2014 interest on federal UI trust advances

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                UI
               ADVISORY SYSTEM                           CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                       OUI/DFAS
             Washington, D.C. 20210                      DATE
                                                          February 18, 2014


ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 8-14

TO:             STATE WORKFORCE AGENCIES

FROM:           ERIC M. SELEZNOW /s/
                Acting Assistant Secretary

SUBJECT:        Interest Rate on Title XII Advances During Calendar Year (CY) 2014

1. Purpose. To announce the rate of interest that the U.S. Department of the Treasury
   (Treasury) will charge on Title XII advances during CY 2014.

2. References. Sections 303 and 1202 of the Social Security Act (SSA); Section 3304 of the
   Federal Unemployment Tax Act (FUTA); and 20 CFR part 606.

3. Background. The criteria for establishing the rate of interest to be charged on Title XII
   advances during any CY are described in Section 1202(b)(4), SSA. In brief, the interest rate
   for a CY is the earnings yield on the Unemployment Trust Fund (UTF) for the quarter ending
   December 31 of the previous CY.

4. CY 2014 Interest Rate. The Treasury has established the earnings yield on the UTF for the
   quarter ending December 31, 2013, to be 2.3874 percent. As such, this becomes the rate of
   interest that will be charged to repayable Title XII advances during CY 2014.

5. Action Requested. States expecting to request a Title XII advance should take necessary
   action to establish a mechanism to provide funds for the payment of interest on those
   advances, in accordance with the provisions of Section 1202(b), SSA, and subject to the
   limitations in Section 303(c)(3) and 1202(b)(5), SSA and Section 3304(a)(17), FUTA.

   In summary, interest is due and payable each September 30, and may not be paid from the
   state’s unemployment fund or from Federal funds. However, there are several provisions for
   interest relief, including “Cash flow loans,” “May/September delays,” “High unemployment
   deferrals,” and “High unemployment delays.” For further information concerning relief from
   Title XII interest payments, see 20 CFR part 606, subparts D and E.

6. Inquiries. Questions should be directed to the appropriate Regional Office.




 RESCISSIONS                                            EXPIRATION DATE
 None                                                   December 31, 2014