The Board Continues to Deliver on Its Long-Term Plan
As part of a continuing multi-year plan to reduce its overfunded position and ensure the actual cost of the compensation system is reflected in the rates paid by employers, the Yukon Workers’ Compensation Health and Safety Board is today announcing a 3 per cent increase in the average assessment rate for 2018.
Next year the average assessment rate will rise to $1.93 from the current rate of $1.87, an increase of 6 cents.
At the end of 2016 the Compensation Fund stood at a funded level of 150 per cent, down five per cent from the year prior. The board’s funding policy indicates a target range of 121 to 129 per cent of our total liability.
The average assessment rate is used when calculating the various industry group rates which employers will pay. Injury cost experience has a major influence on those calculations. As a result, the rates employers pay may be higher or lower than the average rate.
“We remain committed to reducing the fund to its target range and reducing the disparity between what employers pay, on average, to support the workers’ compensation system, and what the actual cost is,” said Board Chair Mark Pike. “Year after year we are narrowing the gap, but even with this increase to the average rate in 2018, a 19 per cent rate subsidy of 37 cents will remain.”
“That rate subsidy is an effect of our over-funded position,” Pike continued. “As we reduce that position, like we did by 5 per cent last year, our funding policy requires that we increase the rates employers pay by reducing the subsidy.”
“That’s a good thing,” Dieckmann added. “We firmly believe that when employers experience the actual costs of the compensation system, they can more easily recognize the benefit of reducing job-related injuries and illnesses.”
“We don’t want there to be any surprises for employers,” said Pike. “Our decision to increase the average assessment rate delivers on our steady promise to manage the workers’ compensation system responsibly and equitably.”
“Setting rates is a complex, time consuming process that involves a wide variety of factors,” continued Pike. “One factor rises above the rest, however: keeping workplaces safe.”
In its ongoing efforts to reduce its overfunded position and ensure assessment rates reflect the actual cost of the workers’ compensation system, since 2012 Yukon Workers’ Compensation Health and Safety Board has distributed approximately 40 million dollars of excess reserves to employers in the form of rate subsidies and rebates.
Industry classifications and assessment rates for 2018 will be announced later this year.
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The average assessment rate for 2018 is $1.93, a $.06 increase over the 2017 rate of $1.87. This is still below the current actual cost of the compensation system of approximately $2.30 per $100 of payroll.
Projected assessable for the coming year.
The anticipated cost of injuries that are expected to occur in the coming year.
The investment performance of the Compensation Fund.
The 2018 average assessment rate is used to calculate the industry-specific rates that employers will actually be assessed on in 2018.
Employers pay rates that correspond with their particular industry classifications (e.g., Resources and Transportation, Construction or Services) and the risk levels for particular occupations within those classifications (low, medium or high).
In 2017 these rates range from $0.66 per hundred dollars of payroll for the Low Services rate group (e.g., childcare or communication services) to $7.94 for the High Resources and Transportation rate group (e.g., diamond drilling and long-haul trucking).
Current and historical rates are published on our website.
The 2018 assessment rates will be announced later this year.