WCB Proposes Reduced Rates for ’06

October 12, 2005

The Saskatchewan (Canada) Workers’ Compensation Board (WCB) this week announced its proposal for a 6.6% decrease in employer premium rates for 2006.

Acceptance of the proposal by employers and WCB Board members will mean a drop in the average net premium rate of 13 cents from $1.97 to $1.84 per $100 of payroll.

“WCB Board Members have reviewed the preliminary rate package and have directed the administration to seek employers’ views in rate consultation sessions before we give final approval to the 2006 rates,” said WCB Chairman John Solomon.

More than 93% of the WCB’s nearly 34,000 registered employers could be assessed lower premiums or could see premiums frozen for 2006. The remaining employers may see modest increases averaging 4.6%.

According to WCB Chief Executive Officer Peter Federko, three factors contributed to the WCB’s proposed rate decrease. “We’re seeing a decline in the number and duration of claims requiring time off work. This is combining with a drop in the province’s workplace injury rate from a 20-year high of 4.95% in 2002 to a projected 4.13% at the end of this year. As well, investment income is continuing a slow, but steady rise.”

The proposed $1.84 employer premium rate includes additional allocations for rebuilding reserves and paying the costs of administering workplace injury incentive programs.

“The majority of the premium rate is used to fund the costs of injuries,” noted Federko. “Even with these additions, we were able to reduce premiums from last year’s levels.”

New for 2006 is the proposed two cents added to the base premium rate to rebuild the WCB’s Economic Stabilization Reserve (ESR). This reserve was drawn down as one of the strategies for reducing the deficit in the Injury Fund, used to accumulate surpluses for paying the future costs of claims.

Proposed rates continue to contain an addition agreed to by employers to help replenish the Injury fund over 15 years. For 2006, this represents another five cents on the base premium.

“Replenishment of the Injury Fund and reserves is critical to the financial integrity of the WCB and the stability of premium rates,” noted Federko.

Rates also reflect a one-cent allocation for funding premium discounts under the WCB’s experience rating program. The costs of this program were formerly covered by investment income. The program is expected to become self-funded by 2007.

Also introduced at the employer consultation held in Regina was the Certificate of Recognition (COR) program. A program pilot, slated to commence next year, will gauge whether certification of employers developing health and safety management systems is an effective incentive for reducing workplace injuries. Funding for this pilot will see another cent added to employers’ base 2006 premiums.

Last year, the WCB Board approved an eight-cent (3.9%) decrease on the average premium rate. This followed three years of rate increases (2.47% in 2002; 9.1% in 2003 and 12% in 2004).

“Our 2006 rate proposal represents a significant turnaround from 2002, when increased time-loss claims and declining investment income required three consecutive years of higher rates to offset operating shortfalls,” noted John Solomon.

“Saskatchewan premiums continue to be competitive with the western provinces and are among the lowest of all provinces across Canada.”

The WCB holds consultations on its rate proposal each year with trade associations, large employers and labour organizations across the province.

After review and approval by WCB Board members, rates become effective Jan. 1, 2006.

Was this article valuable?

Here are more articles you may enjoy.