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U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UIS

CORRESPONDENCE SYMBOL

TEURL

ISSUE DATE

March 11, 1983

RESCISSIONS

 

EXPIRATION DATE

October 31, 1983

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 07-81, Change 2 (REVISED)

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

ROYAL DELLINGER
Administrator
for Regional Management

 

SUBJECT

:

Revocation of Change 1 to UIPL 7-81 and Reinstatement of Original Provisions of UIPL 7-81

  1. Purpose. To announce reinstatement of the interpretation of subparagraph (B) of Section 3304(a) (15), FUTA, set forth in UIPL 7-81 issued on November 7, 1980.

  2. References. UIPL 7-81 and Change 1.

  3. Background. Under subparagraph (B) of Section 3304(a)(15), FUTA, a Stace law "may provide for limitations on the amount of any such reduction jof unemployment benefits otherwise, required under subparagraph (A)] to take into account contributions made by the individual for the pension . . ." Basic UIPL 7-81 stated that a State may, under this option, provide by law for eliminating any part of the pension payment "equivalent to the employee's share of the contributions to the pension fund" or for eliminating "a representative percentage of the pension as determined under the State law." It further stated that, although "broad latitude" is provided to a State, "any limitation adopted should be consistent with the basic purpose of the option which is to allow elimination of the individual's share of the contributions to the pension fund in determining the amount of pension to be deducted."

    Change 1 to UIPL 7-81 superseded the foregoing statements and prescribed what the U.S. Court of Appeals, District of Columbia Circuit, later, is a suit challenging the revised interpretation of subparagraph (B), described in part as rulemaking subject to the public notices and opportunity for comment requirements of the Federal Administrative Procedure Act. As a result, there remains in effect an injunction against enforcement of the requirements of subparagraph (B) of Section 3304 (a) (15) as set forrh in section 5 of Change 1.

    To resolve this matter and overcome the injunction, the Department is reinstating the position taken in basic UIPL 7-81. Therefore, States may provide for taking into account employee contributions to pension plans to the extent provided in the State laws. It will no longer be required that the amount of employee contributions taken into account not exceed the proportion of an employee's contribution to the pension plan. States are encouraged, nevertheless, to carry out the intent of Congress in enacting subparagraph (B) by not giving greater effect to employee contributions than the proportion of employee contributions bears to total contributions to the pension plan.

  4. Decision. The position set forth in the original UIPL 7-81 2.s hereby reinstated. Change 1 to UIPL 7-31 is hereby revoked.

  5. Action Required. Administrators are requested to delete Change 1 to UIPL 7-81 and provide the above decision to appropriate staff.

  6. Inquiries. Questions should be directed to the appropriate regional office.