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Determining Highest 60 Months for Tier 2 Calculation
(Posted April 8, 2008)
Question 660: I understand the Tier 2 benefits of a Railroad Retirement Annuity are calculated by the 60 individual highest months of earnings. I am trying to determine how the Railroad Retirement Board (RRB) actually does this. Does the board cherry pick these highest months throughout mycareer or does it treat the months pro rata as 12 segments using the highest yearly earnings? The RRB online annuity calculator seems to only use yearly earnings.
Answer: The RRB follows the law in calculating Tier 2. Railroads report earnings to the RRB on an annual basis. The RRB finds the 5 highest calendar years of earnings. It then calculates the average monthly earnings for each of the five years. The results are used as the highest 60 months in calculating the Tier 2 benefit.
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