Prepared by:

Purpose

The purpose of this letter is to provide you with the attached new file layout for Form BA-3, "Annual Report of Creditable Service and Compensation." This letter is for information and planning purposes. It is being sent to all covered employers, including those currently filing on paper, because the paper form will also be revised to reflect these changes.  

The reason that changes in the annual report are needed

Changes in the annual reports are required to accommodate an increase in the Tier I earnings base and in the maximum daily pay rate. The Tier I earnings base could exceed $99,999.99 as early as 2006 and likely in 2007. Similarly, the daily rate of pay to qualify for maximum benefits could exceed $99.99 as early as 2006 and likely in 2007. Thus, those field sizes need to be increased for employers who file on magnetic media. Because of the lead time needed to make an industry-wide change, we must prepare now for a potential change in reporting 2006 earnings. Attachment 1 is the new BA-3 annual report file layout. Attachment 2 is instructions for reporting the daily pay rate.

We are expanding the Tier II compensation field at the same time as the Tier I compensation field in preparation for future increases in the Tier II earnings base. Form BA-4, Report of Creditable Compensation Adjustments, will also be revised to correspond to changes made on Form BA-3.

Effective Date

Do not file BA-3 using the new file layout until advised by RRB. We anticipate that this new layout will first be used for 2006 compensation which is reported in 2007. We are sending this information in 2004 because several employers requested the information two years prior to the effective date so that they have sufficient time to make the needed program changes. At a later date, we will issue an implementation schedule including information for those who may wish to send the RRB a test file.

If you file your annual report on paper, we expect that the revised BA-3 paper form will be available in 2006 for filing in 2007. We also expect to have an Internet BA-3 and revised Internet applications of Forms BA-4 and BA-6a available for use at that time or sooner.

When the RRB notifies you to use the new file layouts, compliance will be mandatory. Reports in the old format cannot be processed correctly once the new format is in place. Employers who report only sick pay compensation will need to convert from filing Form BA-10 to filing Form BA-3 by the due date. Although using the new file layout will be mandatory, the RRB is implementing certain enhancements which are optional. The optional enhancements are clearly identified below as optional.

Changes in addition to the expanded field sizes

Because we are already making needed changes in the annual report to accommodate increased field sizes, we are taking advantage of this opportunity to also include some enhancements. The enhancements were requested by employers over the years but had not previously been adopted due to the amount of work for both RRB and employers to make the program changes. The enhancements are described below.

Name and Year fields are being expanded

We are expanding the size of three fields as follows:

• Surname is expanded to 20 characters;
• First (initial) Name is expanded to 15 characters;
• Year is expanded to 4 characters.

The surname was initially limited to 5 positions because punch card reports, which were common at the time, were limited to a total of 80 positions per record. The expanded name fields will improve the RRB's validation of the employees' identifying information.

Sick Pay and Miscellaneous Compensation included on BA-3

In the past, employers who filed on magnetic tape or cartridges could report sick pay and miscellaneous compensation on the same report as their regular earnings, a BA-3d. (Note that the 'a' and 'd' designations on the BA-3 form are no longer needed as we now have only one report which includes sick pay and miscellaneous compensation.) Now all employers will report sick pay on their annual report including employers filing on the Internet and paper forms. Since sick pay and miscellaneous compensation will be reported on Form BA-3, Form BA-10, Report of Miscellaneous Compensation and Sick Pay, will be eliminated. Revised Reporting Instructions will be issued for Sick Pay Employers. See Attachment 3 for more information on reporting sick pay and miscellaneous compensation on Form BA-3, Annual Report of Creditable Compensation.

Form GL-99, Employer's Deemed Service Month Questionnaire (optional)

We are investigating means whereby employers can report employment relation information on their annual report, rather than replying to Form GL-99, if the employer chooses to do so. The details of the process are not yet final. Within the next few months, the RRB will issue a Program Letter explaining how to report employment relation on the revised BA-3 annual report.

Form UI-41a, Supplemental Report of Compensation (optional)

We have added a new field whereby employers can report RUIA compensation at the higher monthly maximum which is needed to determine the maximum amount of benefits payable. Completing this new RUIA field does not mean that employers are no longer required to provide the RUIA information that they now provide. The RUIA compensation currently reported is needed to determine an employee's eligibility for benefits. This new, second RUIA compensation field is provided for those employers who choose to provide this information on their annual report rather than replying to Forms UI-41a throughout the year. RUIA I and RUIA II are determined in the same manner only using different monthly maximums. This is similar to Tier I and Tier II which are determined in the same manner only using different annual maximums. See Attachment 4 for more information on the new RUIA field.

Address information included on BA-3 (optional)

We have extended the BA-3 file layout so that address information could be included in the same report as earnings information. Including addresses on the BA-3 report is optional but reporting addresses for new hires is still required. Including addresses on the BA-3 report is available only on the file layout. Employers who report on paper will still report addresses on paper Form BA-6a. Employers who report on the Internet will also be filing a separate Form BA-6a but the process is being designed to provide employers similar efficiencies to the combined BA-3 file layout. The field sizes for the address report are being expanded and a new date field is being added. See below.

Form BA-6a, BA-6 Address Report, is being revised

The paper Form BA-6a and the BA-6a tape layout are being expanded to include a new date field. The new field is the effective date for the address. The date field will allow the RRB to accept changes of addresses, if the employer chooses to report changes. Employers are required to report addresses only for new hires, but several employers have asked the RRB to also accept a report of address changes. With the addition of the new field for effective date, the RRB can accept address changes. The RRB will use the effective-date to evaluate the address change submitted by the employer against changes-of-address received from other sources such as the US Postal Service and the employee. The new file layout for Form BA-6a, BA-6 Address Report, is in Attachment 5. The RRB will issue a separate Program Letter with more detailed information about the changes in address reporting.

Optional changes are intended to reduce the reporting burden 

The enhancements marked as "optional" are just that. You can leave the optional fields blank. At this time, these enhancements are an individual choice but we encourage you to take advantage of these options. Each of these enhancements is provided because employers indicated that including this information on the annual report would reduce their overall reporting burden compared to providing the information in response to individual requests. The enhancements will also help the RRB in that the data will be received more timely and with less cost.

Have Questions? Want Training?

There is a lot of information in this letter to consider and decisions you will need to make. If you have questions about this letter, please contact QRSC at (312) 751-4992 or Carol Arnold at (312) 751-4833. If you would like a more in-depth analysis of these changes, we will try to accommodate you as best we can. We will provide training on this topic at any upcoming training seminars.

Attachments

Attachment 1 provides the new BA-3 file layout.
Attachment 2 explains how to report the new daily pay rate.
Attachment 3 explains the inclusion of sick pay and miscellaneous pay on the BA-3.
Attachment 4 explains how to report the new RUIA compensation.
Attachment 5 provides the new BA-6a file layout.