The Ontario Workplace Safety and Insurance Board has just released its financial report for the fourth quarter of 2008. Along with the financial downturn we have all been experiencing, the report also exhibits varied financial results for the WSIB.
In particular, the administration and health care expenses are areas in which the WSIB has reduced costs, but enhanced efficiency. According to the report, these efforts have resulted in savings of $10 million from administrative expenses.
Unfortunately, the economic downturn has still affected the WSIB. By the end of the fourth quarter of 2008, the WSIB’s unfunded liability (UFL) has reportedly increased from $8.1 billion to a disappointing $11.5 billion. The UFL is about projected future costs of claims in the system that can extend between 30 to 40 years down the road. Originally, the WSIB implemented a 2014 target date for full funding of the workplace safety and insurance system, i.e., the elimination of the UFL. Regrettably, this target date is no longer appears viable.
Undeniably, the UFL increase is largely due to minimal investment returns, common to many world market experiences of 2008. Nevertheless, WSIB’s investment strategies still resulted in better returns compared to other Canadian pension funds. The WSIB suffered a loss of 15.5 percent, while other large Canadian pension funds’ performances ranged from -16.0 percent to -18.0 percent. As involved stakeholders, we encourage you to view the whole 2008 Fourth Quarter Report.