Actuarial update: Authority’s fund position remains strong but contributions below projection and claims rising

Harindra of the Spring Group presented the July–September incurred-basis quarterly results to the finance committee and said the Authority’s fund position remains strong but that recent trends warrant close monitoring. “The prior projection … had a starting fund balance of 641,000,000,” Harindra said, and after revisions the starting fund balance was $638,900,000. “The net activity for the quarter was 200,000 in total,” he said.

Harindra reported earned contributions of $111,400,000, investment income of $6,700,000 and incurred claims of $122,200,000 for the quarter; he said those items produced an ending fund balance of about $639,100,000. He noted contributions in July were lower than expected and that part of the variance reflected the private-plan refunds staff described earlier.

The full-year projection was revised: Harindra said the extrapolated ending fund balance for the year is projected at roughly $648,600,000 with net activity close to $10,000,000 positive, but he cautioned that contributions tend to rise in the first calendar quarter and staff will continue to reforecast as more data arrive. Committee members asked about using WARN Act filings and other forward-looking signals; Harindra and staff said they will incorporate additional data sources where available and that the Authority is monitoring claims trends closely.

Separately, Dave summarized October operating and contribution results: October operating results were just under $2,600,000 (about $376,000 worse than budget for the month) and contribution revenue for the month was $109,800,000 (a negative variance vs. budget of just over $5.4 million). Year-to-date contribution revenue was about $64,300,000, a negative variance of $17,300,000. Dave said short-term investment returns were slightly ahead of budget and that staff expect a contribution uptick in January–March.