Learn why employers received a distribution after 2015 year end, how it was distributed and which firms were eligible for the distribution.
At our 2015 year end, the Saskatchewan WCB’s funded position exceeded the 105-120 per cent funding policy target range. By Dec. 31, 2015, the WCB’s funded position was 144.7 per cent, resulting in a surplus of $281.5 million. The increase in our 2015 funded position is substantially due to investment income.
Following stakeholder input that included representation from both employers and workers, the WCB Board authorized that 100 per cent of the total surplus funds ($281.5 million) be distributed to Saskatchewan employers in two installments in 2016 – $140.75 million in July and the remaining 50 per cent by the end of the year.
The Board considered the following factors in order to make its decision: market uncertainties and investment return volatility; funding policy review; cash flow requirements; economic uncertainty; changes in accounting and actuarial standards; and the uncertainty around Committee of Review recommendations.
Firms will be eligible for the distribution of the 2015 surplus if their net premiums exceeded their claims costs for the years 2012 to 2014. The surplus amount will be distributed to employers by cheque or credit to their WCB employer account in summer 2016.
A: Employers are receiving a distribution because we are overfunded, according to the WCB’s funding policy. If the WCB’s funded position exceeds 122 per cent, a surplus may be distributed back to employers. The increase in our 2015 funded position is substantially due to investment income.
A: No, premiums exceeded claims costs by only eight per cent in 2015. The surplus is substantially a result of investment income.
A: The WCB will distribute 100 per cent of the surplus to employers in two installments; one in July and the second by the end of the year. The surplus will be distributed by cheque or credit to their WCB employer account in 2016.
A: At the time of the distribution, eligible employers whose accounts are current will receive a cheque. Eligible employers who owe WCB on their account will receive a credit. Past due accounts with amounts owing from 2015 are only eligible to receive credits.
A: Only those employers who are receiving a portion of the distribution will be notified.
A: The distribution will be transparent and is based on a fair and equitable process that is determined by comparing each firm’s premiums paid to the claims costs associated with their firm. Firms will be eligible for the distribution if their net premiums exceeded their claims costs for the years 2012 to 2014. The amount of the distribution is determined based on 2014 base premiums. This is the most current year of assessed actual payroll.
A: Yes, the WCB Board is distributing 100 per cent of the surplus in two installments in 2016. When over funded, the WCB funding policy allows up to five years to distribute the excess surplus to employers. At the end of 2015, according to the funding policy, the amount within the Injury Fund in excess of the funding policy is $281.5 million. Of that amount, the Board approved a distribution of $140.75 million, or 50 per cent of the excess surplus, in July. The remaining 50 per cent will be distributed by the end of the year.
A: Following stakeholder input from both employers and workers representation, the WCB Board authorized that the surplus funds in the amount of $281.5 million be distributed to Saskatchewan employers in 2016 in two installments. The first installment of 50 per cent ($140.75 million) will be distributed in July and the remaining 50 per cent by the end of the year. The Board carefully considered the following factors in order to make its decision: market uncertainties and investment return volatility; funding policy review; cash flow requirements; economic uncertainty; changes in accounting and actuarial standards; and the uncertainty around Committee of Review recommendations.
A: In making its decision, the Board did consider current political and economic unrest, including Brexit. While the decision to distribute 100 per cent of the surplus in 2016 is firm, the Board recognizes that current political decisions and other economic uncertainties may have a future impact on the WCB’s funded position. There could also be an impact on premiums should the Board’s funded position fall below 103 per cent.
A: The surplus is substantially a result of investment income and the WCB requires time to responsibly liquefy assets into cash in order to minimize the impact on the price received.
A: Employers who were a net contributor to the compensation system over a three year cumulative period (2012 -2014). Net contributions are defined as base premium plus surcharges less discounts less claim costs. Employers also must have an active status as of December 31, 2015.
A: The excess funded positon was realized during the fiscal year ended Dec. 31, 2015. Employers are required to have an active account as of Dec. 31, 2015.
A: 2014 is the most current year that WCB has completely assessed actual payrolls. A three-year period was chosen to ensure employers were not disqualified based on one or two bad years with respect to claim costs.
A: All employers who were a net contributor (or who have premiums greater than their claims costs) to the compensation system over the three-year period from 2012 to 2014 are eligible.
A: The surplus is targeted to be distributed in summer 2016.
A: A distribution was made in 2015 and prior to that the last similar distribution was over 10 years ago. There is no set interval for distribution. According to our funding policy, the WCB has up to five years to distribute excess surplus.
A: No. The funded position is mostly impacted by realized investment earnings which are hard to predict in volatile investment markets.
A: The Board considered many factors when making its decision and that included both the employers’ and the workers’ perspective. Also, workers’ benefits are determined by legislation. The Workers’ Compensation Act, 2013 increased the maximum wage rate for workers.
A: The board considered many factors when making its decision and that included both the employers’ and the workers’ perspective. Prevention initiatives are managed through the strategic planning and operational planning processes and funded through operational budgets. Safety associations also can request funding from their member employers, which is reflected in the premiums charged to the employers belonging to that safety association.
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