U n i t e d S t a t e s G o v e r n m e n t

MEMORANDUM

FORM 0-1151(1-92)

R a i l r o a d R e t i r e m e n t B o a r d 

L-2000-31

TO: Edmund T. Fleming

Chief, Audit & Compliance Section

THROUGH: Peter A. Larson

OCT 1 8 2000

Director of Fiscal Operations

FROM: Steven A. Bar

General Com

SUBJECT: Union Pacific Railroad Corporation

Protection/Guarantee Payments

This is in reply to your memorandum of September 18, 2000, regarding the Union Pacific 

Railroad Corporation’s (UPRC) non-reporting as creditable compensation for 1997 through 1999 

of approximately $1.1 million in protection/guarantee payments.

You request advice as to whether these payments are creditable compensation under the Railroad 

Retirement and Railroad Unemployment Insurance Acts. The UPRC contends that the payments 

are paid pursuant to a non-govemmental supplemental unemployment plan and as such are not 

compensation under those Acts. The UPRC argues that this matter was resolved in 1992 when a 

hearings examiner was appointed to resolve disputed claims of money owed by the Chicago & 

North Western Railroad. You advise that none of the employees who received 

protection/guarantee payments received unemployment insurance during the same year.

Section l(i) of the Railroad Unemployment Insurance Act (RUIA) provides that:

The term “compensation” means any form of money remuneration, including pay for 

time lost but excluding tips, paid for services rendered as an employee to one or more 

employers, or as an employee representative * * *. An employee shall be deemed to be 

paid, “pay for time lost” the amount he is paid by an employer with respect to an 

identifiable period of absence from the active service of the employer, including absence 

on account of a personal injury * * *. '

“Remuneration” is defined in section l(j) of the RUIA as follows:
Edmund T. Fleming

The term “remuneration” means pay for services for hire, including pay for time lost * *

* * The term “remuneration” does not include any money payments received pursuant to 

any nongovernmental plan for unemployment insurance, maternity insurance, or sickness 

insurance.

On June 7,1991, the Board adopted regulations governing nongovernmental plans for 

unemployment or sickness insurance. Section 323.3 of those regulations sets forth criteria which 

a benefit plan must meet in order to constitute such a plan so that payments made thereunder do 

not constitute remuneration. While the UPRC’s plan was not submitted to this office and we 

cannot, therefore, advise whether the plan meets these criteria, it should be noted that sections 

323.5 and 323.6 require that, in order for a plan to constitute a nongovernmental plan for 

unemployment or sickness insurance, that plan must be approved by this agency. In the absence 

of a ruling with respect to UPRC’s plan, the payments thereunder would constitute remuneration 

and compensation.

I can find no basis for UPRC’s contention that this issue was resolved in connection with the 

resolution of the Chicago & North Western Railroad dispute in 1992. There was no report or 

decision issued by the hearings officer in that case, and the RRB did not abandon its position that 

the payments in question were not made pursuant to a non-governmental plan for unemployment 

or sickness insurance.

MCLitt:mcl:ik 

c. 3069-00

H:\MISC\nongovemmental3069.mcl.doc