The system is designed so an employer with few or no former employees claiming unemployment insurance benefits will have a contribution rate lower than an employer with many former employees filing against the system. Because the rates are assigned based on experience, there can be a lag of up to one year form the beginning of the unemployment experience until the employer s contribution rate is adjusted and has an effect on the trust fund. All employer contributions collected under the Oklahoma Employment Security Act, as well as interest earned on the fund balance, are deposited into a federally maintained unemployment insurance trust fund account specific to Oklahoma. This trust fund can only be used for the payment of benefits to eligible unemployed individuals. By state statute, the fund is supported solely by contributions from Oklahoma employers.
Employees make no contribution to the trust fund.
The trust fund balance at the end of 1999 was about 4.4 percent of estimated taxable wages for the year. This widely used indicator of trust fund solvency was below the 4.8 percent experienced in 1998 and the 5.2 percent experienced in 1997. A 5.0 percent ratio is generally regarded as adequate to ensure that funds will be available to pay unemployment benefits. This was significantly lower than the 75 months of benefits available at the end of 1998. The high-cost multiple at the end of 1999 was 1.23.