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CT Paid Leave Authority presents multi‑year expense review, says limited room to cut costs
Summary
Authority staff presented five–six years of financial data showing administrative expenses (~$37–$39M) are small relative to benefit payouts (reported at $445M in the most recent full year), highlighted the $22.7M Aflac admin fee and outreach investments, and said there is little ‘wiggle room’ to reduce spending without harming program operations.
At a morning meeting the CT Paid Leave Authority heard a detailed finance briefing showing administrative costs remain a small share of total outflows while benefit payments have grown significantly.
Presenter Dave led a slide review of five to six years of activity and said total administrative expenses have run between about $37 million and $39 million in recent years while benefit payments have climbed, reaching roughly $445 million in the most recent full year. "Expenses for the authority are pretty low compared to the amount of benefits we've been paying out," he said.
Dave identified the two largest expense categories as the benefit administrative fee paid to the program administrator (Aflac) — about $22.7 million annually under the contract that had a flat fee for an original term through December 2024 — and paid‑leave administrative expenses (payroll, IT, outreach, adjudication). He said the Aflac fee rose 3% in January 2025 after the contract’s flat period ended and noted that a portion of fiscal 2023 was lower because contract servicing levels were not met and money was returned to the authority.
Staff described how specific lines have moved: payroll and related employee costs rose during the initial ramp (from three FTEs in year one to as many as 34 at peak) and have since leveled; contact center services (currently United Way) run at roughly $1.5 million annually; outreach increased to about $1.4 million in fiscal 2025 because the authority launched a Community Engagement Coordinator (CEC) program to provide in‑person assistance and leverage partner ties; and IT costs vary by year depending on consultant use and software licensing.
"Outreach is a really important investment for the authority to get the word out," Dave said, citing a New Jersey paid‑leave presentation at a NASWA meeting as a model for long‑running outreach programs. He added the authority prefers competitive procurement and judicious consultant use: "We don't hire consultants just to hire consultants; there's a method behind the madness."
Staff also highlighted operational practices that contain costs: employees are fully remote, which eliminates occupancy expenses; some bond and seed repayments have been completed (the state seed repayment due October 2022 has been returned); and the authority absorbs electronic contribution processing fees rather than passing them to employers.
A board member, Melissa Gibran, asked for an updated FY25 organizational chart to compare with FY24 and whether FTE counts are tracked year‑to‑year; staff agreed to provide the chart. On pension/fringe mechanics, staff clarified the authority pays an overhead rate (about 60%) with each payroll and funds associate costs from the authority’s revenue rather than via the comptroller.
Staff reviewed August results: the authority spent just over $1.0 million for the month (about $200,000 under budget), with payroll and benefits at just under $700,000; contact center costs at about $133,000; and outreach at about $116,000. Contribution activity for the month was just under $48,000,000 while benefits paid were roughly $49,200,000 (the larger benefits number reflected reimbursement to Aflac for a five‑week period). The contribution fund balance reported was about $630,000,000 and total assets about $636,000,000. Investment income in August ran about 4.4%, and staff said yields were expected to ease slightly following a Federal Reserve rate reduction.
Dave closed by saying the authority has generally run administrative expenses below budget (admin actuals roughly $12–$14 million versus budgeted $17–$18 million in recent years) and that, given the structure of those costs and program priorities, "there's really not much, if any, wiggle room to cut the expenses," adding that cutting essentials could be "penny wise and pound foolish."
The presentation did not produce any formal motions or policy changes; staff will provide the requested FY25 org chart and continue regular financial reporting.
