CT Paid Leave Authority finance panel hears actuarial update, tables vote on meeting cadence and minutes

The CT Paid Leave Authority Finance Committee met virtually on Dec. 1, 2024, for an informational session on actuarial projections and November financial results but did not have a quorum and therefore tabled both approval of the Nov. 22, 2024, minutes and a formal vote on the committee's meeting frequency.

The session’s central presentation was an actuarial and financial update from staff. Erin (staff member) said the fund “is solvent” and “continues to meet its solvency metrics,” but warned that higher-than-estimated claim volume has reduced the balance relative to budget and will materially affect 10-year projections if current trends continue. Erin said Spring, the authority’s actuary, updated its projection to reflect an assumed increase in incurred claims of about $22,000,000 for the fiscal year and that recent six-month claim volume rose roughly 13% compared with the prior six months.

Why it matters: committee members and staff said the authority’s reserve is large in absolute dollars but sensitive to small changes in claims or contributions, and that the authority has limited immediate tools to respond because the statutory contribution cap is fixed. That constraint, members said, would require legislative action to change.

At the meeting, Dave (finance staff) reviewed November operating and contribution results. He reported net operating activity for November of about negative $1.4 million with a modest positive variance for the month after timing-related payroll differences, and said year-to-date operating net activity was just under $4.6 million with a roughly $2.0 million positive variance through November. On contributions and benefits, Dave reported November benefit payments of about $43.6 million (noting five weeks were reimbursed to Aflac that month) and that year-to-date contribution-related net activity was roughly negative $33.8 million, approximately $21.8 million lower than budgeted largely because benefit payments exceeded projections.

Staff and members discussed longer-term outlooks. Erin said Spring’s updated 10-year projection shows a range of scenarios: a baseline (“green”) that would leave the fund near the low hundreds of millions at 10 years; a more adverse scenario combining higher claims and lower contributions (“red”) that would generate material net losses; and intermediate lines in between. Erin observed that raising the contribution rate to 5.54% in the model would reach a preferred resiliency target but noted the authority does not have unilateral power to change the statutory cap.

Board members on the call — including Mike Soltes and Ellen McKitterick — urged the finance committee to continue monthly meetings so staff and the committee can track changes closely. Soltes said he preferred to continue monthly meetings “to watch the money,” and McKitterick said monthly meetings were appropriate given recent presentation material showing small changes can have large effects on 10-year projections.

Committee discussion also covered the authority’s outreach and IT spending. Dave said operating savings this year included lower-than-budgeted Salesforce licensing fees and use of bond funds for custom fund-recovery solutions; he reported about $1.8 million of bond funds remained for those purposes. He also said the authority had budgeted for community education partnerships with 12 organizations but had executed seven contracts to date, producing savings in outreach and legal expenses.

No formal votes or policy changes were taken. The committee tabled formal approval of the Nov. 22 minutes and a vote on whether the finance committee should change its meeting cadence; staff said those items will be brought back once enough members can participate. Erin reiterated staff will continue educating the legislature about how the authority’s funding mechanism works and the implications of the contribution cap, but she said staff has no current legislative plan to seek a cap change without board direction.

The meeting closed after a brief question-and-answer period and the committee adjourned at 9:41 a.m.

Ending: The committee will reconvene at its next scheduled meeting; staff shared slides and the updated Spring projections with members for their review prior to that meeting.