(a) Fringe benefits (account series 12–00–00) distributed to the activities using one
of the following techniques (in order of preference):
(1) Apply appropriate factors to the total of the fringe expense account, in such a way
as to distribute an equitable proportion of cost to each activity. These factors shall be developed to take into account variables such as the following:
(i) The effect of seniority on the expense. For example, profit sharing or pensions may be available to only certain categories
of employees, which may be more predominant in one activity than another.
(ii) The effect of the type of work performed. For example, workmen's compensation expense may vary for each category of employees
because of the rate charged or the claims experience of the category.
(iii) Any other variable which may have an appreciable effect on the equity of the apportionment.
(2) Distribute the amount in the same proportion as the pay charged to each activity
in account series 11–00–00 (salaries and wages).
(3) Distribute the amounts using any other equitable basis which the carrier can substantiate.
(b) All carriers shall be prepared to describe the basis of apportionment used to distribute
expenses included in this instruction.
(c) Any carrier which finds it impracticable to distribute expenses as required by this
instruction should furnish the Board with full particulars of the conditions which
prevent the proper distribution. Upon receipt of such information carrier will be advised of the procedure to be
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