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ATTACHMENT
VII
ERI CALCULATION
The Experience Rating Index is calculated by first computing
"effective benefit charges" by taking the total benefits paid during the
reporting period and subtracting from them the ineffective charges, inactive
charges and noncharges. The remainder is then divided by the total
benefits.
ERI
= ((BEN-(IEC+IAC+NNC)) / BEN) * 100
where,
IEC
= Ineffective charges: Calculated from the ETA 204, Section C. -- Those charges
for which employer taxes do not fully cover the benefits charged. Employers are
aggregated, by experience factor, into approximately 30 groups. Within each group, the excess, if any,
of benefits charged over estimated contributions is calculated. IEC is the sum of these excesses over
all groups.
IAC
= Inactive charges: ETA 204, Section B, item 6(a) (2). -- Charges to employers
who have gone out of business and from which taxes cannot be collected.
NNC
= Noncharges: ETA 204, Section B, item 6(b) plus item 7(b) -- Payments made to
claimants, but not charged to a particular employer.
BEN
= Total benefits paid during the computation year: ETA 204, Section B, item 5
minus item 7(a).
Example:
State Data: IEC = 50,588
IAC
= 12,132
NNC
= 38,182
BEN
= 205,777
State’s ERI = ((BEN-(IEC+IAC+NNC)) / BEN) * 100
=
((205777 - (50588 + 12132 + 38182)) / 205777) * 100
= 51
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