82 FR 57789 - 2018 Railroad Experience Rating Proclamations, Monthly Compensation Base and Other Determinations

RAILROAD RETIREMENT BOARD

Federal Register Volume 82, Issue 234 (December 7, 2017)

As required by the Railroad Unemployment Insurance Act (Act), the Railroad Retirement Board (RRB) hereby publishes its notice for calendar year 2018 of account balances, factors used in calculating experience-based employer contribution rates, computation of amounts related to the monthly compensation base, and the maximum daily benefit rate for days of unemployment or sickness.

[Federal Register Volume 82, Number 234 (Thursday, December 7, 2017)]
[Notices]
[Pages 57789-57790]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26430]


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RAILROAD RETIREMENT BOARD


2018 Railroad Experience Rating Proclamations, Monthly 
Compensation Base and Other Determinations

AGENCY: Railroad Retirement Board.

ACTION: Notice.

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SUMMARY: As required by the Railroad Unemployment Insurance Act (Act), 
the Railroad Retirement Board (RRB) hereby publishes its notice for 
calendar year 2018 of account balances, factors used in calculating 
experience-based employer contribution rates, computation of amounts 
related to the monthly compensation base, and the maximum daily benefit 
rate for days of unemployment or sickness.

DATES: The balance in notice (1) and the determinations made in notices 
(3) through (7) are based on data as of June 30, 2017. The balance in 
notice (2) is based on data as of September 30, 2017. 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 2018. The determinations made in notices (8) 
through (11) are effective January 1, 2018. The determination made in 
notice (12) is effective for registration periods beginning after June 
30, 2018.

ADDRESSES: Secretary to the Board, Railroad Retirement Board, 844 Rush 
Street, Chicago, Illinois 60611-1275.

FOR FURTHER INFORMATION CONTACT: Michael J. Rizzo, Bureau of the 
Actuary and Research, Railroad Retirement Board, 844 Rush Street, 
Chicago, Illinois 60611-1275, telephone (312) 751-4771.

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 publish by 
December 11, 2017, the computation of the calendar year 2018 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, 2018, 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, 2018. 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, 2017, is $97,732,177.41;
    2. The September 30, 2017, balance of any new loans to the RUI 
Account, including accrued interest, is zero;
    3. The system compensation base is $4,042,278,849.27 as of June 30, 
2017;
    4. The cumulative system unallocated charge balance is 
($421,642,171.99) as of June 30, 2017;
    5. The pooled credit ratio for calendar year 2018 is zero;
    6. The pooled charged ratio for calendar year 2018 is zero;
    7. The surcharge rate for calendar year 2018 is 1.5 percent;
    8. The monthly compensation base under section 1(i) of the Act is 
$1,560 for months in calendar year 2018;
    9. The amount described in sections 1(k) and 3 of the Act as ``2.5 
times the monthly compensation base'' is $3,900.00 for base year 
(calendar year) 2018;
    10. The amount described in section 4(a-2)(i)(A) of the Act as 
``2.5 times the monthly compensation base'' is $3,900.00 with respect 
to disqualifications ending in calendar year 2018;
    11. 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 
$2,015 for months in calendar year 2018;
    12. The maximum daily benefit rate under section 2(a)(3) of the Act 
is $77 with respect to days of unemployment and days of sickness in 
registration periods beginning after June 30, 2018.

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 ratio of the June 30, 2017 system compensation base of 
$4,042,278,849.27 to the June 30, 1991 system compensation base of 
$2,763,287,237.04 is 1.46285149. Multiplying 1.46285149 by $100 million 
yields $146,285,149.00. Multiplying $50 million by 1.46285149 produces 
$73,142,574.50. The Account balance on June 30, 2017, was 
$97,732,177.41. Accordingly, the surcharge rate for calendar year 2018 
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 2018 shall be 
equal to the greater of (a) $600 or (b) $600 [1 + {(A-37,800)/
56,700{time} ], where A equals

[[Page 57790]]

the amount of the applicable base with respect to tier 1 taxes for 2018 
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.
    Using the calendar year 2018 tier 1 tax base of $128,400 for A 
above produces the amount of $1,558.73, which must then be rounded to 
$1,560. Accordingly, the monthly compensation base is determined to be 
$1,560 for months in calendar year 2018.

Amounts Related to Changes in Monthly Compensation Base

    For years after 1988, sections 1(k), 3, 4(a-2)(i)(A) and 2(c) 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. 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. 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 2018 monthly compensation base 
of $1,560 produces $3,900.00. Accordingly, the amount determined under 
sections 1(k), 3 and 4(a-2)(i)(A) is $3,900.00 for calendar year 2018.
    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 2018 monthly compensation base is 
$1,560. The ratio of $1,560 to $600 is 2.60000000. Multiplying 
2.60000000 by $775 produces $2,015. Accordingly, the amount determined 
under section 2(c) is $2,015 for months in calendar year 2018.

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, 2018, 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 2017 monthly compensation base is $1,545. 
Multiplying $1,545 by 0.05 yields $77.25. Accordingly, the maximum 
daily benefit rate for days of unemployment and days of sickness 
beginning in registration periods after June 30, 2018, is determined to 
be $77.

    By Authority of the Board.
Martha P. Rico,
Secretary to the Board.
[FR Doc. 2017-26430 Filed 12-6-17; 8:45 am]
 BILLING CODE 7905-01-P