PART 345—EMPLOYERS' CONTRIBUTIONS AND CONTRIBUTION REPORTS Authority: 45 U.S.C. 362(l). Source: 61 FR 20072, May 3, 1996, unless otherwise noted. Subpart A—General Provisions and Definitions § 345.101 Requirement for contribution. Every employer, as defined in part 301 of this chapter, shall pay to the Railroad Retirement Board a contribution with respect to the compensation paid to an employee in any calendar month for service by such employee (except for service to a local lodge or division of a railway labor organization). For the purposes of this part, the term “compensation” is defined in part 302 of this chapter. The compensation subject to contribution is the gross amount of compensation paid to an employee for service in any month, not to exceed the amount of the monthly compensation base (MCB), as defined in part 302 of this chapter. The amount of contribution payable by each employer is to be computed and paid pursuant to the provisions of this part. § 345.102 Multiple employer limitation. (a) The contributions required by this part shall not apply to any amount of the aggregate compensation paid to such employee by all such employers in such calendar month which is in excess of the MCB; and (b) Each employer (other than a subordinate unit of a national-railway-labor-organization employer) shall be liable for that portion of the contribution with respect to such compensation paid by all such employers which the compensation paid by the employer to such employee bears to the total compensation paid in such month by all such employers to such employee. (c) In the event that the compensation paid by such employers to the employee in such month is less than the MCB, each subordinate unit of a national-railway-labor-organization employer shall be liable for such portion of any additional contribution as the compensation paid by such employer to such employee in such month bears to the total compensation paid by all national-railway-labor-organization employers to such employee in such month. § 345.103 Rate of contribution. (a) Each employer will have an experience-rated rate of contribution computed by the Board under the provisions of section 8(a)(1)(C) of the Railroad Unemployment Insurance Act. See subpart D of this part. (b) Notwithstanding paragraph (a) of this section the rate of contribution applicable to an employer that first becomes subject to this part after December 31, 1989, will be computed by the Board in accordance with section 8(a)(1)(D) of the Railroad Unemployment Insurance Act. See subpart D of this part. § 345.104 Employees and employee representatives not liable. The amount of contributions for which an employer is liable under this part shall not be deducted from an employee's compensation, and the Board will not recognize any agreement under which an employee assumes liability for such contributions. Employee representatives under part 205 of this chapter are not employees for purposes of the Railroad Unemployment Insurance Act and are not liable for payment of contributions under this part. § 345.105 Definitions. (a) Chief Financial Officer. (b) Monthly compensation base. Federal Register (c) Month defined. (2) If the date prescribed for filing the report or paying the contribution is a date other than the last day of a calendar month, the period that terminates with the date numerically corresponding thereto in the succeeding calendar month and each such successive period shall constitute a month. If, in the month of February, there is no date corresponding to the date prescribed for filing the report or paying, the period from such date in January through the last day of February shall constitute a month. Thus, if a report is due on January 30, the first month shall end on February 28 (or 29 if a leap year), and the succeeding months shall end on March 30, April 30, etc. (3) If a report is not timely filed or a contribution is not timely paid, the fact that the date prescribed for filing the report or paying the contribution, or the corresponding date in any succeeding calendar month, falls on a Saturday, Sunday, or a legal holiday is immaterial in determining the number of months. (d) Reference to forms. (e) Showing reasonable cause. Subpart B—Reporting and Collecting Contributions § 345.110 Reports of compensation of employees. The provisions of part 209 of this chapter shall be applicable to the reporting of compensation under the Railroad Unemployment Insurance Act to the same extent and in the same manner as they are applicable to the reporting of compensation under the Railroad Retirement Act. § 345.111 Contribution reports. (a) General. (2) Contribution reports of employers who are required by State law to pay compensation on a weekly basis shall include with respect to such compensation all payroll weeks in which all or the major part of the compensation falls within the period for which the reports are required. (b) Compensation to be reported on Form DC-1. (Approved by the Office of Management and Budget under control number 3220-0012) [67 FR 13567, Mar. 25, 2002] § 345.112 Final contribution reports. Upon termination of employer status, as determined under part 301 of this chapter, the last contribution report of the employer shall be so indicated by checking the box on the Form DC-1 entitled “Final Report”. Such contribution report shall be filed with the Board on or before the sixtieth day after the final date for which there is payable compensation with respect to which contribution is required. The period covered by each such contribution report shall be plainly written thereon, indicating the final date for which compensation is payable. There shall be executed as part of each such final contribution report a statement giving the address at which compensation records will be kept and the name of the person keeping the records. (Approved by the Office of Management and Budget under control number 3220-0012) § 345.113 Execution of contribution reports. (a) Each contribution report on Form DC-1 shall be signed by hand by: (1) The individual, if the employer is an individual; (2) The president, vice president, or other duly authorized officer, if the employer is a corporation; or (3) A responsible and duly authorized member or officer having knowledge of its affairs if the employer is a partnership or other unincorporated organization. (b) The Form DC-1 may be filed electronically through the Board's authorized agent. If filed electronically, no further authentication is required. [67 FR 13567, Mar. 25, 2002] § 345.114 Prescribed forms for contribution reports. Each employer's contribution report, together with any prescribed copies and supporting data, shall be filled out in accordance with the instructions and regulations applicable thereto. The prescribed forms may be obtained from or accessed by contacting the Board. An employer will not be excused from making a contribution report for the reason that no form has been furnished to such employer. Application should be made to the Board for the prescribed forms in ample time to have the contribution report prepared, verified, and filed with the Board on or before the due date. Contribution reports that have not been so prepared will not be accepted and shall not be considered filed for purposes of § 345.115 of this part. In case the prescribed form has not been obtained, a statement made by the employer disclosing the period covered and the amount of compensation with respect to which the contribution is required may be accepted as a tentative contribution report if accompanied by the amount of contribution due. If filed within the prescribed time, the statements so made will relieve the employer from liability for any penalty imposed under this part for the delinquent filing of the contribution report provided that the failure to file a contribution report on the prescribed form was due to reasonable cause and not due to willful neglect, and provided further, (Approved by the Office of Management and Budget under control number 3220-0012) [67 FR 13568, Mar. 25, 2002] § 345.115 Place and time for filing contribution reports. Each employer shall file its contribution report with the Chief Financial Officer, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois, 60611-2092, or the Chief Financial Officer's designee. The employer's contribution report for each quarterly period shall be filed on or before the last day of the calendar month following the period for which it is made. If such last day falls on Saturday, Sunday, or a national legal holiday, the report may be filed on the next following business day. If mailed, reports must be postmarked on or before the date on which the report is required to be filed. [67 FR 13568, Mar. 25, 2002] § 345.116 Payment of contributions. (a) The contribution required to be reported on an employer's contribution report is due and payable to the Board without assessment or notice, at the time fixed for filing the contribution report as provided for in § 345.115 of this part. (b) An employer shall deposit the contributions required under this part in accord with instructions issued by the Railroad Retirement Board. At the direction of the Board, the Secretary of the Treasury shall credit such contributions to the Railroad Unemployment Insurance Account in accord with section 10 of the Railroad Unemployment Insurance Act and to the Railroad Unemployment Insurance Administration Fund in accord with section 11 of the Railroad Unemployment Insurance Act. § 345.117 When fractional part of cent may be disregarded. In the payment of employers' contributions to the Board a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent. § 345.118 Adjustments. (a) In general. (b) Compensation adjustment. (c) Adjustment of contributions. (2) If less than the correct amount of contributions is paid for any previous calendar quarter or calendar year because of an error that does not constitute a compensation adjustment as defined in paragraph (b) of this section, the employer shall adjust the error by— (i) Reporting the additional contribution on the next report filed after discovery of the error; and (ii) Paying the amount thereof to the Board at the time such report is filed. (3) If more than the correct amount of contributions is paid for any previous calendar quarter or calendar year because of an error that does not constitute a compensation adjustment as defined in paragraph (b) of this section, the employer shall adjust the error by applying the excess payment as a credit against the contribution due on the next report filed after discovery of the error. However, if the overpayment cannot be adjusted because the employer is no longer required to file a report or because the overpayment to be adjusted exceeds the amount of contribution due on the employer's next report, the employer may file for a refund of the amount which cannot be adjusted as provided for in this section. If the overpayment is the result of an incorrect contribution rate as determined by the Board, the employer may file for a refund of the amount of overpayment or may take an adjustment as provided for in this section. (d) Limitations on adjustments. § 345.119 Refunds. (a) In general. (b) When permitted. (c) Form of claim. (d) Claim by fiduciary. (e) Time limit. (f) Interest. (g) Refunds reduced by underpayments. § 345.120 Assessment and collection of contributions or underpayments of contributions. (a) If any employer's contribution is not paid to the Board when due or is not paid in full when due, the Board may, as the circumstances warrant, assess the contribution or the deficiency and any interest or penalty applicable under this part (whether or not the deficiency is adjustable as an underpayment under § 345.118 of this part). (b) The amount of any such assessment will be collected in accordance with the applicable provisions of law. If any employer liable to pay any contribution neglects or refuses to pay the same within ten days after notice and demand, the Board may collect such contribution with such interest and other additional amounts as are required by law, by levy, by administrative offset as authorized by 31 U.S.C. 3716 and in accordance with the procedures set forth in part 367 of this chapter, or by a proceeding in court, but only if the levy is made or proceeding begun: (1) Within 10 years after assessment of the contribution; or (2) Prior to the expiration of any period, including extension thereof, for collection agreed upon by the Chief Financial Officer and the employer. (c) All provisions of law, including penalties, applicable with respect to any tax imposed by the provisions of the Railroad Retirement Tax Act and the regulations thereunder, insofar as not inconsistent with the provisions in this part, shall be applicable with respect to the assessment and collection of contributions under this part. § 345.121 Jeopardy assessment. (a) Whenever in the opinion of the Board it becomes necessary to protect the interests of the Government by effecting an immediate reporting and collection of an employer's contribution, the Board will assess the contribution whether or not the time otherwise prescribed by law for filing the contribution report and paying such contribution has expired, together with all penalties and interest thereon. Upon assessment, such contribution, and any penalty, and interest provided for under this part shall be immediately due and payable, and the Board shall thereupon issue immediately a notice and demand for payment of the contribution, penalty, and interest. (b) The collection of the whole or any part of the amount of the jeopardy assessment may be stayed by filing with the Board a bond in an amount equal to the amount with respect to which the stay is desired, and with such sureties as the Board may deem necessary. Such bond shall be conditioned upon the payment of the amount (together with interest and any penalties thereon) the collection of which is stayed, at the time at which, but for the jeopardy assessment, such amount would be due. In lieu of surety or sureties the employer may deposit with the Board bonds or notes of the United States, or bonds or notes fully guaranteed by the United States as to principal and interest, having a par value not less than the amount of the bond required to be furnished, together with an agreement authorizing the Board in case of default to collect or sell such bonds or notes so deposited. § 345.122 Interest. (a) Rate. (b) Waiver of interest. (1) There was a reasonable cause and not willful neglect for the late filing, late payment or underpayment, such as: the serious illness or death of an individual with the sole authority to execute the return and payment; fire, casualty, or natural disaster at the place where the railroad unemployment insurance records are kept; or reasons outside the employer's control, such as, the failure of the employer's bank to comply with the employer's filing and payment instructions; (2) The amount of interest attributed to the delinquency is totally disproportionate to the period of the delay and the amount of contributions paid; and (3) The employer's past record for timely compliance with railroad unemployment insurance reporting and payment requirements warrants such action considering such factors as the number and extent of delays associated with late reports, payments, and underpayments. § 345.123 Penalty for delinquent or false contribution reports. (a) Delinquent reports. (b) Waiver of penalty. (c) Penalty on net amount. (d) False reports. § 345.124 Right to appeal the amount of a contribution, interest, or penalty. (a) Except as otherwise provided, an employer may seek administrative review of any determination with respect to any contribution, interest, or penalty made under this part by filing a request for reconsideration with the Chief Financial Officer within 30 days after the mailing of notice of such determination. An employer shall have a right to appeal to the Board from any reconsideration decision under this section by filing notice of appeal to the Secretary to the Board within 14 days after the mailing of the decision on reconsideration. Upon receipt of a notice of an appeal, the Board may designate one of its officers or employees to receive evidence and report to the Board under the procedures set forth in part 319 of this chapter. An appeal of the contribution rate is made under § 345.307 of this part. (b) Any appeal filed under this part shall not relieve the employer from filing any reports or paying any contribution required under this part nor stay the collection thereof. Upon the request of an employer, the Board may relieve the employer of any obligation required under this part pending an appeal. Unless specifically provided by the Board, such relief shall not stay the accrual of interest on any disputed amount as provided for in § 345.122 of this part. [67 FR 13568, Mar. 25, 2002] § 345.125 Records. Every employer subject to the payment of contributions for any calendar quarter shall, with respect to each such quarter, keep such permanent records as are necessary to establish the total amount of compensation payable to its employees, for a period of at least five calendar years after the date the contribution report to which the compensation relates was required to be filed, or the date the contribution is paid, whichever is later. The record should be in such form as to contain the information required to be shown on the quarterly contribution report. All records required by the regulations in this part shall be kept at a safe and convenient location accessible to inspection by the Board or any of its officers or employees, or by the Inspector General of the Railroad Retirement Board. Such records shall be at all times open for inspection by such officers or employees. (Approved by the Office of Management and Budget under control number 3220-0012) § 345.126 Liens. If any employer, after demand, neglects or refuses to pay a contribution required under this part, the amount of such contribution (including any interest, penalties, additional amount, or additions to such contribution, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such employer. Subpart C—Individual Employer Records § 345.201 Individual employer record defined. Effective January 1, 1990, the Board will establish and maintain a record, hereinafter known as an Individual Employer Record, for each employer subject to this part. As used in this subpart, “Individual Employer Record” means a record of each employer's benefit ratio; reserve ratio; 1-year compensation base; 3-year compensation base; unallocated charge; reserve balance; net cumulative contribution balance; and cumulative benefit balance. See § 345.302 of this part for a definition of these terms. Whenever a new employer begins paying compensation with respect to which contributions are payable under this part, the Board will establish and maintain an individual employer record for such employer. § 345.202 Consolidated employer records. (a) Establishing a consolidated employer record. (b) Discontinuance of a consolidated employer record. [80 FR 13764, Mar. 17, 2015] § 345.203 Merger or combination of employers. In the event of a merger or combination of two or more employers, or an employer and non-employer, the individual employer record of the employer surviving the merger (or any person that becomes an employer as the result of the merger or combination) shall consist of the combination of the individual employer records of the entities participating in the merger. Where the person surviving the merger is an existing employer under part 202 of this chapter, the individual employer record for the surviving employer will not be updated to reflect the combined record until the calendar year following the year of the Board's determination. Where the entity surviving the merger becomes an employer under part 202 of this chapter by virtue of the merger, the individual employer record shall consist of the combined record effective with its employer effective date. [70 FR 42489, July 25, 2005] § 345.204 Sale or transfer of assets. (a) In the event property of an employer is sold or transferred to another employer (or to a person that becomes an employer as the result of the sale or transfer) or is partitioned among two or more employers or persons, the individual employer record of such employer shall be prorated among the employer or employers that receive the property (including any person that becomes an employer by reason of such transaction or partition), in accordance with any agreement among the respective parties (including an agreement that there shall be no proration of the employer record). Such agreement shall be subject to the approval of the Board. Where the employer acquiring the assets is an existing employer under part 202 of this chapter, that employer's individual employer record will take into consideration the acquired assets no earlier than the calendar year following the year of the Board's determination, unless an agreement among the respective parties provides otherwise. Where the employer acquiring the assets becomes an employer under part 202 of this chapter by virtue of such acquisition, the individual employer record for such employer shall consider the acquired assets as of such person's employer effective date, subject to any agreement between the respective parties and the provisions of paragraph (b) of this section. (b) There shall be no transfer of the employer record where an employer abandons a line of track in accordance with the provisions of the Interstate Commerce Act and the applicable regulations thereunder, and a new entity, found by the Board to be an “employer” under part 301 of this chapter, is formed to operate or continue service over such line; the Board will assign to such entity a new-employer contribution rate in accordance with section 8(a)(1)(D) of the RUIA and § 345.304 of this part. [61 FR 20072, May 3, 1996, as amended at 70 FR 42489, July 25, 2005] § 345.205 Reincorporation. The cumulative benefit balance, net cumulative contribution balance, 1-year compensation base, and 3-year compensation base of an employer that reincorporates or otherwise alters its corporate identity in a transaction not involving a merger, consolidation, or unification will attach to the reincorporated or altered identity. § 345.206 Abandonment. If an employer abandons property or discontinues service but continues to operate as an employer, the employer's individual employer record shall continue to be calculated as provided in this subpart without retroactive adjustment. § 345.207 Defunct employer. If the Board determines that an employer has permanently ceased to pay compensation with respect to which contributions are payable under this part, the Board will, on the date of such determination, transfer the employer's net cumulative contribution balance as a subtraction from, and the cumulative benefit balance as an addition to, the system unallocated charge balance and will cancel all other accumulations of the employer. The Board's determination that an employer is defunct will be based on evidence indicating that the employer has ceased all operations as an employer and has terminated its status as an employer. In making its determination, the Board will consider evidence as described in part 202 of this chapter with respect to termination of employer status under the Railroad Retirement Act. Mere failure of an employer to pay contributions due under this part does not indicate that such employer is defunct. § 345.208 System records. Effective January 1, 1990, the Board will establish and maintain records necessary to determine pooled charges, pooled credits, and unallocated charges for the experience rating system and will publish a notice with respect thereto no later than October 15 of each year. See § 345.302 of this part for the definition of these terms. Subpart D—Contribution Rates § 345.301 Introduction. (a) General. (b) Components of an experience-rated contribution rate. (1) An allocated charge based upon the amount of benefits paid to employees of such employer; this charge is explained in subpart E of this part; (2) An unallocated charge based upon a proportionate share of the system unallocated charge balance, the computation of which is explained in § 345.302(p) of this part; (3) A pooled charge, also referred to as risk-sharing, to cover the cost of benefit payments that are chargeable to a base year employer but are not captured by the contribution rate assigned to such employer because it is paying contributions at the maximum rate of contribution; the formula for computing the pooled charge is set forth in § 345.302(j) of this part; (4) A surcharge of 1.5, 2.5, or 3.5 percent, or a pooled credit, depending on the balance to the credit of the Account as of June 30 of a given year; and (5) An addition of 0.65 percent to the rate of contribution to cover the expenses incurred by the Board in administering the RUIA. (c) Maximum rate of contribution. § 345.302 Definition of terms and phrases used in experience-rating. (a) Account. (b) Benefit ratio. (c) Benefits. (d) Compensation. (e) Contributions. (f) Cumulative benefit balance. (1) The net amount of the benefits charged to the employer under subpart E on or after January 1, 1990, and (2) The cumulative amount of the employer's unallocated charges on and after January 1, 1990, as computed under paragraph (r) of this section. (g) Fund. (h) Net cumulative contribution balance. (1) Step 1. (2) Step 2. (3) Step 3. (i) One-year compensation base. (j) Pooled charge ratio. (1) Step 1. (2) Step 2. (3) Step 3. (4) Step 4. (k) Pooled credit ratio. (1) Step 1. (2) Step 2. (l) Reserve balance. (m) Reserve ratio. (n) Surcharge rate. (1) Step 1. (2) Step 2. (o) System compensation base. Federal Register (p) System unallocated charge balance. (1) Step 1. (2) Step 2. (3) Step 3. (4) Step 4. (5) Step 5. (6) Step 6. (7) Step 7. Federal Register (q) Three-year compensation base. (r) Unallocated charge. § 345.303 Computation of rate. (a) With respect to compensation in a calendar year that begins after December 31, 1992, the Board will compute, by October 15, 1992, and by October 15 of each subsequent year, a contribution rate for each employer (other than a new employer) in accordance with the following 8-step process: (1) Step 1. benefit ratio (2) Step 2. reserve ratio benefit ratio; (3) Step 3. pooled credit ratio (4) Step 4. (5) Step 5. (6) Step 6. surcharge rate (7) Step 7. pooled charge ratio (8) Step 8. (b) The percentage rate computed under paragraph (a) of this section is the employer's rate of contribution for the calendar year in question. (c)(1) Any computation that is to be made under this section on the basis of a 12-quarter period ending on a given June 30 shall be made on the basis of a period beginning on January 1, 1990, or on the first day of the first calendar quarter that begins after the date on which the employer first began to pay compensation subject to this part, or on July 1 of the third calendar year preceding that June 30, whichever date is later, and ending on that June 30. (2) The amount computed under paragraph (c)(1) of this section shall be increased to an amount that bears the same ratio to the amount so computed as 12 bears to the number of calendar quarters on which the computation is based. § 345.304 New-employer contribution rates. (a) An employer whose coverage under the RUIA becomes effective after December 31, 1989, is considered a “new employer” for the purposes of this part and will be assigned a contribution rate as computed under this section. The Board shall determine where an employer is a new employer and, if so, the effective date of its coverage under the RUIA and its rate of contribution with respect to compensation paid to employees on and after such effective date. (b) Initial contribution rate. (c) Second contribution rate. (d) Third contribution rate. (e) Subsequent calendar years. (f) Meaning of symbols. (g) Special rule for certain computations. § 345.305 Notification and proclamations. (a) Quarterly notifications to employers. (b) Annual notifications to employers. (c) Proclamations. (1) The balance to the credit of the Account as of the preceding June 30 for purposes of computing the pooled credit ratio and the surcharge rate of contribution; (2) The balance of any advances to the Account under section 10(d) of the RUIA after September 30, 1985, that has not been repaid with interest as provided in such section as of September 30 of that year; (3) The system compensation base as of that June 30; (4) The system unallocated charge balance as of that June 30; and (5) The pooled credit ratio, the pooled charge ratio, and the surcharge rate of contribution, if any, applicable in the following calendar year. (d) Publication and notice. Federal Register. § 345.306 Availability of information. Upon request of an employer subject to this part, the Board will make available to such employer any information that is necessary to verify the accuracy of its rate of contribution, as determined by the Board, including information necessary to verify the accuracy of the data maintained by the Board in the employer's individual employer record. § 345.307 Rate protest. (a) Request for reconsideration. (b) Appeal to the Board. (c) Decision of the Board final. (d) Waiver of time limits. (e) Rate pending review. (f) The amount of a contribution, interest, or penalty may be protested in accord with § 345.124 of this part. [67 FR 13568, Mar. 25, 2002, as amended at 80 FR 13764, Mar. 17, 2015] Subpart E—Benefit Charging § 345.401 General rule. Effective January 1, 1990, all benefits paid to an employee for his or her days of unemployment or days of sickness will be charged to the base year employer of such employee, except as hereinafter provided in this part. The Board will make the charge by adding the gross amount of the benefits payable to an employee on the basis of a claim for benefits to that employee's base year employer's cumulative benefit balance. The benefit charge does not depend on whether the employee receiving the benefit payment is a current employee of the base year employer. § 345.402 Strikes or work stoppages. If benefits are payable to an employee for days of unemployment resulting from a strike or work stoppage growing out of a labor dispute, the Board will charge the benefit payment to the system unallocated charge balance, not to the cumulative benefit balance of the employee's base year employer. For the purposes of this section, the phrase “strike or work stoppage growing out of a labor dispute” does not include an employee's protected refusal to work under section 212(b) of the Federal Railroad Safety Act of 1970 (45 U.S.C. 441(b)). § 345.403 Multiple base year employers. (a) General rules for benefit charging. (1) If the employer at the time of the claim is the same as the last employer in the base year, benefits will be charged in reverse chronological order, but the amount charged to each base year employer shall not exceed the amount of compensation paid by such employer to the employee in the base year; (2) In all other cases, benefits will be charged in the same ratio as the compensation paid to such employee by the employer bears to the total of such compensation paid to such employee by all such employers in the base year; benefit charging in accordance with this method shall apply whether the base year employment was with successive employers or with concurrent employers. (b) Excess benefit payments. (c) Board records as basis for charging multiple base year employers. § 345.404 Adjustments. (a) Recovery of benefits charged to base year employer. (b) Recovery of other benefit payments. (c) Payment of interest or other debt collection-related charges. (d) Limitations. (1) If the Board waives recovery of a debt in accordance with part 340 of this chapter, or (2) If the Board finds that a debt is uncollectible, or (3) To the extent of the amount not recovered by the Board by reason of a compromise settlement of a debt. § 345.405 Notices to base year employers. (a) Prepayment notification. (b) Notice of claim determination. (c) Quarterly notice of benefit charges. (1) The total amount of unemployment and sickness benefit payments made after December 31, 1989, that have been charged to the employer as the base year employer of the employees who received the benefits; minus (2) The total amount realized in recovery of such benefits; plus (3) The total amount of the unallocated charges assigned to such base year employer after December 31, 1989; minus (4) The total amount realized in recovery of such unallocated charges. § 345.406 Defunct employer. Whenever the Board determines, pursuant to § 345.207 of this part, that an employer is defunct, the Board will add the amount of such employer's benefit charges, as shown in its cumulative benefit balance, to the system unallocated charge balance.