and the total of prior benefit payments is less than what the employee paid in pre-1975 railroad retirement taxes. Fewer than 10 residual payments were awarded in the 2015 fiscal year; they averaged $2,684.