Posts Tagged ‘sequestration’

RRB update from the labor member: 2021 Covid and budget notice

John Bragg, Labor Member, Railroad Retirement Board

Brothers and Sisters,

It has been one challenging year for us all and many of you have been hit extremely hard by COVID-19 – if not by the virus itself, by the impact it has had on the railroad industry. As you may have heard, Congress recently enacted legislation to provide some financial relief.

In the legislation entitled the Continued Assistance to Rail Workers Act of 2020, as outlined below, Congress essentially extended the benefits created by the CARES Act. In addition, Congress has finally granted some relief from sequestration – though not permanent. The legislation grants temporary relief from sequestration beginning 10 days from enactment through 30 days after the date on which the Presidential declaration of emergency for COVID terminates. This means that railroad employees will no longer have their regular unemployment and sickness benefits reduced for sequestration during the specified time period. In addition, the temporary relief is not retroactive to any earlier period of time.

Similar to the CARES Act, this legislation provides for the following benefits:

  • A recovery benefit of $600 per two-week unemployment registration period. The duration is for registration periods from December 26, 2020, to March 14, 2021. This amount is down from $1,200 per registration period in the CARES Act.
  • Extended unemployment benefits for employees who have otherwise exhausted benefits. These are payable for claims starting after enactment and on or before March 14, 2021. No extended benefits are payable after April 5, 2021.
  • Waiver of the seven-day waiting period for unemployment and sickness benefits. This was also extended to March 14, 2021.

As with previous legislation, the RRB will update the information on its website with the details regarding these benefits.

In addition, the Railroad Retirement Board’s (RRB)’s budget for fiscal year (FY) 2021 has been finalized. In the annual funding legislation, Congress provided for $123.5 million in appropriations for the RRB, which includes $9M for IT investment initiatives. Unfortunately, the total amount provided remains the same as FY 2020, but there was a change of allocation. The amount allocated for IT investment initiatives was decreased from $10M for FY 2020 to $9M for FY 2021, which translates to an increase in the agency’s general administrative budget from $113.5M for FY 2020 to $114.5M for FY 2021. This $1M increase in the general administrative budget will help cover some of the annual cost increases that the agency anticipates.

As a reminder, the agency is still facing pressure from short-staffing in field service offices and at RRB headquarters. RRB is still experiencing high call volume due to COVID-19 related issues, and anticipates the annual spike in calls that generates through January of each year. Those calling the agency’s toll-free number in January commonly ask about income tax statements, which will be mailed out by January 19, 2021. The RRB will not accept requests for duplicate tax statements until February 1, 2021.

With most RRB field offices still closed to the public because of the pandemic, the agency is again reminding customers of the self-service options available to them to help avoid lengthy wait times. I encourage all railroaders to set up a myRRB.gov account on the RRB.gov website to help avoid any possible delays. Customers can request the following documents online by visiting RRB.gov/myRRB:

  • Letters verifying income and monthly benefit rates
  • Service and compensation statement
  • Replacement Medicare card
  • Duplicate tax statement (CY 2021 available after January 31, 2021)

In addition, railroad employees who have established myRRB accounts can log in and:

  • Apply for and claim unemployment benefits
  • Claim sickness benefits
  • Check the status of their unemployment or sickness benefit claims
  • View their railroad service and compensation history
  • Get an estimate of retirement benefits

To establish an account, employees should go to RRB.gov/myRRB and click on the button labeled SIGN IN WITH LOGIN.GOV at the top of the page. This directs them to login.gov where they will be guided through the process of creating an account and verifying their identity — which takes about 20 minutes to complete. Once an employee’s identity is verified, they will be prompted to sign in to their account and then return to myRRB.

In closing, I would like to wish everyone in the rail community a healthy and happy 2021!

RRB: Sequestration hits unemployment and sickness benefits

Railroad Unemployment and Sickness Benefits Will See Slight Decrease in New Sequestration Reduction Rate

Under the Budget Control Act of 2011, and a subsequent sequestration order to implement mandated cuts, railroad unemployment and sickness insurance benefits are reduced by a set percentage that is subject to revision at the beginning of each fiscal year.

Starting October 1, 2020, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 5.7%, down from the current 5.9% reduction, as required by law. The adjusted reduction amount is based on revised projections of benefit claims and payments under the Railroad Unemployment Insurance Act and will remain in effect through September 30, 2021, the end of the fiscal year. Reductions in future fiscal years, should they occur, will be calculated based on applicable law.

The current daily benefit rate for both unemployment and sickness is $80.00. Applying the sequestration rate of 5.7%, the maximum amount payable in a two-week period will be reduced from $800.00 to $754.40. Sickness benefits paid to an employee within six months from the date last worked for a reason other than an on-the-job injury are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65%. Applying the 5.7% reduction to these sickness benefits will result in a maximum two-week total of $696.69.

In fiscal year 2019, the RRB paid about $13 billion in retirement and survivor benefits to about 535,000 beneficiaries, and net unemployment-sickness benefits of about $93.4 million to approximately 23,000 claimants.

Rail workers of all unions urged to end RRB unemployment sequestration

U.S. rail unions have united in an effort to overturn the sequestration of Railroad Unemployment Insurance Act (RUIA) benefits that was enacted by a GOP-held Congress during the Obama administration and continues to reduce the unemployment and sickness benefits of railroaders nearly a decade later.

A large bloc of the unions are represented by AFL-CIO’s Transportation Trades Department (TTD), of which the SMART Transportation Division is a member.

A letter to U.S. Sens. Rob Portman and Sherrod Brown of Ohio sent by the union coalition requested that they jointly co-sponsor language consistent with the HEROES Act (H.R. 6800) to eliminate RUIA benefits from sequestration by amending the Balanced Budget and Emergency Deficit Control Act of 1985 to include RUIA among the other various programs that are not subject to sequestration. Portman, a Republican out of Cincinnati, is chairman of the Senate subcommittee that will make a decision on sequestration.

“Unlike the average U.S. worker, railroad employees do not receive unemployment benefits through state-administered unemployment insurance programs. Instead, unemployed railroaders receive these benefits through the RUIA program, which is administered by the United States Railroad Retirement Board (RRB),” TTD President Larry Willis said. “As a result of the Budget Control Act of 2011, RUIA (benefits) are subject to sequestration. No state unemployment insurance benefits in the country are subject to this unfair treatment.”

RUIA unemployment and sickness benefits are sequestered at 5.9%, and have been subject to reduction for nine years. These rates are adjusted when the federal sequestration is recalculated yearly.

Railroaders are urged to call Portman at (202) 224-3353 to tell him to exclude RRB sickness and unemployment benefits from those reductions.

Read the unions’ joint letter to the senators.

Railroad unemployment and sickness benefits reduced again due to sequestration

Starting October 1, 2019, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 5.9%, down from the current 6.2% reduction, as required by law.

The adjusted reduction is based on revised projections of benefit claims and payments under the Railroad Unemployment Insurance Act. It will remain in effect through September 30, 2020, the end of the fiscal year. Reductions in future fiscal years, should they occur, will be calculated based on applicable law.

The current daily benefit rate is $78.00, so the 5.9% reduction in railroad unemployment and sickness benefits will reduce the maximum amount payable in a two-week period with 10 days of unemployment from $780.00 to $733.98.

Certain railroad sickness benefits are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65%. Applying the 5.9% reduction to these sickness benefits will result in a maximum two-week total of $677.83.

Under the Budget Control Act of 2011, and a subsequent sequestration order to implement mandated cuts, railroad unemployment and sickness insurance benefits are reduced by a set percentage, which is subject to revision at the beginning of each fiscal year.

When sequestration first took effect in March 2013, railroad unemployment and sickness benefits were subject to a 9.2% reduction. This amount was then adjusted to 7.2% in October 2013, 7.3% in October 2014, 6.8% in October 2015, 6.9% in October 2016, 6.6% in October 2017, and 6.2% in October 2018, as required by law.

In fiscal year 2018, the RRB paid about $12.7 billion in retirement and survivor benefits to about 540,000 beneficiaries, and net unemployment-sickness benefits of about $92.6 million to approximately 24,000 claimants.

New sequestration rate cuts into railroad unemployment and sickness benefits

Starting October 1, 2018, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 6.2 percent, down from the current 6.6 percent reduction, as required by law.

The adjusted reduction amount is based on revised projections of benefit claims and payments under the Railroad Unemployment Insurance Act. It will remain in effect through September 30, 2019, the end of the fiscal year. Reductions in future fiscal years, should they occur, will be calculated based on applicable law.

The daily benefit rate is $77, so the 6.2 percent reduction in railroad unemployment and sickness benefits will reduce the maximum amount payable in a 2-week period with 10 days of unemployment from $770.00 to $722.26.

Certain railroad sickness benefits are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65 percent. Applying the 6.2 percent reduction to these sickness benefits will result in a maximum 2-week total of $667.01.

These reductions are required under the Budget Control Act of 2011 and a subsequent sequestration order to implement the mandated cuts. The law exempted social security benefits, as well as railroad retirement, survivor and disability benefits paid by the RRB, from sequestration.

When sequestration first took effect in March 2013, railroad unemployment and sickness benefits were subject to a 9.2 percent reduction. This amount was then adjusted to 7.2 percent in October 2013, 7.3 percent in October 2014, 6.8 percent in October 2015, 6.9 percent in October 2016, and 6.6 percent in October 2017, as required by law.

In fiscal year 2017, the RRB paid almost $12.6 billion in retirement and survivor benefits to about 548,000 beneficiaries, and net unemployment-sickness benefits of almost $105.4 million to approximately 28,000 claimants.