Railroad Retirement Benefits for Widows

by Kathy Adams McIntosh ; Updated July 27, 2017

The Railroad Retirement Board administers a pension fund whose benefits are payable to railroad employees and their survivors. As of 2010, the fund paid out $5.7 billion annually, according to the group's statistical report. Widows whose spouses worked for a railroad are eligible to receive benefits thorough this system, which resembles the Social Security Administration in both purpose and function.

Tier I Survivor Benefits

Tier I survivor benefits provide income to widows when their spouse dies. The benefit amount is calculated to match the survivor benefit that would have been provided from Social Security. Widows qualify to receive Tier I benefits if their spouse retired after working for the railroad for a minimum of ten years or died while still actively employed. The average annuity paid to widows in 2008 was $1,625 per month. If the widow had been receiving a spousal annuity from the railroad, her survivor's benefit will not be less than the amount she received from the annuity.

Tier II Survivor Benefits

Tier II benefits provide an additional payment to the railroad employee’s spouse. This additional benefit increases the total amount paid to the widow to compare more favorably with that received from a private defined-benefit pension plan. This benefit is determined by calculating the employee’s average monthly earnings for his last five years of working. This amount is multiplied by 0.7 percent. It is multiplied again by the number of years he worked for the railroad. The final amount is the benefit amount the widow will receive. Tier II benefits are increased to account for inflation, and are raised by 32.5 percent of the increase in the Consumer Price Index each year.

Benefit Reduction

Railroad retirement benefits may be reduced for various reasons. If the employee retired early and received a reduced annuity amount, the benefit paid to the widow will be reduced. If the widow receives social security payments, the railroad retirement benefits will be reduced by the amount she receives. This is the case even if the social security benefits are based on her own earnings. If the widow receives a government pension based on her own earnings, her railroad retirement benefit will also be reduced. Military pensions are exempt.

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