TN 25 (11-96)
RS 00605.021 Computation of the PIA Under the 1978 NS Method
To compute a PIA, the AIME is split into portions using bend points. Each portion is multiplied by a constant percentage. The bend points are adjusted yearly as average wages rise or decline.
1. Determining the AIME
To determine the AIME:
Determine base years (RS 00605.017).
Select years of highest earnings from the indexed earnings record to be used as computation years (RS 00605.018). These years may contain both indexed and non-indexed earnings. An unindexed year, (one that occurs after the indexing year), can be a high year and, therefore, a computation year.
Add the highest earnings in the computation years for the dividend.
Divide the dividend by the divisor month to determine the AIME.
Round the AIME down to the whole dollar.
2. Determining the AIME PIA
To determine the AIME PIA:
Take the sum of:
90 percent of the AIME through the first bend point (see chart in RS 00605.900 for yearly bend points).
32 percent of the AIME through the second bend point.
15 percent of the AIME in excess of the second bend point.
Round the result to the lower dime. (For benchmark years before 1983, round to the higher dime.) This is the RAW PIA as of January of the eligibility year.
Add applicable COLA's to the RAW PIA beginning with the year of eligibility through the month of entitlement. See RS 00601.120.
RIB with Entitlement After Benchmark Year
Lorraine Staley, dob 9/24/17, filed for and became entitled to RIB in 9/82. Her benchmark year is 1979, the year she attained age 62. There were COL increases each June beginning in 1979. Her 9/82 PIA was computed as follows:
Compute an AIME
Her computation years are 23 (276 divisor months)
A review of her ER after indexing shows that earnings in the 23 highest base years total $188,134.80 so the AIME is:
|$188,314.80 divided by 276 =||$682.30 or|
| ||$682 AIME|
|$682.00 - 180.00|
| ||$ 322.64 or $322.70|
basic AIME PIA
|6/79||$322.70×109.9%||= 354.647 or|
|6/80||$354.70×114.3%||= $405.422 or|
|6/81||$405.50×111.2%||= $450.916 or|
|6/82||$451.00×107.4%||= $484.374 or|
Thus the payment PIA in 9/82 will be $484.30.