Robert Koci
WSIB's unfunded liability more than reported, says C.D. Howe
Canadian Contractor canada Insurance LiabilityAccording to the C.D. Howe Institute, the $12.3 billion unfunded liability of the Workers Safety and Insurance Board in Ontario is actually $19.7 billion.
Ontario’s Workplace Safety Insurance Board (WSIB), which levies employer premiums intended to fund benefits for employees injured in the workplace, has a growing unfunded liability problem. The WSIB’s pace of revenue collection and asset accumulation has not matched growth in current and expected benefit entitlements.
The WSIB reports an unfunded liability of $12.3 billion: to arrive at that number the Board discounts its current benefit liabilities at a 7.0 percent nominal interest rate. A fair-value accounting method would use a much lower discount rate, implying a much higher true liability.
Were the WSIB to discount benefit liabilities at a rate that better reflected the cost of guaranteeing benefits, it would report an unfunded liability about $7.4 billion higher, at $19.7 billion, implying a shortfall of about $4,100 per insured worker in Ontario.
For the full report explaining in detail the author’s conclusions, click here.
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