∙ Connecticut Unemployment Insurance Special Assessments to be Mailed in August

---

”As reported in previous Employer Information Notices, Connecticut’s Unemployment Trust Fund became insolvent on October 13, 2009. To continue paying UI benefits to unemployed workers, as required by law, Connecticut began borrowing funds from the U.S. Department of Labor. Generally, federal loans carry interest, but the American Recovery and Reinvestment Act of 2009 (ARRA) contained a provision waiving interest on UI trust fund loans through 2010. When this interest waiver expired, Connecticut, along with more than 20 other states, was required to pay interest on these loans from January 2011. The interest rate for 2011 was set by the Federal Treasury at 4.0869%. ”In Connecticut, the statutory mechanism to collect these interest payments is via an annual special assessment billed to the state’s employers on August 1 and due on August 31. In 2011 the agency issued an assessment to collect approximately $30 million interest due and, thanks to your collective response, Connecticut made its interest payment to the U.S. Treasury in full and on time. ”In December 2011 the state was able to make a payment of one hundred million ($100,000,000) to reduce the principal on which interest will be calculated. We recently made an additional payment in an effort to further reduce the outstanding loan balance and the corresponding interest due. Our current outstanding loan balance is approximately $630 million. The interest rate on trust fund loans for 2012 has been set at 2.9430%. So, while we are required to pay interest on 12 months of outstanding loans this year (as opposed to nine months in 2011 due to the waiver) we expect this year’s total interest charge to be approximately the same as last year. ”Therefore the projected 2012 special assessment will be approximately $1.70 per thousand dollars of taxable payroll, or about $25.50 per full time employee. For example, an employer with 10 workers might expect an August assessment of about $255.” Source: CTDOL

---