# 20 CFR 225.34 - How the amount of the DRC is figured.

*Employee attained age 65 before 1982.*The DRC equals one-twelfth of one percent of the PIA times the number of months after 1970 in which the employee is age 65 or older and for which credit is due.

*Employee attains age 65 after 1981 and before 1990.*The DRC equals one-fourth of one percent of the PIA times the number of months in which the employee is age 65 or older and for which credit is due.

Year employee attains age 65 | Delayed retirement credit percent |
---|---|

1990 |
^{7}/_{24} of 1%. |

1991 | Do. |

1992 |
^{1}/_{3} of 1%. |

1993 | Do. |

1994 |
^{3}/_{8} of 1%. |

1995 | Do. |

1996 |
^{5}/_{12} of 1%. |

1997 | Do. |

1998 |
^{11}/_{24} of 1%. |

1999 | Do. |

2000 |
^{1}/_{2} of 1%. |

2001 | Do. |

2002 |
^{13}/_{24} of 1%. |

Year employee attains full retirement age | Delayed retirement credit percent |
---|---|

2003 |
^{13}/_{24} of 1%. |

2004 |
^{7}/_{12} of 1%. |

2005 | Do. |

2006 |
^{5}/_{8} of 1%. |

2007 | Do. |

2008 and later |
^{2}/_{3} of 1%. |

*Example:*Mr. Jones was qualified for a full age and service annuity when he reached age 65 in January 1985, but decided not to apply for an annuity because he was still working. Mr. Jones stopped working on December 31, 1985, and applied for his annuity to begin January 1, 1986. Based on his earnings, his PIA was $350.50. Since Mr. Jones did not receive an annuity for the 12 months from the month in which he became 65 (January 1985) until the month following the month he stopped working (January 1986), he is due credit for each of those 12 months. The total amount of his DRC's is calculated as follows:

Percent | PIA | No. of months | Unrounded result | Total amount of DRC's | ||||
---|---|---|---|---|---|---|---|---|

.25% | X | 350.50 | X | 12 | = | 10.51 | = | $10.50 |

(a) The amount of the DRC depends on -

(1) The year the employee reaches full retirement age; and

(2) The number of months for which the credit is due, as explained in § 225.33.

(b) The percent given in paragraph (b)(1), (2), or (3) of this section is multiplied by the PIA; that product is then multiplied by the number of months for which credit is due and rounded to the next lowest multiple of $0.10, if the answer is not already a multiple of $0.10. The result is the DRC which is added to the PIA.

(1) Employee attained age 65 before 1982. The DRC equals one-twelfth of one percent of the PIA times the number of months after 1970 in which the employee is age 65 or older and for which credit is due.

(2) Employee attains age 65 after 1981 and before 1990. The DRC equals one-fourth of one percent of the PIA times the number of months in which the employee is age 65 or older and for which credit is due.

(3) Employee attains age 65 in 1990 and before 2003.

(i) The rate of the DRC (one-fourth of one percent) is increased by one-twenty-fourth of one percent in each even year through 2002. Therefore, depending on when the employee attains age 65, the DRC percent will be as follows:

Year employee attains age 65 | Delayed retirement credit percent |
---|---|

1990 | 7/24 of 1%. |

1991 | Do. |

1992 | 1/3 of 1%. |

1993 | Do. |

1994 | 3/8 of 1%. |

1995 | Do. |

1996 | 5/12 of 1%. |

1997 | Do. |

1998 | 11/24 of 1%. |

1999 | Do. |

2000 | 1/2 of 1%. |

2001 | Do. |

2002 | 13/24 of 1%. |

(ii) The delayed retirement credit equals the appropriate percent of the PIA times the number of months in which the employee is age 65 or older and for which credit is due.

(4) Employee attains full retirement age in 2003 or later. The rate of the DRC (one-fourth of one percent) is increased by one-twenty-fourth of one percent in each even year through 2008. Therefore, depending on when the employee attains full retirement age, the DRC percent will be as follows:

Year employee attains full retirement age | Delayed retirement credit percent |
---|---|

2003 | 13/24 of 1%. |

2004 | 7/12 of 1%. |

2005 | Do. |

2006 | 5/8 of 1%. |

2007 | Do. |

2008 and later | 2/3 of 1%. |

(c) Example: Mr. Jones was qualified for a full age and service annuity when he reached age 65 in January 1985, but decided not to apply for an annuity because he was still working. Mr. Jones stopped working on December 31, 1985, and applied for his annuity to begin January 1, 1986. Based on his earnings, his PIA was $350.50. Since Mr. Jones did not receive an annuity for the 12 months from the month in which he became 65 (January 1985) until the month following the month he stopped working (January 1986), he is due credit for each of those 12 months. The total amount of his DRC's is calculated as follows:

Percent | PIA | No. of months | Unrounded result | Total amount of DRC's | ||||
---|---|---|---|---|---|---|---|---|

.25% | X | 350.50 | X | 12 | = | 10.51 | = | $10.50 |