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CT Paid Leave Authority keeps 2026 contribution rate at 0.5% after fund projections show long‑term shortfall
Summary
After a Spring Group presentation showing a projected 10‑year fund shortfall under baseline assumptions, the CT Paid Leave Authority voted to keep the 2026 contribution rate at the statutory cap of 0.5%; several board members requested a further review of operational expenses before any future rate request to the legislature.
The CT Paid Leave Authority on Sept. 11 voted to set the 2026 contribution rate at 0.5%, the statutory cap, after staff presented quarterly results and a multi‑scenario sensitivity analysis that illustrated potential long‑term deficits.
Harindra (Spring Group) presented the authority's FY25 year‑end position and 10‑year projections. He reported a FY25 ending fund balance of $641,000,000 and a baseline projected 10‑year net activity of approximately −$258,600,000 under the models presented. Staff calculated a 10‑year target reserve of roughly $761,900,000 based on assumptions the board previously adopted (including a 10% reduction in contributions over three years and a 25% increase in claims over three years), leaving an estimated shortfall in the hundreds of millions under baseline assumptions. Staff also described several sensitivity scenarios — single‑year spikes in claims, multi‑year employment declines that reduce contributions, and small reductions in the contribution rate — which materially reduced the projected fund balance.
Erin (staff) told the board the authority currently lacks statutory authority to raise the contribution rate above 0.5% and recommended retaining the rate at 0.5% for 2026. "Given that our cap is a half a percent, you have no ability to increase it under existing legislation," Erin said, urging caution because modeled rate decreases would worsen solvency.
Board discussion reflected support for keeping the rate at the cap while asking staff to seek operational savings and better documentation before discussing any legislative change. Molly Weston Williamson said the projections and program rollout argue for maintaining the current rate; Melissa Gibran characterized the contribution as a "payroll tax" and urged attention to affordability and expense control before requests to increase the rate. Justin Zartman and Asia asked for a deeper operational expense review if the board later considers asking the legislature for rate‑raising authority.
A motion to set the 2026 contribution rate at 0.5% was moved, seconded, and approved by roll call. Amber administered the roll call; the ayes carried and the motion passed.
What it means: The contribution rate will remain at the statutory cap for 2026. Staff cited projections that show the fund remains solvent in the near term under the cap but faces long‑term pressure under several plausible scenarios, underscoring the board’s request that staff examine operational expenses and continue monitoring claims and contributions.
Next steps: Staff will continue monitoring trends, refine projections, and prepare a deeper operational expense review should the board consider requesting legislative authority to change the cap.
