For the second year in a row the Yukon Workers’ Compensation Board is giving back $10 million to Yukon employers, the board announced Thursday.
For the past few years the WCB has been dealing with an unusual problem: it has too much money.
Its funding model requires it to have between 121 and 129 per cent of what it would cost to compensate every single worker who has an active claim.
At it stands, the fund is at 155 per cent, well above target.
In 2014 the WCB started a four-year plan to bring the fund in line with its target. Last year it gave back $10 million, reducing the surplus from 160 per cent to 155.
Eligible employers will receive a rebate equal to 15.5 per cent of their total premiums paid from January 2013 to Dec. 31, 2015.
The board has also charged lower rates to reduce that surplus. But that technique creates “a gap between what employers perceive to be the costs for caring for injured workers and what the cost really is,” said WCB chair Mark Pike.
The 2017 average rate for Yukon employers will be at $1.87 per $100 of payroll, when the true cost is around $2.30.
“This has the potential to erode workplace safety and increase the risks of injury and occupational diseases,” Pike said.
Between 2012 and 2016 the board returned $35 million through a combination of rebates and rate subsidies.
Good investments and low injury rates brought the fund to its overfunded position, Pike said.
But the WCB doesn’t want to give the entire surplus back in one shot: that would simply cause the assessment rates to skyrocket.
Instead it wants the rates to gradually increase until they reflect the true costs of compensating injured workers.
For 2017 half of Yukon employers will see an increase in the assessment rate. That includes the biggest employer: the Yukon government.
The rates for municipal, First Nations, and Yukon governments will go up by 2.8 per cent to $1.45.
Pike noted that employers and employees can affect the assessment rate by making sure workplace safety rules are followed.
It’s safe to expect that the assessment rates will still be subsidized next year, WCB president Kurt Dieckmann said.
Whether there will be another rebate will be decided next year, as it depends on how well the investment funds are doing and what the excess reserves are.
Ultimately, while the board wants to solve the overfunding issue, the WCB says it’s in a good situation.
“To be in a position where you have excess reserves is a way nicer problem than, say, Ontario who is significantly underfunded,” Pike said.
Ontario’s WCB fund is below the 100 per cent target, he said.
Contact Pierre Chauvin at pierre.chauvin@yukon-news.com