[Federal Register Volume 62, Number 222 (Tuesday, November 18, 1997)]
[Notices]
[Pages 61558-61559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30168]


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RAILROAD RETIREMENT BOARD


1998 Railroad Experience Rating Proclamations, Monthly 
Compensation Base and Other Determinations

AGENCY: Railroad Retirement Board.

ACTION: Notice.

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SUMMARY: 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, 1997, is $83,062,894.58;
    2. The September 30, 1997, balance of any new loans to the RUI 
Account, including accrued interest, is zero;
    3. The system compensation base is $2,754,953,781.58 as of June 30, 
1997;
    4. The cumulative system unallocated charge balance is 
($194,812,974.38) as of June 30, 1997;
    5. The pooled credit ratio for calendar year 1998 is zero;
    6. The pooled charged ratio for calendar year 1998 is zero;
    7. The surcharge rate for calendar year 1998 is 1.5 percent;
    8. The monthly compensation base under section 1(i) of the Act is 
$925 for months in calendar year 1998;
    9. The amount described in section 1(k) of the Act as ``2.5 times 
the monthly compensation base'' is $2,312.50 for base year (calendar 
year) 1998;
    10. 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 
$1,195 for months in calendar year 1998;
    11. The amount described in section 3 of the Act as ``2.5 times the 
monthly compensation base'' is $2,312.50 for base year (calendar year) 
1998;
    12. The amount described in section 4(a-2)(i)(A) of the Act as 
``2.5 times the monthly compensation base'' is $2,312.50 with respect 
to disqualifications ending in calendar year 1998;
    13. The maximum daily benefit rate under section 2(a)(3) of the Act 
is $44 with respect to days of unemployment and days of sickness in 
registration periods beginning after June 30, 1998.

DATES: The balance in notice (1) and the determinations made in notices 
(3) through (7) are based on data as of June 30, 1997. The balance in 
notice (2) is based on data as of September 30, 1997. 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 1998. The determinations made in notices (8) 
through (12) are effective January 1, 1998. The determination made in 
notice (13) is effective for registration periods beginning after June 
30, 1998.

ADDRESSES: Secretary to the Board, Railroad Retirement Board, 844 Rush 
Street, Chicago, Illinois 60611-2092.

FOR FURTHER INFORMATION CONTACT: Marla L. Huddleston, Bureau of the 
Actuary, Railroad Retirement Board, 844 Rush Street, Chicago, Illinois 
60611-2092, telephone (312) 751-4779.

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 Pub. L. 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, 1997, the computation of the calendar year 1998 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, 1998, 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, 1998.

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 is 
less than $100 million on the preceding June 30. If the RUI Account 
balance is less than $100 million, but at least $50 million, the 
surcharge will be 1.5 percent. If the RUI Account balance is less than 
$50 million, 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 Account balance on June 30, 1997, was $83,062,894.58. 
Accordingly, the surcharge rate for calendar year 1998 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 1998 shall be 
equal to the greater of (a) $600 or (b) $600 [1 + {(A -37,800)/
56,700}], where A equals the amount of the applicable base with respect 
to tier 1 taxes for 1998 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.
    The calendar year 1998 tier 1 tax base is $68,400. Subtracting 
$37,800 from $68,400 produces $30,600. Dividing $30,600 by $56,700 
yields a ratio of 0.53968254. Adding one gives 1.53968254. Multiplying 
$600 by the amount 1.53968254 produces the amount of $923.81, which 
must then be rounded to $925. Accordingly, the monthly compensation 
base is determined to be $925 for months in calendar year 1998.

Amounts Related to Changes in Monthly Compensation Base

    For years after 1988, sections 1(k), 2(c), 3 and 4(a-2)(i)(A) 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. Multiplying 2.5 by the 
calendar year 1998 monthly compensation base of $925 produces 
$2,312.50. Accordingly, the amount determined under section 1(k) is 
$2,312.50 for calendar year 1998.
    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

[[Page 61559]]

to $775 as the monthly compensation base for that year bears to $600 
shall be taken into account.The calendar year 1998 monthly compensation 
base is $925. The ratio of $925 to $600 is 1.54166667. Multiplying 
1.54166667 by $775 produces $1,195. Accordingly, the amount determined 
under section 2(c) is $1,195 for months in calendar year 1998.
    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. Multiplying 2.5 by the 
calendar year 1998 monthly compensation base of $925 produces 
$2,312.50. Accordingly, the amount determined under section 3 is 
$2,312.50 for calendar year 1998.
    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 1998 
monthly compensation base of $925 produces $2,312.50. Accordingly, the 
amount determined under section 4(a-2)(i)(A) is $2,312.50 for calendar 
year 1998.

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, 1998, 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 1997 monthly compensation base is $890. 
Multiplying $890 by 0.05 yields $44.50, which must then be rounded down 
to $44. Accordingly, the maximum daily benefit rate for days of 
unemployment and days of sickness beginning in registration periods 
after June 30, 1998, is determined to be $44.

    Dated: November 10, 1997.
    By authority of the Board.
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. 97-30168 Filed 11-17-97; 8:45 am]
BILLING CODE 7905-01-P