[Federal Register Volume 63, Number 214 (Thursday, November 5, 1998)]
[Notices]
[Pages 59813-59814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29675]
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RAILROAD RETIREMENT BOARD
1999 Railroad Experience Rating Proclamations, Monthly
Compensation Base and Other Determinations
AGENCY: Railroad Retirement Board.
ACTION: Notice.
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SUMMARY: Pursuant to section 8(c)(2) and section 12(r)(3) of the
Railroad Unemployment Insurance Act (Act) (45 U.S.C. 358(c)(2) and 45
U.S.C. 362(r)(3), respectively), the Board gives notice of the
following:
1. The balance to the credit of the Railroad Unemployment Insurance
(RUI) Account, as of June 30, 1998, is $81,520,684.90;
2. The September 30, 1998, balance of any new loans to the RUI
Account, including accrued interest, is zero;
3. The system compensation base is $2,817,307,517.24 as of June 30,
1998;
4. The cumulative system unallocated charge balance is
($202,216,518.19) as of June 30, 1998;
5. The pooled credit ratio for calendar year 1999 is zero;
6. The pooled charged ratio for calendar year 1999 is zero;
7. The surcharge rate for calendar year 1999 is 1.5 percent;
8. The monthly compensation base under section 1(i) of the Act is
$970 for months in calendar year 1999;
9. The amount described in section 1(k) of the Act as ``2.5 times
the monthly compensation base'' is $2,425 for base year (calendar year)
1999;
10. The amount described in section 2(c) of the Act as ``an amount
that bears the same ratio to $775 as the monthly compensation base for
that year as computed under section 1(i) of this Act bears to $600'' is
$1,253 for months in calendar year 1999;
11. The amount described in section 3 of the Act as ``2.5 times the
monthly compensation base'' is $2,425 for base year (calendar year)
1999;
12. The amount described in section 4(a-2)(i)(A) of the Act as
``2.5 times the monthly compensation base'' is $2,425 with respect to
disqualifications ending in calendar year 1999;
13. The maximum daily benefit rate under section 2(a)(3) of the Act
is $46 with respect to days of unemployment and days of sickness in
registration periods beginning after June 30, 1999.
DATES: The balance in notice (1) and the determinations made in notices
(3) through (7) are based on data as of June 30, 1998. The balance in
notice (2) is based on data as of September 30, 1998. The
determinations made in notices (5) through (7) apply to the
calculation, under section 8(a)(1)(C) of the Act, of employer
contribution rates for 1999. The determinations made in notices (8)
through (12) are effective January 1, 1999. The determination made in
notice (13) is effective for registration periods beginning after June
30, 1999.
ADDRESSES: Secretary to the Board, Railroad Retirement Board, 844 Rush
Street, Chicago, Illinois 60611-2092.
FOR FURTHER INFORMATION CONTACT: Marla L. Huddleston, Bureau of the
Actuary, Railroad Retirement Board, 844 Rush Street, Chicago, Illinois
60611-2092, telephone (312) 751-4779.
SUPPLEMENTARY INFORMATION: The RRB is required by section 8(c)(1) of
the Railroad Unemployment Insurance Act (Act) (45 U.S.C. 358(c)(1)) as
amended by Public Law 100-647, to proclaim by October 15 of each year
certain system-wide factors used in calculating experience-based
employer contribution rates for the following year. The RRB is further
required by section 8(c)(2) of the Act (45 U.S.C. 358(c)(2)) to publish
the amounts so determined and proclaimed. The RRB is required by
section 12(r)(3) of the Act (45 U.S.C. 362(r)(3)) to
[[Page 59814]]
publish by December 11, 1998, the computation of the calendar year 1999
monthly compensation base (section 1(i) of the Act) and amounts
described in sections 1(k), 2(c), 3 and 4(a-2)(i)(A) of the Act which
are related to changes in the monthly compensation base. Also, the RRB
is required to publish, by June 11, 1999, the maximum daily benefit
rate under section 2(a)(3) of the Act for days of unemployment and days
of sickness in registration periods beginning after June 30, 1999.
Surcharge Rate
A surcharge is added in the calculation of each employer's
contribution rate, subject to the applicable maximum rate, for a
calendar year whenever the balance to the credit of the RUI Account on
the preceding June 30 is less than the greater of $100 million or the
amount that bears the same ratio to $100 million as the system
compensation base for that June 30 bears to the system compensation
base as of June 30, 1991. If the RUI Account balance is less than $100
million (as indexed), but at least $50 million (as indexed), the
surcharge will be 1.5 percent. If the RUI Account balance is less than
$50 million (as indexed), but greater than zero, the surcharge will be
2.5 percent. The maximum surcharge of 3.5 percent applies if the RUI
Account balance is less than zero.
The system compensation base as of June 30, 1991 was
$2,799,430,259.23. The system compensation base for June 30, 1998 was
$2,817,307,517.24. The ratio of $2,817,307,517.24 to $2,799,430,259.23
is 1.00638603. Multiplying 1.00638603 by $100 million yields
$100,638,603. Multiplying $50 million by 1.00638603 produces
$50,319,302. The Account balance on June 30, 1998, was $81,520,684.90.
Accordingly, the surcharge rate for calendar year 1999 is 1.5 percent.
Monthly Compensation Base
For years after 1988, section 1(i) of the Act contains a formula
for determining the monthly compensation base. Under the prescribed
formula, the monthly compensation base increases by approximately two-
thirds of the cumulative growth in average national wages since 1984.
The monthly compensation base for months in calendar year 1999 shall be
equal to the greater of (a) $600 or (b) $600 [1 + {(A-37,800)/
56,700}], where A equals the amount of the applicable base
with respect to tier 1 taxes for 1999 under section 3231(e)(2) of the
Internal Revenue Code of 1986. Section 1(i) further provides that if
the amount so determined is not a multiple of $5, it shall be rounded
to the nearest multiple of $5.
The calendar year 1999 tier 1 tax base is $72,600. Subtracting
$37,800 from $72,600 produces $34,800. Dividing $34,800 by $56,700
yields a ratio of 0.61375661. Adding one gives 1.61375661. Multiplying
$600 by the amount 1.61375661 produces the amount of $968.25, which
must then be rounded to $970. Accordingly, the monthly compensation
base is determined to be $970 for months in calendar year 1999.
Amounts Related to Changes in Monthly Compensation Base
For years after 1988, sections 1(k), 2(c), 3 and 4(a-2)(i)(A) of
the Act contain formulas for determining amounts related to the monthly
compensation base.
Under section 1(k), remuneration earned from employment covered
under the Act cannot be considered subsidiary remuneration if the
employee's base year compensation is less than 2.5 times the monthly
compensation base for months in such base year. Multiplying 2.5 by the
calendar year 1999 monthly compensation base of $970 produces $2,425.
Accordingly, the amount determined under section 1(k) is $2,425 for
calendar year 1999.
Under section 2(c), the maximum amount of normal benefits paid for
days of unemployment within a benefit year and the maximum amount of
normal benefits paid for days of sickness within a benefit year shall
not exceed an employee's compensation in the base year. In determining
an employee's base year compensation, any money remuneration in a month
not in excess of an amount that bears the same ratio to $775 as the
monthly compensation base for that year bears to $600 shall be taken
into account. The calendar year 1999 monthly compensation base is $970.
The ratio of $970 to $600 is 1.61666667. Multiplying 1.61666667 by $775
produces $1,253. Accordingly, the amount determined under section 2(c)
is $1,253 for months in calendar year 1999.
Under section 3, an employee shall be a ``qualified employee'' if
his/her base year compensation is not less than 2.5 times the monthly
compensation base for months in such base year. Multiplying 2.5 by the
calendar year 1999 monthly compensation base of $970 produces $2,425.
Accordingly, the amount determined under section 3 is $2,425 for
calendar year 1999.
Under section 4(a-2)(i)(A), an employee who leaves work voluntarily
without good cause is disqualified from receiving unemployment benefits
until he has been paid compensation of not less than 2.5 times the
monthly compensation base for months in the calendar year in which the
disqualification ends. Multiplying 2.5 by the calendar year 1999
monthly compensation base of $970 produces $2,425. Accordingly, the
amount determined under section 4(a-2)(i)(A) is $2,425 for calendar
year 1999.
Maximum Daily Benefit Rate
Section 2(a)(3) contains a formula for determining the maximum
daily benefit rate for registration periods beginning after June 30,
1989, and after each June 30 thereafter. Legislation enacted on October
9, 1996, revised the formula for indexing maximum daily benefit rates.
Under the prescribed formula, the maximum daily benefit rate increases
by approximately two-thirds of the cumulative growth in average
national wages since 1984. The maximum daily benefit rate for
registration periods beginning after June 30, 1999, shall be equal to 5
percent of the monthly compensation base for the base year immediately
preceding the beginning of the benefit year. Section 2(a)(3) further
provides that if the amount so computed is not a multiple of $1, it
shall be rounded down to the nearest multiple of $1.
The calendar year 1998 monthly compensation base is $925.
Multiplying $925 by 0.05 yields $46.25, which must then be rounded down
to $46. Accordingly, the maximum daily benefit rate for days of
unemployment and days of sickness beginning in registration periods
after June 30, 1999, is determined to be $46.
Dated: October 28, 1998.
By Authority of the Board.
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. 98-29675 Filed 11-4-98; 8:45 am]
BILLING CODE 7905-01-P
