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Program 

Letter 

United States 

Railroad Retirement Board 

Office of Programs 

Quality Reporting Service Center

E-MAIL: qrsc@rrb.gov

CONTACT: Edward Roberts 

Phone: (312) 751-4992

 Fax: (312) 751-7190 

Phone: (312) 751-7139 x2159 

Letter No. 2007-02 Date: November 17, 2006 

TO: Certification Contact Officials 

SUBJECT: Employer Responsibilities Under Sections 2(f) and 12(o) of the 

Railroad Unemployment Insurance Act

_________________________________________________________________________ 

This program letter supersedes program letter 2003-05 from May 2003 and provides 

information about what railroad employers need to know regarding sections 2(f) and 12(o) of 

the Railroad Unemployment Insurance Act (RUIA). Copies of this program letter should be 

provided to all claims department, labor relations and payroll department personnel 

involved in the processing and payment of claims for pay for time lost, guarantee pay and 

personal injury settlements. Printable versions of these program letters are available at 

RRB.gov. 

General 

Railroad employers are required under certain circumstances to reimburse the Railroad 

Retirement Board (RRB) for unemployment and sickness insurance benefits paid to their 

employees. Such reimbursements are required under sections 2(f) and 12(o) of the RUIA. 

 

Section 2(f) - Section 2(f) requires that employers reimburse the RRB for benefits paid to an 

employee for days for which salary, wages, pay for time lost or other remuneration is later 

determined to be payable. Reimbursements under section 2(f) generally result from the award of 

pay for time lost or the payment of guaranteed wages. Please note that the term "remuneration" 

includes the following types of employer payments, and that the payments are, therefore, subject 

to the provisions of section 2(f): 

• Dismissal allowances paid pursuant to labor-protective conditions imposed by the 

Surface Transportation Board (e.g. New York Dock or Oregon Conditions), or under any 

related implementing agreements; 

• Coordination allowances under the Washington Job Protection Agreement of 1936; 
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• Annual Compensation payments under Article IV of the job stabilization agreement of 

February 7, 1965, or under revisions to that agreement; and 

• Any similar employer payments under any merger agreement or job protection 

arrangement that guarantees payment of compensation during periods when an employee 

has been deprived of employment. 

The only exception to the types of payments listed above are payments made under a nongovernmental plan for unemployment insurance that the RRB has approved under section 1(j) of 

the RUIA. Benefits paid under a non-governmental plan do not constitute "remuneration". (See 

Circular Letter No. UI-C-220, RRB Regulation Defining Non-governmental Plans for 

Unemployment or Sickness Insurance.) 

The statutory language of section 2(f) is as follows: 

(f)"If (i) benefits are paid to any individual with respect to unemployment or sickness in any 

registration period, and it is later determined that remuneration is payable to such employee 

with respect to any period which includes days in such registration period which had been 

determined to be days of unemployment or sickness, and (ii) the person or company from which 

such remuneration is payable has, before payment thereof, notice of the payment of benefits upon 

the basis of days of unemployment or sickness included in such period, the remuneration so 

payable shall not be reduced by reason of such benefits but the remuneration so payable, to the 

extent to which benefits were paid upon the basis of days which had been determined to be days 

of unemployment or sickness and which are included in the period for which such remuneration 

is payable, shall be held to be a special fund in trust for the Board. The amount of such special 

fund shall be paid to the Board and in the collection thereof the Board shall have the same 

authority, and the same penalties shall apply, as are provided in section 8 of this Act with 

respect to contributions. 

 

Section 12(o) - Under section 12(o), the RRB is entitled to reimbursement of benefits paid for 

days of sickness resulting from any injury or infirmity for which the employee is paid a personal 

injury settlement or damages. Section 12(o) of the RUIA reads as follows: 

(o) Benefits payable to an employee with respect to days of sickness shall be payable regardless 

of the liability of any person to pay damages for such infirmity. The Board shall be entitled to 

reimbursement from any sum or damages paid or payable to such employee or other person 

through suits, compromise, settlement, judgment, or otherwise on account of any liability (other 

than a liability under a health, sickness, accident, or similar insurance policy) based upon such 

infirmity, to the extent that it will have paid or will pay benefits for days of sickness resulting 

from such infirmity. Upon notice to the person against whom such right or claim exists or is 

asserted, the Board shall have a lien upon such right or claim, any judgment obtained 

thereunder, and any sum or damages paid under such right or claim, to the extent of the amount 

to which the Board is entitled by way of reimbursement. 
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RRB Notices Under Sections 2(f) and 12(o) 

Effective July 1, 2006 the RRB no longer sends form letter ID-30 (Notice Under Section 2(f) Of 

Railroad Unemployment Insurance Act) to payroll offices when employees indicate on 

unemployment applications that they may receive wage guarantee payments or pay for time lost. 

Each business day the RRB sends form letter ID-4E (Notice of RUIA Claim Determination) or 

its electronic equivalent notice via RaiLinc to rail employers. This constitutes sufficient and 

timely notice of benefit payments that may be subject to reimbursement under section 2(f) of the 

RUIA from any salary, wages, pay for time lost, or other remuneration that may become payable 

for days for which benefits are paid. 

You should continue to obtain information from the RRB about the amount of reimbursement 

due under section 2(f) by email or facsimile when: 

(1) an employee who is claiming unemployment benefits receives a coordination or dismissal 

allowance or may be covered under the National Job Stabilization Agreement or under a 

similar plan providing for a minimum amount of work or compensation, or 

(2) an employee who is claiming unemployment benefits receives pay for time lost. 

A notice of lien (Form ID-30B) is mailed to an employer when an applicant for sickness benefits 

indicates that he or she has filed or expects to file a claim against the employer for personal 

injury. Form ID-30B is notice of the RRB's right to reimbursement of sickness benefits from any 

sum or damages payable on account of liability for the employee's injury or illness. 

Amount of Reimbursement 

Prior to payment of either pay for time lost in the form of wages or guarantee pay, or the 

payment of a personal injury settlement, railroad employers should contact the RRB's Sickness 

and Unemployment Benefits Section to obtain information about the amount of benefits to be 

deducted from the award for reimbursement under section 2(f) or section 12(o). See Employer 

Requests for Information below. 

 

Section 2(f) - In general, the amount of reimbursement due under section 2(f) from the award of 

pay for time lost or other remuneration is the amount of benefits paid for days in the period for 

which the payment is to be made, or the amount of the payment for the period, whichever is less. 

Section 12(o) - Under the RRB's regulations (20 CFR 341.5), the amount of reimbursement due 

the RRB under section 12(o) is the amount of the sickness benefits paid to the employee for the 

infirmity for which he or she is paid any sum or damages, or the net amount of the settlement, 

whichever is less. The net settlement is considered to be the amount of the damages paid with 

respect to the employee's injury or infirmity, minus the amounts of the medical, hospital and 

legal expenses incurred by the employee in connection with the injury. Medical and hospital 
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expenses are deductible in determining the amount of the net settlement even if they are covered 

by the employee's insurance. 

Advances paid to an employee on a personal injury settlement are considered to be paid on 

account of liability and are subject to the provisions of section 12(o). This is true even if no 

settlement or judgment is entered, or the employee does not prevail in a court action for damages 

against the employer. When money is paid to an employee in the form of an advance on a 

personal injury settlement, keep in mind that sickness benefits paid by the RRB may be 

recoverable as a result of such payments. 

Employer Requests for Information 

Please refer to Program Letter 2006-05 from February 2006 for information about use of secure 

email for requesting reimbursement amounts. 

Employer requests for information about amounts due under sections 2(f) and 12(o) may be 

made by facsimile using special forms (Forms ID-3S and ID-3U) developed by the RRB. Under 

normal circumstances, you will receive a reply to your request on the first business day following 

the RRB's receipt of your fax transmission. You may make fax requests Monday through Friday 

(except Federal holidays), 8:00 AM to 4:30 PM, Central Time. The fax number is (312) 751-

7185. 

Employers’ use of Forms ID-3S and ID-3U helps to ensure that all the information we need to 

respond to your request is provided. The forms along with detailed instructions for their 

completion may be obtained by contacting our Sickness and Unemployment Benefits Section. 

The telephone number is (312) 751-4820. Printable document versions of the forms are 

available at www.rrb.gov. 

The completed fax form reply from the RRB is your confirmation of the amount due under 

section 2(f), or the amount of the RRB's lien under section 12(o). A confirmation letter will not 

be sent. 

Forms ID-3S or Form ID-3U may also be used for inquiries about RUIA benefit amounts paid to 

employees prior to any settlement or guarantee payments. Please clearly mark such forms 

“For Informational Purposes Only”. 

Employer Reporting Requirements 

Section 2(f) - Under the RRB's regulations (20 CFR 340.16), an employer paying remuneration 

for time lost, including guarantee pay, must remit the amount of reimbursement due under 

section 2(f) within 30 days of the date of the payment of the remuneration. The following 

information is always needed in order to determine the amounts due under section 2(f): 

 

• the employee’s name and social security number, 

• the amount of the payment, 
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• the time period covered by a guarantee payment 

• the exact days paid in a pay for time lost claim. 

Notice of the payment should be made by facsimile using Form ID-3U. 

Section 12(o) - When an employer makes a settlement or must satisfy a final judgment based on 

an injury for which the employee received benefits, the RRB's regulations (20 CFR 341.6) 

provide that the employer must notify the RRB in writing of the settlement or judgment. The 

notice must be made within 5 days of the date of the settlement or judgment, and include: 

• the employee’s name and social security number, 

• the amount of the settlement or judgment, 

• the date of settlement or final judgment, and 

• the amount withheld from the settlement or judgment to satisfy the RRB's lien. 

Notice of the settlement should be made by facsimile using Form ID-3S. 

Employer Reimbursement Requirements 

Section 2(f) - Payment of an amount due under section 2(f) is due at the RRB within 30 days of 

the date of the payment of the remuneration for time lost. 

Section 12(o) - Payment of the amount of the RRB's lien is due at the RRB within 30 days after 

the date of the settlement or final judgment. In order to insure that remittances are properly 

credited, be sure to include the following information on the check or on the remittance 

document: 

• Your payor code, 

• The billing document ID number, and 

• Whether the remittance is for reimbursement of unemployment (UI) or sickness (SI) 

benefits. 

 

Your payor code and the billing document ID number will be shown on the RRB's response to 

your Form ID-3S or Form ID-3U if you indicated on the form that the employee's claim has been 

settled, i.e. your Form ID-3S or Form ID-3U request was not for informational purposes only. 

Payor codes and billing document ID numbers are also shown on the Form G-145 billing 

statements issued by the RRB.

If you do not know your payor code or the billing document ID number, then show on your 

remittance the employee's name, the employee's social security number and the date of the injury 

or the period of time for which reimbursement is being made. 

Remittances 

Please refer to Program Letter 2006-07 from September 2006, for information concerning online remittances via the Department of Treasury’s Pay.gov service. 
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Remittances may be made electronically through the Automated Clearing House (ACH) using 

the RRBLINK system. If the RRBLINK system is not used, remittances are to be mailed to the 

RRB's lockbox which is operated by U.S. Bank. The lockbox address is: 

U.S. Railroad Retirement Board 

Debt Recovery Division - RUIA 

P.O. Box 953492 

St. Louis, Missouri 63195-3492 

Although every effort is made to credit remittances to the correct account, if a remittance cannot 

be properly matched with the accounts receivable, a second billing notice may be issued on the 

debt. If you receive notice of a debt after submitting a reimbursement, please show the date and 

the amount of your remittance on the second notice and return a copy of the notice to the RRB. 

RRBLINK - Electronic Payment System 

RRBLINK is an electronic payment system designed specifically for railroad employers. In 

addition to paying reimbursements due under sections 2(f) and 12(o) of the RUIA, RRBLINK 

can be used to make various tax deposits, including unemployment insurance contributions, 

Employer's Annual Railroad Retirement and Unemployment Return (CT-1), Quarterly Federal 

Excise Tax Return (720), Employer's Annual Federal Unemployment Tax Return (940), 

Employer's Quarterly Federal Tax Return (941) and Annual Return of Withheld Federal Income 

Taxes (945). 

RRBLINK payments can be initiated by a personal computer with a communications modem, a 

touch-tone telephone or a voice telephone. RRBLINK is the recommended method for making 

reimbursements under sections 2(f) and 12(o). The system ensures that payments are credited 

properly and timely, and helps employers avoid unwanted interest and penalty charges. 

Additional information about RRBLINK and enrollment instructions can be obtained by 

contacting the agency's RRBLINK representative at (312) 751-4668 or U.S. Bank’s system 

administrator at (888) 273-2265. 

Interest Charges 

The RRB charges interest and assesses penalties on delinquent debts. The regulations of the RRB 

(20 CFR 340.16 (b)) require that railroad employers and other parties paying any sum or 

damages for personal injury reimburse the RRB for amounts due under section 12(o) of the 

RUIA within 30 days of the date of settlement. The RRB's notice of the lien amount is the initial 

notice of the amount due upon settlement. Billing statements are issued when the RRB is notified 

of a settlement. Amounts due under section 12(o) are due within 30 days of the settlement date. 

 

Interest begins to accrue on the outstanding principal amount of a debt on the day of the final 

settlement or judgment and is charged to the delinquent account 30 days later. Thereafter, 

interest is charged every 30 days until the debt is paid in full. Interest is calculated according to 

the following formula: 
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Interest Rate x Interest Days x Principal 

divided by 

Days in the Year (365) 

Example of Interest Charge Dates: 

In this example, a personal injury settlement is made on June 13. The railroad must notify the 

RRB of the settlement by June 18. Payment is due at the RRB by July 13, 30 days after the date 

of settlement. If payment is not received by July 13, interest will be calculated and charged on 

the unpaid balance on July 13 and every 30 days thereafter until the debt is paid in full. 

6/13 7/13 8/12 9/11 

Settlement 

Date 

1st 

Interest 

Charge 

2nd 

Interest 

Charge 

3rd 

Interest 

Charge 

Accounts receivable under section 12(o) of the Railroad Unemployment Insurance Act are 

subject to interest at an annual rate determined by the U.S. Treasury Department. 

Accounts receivable under section 2(f) of the Railroad Unemployment Insurance Act are subject 

to interest in the same manner as unpaid employer contributions under section 8(g) of the RUIA. 

Section 8(g) provides for the assessment of interest at the rate of 1 percent per month, or fraction 

thereof, from the due date until paid. The annual interest rate applied to debts incurred under 

section 2(f) is 12 percent. The rate is shown on all section 2(f) billing statements. 

Penalty Charges 

Debts that remain unpaid by the collection due date (30 days after the date of the billing 

statement) are considered delinquent. Debts which are delinquent for 90 days incur a penalty 

calculated at a rate of 6 percent per year assessed on the principal balance of the debt. Penalty 

charges continue to be assessed every 30 days until the debt is paid in full. Penalties are 

calculated using the following formula: 

Penalty Rate x Penalty Days x Principal 

divided by 

Days in Year (365) 

Example of Penalty Charges: 

In this example, a railroad is issued a billing statement on October 1. The collection due date is 

October 31. If the bill is not paid in full 90 days after the collection due date, penalties will be 

calculated and charged on January 29, February 28 and every 30 days thereafter until the debt is 

paid in full. 
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10/1 10/31 11/30 12/30 1/29 2/28 

Settlement 

Date 

Collection 

Due Date 

30 Days 

Delinquent 

60 Days 

Delinquent 

1st Penalty 

Calculation 

(90 day charge) 

2nd Penalty 

Calculation 

(30 day charge) 

Delinquent Debts 

The RRB is required by the Debt Collection Improvement Act of 1996 to refer debts, delinquent 

for 180 days, to the Department of the Treasury for offset of any Federal government payments 

that may be due to the debtor by any Federal agency or program and for cross-servicing of the 

debt. Cross-servicing is an enforcement program in which debts are placed in collection 

programs such as referral to private collection agencies, referral to the Department of Justice, 

wage garnishment, etc. to enforce recovery of the debt. Charges may be added to the debt by 

Treasury, private collection agencies, DOJ, etc. on debts referred for offset or cross-servicing. 

Once a debt has been referred to Treasury, it is no longer in the RRB’s jurisdiction. After referral 

to Treasury, all inquiries regarding the debt should be made directly to the U.S. Treasury. Their 

toll free number is (888) 826-3127. 

Canceling Billing Statements and Refund Procedures 

Occasionally, the RRB receives premature information that a settlement has been made and a 

billing statement is prepared on the basis of that information. If you receive a billing statement 

on a case that has not yet been settled, contact our Sickness and Unemployment Benefits Section 

immediately by telephone or fax. The telephone number is (312) 751-4825. The billing 

document will be canceled and your account will be adjusted accordingly. 

Under certain circumstances, railroads are entitled to refunds of amounts remitted to the RRB. 

Refunds of amounts that were improperly paid or are no longer due the RRB can be obtained by 

writing to U.S. Railroad Retirement Board, Bureau of Fiscal Operations - Debt Recovery 

Division, 844 N. Rush Street, Chicago, Illinois 60611-2092. Give the name and social security 

number of the individual for whom an incorrect remittance was made, the amount to be refunded 

and the reason for the refund request. 

Railroad employers cannot take credit for overpaid amounts on remittances that are due on other 

employee accounts. Refunds of amounts incorrectly paid can only be obtained by writing to the 

Bureau of Fiscal Operations - Debt Recovery Division. 

Paperwork Reduction Act Notice 

The RRB is authorized to collect the information requested on Forms ID-3S and ID-3U under 

section 5(b) of the Railroad Unemployment Insurance Act (RUIA). The information is needed to 

determine the amount of benefits reimbursable under section 12(o) or section 2(f) of the RUIA. 

We estimate that Forms ID-3S and ID-3U take an average of 3 minutes per response to complete, 

including time for reviewing the instructions, getting the needed data, and reviewing the 

completed form. If you wish, send comments regarding the accuracy of our estimate or any other 

aspects of the forms, including suggestions for reducing completion times, to the Chief of 
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Information Management, Railroad Retirement Board, 844 N. Rush Street, Chicago Illinois 

60611-2092. 

Inquiries 

Questions and inquiries concerning sections 2(f) and 12(o) of the Railroad Unemployment 

Insurance Act should be directed as follows: 

Questions concerning Form ID-30B, and requests for information about amounts due under 

section 2(f) or section 12(o) 

 

 Sickness and Unemployment Benefits Section 

 (312) 751-4825 

 Fax: (312) 751-7185 

 

Inquiries about billing statements, interest and penalty charges 

 Bureau of Fiscal Operations - Debt Recovery Division 

 (312) 751-4848 

 Fax: (312) 751-3364