The WSIB has announced that premium rates will be maintained at current levels for all employers in 2014. Our Board of Directors’ decision to keep rates at current levels was made based on careful actuarial and financial analysis. The decision balances the needs of Ontario’s workers while providing stability for employers as the WSIB reviews its methods for setting premium rates in consultation with stakeholders to come up with the fairest and most effective solutions.
The WSIB is well-positioned to offer premium-rate stability. Results for the first quarter of 2013 show the system is progressing well toward meeting financial requirements set under government regulation last year.
Our sufficiency ratio of assets to liabilities has already improved from 54.2% in 2009 to 56.9% by the end of 2012. The WSIB’s ongoing Rate Framework stakeholder consultation is looking at changes to the premium rate setting process and experience rating to improve fairness in the way the system is funded. This work will help ensure we can achieve our legislated funding requirements of 60% by 2017, 80% by 2022, and full funding by 2027.
We have seen significant improvements in recovery and return to work outcomes for injured workers since 2009. These improvements have been accomplished while maintaining benefit levels for injured workers.
Premium rate increases, along with growth in insurable earnings, brought an additional $2.4 billion into the system from 2010 and 2013. At the same time, Lost Time Injuries have decreased, and better outcomes for injured workers have reduced benefit costs, saving the system more than $500 million a year.
In 2012, employer premiums fully covered the WSIB’s operating costs, meaning approximately $1.3 billion of investment earnings could be applied against the unfunded liability. Our administration expenses continue to be tightly controlled, with improved efficiency and modernization.
Under legislation, the Maximum Insurable Earnings Ceiling for determining benefits and premiums is set each year based on the July average industrial wage for Ontario from Statistics Canada. The ceiling for 2014 is $84,100. This is an increase of 1.1 per cent from $83,200 in 2013.
Collaboration and planning
We recently released updates on two major consultations to improve our premium rate framework and benefits policies. Both consultations show how we are working with stakeholders to ensure that key elements of the system are fair and sustainable for years to come.
We also plan to release our Sufficiency Plan and Funding Policy, demonstrating robust approaches to meeting financial goals between now and 2027. These will serve as guides in reaching funding targets mandated by the Ontario government.
Our Funding Policy outlines the principles of a fair and transparent approach to funding. The Sufficiency Plan is a road map to achieving our legislated funding targets. It allows us to create and test asset and liability assumptions and risk mitigation strategies in relation to the achievement of the legislated targets.
And we’ll be keeping stakeholders informed about our progress with the latest of our regular quarterly financial and Measuring Results reports, as well as our updated By the Numbers online statistical report.