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Code of Federal Regulations Title 20. Employees' Benefits § 20.225.3 PIA computation formulas

Current as of January 02, 2025 | Updated by Findlaw Staff

(a) General. PIA's are generally computed under one of two normal formulas determined by the employee's eligibility year. In addition, there is a special PIA formula, based on an employee's years of coverage, that is used when it produces a PIA that is higher than the PIA computed under the appropriate PIA formula. The two most common PIA formulas are the Average Indexed Monthly Earnings PIA formula and the Average Monthly Earnings PIA formula. The special PIA formula is called the Special Minimum PIA formula.

(b) Average Indexed Monthly Earnings PIA formula. When the employee's eligibility year is after 1978, the Tier I PIA, Overall Minimum PIA, Survivor Tier I PIA, Employee's Retirement Insurance Benefit PIA and Residual Lump–Sum PIA are computed under the Average Indexed Monthly Earnings PIA formula.

(c) Average Monthly Earnings PIA formula. The Average Monthly Earnings PIA formula is used to compute a PIA for one of two reasons:  either the employee's eligibility year is before 1979 or the type of PIA requires that it always be computed under the Average Monthly Earnings PIA formula.

(1) Use of Average Monthly Earnings PIA formula based on the employee's eligibility year. The Average Monthly Earnings PIA formula is used in computing the Tier I PIA, the Overall Minimum PIA, the Employee Fictional Retirement Insurance Benefit PIA and the Residual Lump–Sum PIA when the employee's eligibility year is before 1979.

(2) Types of PIA's always computed using the Average Monthly Earnings PIA formula. The following PIA's used by the Board are determined under the Social Security Act as in effect on December 31, 1974, and are always computed using the Average Monthly Earnings PIA formula.

(i) Combined Earnings Dual Benefit PIA described in § 225.12.

(ii) Social Security Earnings Dual Benefit PIA described in § 225.13.

(iii) Railroad Earnings Dual Benefit PIA described in § 225.14.

(iv) Combined Earnings PIA described in § 225.23.

(v) Social Security Earnings PIA described in § 225.24.

(vi) Railroad Earnings PIA described in § 225.25.

(d) Special Minimum PIA formula. The Special Minimum PIA formula is based on the employee's years of coverage. The Special Minimum PIA formula usually applies when the employee had consistently low earnings during his or her working lifetime. The Special Minimum PIA formula is used when it is higher than the PIA calculated under the applicable Average Indexed Monthly Earnings formula or the Average Monthly Earnings formula.

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Cite this article: FindLaw.com - Code of Federal Regulations Title 20. Employees' Benefits § 20.225.3 PIA computation formulas - last updated January 02, 2025 | https://codes.findlaw.com/cfr/title-20-employees-benefits/cfr-sect-20-225-3/

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