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Unemployment Services Trust
Did you know your organization may have an option besides the traditional state unemployment program?
The Unemployment Services Trust (UST) is a grantor trust created by and for nonprofit organizations. Rather than subsidizing the unemployment claims of for-profit companies, UST members pool their resources to pay only the claims incurred by their members.
A federal law enacted in 1970, entitles 501(c)(3) organizations to opt out of their state's unemployment tax systems. If your organization has at least 10 employees, it's possible that UST can save you money. Members save 50% off their unemployment taxes their first year of participation in the Trust. A typical member continues to save approximately 30% of what they would have contributed into the state system.
Take our quiz to see if you can save on your unemployment taxes
Please take the quiz below to see if your organization is a good candidate for UST. If you think your organization can save money through the Trust, you may request a savings quote from their website, or contact Bill Downey at bdowney@agia.com
How the Trust works
Your organization makes quarterly contributions to your Individual Trust Account. In your first year of participation, the contribution rate is 50% of your state assigned rate. The second year, your rate equals your state rate - but just for this one year, to help establish a solid reserve in your account. In future years, your contribution rate is determined actuarially, meaning that your rate is set according to your actual claims versus contributions. The Trust allows you to eliminate the State dictated subsidies (for high turnover employers) from your contribution rate. Your employees will experience no difference in the amount or manner of receiving their unemployment benefits.
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