Actuary: Segal says higher funding assumptions were used in earlier projections; board orders reconciliations

Richard Ward of Segal Consulting told the board that the actuarial work supporting earlier rate proposals used AEGIS and RGGI funding amounts that turned out to be higher than the amounts in the legislatively approved budget. He told the board that the restatement reduces expected revenue by about $30 million a year and roughly $56 million over the two-year horizon used in the presentations.

Ward explained that Segal’s projections were built from the data made available to it at the time and that the final approved budget figures were not communicated to Segal until recently. Staff and members discussed differences between cash-basis and incurred-basis accounting, timing variability in RGGI payments, and how monthly cash irregularities can mask small per-capita rate gaps. Ward said Segal projects a near-breakeven year on a cash basis given the information they have now, but acknowledged the restatement materially alters earlier rate recommendations.

Board members pressed Segal on whether actuaries should have flagged the discrepancy earlier. Ward said actuaries provide recommendations and rely on the official inputs the program shares; Teresa Carsten said an internal review of prior budget builds and systems coding is underway and that any unaccounted assets will be disclosed at the March meeting.

The board directed staff to reconcile the amounts in the AEGIS and RGGI accounts, provide supporting documentation for any transfers into the main budget account, and return in March with updated rate scenarios and migration modeling so the board can set final rates then.