[Federal Register Volume 61, Number 224 (Tuesday, November 19, 1996)]
[Notices]
[Pages 58911-58912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29495]


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RAILROAD RETIREMENT BOARD


1997 Monthly Compensation Base and Other Determinations

AGENCY: Railroad Retirement Board.

ACTION: Notice.

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SUMMARY: Pursuant to section 12(r)(3) of the Railroad Unemployment 
Insurance Act (Act) (45 U.S.C. 362(r)(3)), the Board gives notice of 
the following:
    1. The monthly compensation base under section 1(i) of the Act is 
$890 for months in calendar year 1997;
    2. The amount described in section 1(k) of the Act as ``2.5 times 
the monthly compensation base'' is $2,225.00 for base year (calendar 
year) 1997;
    3. 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 
$1,150 for months in calendar year 1997;
    4. The amount described in section 3 of the Act as ``2.5 times the 
monthly compensation base'' is $2,225.00 for base year (calendar year) 
1997;
    5. The amount described in section 4(a-2)(i)(A) of the Act as ``2.5 
times the monthly compensation base'' is $2,225.00 with respect to 
disqualifications ending in calendar year 1997;
    6. The maximum daily benefit rate under section 2(a)(3) of the Act 
is $43 with respect to days of unemployment and days of sickness in 
registration periods beginning after June 30, 1997.

DATES: The determinations made in notices (1) through (5) are effective 
January 1, 1997. The determination made in notice (6) is effective for 
registration periods beginning after June 30, 1997.

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

FOR FURTHER INFORMATION CONTACT: Timothy H. Hogueisson, Bureau of the 
Actuary, Railroad Retirement Board, 844 Rush Street, Chicago, Illinois 
60611-2092, telephone (312) 751-4789.

SUPPLEMENTARY INFORMATION: The RRB is required by section 12(r)(3) of 
the Railroad Unemployment Insurance Act (Act) (45 U.S.C. 362(r)(3)) as 
amended by Public Law 100-647, to publish by December 11, 1996, the 
computation of the calendar year 1997 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, 1997, 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, 1997.

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 growth in average national wages. The monthly 
compensation base for months in calendar year 1997 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 1997 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 1997 tier 1 tax base is $65,400. Subtracting 
$37,800 from $65,400 produces $27,600. Dividing $27,600 by $56,700 
yields a ratio of 0.48677249. Adding one gives 1.48677249. Multiplying 
$600 by the amount 1.48677249 produces the

[[Page 58912]]

amount of $892.06, which must then be rounded to $890. Accordingly, the 
monthly compensation base is determined to be $890 for months in 
calendar year 1997.

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 1997 monthly compensation base of $890 produces 
$2,225.00. Accordingly, the amount determined under section 1(k) is 
$2,225.00 for calendar year 1997.
    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 1997 monthly compensation base is $890. The ratio 
of $890 to $600 is 1.48333333. Multiplying 1.48333333 by $775 produces 
$1,150. Accordingly, the amount determined under section 2(c) is $1,150 
for months in calendar year 1997.
    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 1997 monthly compensation base of $890 produces 
$2,225.00. Accordingly, the amount determined under section 3 is 
$2,225.00 for calendar year 1997.
    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 1997 
monthly compensation base of $890 produces $2,225.00. Accordingly, the 
amount determined under section 4(a-2)(i)(A) is $2,225.00 for calendar 
year 1997.

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 growth in average national wages. 
The maximum daily benefit rate for registration periods beginning after 
June 30, 1997, 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 1996 monthly compensation base is $865. 
Multiplying $865 by 0.05 yields $43.25, which must then be rounded down 
to $43. Accordingly, the maximum daily benefit rate for days of 
unemployment and days of sickness beginning in registration periods 
after June 30, 1997, is determined to be $43.

    Dated: November 8, 1996.

    By Authority of the Board.
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. 96-29495 Filed 11-18-96; 8:45 am]
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