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Actuarial update: CT Paid Leave Authority posts $19.9M net activity; long-term claims trend narrows cushion
Summary
Consultants reported a $19.9 million net activity gain for July 2024–March 2025 and a $648.6 million ending fund balance, but warned that a longer-term rise in claims is narrowing the authority's adverse-loss cushion and warrants continued monitoring.
The CT Paid Leave Authority received an actuarial quarterly update showing net activity of $19.9 million for the nine months ending March 2025, Spring Group consultant Harindra said, a result driven by slightly higher contributions, modestly stronger investment income and lower incurred claims.
"The net activity for this 9‑month period was 19.9 million," Harindra said during the presentation, noting the figure compared with a prior projection of $13.4 million. Contributions for the period were about $359.9 million and investment income ran roughly $21.1 million; incurred claims were reported at about $333.9 million. The consultant reported an ending fund balance of $648.6 million.
Why it matters: the authority uses several funding metrics to judge whether the trust can withstand shocks. Harindra walked the board through three metrics: the reserve‑to‑net‑fund‑balance ratio (target: net balance at least one‑third of reserve), whether the net fund balance covers one‑third of next year’s contributions, and an adverse‑loss stress test that simulates multi‑year claim increases. The presenters warned the adverse‑loss metric is moving closer to its trigger.
"The way we look at adverse losses is we look at next year's claims and say okay if the claims increase by 50%, do we have enough funds to cover that loss," Harindra said, explaining the stress scenario the authority uses to evaluate multi‑year deterioration in claims experience.
Board member Mike Sult pressed presenters to reconcile a single quarter of lower claims with an overall rising claims trajectory. Harindra and staff said the recent quarter’s better result was modest and likely seasonal, while December’s revised projections had already raised assumptions to reflect increasing claims. Staff also showed an internal chart comparing actual monthly paid claims with budget and revised projections; recent months averaged about 102% of the most recent projection.
Despite slightly better short‑term experience, Spring Group said it would not change the FY2025 annual projection at this time, preferring a conservative stance until it is clear whether favorable variance persists.
The board received the report and asked staff to continue monitoring claim trends and include sensitivity analyses in future actuarial reporting. No policy action or change to the projection was adopted at the meeting.
