---
kind: "section"
citation: "20 C.F.R. § 226.10"
title: "20"
number: "226.10"
heading: "Employee tier I."
url: "https://uscodex.org/cfr/20/226.10"
---

# §226.10. Employee tier I.


Tier I of an employee annuity is an amount similar to the social security benefit the employee would receive based on combined railroad and social security earnings. The tier I benefit is computed as follows:

- (a) A tier I PIA is computed based on combined railroad and social security earnings, as shown in [§ 225.11](/cfr/20/225.11.md) of this chapter. This PIA is adjusted for any delayed retirement credits or cost-of-living increases, as shown in subparts [D](/cfr/20/part225-subpartD.md) and [E](/cfr/20/part225-subpartE.md) of part 225 of this chapter, and is reduced for receipt of a pension based upon non-covered service in accordance with [section 215(a)(7)](/cfr/20/215.md?p=a-7) of the Social Security Act. The tier I of a disability annuity may also be adjusted for other benefits based on disability, as shown in [§§ 226.70-226.74](/cfr/20/226.70-226.74.md) of this part. Except in the case of an employee who retires at age 60 with 30 years of service, if the result is not a multiple of $1, it is rounded to the next lower multiple of $1. In the case of an employee who retires with an age reduced annuity based upon 30 years of service (see [§ 216.31](/cfr/20/216.31.md) of this chapter) the tier I is not rounded until all reductions have been made.
- (b) If the employee is entitled to a reduced age annuity (see [§ 216.31](/cfr/20/216.31.md) of this chapter), the rate from [paragraph (a)](#a) of this section is multiplied by a fraction for each month the employee is under retirement age on the annuity beginning date. The result is subtracted from the rate in [paragraph (a)](#a) of this section. At present the fraction is 5/9 of 1% (or 1/180). If the employee retires before age 62 with at least 30 years of service, the employee is deemed age 62 for age reduction purposes and a 20% reduction is applied. This reduction remains in effect until the first full month throughout which the employee is age 62, at which time the tier I is recomputed to reflect interim increases in the national wage levels and the age reduction factor is recomputed, if necessary, in accordance with this paragraph.
- (c) The amount from paragraph [(a)](#a) or [(b)](#b) of this section is reduced by the amount of any monthly benefit payable to the employee under title II of the Social Security Act, including any social security benefit payable under a totalization agreement between the Social Security Administration and another country. The social security benefit used to reduce the tier I may be an age or disability benefit on the employee's own earnings record, a benefit based on the earnings record of another person, or the total of two types of benefits. The amount of the social security benefit used to reduce tier I is before any deduction for excess earnings. It is after any reduction for other benefits based on disability. The result cannot be less than zero.
- (d) The tier I is subject to automatic annual increases as provided for in [subpart E of part 225](/cfr/20/part225-subpartE.md) of this chapter.

## Notes

### Authority

Authority: 45 U.S.C. 231f(b)(5).

### Source

Source: 60 FR 22262, May 5, 1995, unless otherwise noted.