FICA Tier 1 benefits are for railroad workers, and are the equivalent of Social Security benefits. They are calculated using a formula similar to Social Security benefits.
Railroad workers don't pay into the same government retirement plan as other workers. Instead, workers and their employers pay taxes on earned wages, and receive benefits that are similar to Social Security. There are two tiers for those benefits: Tier 1 is similar to Social Security, and Tier 2 is more of a private pension program.
Tier 1 contributions are set up like the FICA payment plan, in that the contributions cover disability insurance, health insurance, and old age and survivors insurance. The taxes are based on earnings up to a maximum wage base for that particular year.
The Tier 2 contributions are a contribution to a private pension plan. The wage base is similar to that in Tier 1 payments, except that in Tier 2, the employer pays for a larger portion of the contribution.
The money is still collected by the Internal Revenue Service, but it then goes to a separate division called the Railroad Retirement Board. All of the taxes collected fund an annuity that provides the benefits to the railroad workers when they are eligible to start collecting.