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Sample of Form BA-6

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Tables

Table 1.--Indexing Factors and Average Wages 1951-2021

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Benefit Information

Many railroad workers and annuitants want to know how their railroad retirement benefits are calculated.

The following describes the various components of a railroad retirement annuity, defines terms, and explains the calculation of each component. It also provides various tables at the end to help individuals understand how their annuities are calculated.

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Determining the Supplemental Annuity Amount

Amount payable

For employees meeting eligibility requirements, the amount payable is equal to

$23 for the first 25 years of service
plus $4 for each full year of service over 25 (up to a maximum of $43 (30 years of service))

NOTE. For any fractional years between 25 and 30, a fraction of $4 is added to the minimum rate of $23.

Effect of receiving an employer private pension

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Determining the Vested Dual Benefit Amount

Amount payable

For employees meeting the vesting requirements, the additional amount is determined by computing PIA's based solely on the individual's

railroad service before 1975,
social security covered earnings before 1975, and
combined railroad and nonrailroad earnings before 1975.

The vested dual benefit is the amount by which the total of the first two PIA computations exceeds the third PIA computation.

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Determining the Tier II amount

Gross tier II

The formula for the gross tier II amount is 7/10 of 1% of the employee's average monthly railroad earnings (up to the tier II taxable maximum earnings base) in the 60 months of highest earnings, times the years of service in the rail industry.

.007 x Average monthly earnings x Years of service =
Tier II for highest 60 months of earnings

Table 4 shows the tier II taxable maximum earnings base from 1973-2014.

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Determining the Tier I amount

There are 8 steps in computing a tier 1 benefit amount for those whose first year of eligibility is in 1991 or later. They are listed below.

Step 1

Determine the number of computation years to use.

The number of computation years is 35 for employees whose first year of eligibility was in 1991 or later (it will likely be fewer than 35 years if disabled).

Step 2

Index creditable earnings.

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Terms used in Tier I

The Railroad Retirement Board calculates the tier I component for annuities based on age and service using a number of factors.

The following is an explanation of the terms involved.

First year of eligibility

For most cases, the Railroad Retirement Board considers the year the employee attains age 62, becomes disabled, or dies as his or her first year of eligibility.