UI Trust Fund OK?
By Sam Slom, President & CEO, Smart Business Hawaii"The Unemployment Trust Fund (UTF), which is used to pay unemployment benefits, entered the new federal fiscal year in the black," said Department of Labor and Industrial Relations Director Dwight Takamine. The state had borrowed funds from the federal government beginning in December 2010 and anticipated owing $1 million in interest on September 30. Instead, the state only paid $211,000 for interest on loans made in December 2010. However, the State and Hawai'i employers were potentially facing additional interest payments this year. For loans taken during calendar year 2011, the accrued interest of $371,000 would be waived as long as the state took no further federal loans between October 1 and December 31, 2011. The DLIR, however, projected needing to borrow again during the last quarter of 2011, which would require the immediate payment of $371,000 in interest that had accrued on federal loans taken since January 1, 2011.
According to Governor Abercrombie,. Hawai'i employers' will save $1,200,000 because the law providing the mechanism for the assessment for the interest payment allows the DLIR to forego charging an Employment & Training Fund Assessment next year. DLIR projects paying off any short-term loan by the end of 2011.
Taken from his weekly column, 11-2-2011.