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Paid Leave Finance Committee Reports Higher Benefits Payments, Trust Fund Remains Strong
Summary
Finance and Audit Committee reported higher-than-expected benefit payments in February and March, resulting in short-term negative variances but projecting a year-end trust fund balance around $580 million.
The Connecticut Paid Leave Authority’s finance and audit committee reported April 10 that benefit payments have risen above prior budget projections, producing near-term negative variances while the trust fund remains well capitalized.
Dave Marcon presented results for February and a preview of March activity. The operating account showed a February loss of about $958,000, which Marcon said was $445,000 better than budget for the month. Year-to-date operating results were negative about $1.6 million, a $1.4 million shortfall compared with budget, Marcon said, and he noted the authority deferred a planned $5 million transfer for administrative fees because operating reserves were sufficient.
Marcon reported that the contribution fund had a year-to-date balance approaching $600 million as of February. He described contribution activity for February as negative roughly $32.5 million, driven primarily by higher benefit payments. Benefits paid for the month were about $33.9 million, an average run rate he said of about $8.5 million per week, and March benefits paid were reported at about $35.2 million (an $8.8 million weekly run rate).
Marcon also said benefit administrative fees rose to $1,957,000 per month because of an allowed 3% contract price increase, but other lines had positive variances. He projected the trust fund balance around $580 million at the end of the fiscal year and said operating account projections remained broadly positive when accounting for the deferred administrative transfer.
The committee said usual seasonality affects benefits—activity rose after the late-January trough—and that contribution receipts were expected to increase during April’s employer grace period. Investment income on short-term investments was reported near 4.4%, contributing to positive revenue.
Board members asked no substantive questions during the presentation. The finance report will be discussed further at the finance and audit committee meeting on April 23 and then at the board’s May meeting.
