This presentation covers WorkSafeBC’s mandate, an overview of the classification and rate setting system, school district classification unit details, historical and 2012 rates for School Districts, and 2012 rate details for industry performance trends.
2. Topics WorkSafeBC’s mandate Overview of the classification & rate setting system School district classification unit details Historical and 2012 rates for School Districts 2012 rate details Industry performance trends 2
3. WorkSafeBC’s Mandate To work with workers and employers as follows: • To promote the prevention of workplace injury, illness, and disease • To rehabilitate those who are injured, and assist with timely return to work • To provide fair compensation to replace lost wages for injured workers during their recovery • To ensure sound financial management for a viable workers’ compensation system 3
4. Overview of 2012 Rates The average base rate will remain at $1.54 in 2012, down from the 2008, 2009 and 2010 rate of $1.56 per $100 of employers’ assessable payroll. 39 percent of employers will experience a base rate increase 53 percent of employers will experience a base rate decrease 8 percent of employers will have their base rate remain unchanged 4
5. The key rate drivers for 2012 The 2012 benefit target cost rate has decreased 5.9% from the 2011 to 2012 rates The injury rate had a significant 20.9% drop in 2009 (in part due to the decline in the workforce of high risk industries) and a further 2.6% drop in 2010 Smoothed investment income returns in 2010 of 4.8% (9.8% on a market basis) were below the actuarial requirements of 5.4%. The change in financial position from a $758 million surplus in 2009 to a $435 million surplus in 2010 to a projected $8 million deficit by the end of 2011 Modest rate increases are projected through 2015 5
6. Classification & Rate Setting The Board has adopted a modified collective liability system, under which self-sufficient groups of employers are created on the basis of similar cost rates. These groups must be large enough to provide for an adequate spread of the risk and stability in the assessment rate. The costs of compensable injuries and diseases, along with the costs of administering claims and carrying out other statutory requirements, are collected from employers in the form of assessments. For this purpose, employers are classified into classification units, industry groups and rate groups. The costs incurred in relation to these groups determine the assessment rate paid by their members. The Board creates groups that are large enough to provide for an adequate spread of the risk and stability in the assessment rate. 6
7. Rate Group Industry Group Sector Subsector Classification Unit Employer Classification System British Columbia’s aggregate economic undertaking Assessments paid by employers ACCIDENT FUND Aggregation Granulation 7 7
8. 64 firms $3.4 billion in 2010 assessable payroll Top 5 firms make up 35% of the payroll , 36% of the 5-year claim costs Top 10 firms make up 48% of the payroll , 50% of the 5-year claim costs 8
9. DV01 $0.48 Rate Group DV 2012 membership cost rate $0.42 The membership cost rate is calculated using up to 15 years of data (until 2,000 wage loss claims are accumulated), weighted more heavily on most recent years, and capping any claim to a maximum of 8 time maximum assessable payroll. 9
10. Costs and Rates The 2012 base rate down due to lower benefit cost rate and improved rate group surplus arising from significantly lower than projected prior year claim costs. Rate decrease limited to 20%. 10