New Zealand Gazette – 2017 – No. 22

Page 40

✨ ACC Levy Rates Report



NEW ZEALAND GAZETTE, No. 22 — 2 MARCH 2017

HERWIG RAUBAL, BEC, FNZSA, FIAA, Chief Risk and Actuarial Officer, Accident Compensation Corporation.

Appendix A: Work Account

Work Account Long-Term Projections

Year ending 31 March Average levy rates ($ per $100 liable earnings) Levy ($m) Lifetime cost of new-year claim costs ($m) Administration costs for new-year claim costs ($m) Levy required to fund lifetime cost of new-year claim costs (per $100 liable earnings) Levy required to fund administration costs (per $100 liable earnings) Accrued assets ($m) OCL ($m) Account balances ($m) Funding ratio
2016/17 0.80 671 616 238 0.66 0.25 8,808 7,130 1,678 124%
2017/18 0.72 626 647 251 0.66 0.26 8,850 7,201 1,649 123%
2018/19 0.72 651 681 268 0.67 0.26 8,880 7,284 1,596 122%
2019/20 0.77 720 710 282 0.68 0.27 8,949 7,390 1,560 121%
2020/21 0.77 743 737 297 0.68 0.27 9,015 7,520 1,496 120%
2021/22 0.81 805 765 306 0.69 0.28 9,123 7,674 1,449 119%
2022/23 0.81 830 794 317 0.69 0.28 9,226 7,843 1,383 118%
2023/24 0.85 897 825 327 0.70 0.28 9,366 8,023 1,343 117%
2024/25 0.85 924 857 338 0.70 0.28 9,509 8,224 1,285 116%
2025/26 0.88 984 891 349 0.71 0.28 9,684 8,444 1,240 115%
2026/27 0.88 1,013 926 361 0.72 0.28 9,858 8,680 1,178 114%
2027/28 0.91 1,078 961 373 0.73 0.28 10,070 8,930 1,140 113%
2028/29 0.91 1,108 998 385 0.73 0.28 10,282 9,183 1,099 112%

The table above presents the projected levy and funding path after applying the funding policy. The table below summarises the key assumptions underlying these projections.

Work Account Key Assumptions

Year ending 31 March Claim numbers (entitlement claims) Entitlement claim frequency (claims per 1,000 workers) Exposure (liable earnings) ($b) Exposure (number of workers not covered by AEP) (000) Investment return forecasts (June year) Risk-free interest rates (June year) Standard inflation (LCI)
2016/17 31,374 15.17 94 2,069 4.1% 2.0% 1.8%
2017/18 32,224 15.32 97 2,103 4.3% 1.9% 1.8%
2018/19 33,241 15.48 101 2,147 4.4% 2.3% 1.8%
2019/20 33,844 15.54 105 2,177 4.5% 2.6% 1.8%
2020/21 34,178 15.54 108 2,199 4.6% 3.0% 1.8%
2021/22 34,499 15.54 111 2,219 4.8% 3.3% 1.8%
2022/23 34,818 15.54 115 2,240 4.9% 3.5% 1.8%
2023/24 35,135 15.54 118 2,260 5.0% 3.7% 1.8%
2024/25 35,446 15.54 122 2,280 5.1% 3.8% 1.8%
2025/26 35,751 15.59 125 2,293 5.1% 3.9% 1.8%
2026/27 35,947 15.59 129 2,305 5.2% 4.0% 1.8%
2027/28 36,145 15.59 133 2,318 5.3% 4.1% 1.8%
2028/29 36,343 15.59 136 2,331 5.3% 4.1% 1.8%

The following table compares the components of the 2017/19 prescribed average levy rate with those of the 2016/17 rate. The first column shows the components of the 2016/17 prescribed levy rate derived for the 2016/17 levy consultation. The second column shows how the estimates of new-year claim costs and administration costs for the same year differ when calculated using the revised assumptions used for the 2017/19 levy period. The third column then shows how these costs have changed for the new levy period.

Trend in Underlying Costs

Levy per $100 liable earnings Initial 2016/17 (last year’s assessment)
40
Levy per $100 liable earnings Current 2016/17 (this year’s assessment) Prescribed 2017/19 levy rate


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Online Sources for this page:

Gazette.govt.nz — PDF NZ Gazette 2017, No 22




✨ LLM interpretation of page content

🏥 Report on ACC Levy Rates for Work and Earners' Accounts (continued from previous page)

🏥 Health & Social Welfare
Accident Compensation, Levy rates, Work Account, Earners' Account, Financial projections
  • HERWIG RAUBAL, BEC, FNZSA, FIAA, Chief Risk and Actuarial Officer, Accident Compensation Corporation