Individuals receiving railroad retirement benefits could potentially see an increase as of January 2015 due to a rise in the Consumer Price Index (CPI) between 2013 and the same quarter in 2014. The increase is calculated in a similar manner as Social Security benefits.
Amount of Increase
Tier I railroad retirement benefits were expected to increase by 1.7 percent, which is the amount the CPI rose during the period. Those receiving Tier II benefits should have seen an increase of 0.6 percent, which represents 32.5 percent of the CPI increase. Vested dual benefits are not adjusted based on CPI rise, even though those benefits are paid by the Railroad Retirement Board (RRB). This means that, as of January 2015, a retired railroad employee should have seen an increase of $34 per month, bringing their benefit to $2,537. Employee and spouses should have seen an increase of $48 per month, bringing their monthly benefit to $3,666. Widows and widowers should have seen an increase of $20 per month so that their monthly payment would be $1,210.
Exceptions to Increase
Widows and widowers who are being paid under the Railroad Retirement and Survivors’ Improvement Act of 2001 would not have seen an increase unless their annuity exceeds what would have been paid under the prior law. Approximately 39 percent of surviving spouses are being paid under the 2001 law. In addition, if a retiree or their survivor receives other government benefits, including Social Security or Public Service Pension, Tier I annuities are reduced by that amount. This does not apply to Tier II benefits.
Complicated Formula for Railroad Retirement Benefits
Determining how much of an increase you will get as a result of the CPI adjustment can be very complicated if you have retired from the railroad or you are the surviving spouse of someone who was eligible for railroad retirement. Because there are many exceptions and adjustments involved, it is possible you are not receiving the benefits you are qualified to receive. In order to be sure you are receiving adequate compensation, you should discuss your benefits with a qualified attorney. If you or a loved one is receiving railroad retirement benefits, contact Hermann Law Group, PLLC by calling 914-286-3030 to be sure you are receiving the proper benefits.