TN 24 (09-02)

# RS 00615.101 Reduced RIB

## Policy - Reduced Retirement Benefits

### 1. Amount of RIB Reduction

#### a. First 36 Months

The PIA is reduced by 5/9 of 1% for each of the first 36 months prior to FRA. The total reduction for 36 months is 20%.

#### b. Months in Excess of 36

When there are more than 36 reduction months (RF), the PIA is reduced by 20% (for the first 36 months) plus 5/12 of 1% for each month in excess of 36.

#### c. Reduction Formula

Reduced retirement benefits are computed as follows:

If the total RF is 1 thru 36: | PIA multiplied by (180 minus RF) |

If the total RF is 37 thru 60: | PIA multiplied by (192 minus ARM) |

(ARM = Number of RF in excess of 36.)

Round the result down to the next dime for benefits after 5/82 and up to the next dime for benefits prior to 6/82.

**NOTE**: The basic reduction for RIB is 5/9 of one percent per month. 5/9 of one percent is equal to 1/180. So, by multiplying the PIA by 179/180 we are in effect reducing the PIA by 1/180. Using 178/180 for 2 RF we are reducing the PIA by 2 x 5/9 x .01%. The fraction provides both a simplified method of computing reduced benefits and a more accurate method. The basic reduction for RIB after the first 36 months is 5/12 of one percent. 5/12 of one percent is equal 1/240. When we multiply the PIA by 192/240 we start with a benefit already reduced by 20%. By subtracting 1/240 for each RF after 36 we are therefore reducing the PIA by 20% plus 5/12 of one percent for each of those months.

#### d. Reduction Percentage is Based Only on Number of RF

The reduction for each of the first 36 RF is 5/9 of 1%. The reduction for each month greater than 36 is 5/12 of 1%. The reduction amount is based solely on the number of months involved.

**EXAMPLE:** Benefits for a person with a FRA of 67 who retires at age 62 will be reduced for 60 months of early retirement. At age 67 we give them an ARF that is applicable for 25 months. It is not material when those months actually occurred. After the ARF, a reduction for 35 months applies. The reduction is calculated using 5/9 of 1% for 35 months regardless of when those 35 months occurred.

### 2. Chart - Retirement Benefit Reduction Factors

This chart shows the factors to be used when determining a reduced RIB rate. Multiply the PIA by the fraction shown for the applicable number of RFs. Round the result down to the next dime for benefits after 5/82 and up to the next dime for benefits prior to 6/82. This chart can be used whether a person's FRA is 65 or greater.

RF | Fraction |
---|---|

1 | 179/180 |

2 | 178/180 |

3 | 177/180 |

4 | 176/180 |

5 | 175/180 |

6 | 174/180 |

7 | 173/180 |

8 | 172/180 |

9 | 171/180 |

10 | 170/180 |

11 | 169/180 |

12 | 168/180 |

13 | 167/180 |

14 | 166/180 |

15 | 165/180 |

16 | 164/180 |

17 | 163/180 |

18 | 162/180 |

19 | 161/180 |

20 | 160/180 |

21 | 159/180 |

22 | 158/180 |

23 | 157/180 |

24 | 156/180 |

25 | 155/180 |

26 | 154/180 |

27 | 153/180 |

28 | 152/180 |

29 | 151/180 |

30 | 150/180 |

31 | 149/180 |

32 | 148/180 |

33 | 147/180 |

34 | 146/180 |

35 | 145/180 |

36 | 144/180 |

37 | 191/240 |

38 | 190/240 |

39 | 189/240 |

40 | 188/240 |

41 | 187/240 |

42 | 186/240 |

43 | 185/240 |

44 | 184/240 |

45 | 183/240 |

46 | 182/240 |

47 | 181/240 |

48 | 180/240 |

49 | 179/240 |

50 | 178/240 |

51 | 177/240 |

52 | 176/240 |

53 | 175/240 |

54 | 174/240 |

55 | 173/240 |

56 | 172/240 |

57 | 171/240 |

58 | 170/240 |

59 | 169/240 |

60 | 168/240 |

To Link to this section - Use this URL: http://policy.ssa.gov/poms.nsf/lnx/0300615101 | RS 00615.101 - Reduced RIB - 04/21/2016Batch run: 04/25/2016Rev:04/21/2016 |

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