01-11285. Proposed Collection; Comment Request

SUMMARY:

In accordance with requirement of section 3506 (c)(2)(A) of the Paperwork Reduction Act of 1995 which provides opportunity for public comment on new or revised data collections, the Railroad Retirement Board (RRB) will publish periodic summaries of proposed data collections.

Comments are invited on: (a) Whether the proposed information collection is necessary for the proper performance of the functions of the agency, including whether the information has practical utility; (b) the accuracy of the RRB's estimate of the burden of the collection of the information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden related to the collection of information on respondents, including the use of automated collection techniques or other forms of information technology.

Title and Purpose of Information Collection: Verification of Supplemental Annuity.

Under Section 2(b) of the Railroad Retirement Act (RRA), the Railroad Retirement Board (RRB) pays supplemental annuities to qualified RRB employee annuitants. A supplemental annuity, which is computed according to section 3(e) of the RRA, can be paid at age 60 if the employee has at least 30 years of creditable railroad service or at age 65 if the employee had 25-29 years of railroad service. In addition to 25 years of service, a “current connection” with the railroad industry is required. Eligibility is further limited to employees who had at least one month of rail service before October 1981 and were awarded regular annuities after June 1966. Further, if an employee's 65th birthday was prior to September 2, 1981, he or she must not have worked in rail service after certain closing dates (generally the last day of the month following the month in which age 65 is attained).

The supplemental annuities paid by the RRB are financed entirely by the railroad employers under 26 USC of 3221 of the Internal Revenue Code. Under 26 USC 3221(c) every employer must pay a “work hour” tax at such a rate as to make available certain funds for the RRB to pay supplemental annuities at the level provided under section 3(e) of the RRA, unless the exception in 26 USC 3221(d) applies.

Also, under 26 U.S.C. 3221(c) a Supplemental Annuity tax credit is due to the railroad for any month for which an employee's RRB Supplemental Annuity is reduced under Section 2(h)(2) of the RRA for an employer private pension approved by the RRB's Bureau of Law, when either the employer pension was not established pursuant to a collective bargaining agreement; or, if the employer pension was established pursuant to a supplemental annuity tax credit allowed is equal (dollar for dollar) to the amount of the reduction in the employee's supplemental annuity for the private pension.

Section 26 USC 3221(d) of the Internal Revenue Code exempts certain employers from the “work hour tax” when the private pension plan, approved by the RRB's Bureau of Law, that was established pursuant to a collective bargaining (union) agreement and the employee was a member of the collective bargaining unit. Instead a supplemental annuity tax liability is billed to the employer as a “special supplemental tax” under any month for which the employee is paid a RRB supplemental annuity. The “special supplemental tax” is equal to the amount of the supplemental annuity being paid, plus a percentage added to reimburse the RRB for administrative cost.

The RRB currently requires the following information from railroad employers to calculate supplemental annuities. (a) The current status of railroad employer pension plans and whether such an employer pension plan causes a reduction to the supplemental annuity; (b) the amount of the employer private pension being paid to the employee; (c) whether or not the railroad employer pension is based on a collective bargaining agreement, (d) whether or not the employee made contributions to the pension; and (e) whether the employer pension plan continues when the employer status under the RRA changes. The requirements for eligibility to a supplemental annuity and a description of an employer pension are prescribed in 20 CFR 216.40-216.42. The computation of the supplemental annuity is prescribed in 20 CFR 227. Evidence requirements for a deemed current connection for a supplemental annuity are prescribed in 20 CFR 216.15.

The RRB currently utilizes Form(s) G-88p (Employer's Supplemental Pension Report), G-88r (Request for Information About New or Revised Pension Plan), and G-88r.1 (Request for Additional Information about Employer Pension Plan in Case of Change of Employer Status or Termination of Pension Plan), to obtain the necessary information from railroad employers. (OMB approved 3220-0089).

In order to ensure that the supplemental annuity is correctly adjusted and the supplemental annuity tax credits or supplemental annuity tax liabilities are correct, the RRB proposes the implementation of a new information collection consisting of two new forms, Form G-88p.1, Request for Verification of Employer Pension Information, and Form G-88p.2, Verification of Employer Collective Bargaining Pension Information.

The completion time for proposed Form G-88p.1 and G-88p.2 is estimated at between 10 to 120 minutes. The RRB estimates that about 75 G-88p.1's and 15 G-88p.2's will be completed annually. One response is requested of each respondent. Completion is mandatory.

FOR FURTHER INFORMATION CONTACT:

To request more information or to obtain a copy of the information collection justification, forms, and/or supporting material, please call the RRB Clearance Officer at [phone]. Comments regarding the information collection should be addressed to Ronald J. Hodapp. Railroad Retirement Board, 844 N. Rush Street, Chicago, Illinois 60611-2092. Written comments should be received within 60 days of this notice.

Chuck Mierzwa,

Clearance Officer.