Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Actuarial Report topic
No spam. Unsubscribe anytime.
Actuarial update: CT Paid Leave fund drops about $22.2 million as claims surge this quarter
Summary
The authority’s actuary reported a $22.2 million negative net activity through Dec. 31, 2025, lowering the ending fund balance to $616.7 million from the prior projection; staff said a quarterly surge in claims — about 10% above projection — was the main driver while solvency metrics remain above targets.
The CT Paid Leave Authority’s quarterly actuarial update showed the program ran a net negative experience of about $22.2 million for the July–December 2025 period, reducing the fund balance to about $616.7 million from a starting balance near $638.9 million and roughly $10 million below the prior projection.
The actuary told the committee that contributions plus investment income totaled about $237.1 million for the period while incurred claims and other expenses were the major outflows. "Net that was a 20 minus 22.2 million experience," the presenter said, adding that outstanding contributions and claims reserves are excluded from the headline ending-balance figure.
Why it matters: staff said the quarter’s incurred claims ran roughly 10% higher than projected, a short-term spike that drove most of the variance. The presenter described three key assumptions underlying the projections—incidence (the likelihood of filing a claim), duration (how long a claim lasts) and benefit amount paid—and said those assumptions are applied by claim type.
The actuary also noted seasonal patterns in contributions: larger contributions historically arrive in the first calendar quarter (January–March) when more employees have not yet reached wage caps. Staff revised the full-year contribution estimate slightly downward to account for slower wage growth and projected a full-year net activity of about -$5.6 million under the updated assumptions.
Board members pressed for clarification on whether the 10% rise reflected claims incidence or claim volume; staff said the 10% figure reflected this quarter’s higher claim volume rather than a jump in take-up rate, which is measured against a much larger denominator. The presenter said year-over-year growth assumptions baked into the model are materially smaller—roughly a 2–3% incidence increase plus about 4% wage-related benefit growth—so quarterly volatility can produce larger deviations from that path.
The presenter and finance staff said solvency metrics remain within target ranges despite the shortfall and that projections will be updated as additional quarters’ data are received. The committee asked for further analysis of the claims spike and for continued monitoring ahead of the next quarterly update.
No formal board action was taken; the presentation and discussion were informational.
