§231e Lump sum payments

Summary

When annuity money was due to someone but not paid because they died, the law tells who gets it next. First it must go to the person the Board finds was the dead person's spouse, if that spouse was living with them when they died and is still alive to get the money. If there is no such spouse, the money goes to people who paid the funeral costs, up to what they paid and only if they were not already paid back. If no one fits those rules, or if money remains, it goes to the children, grandchildren, parents, or brothers and sisters like a lump-sum payment. If the unpaid annuity belonged to a spouse or divorced wife, it goes back to the worker who earned it, or else follows the same order above. Claims for unpaid annuities must be filed within two years after the death. If no one can be found to take the money, it goes to the Railroad Retirement Account. Rules about who was “living with” the worker and who counts as spouse, child, parent, grandchild, brother, or sister follow old Social Security and state intestacy rules. The law also sets several lump-sum payments with exact rules and formulas. If a worker had ten years of service before January 1, 1975 and was connected to the railroad when they died, a lump sum is computed as if they died on January 1, 1975 and paid under earlier law; no lump sum is paid if a surviving divorced wife would have been entitled to an annuity for the month of death. If the worker did not have ten years before 1975 but did have ten years (or five or more years all after December 31, 1995) when they died, and no widow, divorced wife, widower, child, or parent would be entitled to an annuity for the month of death, a lump sum like the Social Security death payment is made; a later adjustment can be made within one year if survivors’ annuities fall short. If no benefits now or later will be payable, a lump sum is paid to a person named by the worker or, if none, in this order: spouse living with the worker, then children, then grandchildren, then parents, then brothers and sisters, or finally the estate. That lump sum is calculated by adding specific percentage rates of the worker’s compensation for set year ranges (for example 4% for 1937–1946; 7% for 1947–1958; 7.5% for 1959–1961; 8% for 1962–1965) plus employee taxes paid after December 31, 1965 and before January 1, 1975 (with certain exclusions and a half‑percent add), then subtracting all benefits already paid to the worker or others because of the worker. Monthly compensation caps apply: $300 for months before July 1, 1954; $350 for months after June 30, 1954 and before June 1, 1959; $400 for months after May 31, 1959 and before November 1, 1963; $450 for months after October 31, 1963 and before October 1, 1965; and for months after September 30, 1965, either $450 or one‑twelfth of the current maximum annual taxable wages under the tax code, whichever is greater. A separate lump sum at retirement for workers with ten years (but who do not meet other special rules) is calculated by applying these year-by-year percentage rates to “combined earnings” over 1951–1974 using these exact percentages and dollar thresholds (for example 1.5% over $3,600 for years after 1950 and before 1954, 2% over $4,200 for years after 1953 and before 1957, … 4.95% over $13,200 for 1974). Finally, if a worker got separation or severance pay on or after January 1, 1985 and should have had extra months of service credited but did not, a lump sum equals the compensation for those extra months multiplied by the tax rate(s) under the tax code section that imposes the Railroad Retirement employee tax.