(b) Private pension reduced for supplemental annuity. If the employer reduces the private pension for the employee's entitlement to the supplemental annuity, the reduced pension amount is subtracted from the supplemental annuity. However, the reduction in the supplemental annuity can be no greater than the difference between the supplemental annuity amount, after any reduction for railroad retirement family maximum, and the amount the private pension is reduced for the supplemental annuity. This guarantees that the sum of the reduced supplemental annuity and the reduced employer pension is not less than the amount of the full employer pension.

Example:The full employer pension is $80. This is reduced by $35 because of the employee's entitlement to a supplemental annuity. The initial supplemental annuity rate is $43. Full employer pension $80 Reduction for supplemental annuity −35 Reduced pension amount 45 Supplemental annuity 43 Reduced pension amount −45 0 Guarantee amount: Supplemental annuity 43 Reduction in private pension −35 8 Supplemental annuity 43 Reduction in private pension −8 Reduced supplemental annuity 35 The reduced supplemental annuity amount is $35. This amount plus the reduced employer pension of $45 equals $80, the full amount of the employer pension.