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 |
Please share this
information with the appropriate members of your staff who file service and
compensation reporting forms for employees of your organization.
Creditable and Taxable Compensation The 2006 railroad retirement tax
rates and maximum compensation bases are as follows:
Employee Tier 1 |
6.20% |
$94,200 |
Employee Medicare |
1.45% |
No Limit |
Employer Tier 1 |
6.20% |
$94,200 |
Employer Medicare |
1.45% |
No Limit |
Employee Tier 2 |
4.40% |
$69,900 |
Employer Tier 2 |
12.60% |
$69,900 |
Railroad Unemployment |
Variable |
$1,195 per month |
The Tier II tax rates are determined annually from a tax rate schedule
based on an average account benefits ratio reflecting railroad retirement fund
levels. Employer tax rates can range from 8.2 percent to 22.1 percent.
Employee tax rates can range from 0 percent to 4.9 percent.
Experience Rating In October 2005, each employer was sent a notice
of their 2006 Railroad Unemployment Insurance Act (RUIA) contribution rate. If
you have not received your notice, you should contact the Quality Reporting
Service Center.
Retirement and Survivor Benefits Exempt Amounts for Annual Earnings
Test for Less Than Full Retirement Age Annuitants: In 2006, the annual exempt
amount for less than full retirement age annuitants is $12,480. The monthly
exempt amount for the first year of retirement in 2006 is $1,040.
Exempt Amounts for Annual Earnings Test for Full Retirement Age Annuitants:
In 2006, the annual exempt amount for full retirement age annuitants is
$33,240. The monthly exempt amount for the first year in retirement in 2006 is
$2,770.
Cost-of-living Increase: Annuitants will receive a cost-of-living increase
effective December 2005. Tier I will increase by 4.1% and Tier II will
increase by 1.3%. This increase is before adjustment for other benefits.
Unemployment and Sickness Benefits Maximum Daily Benefit Rate: Under
the Railroad Unemployment Insurance Act (RUIA), the maximum daily benefit rate
is equal to 5 percent of the monthly RUIA compensation base, rounded down to the
nearest multiple of $1.00. For days of unemployment and sickness in registration
periods beginning on and after July 1, 2006, the maximum daily rate is $57.00.
The maximum rate for registration periods beginning on or after July 1, 2007, is
$59.00.
Maximum Monthly Compensation Base: The monthly compensation base under the
Railroad Unemployment Insurance Act for calendar year 2006 is $1,195.
Qualifying Base Year Compensation: The amount of base year compensation
required in 2006 to qualify for benefits in the benefit year beginning July 1,
2007, is $2,987.50.
Compensation of $2,987.50 is also the amount of creditable compensation
required to end a voluntary leaving of work disqualification period in months
in calendar year 2006. In addition, remuneration earned in calendar year 2006
from employment covered under the Act cannot be considered subsidiary
remuneration if the employee’s base year earnings are less than $2,987.50.
Maximum Benefits: The monthly amount of base year 2006 compensation that
can be counted in determining the maximum amount of normal benefits payable to
an employee in the benefit year beginning July 1, 2007, is $1,544.
Maximum Monthly Compensation Base and the Earnings Test: For unemployment
registration periods beginning July 1, 2006 and later, no benefits are payable
for which the total amount of an employee’s earnings and other remuneration
from railroad and non-railroad work for days in the period exceeds the monthly
compensation amount of $1,150. |