Prepared by:
Quality Reporting Service Center
Railroad Retirement Board
844 North Rush Street
Chicago, Illinois 60611-2092
Phone: |
(312) 751-4992 |
Fax: |
(312) 751-7190 |
E-mail: |
QRSC@rrb.gov |
Enclosed are copies of the redesigned Forms ID-40Q and ID-40R/S, "Quarterly
Notice to Employers - Railroad Unemployment Insurance Act" (RUIA) and "Annual
Notice to Employers - Railroad Unemployment Insurance Act." The previous forms
only provided general benefit information, while the revised notices now provide
you with more information regarding your employer account.
The former quarterly notice only provided employers with limited information on
cumulative benefit balances and contributions. The redesigned Form ID-40Q now
includes a specific breakdown of the amounts of unemployment (UI) and sickness
benefits (SI) that were paid and recovered for the report quarter. The previous
form only provided two cumulative figures. Also, subsidiary employers listed on
page two of Forms ID-40Q may be either active subsidiaries or predecessors of
your company that are no longer active. The employers listed are included in
your employer balances due to former relationships or links to your company
based on the assets they previously owned which are or were under control of
your company. Please note: Only the employer accounts of subsidiaries listed on
the Form ID-40Q covering the quarter ending June 30th of each year are included
in your contribution rate.
The redesigned Form ID-40R/S combines the forms ID-40R with the ID-40S, "Annual
Proclamation - Railroad Unemployment Insurance Act" into one document. The
revised form provides a more detailed breakdown of how your employer
contribution rate under the RUIA is calculated. The redesigned Form ID-40R/S
will be released by October 15, 2004, to convey employers' 2005 contribution
rates.
To assist you in better understanding the attached forms, we are including the
definitions listed below in the order they appear on the forms.
Terms Contained on Upper Portion of Form ID-40Q Gross Sickness Benefit
Charges - Sickness benefits paid by the RRB to employees or former employees of
your company or subsidiaries during the applicable calendar quarter for whom you
were the base year employer.
Sickness Benefit Recovery Credits - Sickness benefit recoveries made by the
RRB from any employees or former employees of your company or subsidiaries
during the applicable calendar quarter for whom you were previously charged the
benefits.
Net Sickness Benefit Charges - The net total calculated for the applicable
quarter when subtracting the Sickness Benefit Recovery Credits from the Gross
Sickness Benefit Charges. The total can be positive or negative.
Gross Unemployment Benefit Charges - Unemployment benefits paid by RRB to
employees or former employees of your company or subsidiaries during the
applicable calendar quarter for whom you were the base year employer.
Unemployment Benefit Recovery Credits - Unemployment benefit recoveries made
by RRB from any employees or former employees of your company or subsidiaries
during the applicable calendar quarter for whom you were previously charged the
benefits.
Net Unemployment Benefit Charges - The net total calculated for the
applicable quarter when subtracting the Unemployment Benefit Recovery Credits
from the Gross Unemployment Benefit Charges. The total can be positive or
negative.
Net Unemployment and Sickness Benefit Charges for this Quarter - The net
total calculated for the applicable quarter when adding the Net Sickness Benefit
Charges with the Net Unemployment Benefit Charges. The total can be positive or
negative.:
Terms Contained on Lower Portion of Form ID-40Q Cumulative Total
Contributions - The total amount of contributions (RUIA taxes) paid by your
company during the period January 1, 1990 through the present calendar quarter.
Cumulative Administrative Contributions - The total amount of Administrative
Fund Charges paid by your company during the period January 1, 1990 through the
present calendar quarter. Administrative Fund Charge - A charge for the
Railroad Retirement Board to administer the RUIA program. The charge is a
constant 0.65% that all employers pay. The amount is added to the Basic
Contribution Rate. Cumulative Repayment Taxes - During the period 1986-1993 a
repayment tax was added to the contribution rates of all employers deemed
covered at the time. This repayment tax was used to repay funds borrowed from
the Railroad Retirement Account and used to pay UI and SI benefits under the
RUIA. If your company paid any of these taxes, the total amount of the repayment
taxes will be reflected in this amount. Cumulative Pooled Credits - The total
amount of pooled credits allocated to your company during the period January 1,
1990 through the present calendar quarter. Net Cumulative Contribution
Balance - The Cumulative Contribution Balance minus the Cumulative
Administrative Fund plus the Cumulative Repayment Tax plus the Cumulative Pooled
Credits. Used to calculate the Reserve Balance. Cumulative Net Benefits
Charge - The gross amount of UI and SI benefits paid by the RRB to employees or
former employees of your company or subsidiaries during the period January 1,
1990 through the present calendar quarter MINUS the amount of UI and SI benefits
recovered during the same period. Cumulative Unallocated Charge - Each
employer is responsible for a proportionate share of the system unallocated
charge balance. The system unallocated charges includes benefits paid due to a
strike, benefit balance of defunct employers, benefit payments which exceed the
compensation earned by the employee in the base year and other charges.
Offsetting credits include the contribution balance of defunct employers,
transfers from the Administrative Fund, interest income and other credits.
Historically, this figure has been a negative number which results a credit for
employers. Cumulative Benefit Balance - The Cumulative Net Benefits Charge
plus the Cumulative Unallocated Charge. Used to calculate the Reserve Balance.
Terms Contained on Upper Portion of Page 1: Form ID-40R/S Net Benefit
Charge for 12 Calendar Quarters - Also called "3-Year Net Benefits Charged"
amount. The amount is the gross amount of UI and SI paid minus the amount of UI
and SI benefits recovered during the 12 quarters ending June 30th. Used to
calculate the Benefit Ratio.
3-Year Compensation Base - The sum of the latest three, one-year compensation
bases ending June 30th. Used to calculate the Benefit Ratio.
Benefit Ratio - The ratio of chargeable benefits to creditable RUIA
compensation for the three-year period ending June 30th. It is calculated by
dividing the 3-Year Net Benefits Charged amount by the 3-Year Compensation Base.
This amount may be either positive or negative.
Net Cumulative Contribution Balance - See definition under "Terms Contained
on Lower Portion of Form ID-40Q".
Cumulative Benefit Balance - See definition under "Terms Contained on Lower
Portion of Form ID-40Q".
Reserve Balance - The Net Cumulative Contribution Balance less the Cumulative
Benefit Balance. This amount may be either positive or negative. Used to
calculate the Reserve Ratio.
1-Year Compensation Base - The compensation reported on Form DC-1,
"Employer's Quarterly Report of Contributions", for the four calendar quarters
ending June 30th. Used to calculate the Reserve Ratio.
Reserve Ratio - The ratio of the Reserve Balance to the 1-Year Compensation
Base. It is calculated by dividing the Reserve Balance by the 1-Year
Compensation Base. This amount may be either positive or negative.
Terms Contained on Lower Portion of Page 1: Form ID-40R/S Basic
Contribution Rate - The Benefit Ratio minus the Reserve Ratio minus the Pooled
Credit Ratio. The result is then multiplied by 100 and rounded to four decimal
places.
Pooled Credit Ratio - When the RUI Account balance is above the indexed $250
million amount, the excess is "refunded" to the employers in the form of a rate
reduction. The pooled credit ratio is any excess over the indexed $250 million
amount divided by the system compensation base. Each employer's tax rate, prior
to application of individual maximum and minimum limitations, is reduced by that
same amount.
Basic Contribution Rate Adjusted for Minimum - If the Basic Contribution Rate
is equal to or higher than zero, the adjusted rate equals the Basic Contribution
Rate. However, if the Basic Contribution Rate is less than zero the adjusted
rate is increased to zero.
Administrative Fund Charge - See definition above for "Terms Contained on
Lower Portion of Page 1: Form ID-40Q.
Surcharge Rate - A surcharge is added to each employer's basic contribution
rate whenever the balance to the RUI Account falls below a certain indexed
amount. The surcharge can be 1.5%, 2.5% or 3.5% depending on the balance of the
RUI Account.
Pooled Charge Ratio - Also called risk-shared benefit component. Each
employer is responsible for a proportionate share of the pooled charge. The
pooled charge covers benefits that are chargeable to an employer but that cannot
be collected because of a maximum contribution rate.
Computed Contribution Rate - Equals the total of the Basic Contribution Rate
Adjusted for Minimum, Administrative Fund Charge, Surcharge Rate and Pooled
Charge Ratio.
Contribution Rate Adjusted for Maximum OR New Employer Calculations - If the
Computed Contribution Rate is equal to or lower than the maximum contribution
rate (usually 12.0%), the adjusted rate equals the Computed Contribution Rate.
However, if the Basic Contribution Rate is more than the maximum rate, the
adjusted rate is decreased to the maximum rate.
If a company is deemed a "new employer" by the RRB, then they are given a
"new employer rate". If a new employer rate is applicable, it will be reflected
in this position.
Terms Contained on Upper Portion of Page 2: Form ID-40R/S
RUI Account Balance - The balance of the Railroad Unemployment Insurance
account as of June 30 of the applicable year.
System Compensation Base - The total amount of all employer 1-year
compensation bases for the benefit charge year.
Cumulative System Unallocated Charge Balance - See the definition "Cumulative
System Unallocated Charge Balance" above under the heading "Terms Contained on
Lower Portion of Form ID-40Q".
When should employers contact the RRB? Railroad employers should
contact the RRB's Sickness and Unemployment Benefits Section (SUBS) prior to
payment of either pay for time lost in the form of wages or guarantee pay, or
the payment of a personal injury settlement. SUBS will provide information about
the amount of benefits to be deducted from the award for reimbursement under
section 2(f) or settlement under section 12(o).
In order to ensure that your remittances are credited properly and timely,
you must notify the RRB's Sickness and Unemployment Benefits Section before you
send any payment. The employee's RUIA record must be adjusted before an account
receivable and billing document (Form G-145) can be created. A remittance cannot
be credited unless the RUIA record, maintained by SUBS, has been adjusted.
Terms Contained on Lower Portion of Page 2: Form ID-40R/S System
Pooled Credit Ratio - See definition above for "Terms Contained on Lower Portion
of Page 1: Form ID-40R/S.
System Pooled Charge Ratio - See definition above for "Terms Contained on
Lower Portion of Page 1: Form ID-40R/S.
Administrative Fund Charge - See definition above for "Terms Contained on
Lower Portion of Page 1: Form ID-40R/S.
System Surcharge Rate - See definition above for "Terms Contained on Lower
Portion of Page 1: Form ID-40R/S.
Maximum Contribution Rate - Indicates the maximum contribution rate for the
applicable year. Usually this rate is 12.0%, except in a rare case where the
System Surcharge Rate is 3.5% for the year. The maximum contribution rate in
those years would be 12.5%.
Contribution Rate for New Employers - A general rate calculated and to be
used by companies deemed "new employers" by the RRB. These employers have no
employer records of their own and therefore contribution rates cannot be
calculated for them. A New Employer Rate is calculated each year and is based
upon the average contribution rate of all covered employers under the RUIA
during the previous three calendar years.
If you have any questions regarding the redesigned Forms ID-40Q and ID-40R/S,
please call the Quality Reporting Service Center at the number listed on the top
of this program letter.
Example of Form ID-40Q, "Quarterly Notice
to Employers - Railroad Unemployment Insurance Act" in PDF format
Example of Form ID-40R/S, "Annual Notice
to Employers - Railroad Unemployment Insurance Act" in PDF format |