Quick Links
Customer Centres
WorkSafeBC reports surplus in 2006
Richmond, B.C., May 3, 2007 — WorkSafeBC announced today a total comprehensive surplus of $971 million for 2006 compared to $967 million in 2005. Ensuring solid financial stewardship of the workers' compensation system enables WorkSafeBC to accomplish its mandate to prevent workplace injury, illness, and death; provide fair compensation to injured workers; and assist injured workers return to work in a safe and timely manner.
The 2006 surplus was achieved as a result of strong financial markets which provided investment returns of 11.6 percent in 2006; an expanding economy with more employers contributing to the system; and increased employment. Workers' compensation insurance is paid by employers and based primarily on the value of their payrolls; as such, increased employment means increased revenue for WorkSafeBC.
“It should be cautioned, however, that fair value reporting which reflects the market value of investments at the end of the reporting year is susceptible to future market losses,” said WorkSafeBC's Chief Financial Officer Sid Fattedad.
WorkSafeBC's Board of Directors has, therefore, approved the appropriation of $400 million from the surplus to reserves to buffer against future adverse circumstances that could negatively impact WorkSafeBC's financial position. This brings total reserves to $840 million at the end of 2006 or roughly 10 percent of benefit liabilities. The additional premium income and the value of the funds held in reserve will be paid out as benefits to injured workers and their families for many years to come, protecting the system from fluctuating financial markets and economic circumstances.
“In addition, an unappropriated surplus of $1.3 billion remains and this should translate into stable premium rates into the future, provided injury rates don't increase,” said Fattedad. In fact, B.C.'s employer premium rates remained among the lowest in Canada in 2006 — decreasing by 4.5 percent, from $1.99 per $100 of assessable worker payroll in 2005 to $1.90 in 2006. In 2007, the majority of B.C. employers are experiencing an even lower average rate of $1.67.
“The reason that premium rates have continued to decline is due to the better than expected investment gains that we have been experiencing over the past four years, which is a condition we should not expect to continue in perpetuity. Maintaining low rates depends on a lower incidence of injuries and occupational disease in B.C. workplaces,” said Fattedad.
The provincial injury rate, which is the primary cost driver of workers' compensation costs, rose slightly in 2006 to 3.12 short-term disability claims paid per 100 person-years of employment, compared with 3.09 in 2005. The increase was largely attributed to increases in low-duration injuries (claims between one and three days in duration) and a higher rate of employment growth in high risk sectors, such as construction and manufacturing. And, in 2006, work-related fatalities fell and the rate of successful return-to-work assistance reached a record high.
WorkSafeBC's annual report, available online at WorkSafeBC.com, features detailed information about the organization's key performance measures and its success in meeting those measures during 2006.
According to Acting Auditor General of B.C., Arn van Iersel, WorkSafeBC's annual report and service plan conforms fully to the B.C. Reporting Principles. “WorkSafeBC has met the requirements of the B.C. Reporting Principles for the fourth consecutive year. To date, it is the only organization we've recognized as having met this standard,” he said. “I congratulate WorkSafeBC in their continuing efforts to be accountable to their stakeholders in an open and meaningful way.”
WorkSafeBC is an independent provincial statutory agency governed by a Board of Directors that serves nearly 2.2 million workers and about 188,000 employers. WorkSafeBC was born out of a compromise between B.C.'s workers and employers in 1917 where workers gave up the right to sue their employers and fellow workers for injuries on the job in return for a no-fault insurance program fully paid for by employers. The organization is committed to safe and healthy workplaces and to providing return-to-work rehabilitation and legislated compensation benefits to workers injured as a result of their employment.|
For more information please contact: |
| Donna Freeman
|