< Previous2019-2023 FIVE YEAR PLANThe financial statements presented in the Five Year Plan are unaudited.80 WCB 2018 ANNUAL REPORTWCB 2018 ANNUAL REPORT 81In 2018, the Board of Directors adopted a new strategic framework to guide the organization into the future. The framework provides a clear direction and guides the organization to achieve its vision, A safer Manitoba that fosters prevention and return to work.To succeed in our new vision, the WCB has revamped its strategic goals to focus on four priorities that will provide an operational framework for how the organization conducts its business. The Five Year Plan looks to the future, outlining significant initiatives that will build on the strategies for success in each of the four priorities.INTRODUCTIONCreate a SAFE Work CultureDeliver Excellent ServiceEnable Successful Return to WorkGrow our People82 WCB 2018 ANNUAL REPORTTIME LOSS INJURIES Reduce the number to 12,000 or less—Achieve a rate of 2.2 or less per 100 full time workersGoal:• Reduce the number and severity of injuries.Major Initiatives:Expand and enhance Manitoba’s safety infrastructure through Industry-Based Safety ProgramsSAFE Work Manitoba is committed to working in partnership with existing industry-based safety programs and directly supporting the establishment of new safety programs in additional industries.Increase and expand other Prevention ProgrammingSAFE Work Manitoba is committed to increasing public awareness and stakeholder engagement, increasing participation in education and training as well as expanding certification and standards.CREATE A SAFE WORK CULTUREFive Year Targets: In the five year period covered by this plan, the WCB is focused on the following milestones:DAYS LOST TO WORKPLACE INJURY OR ILLNESSReduce the number to 748,000 or less—Achieve a rate of 1.38 or less per 100 full time workersSEVERE INJURIES Reduce the number to 2,200 or less—Achieve a rate of 0.4 or less per 100 full time workersWCB-COVERED PAYROLL Achieve at least 42% that is SAFE Work Certified—Increase percentage served by an industry-based safety program to 72% or moreWCB 2018 ANNUAL REPORT 83ENABLE SUCCESSFUL RETURN TO WORKMajor Initiatives:Improve Return to Work practicesThe WCB is committed to promoting the value of Return to Work and supporting best practices in Return to Work. This includes helping workplaces increase the effectiveness of their Return to Work programs, delivering Return to Work training and ensuring the WCB provides quality services to assist workers to return to meaningful and productive work as soon as safely possible after an injury. Improve our customers’ compensation and Return to Work experience The WCB understands and cares about the diverse needs of our customers. The WCB will continue to implement best practices in customer service and Return to Work by making improvements in telephone service and providing enhanced training in best practices.Goal:• Reduce days lost and improve the return to work experience.Five Year Targets: In the five year period covered by this plan, the WCB is focused on the following milestones:Achieve at least 95% of injured workers returning to health and meaningful work after 60 daysAchieve at least 70%of injured workers returning to health and meaningful work after 10 days84 WCB 2018 ANNUAL REPORTDELIVER EXCELLENT SERVICEMajor Initiatives:Enhance customer service throughout our organizationThe WCB is committed to continuously seeking out new and innovative ways to enhance service to our customers. The WCB will continue to develop comprehensive customer service initiatives, implementing recommendations from the customer journey maps for workers and employers, improving the overall customer service experience, and enhancing ways for customers to provide feedback.Improve customers’ experiences with our assessment processes and claim experienceThe WCB is committed to continuing to implement enhanced online services for employers including making improvements to online payroll reporting and implementing online account statements. For workers, the WCB is committed to improving the claim experience through improved communication methods and streamlined processes.Design and implement electronic healthcare reporting and billing Healthcare providers play a vital part in the recovery and return to work of injured workers. In order to improve the quality, timeliness and efficiency of reporting and billing processes, the WCB has launched a multi-year project to enable electronic healthcare reporting and billing from physiotherapists, chiropractors and doctors. Use business intelligence to continuously drive excellenceThe WCB is committed to continuously utilizing and enhancing our data analytic capabilities. Access to rich WCB data gives our organization timely information to support performance monitoring, strategic planning, and identify opportunities to further improve the service we provide to our customers. Evolve our technical infrastructure to support collaboration, innovation and mobilityThe WCB is committed to enhancing our technology to support strategic initiatives, collaboration, innovation and online capabilities. Improvements include modernizing and simplifying the technical infrastructure and improving the online applications available to external customers and stakeholders.Stakeholder outreach strategyThe WCB is committed to collaborating with partners and continues to reach out to stakeholders to deliver information and resources and gather feedback through new channels such as the Manitoba Chambers of Commerce AGM, the first ever WCB Return to Work Conference (in collaboration with the Manitoba Chambers), and the Winnipeg Chamber of Commerce’s Small Business Forum and Healthy Workplaces Program.Goal:• Strive to improve customers’ satisfaction with their WCB experience.WCB 2018 ANNUAL REPORT 85Maintain the accident fund reserve in keeping with the 130% funding ratio targetAchieve and maintain an average assessment rate at under$1Achieve at least 70% of claims paid within 14 days of injuryAchieve at least 80% in customer satisfaction of employers and injured workersFive Year Targets: In the five year period covered by this plan, the WCB is focused on the following milestones:86 WCB 2018 ANNUAL REPORTMajor Initiatives:Implement initiatives to engage employeesThe WCB is committed to increasing staff engagement and to enhancing collaboration to better serve our customers. The WCB conducts periodic employee surveys, recognizing the value of regularly soliciting input from staff and benchmarking and assessing corporate culture and engagement. The WCB continues in its efforts to implement its mental health strategy and initiatives, which incorporate ongoing education, training and awareness to staff and leaders with the aim to foster a workplace culture that is understanding and supportive of mental health issues and recognizes the importance of prevention in maintaining the health and well-being of our staff. Enhance our leadership developmentStrong leadership is essential to accomplishing organizational goals. The WCB will continue to support its leaders through training and development and by providing change management tools and strategies.Build skills and competencies to support our innovation cultureThe WCB is committed to finding new and better ways to provide service and to making our system more responsive, efficient and effective. The WCB will continue to implement agile innovation projects and support leaders in developing an innovation culture.Renew our physical work environmentThe WCB has developed a comprehensive office renewal plan to create a more effective workspace to meet the needs of our customers and gain organizational efficiency. The first phase of this multi-year renewal plan has been completed. The WCB plans to reassess and continue with the next phase of the renewal plan, which includes improvements to the remaining floors. GROW OUR PEOPLEGoal:• Attract, retain and develop our people to align with our evolving needs.Five Year Targets: In the five year period covered by this plan, the WCB is focused on the following milestones:Achieve at least 80% in employee engagementWCB 2018 ANNUAL REPORT 872019 – 2023 BUDGETED AND PROJECTED FINANCIAL STATEMENTS88The pro-forma financial statements for the years 2019-2023 present the financial outcomes of the strategic and operational plans of the WCB. The average assessment rate is maintained at $0.95 throughout the five year plan. A surplus distribution is planned commencing in 2019, with a goal of reducing the funding ratio toward the 130 per cent policy target. WCB revenues include:Premium revenue: this amount represents a combination of estimated annual assessable payroll and the average assessment rate, using reasonable assumptions for economic and inflationary growth. The average assessment rate used in the Five Year Plan is $0.95.Investment revenue: this amount represents a return that is consistent with the WCB’s investment portfolio profile. A steady rate of return of six per cent is used throughout the Plan, as it is not possible to predict investment markets. Actual results in this area will vary and fluctuations can be significant.WCB expenses include:Claim costs: this amount assumes the injury rate will decline during the Five Year Plan period and includes a reasonable assumption for cost inflation. Fluctuations in claim costs can occur if there is an increase to injury rates, very expensive claims, a change in the mix of old and new claims, or a change in average claim duration. Operating expenses: this amount represents salaries, employee benefits, infrastructure, the Appeal Commission, the Research and Workplace Innovation Program, SAFE Work Manitoba and administrative costs.88 WCB 2018 ANNUAL REPORTProforma Statement of Financial Position (unaudited)As at December 31 (in thousands of dollars)2018 Actual2019 Budget2020 Projection2021 Projection2022 Projection2023 ProjectionAssets$1,942,381$1,904,372$1,878,734 $1,850,831$1,881,535 $1,915,132Liabilities1,310,266 1,345,785 1,377,759 1,409,7121,440,068 1,470,990 Funded position632,115 558,587 500,975441,119 441,467444,142 $1,942,381$1,904,372 $1,878,734 $1,850,831 $1,881,535$1,915,132 Funding ratio148.2%141.5%136.4%131.3%130.7%130.2%Proforma Statement of Operations and Comprehensive Income (unaudited)For the years ending December 31 (in thousands of dollars)2018 Actual2019 Budget2020 Projection2021 Projection2022 Projection2023 ProjectionProjected average assessment rate$0.95$0.95$0.95$0.95$0.95$0.95Premium revenue$210,846 $219,709 $225,554 $229,811$232,735 $236,372 Investment income21,75789,42887,96086,82586,892 89,031Revenue232,603 309,137 313,514316,636 319,627 325,403 Claim costs incurred186,285204,721206,340 207,766207,626 209,196 Operating expenses99,542104,100 106,517108,716 111,653 113,532Total expenses285,827 308,821 312,857 316,482319,279 322,728Operating surplus(53,224)316657 1543482,675 Surplus distribution-(73,844)(58,269) (60,010)--Net surplus(53,224)(73,528)(57,612)(59,856)3482,675Other comprehensive income27,020-----Total comprehensive income$(26,204)$(73,528)$ (57,612)$ (59,856)$ 348$ 2,67589WCB 2018 ANNUAL REPORT 89Next >
< PreviousSensitivity of actuarial assumptionsThe actuarial present value of the defined benefit obligation is sensitive to changes in actuarial assumptions, the most significant assumption being the discount rate. The following table illustrates the sensitivity of the defined benefit obligation to a one per cent change in the discount rate:20182017+1.0%-1.0%+1.0%-1.0%Retirement plans $ (48,339)$ 63,685$ (53,830) $ 71,334Sick leave plan (926) 1,068 (459) 1,674 Retiree healthcare spending account (387) 496 (399) 514 Total cash payments for employee future benefits for 2018, consisting of cash contributed by the WCB to the funded pension plan and cash payments directly to beneficiaries for unfunded plans, were $7.3 million ($5.6 million in 2017). Based on historical experience and expected salary expense, the WCB expects to fund $6.4 million in 2019.Related Party Transactions By definition, the WCB retirement plan is a related party to the WCB. Transactions between the related parties are detailed below: 20182017Contributions from the employees$3,612$3,619Contributions from the employer4,7584,800There were no amounts outstanding as at December 31, 2018, or December 31, 2017. 13. BENEFIT LIABILITIES FOR ALL EMPLOYERSAccounting policyUnder the provisions of the Act, the WCB has a legislated obligation to accept insurance risk from employers in exchange for premiums paid for WCB coverage.The WCB’s Chief Actuary prepares a valuation of the benefit liabilities of the WCB at each year end. This valuation is conducted in accordance with accepted actuarial practice in Canada and is subject to peer review by the WCB’s external actuary. The benefit liabilities represent the actuarial present value of all future benefit payments expected to be made for claims or injuries which occurred in the current fiscal year or in any prior year. The benefit liabilities include provisions for all benefits provided by current legislation, policies and/or administrative practices in respect of existing claims, plus provisions for the future expenses of administering the existing claims. Differences arising from actual claims experience and assumptions used for the previous valuation, as well as the impacts of changes in legislation, policy, administrative practice or actuarial methods and assumptions, are recognized in the period that they occur. Benefit liabilities are determined in accordance with standards established by the Actuarial Standards Board (Canada). The actuarial present value of future benefit payments reflects management’s long term estimates of economic and actuarial assumptions and methods, which are based upon past experience and modified for current trends. As these assumptions may change over time to reflect underlying conditions, it is possible that such changes could cause a material change in the actuarial present value of the future payments. The fair value for benefit liabilities is not readily determinable.The benefit liabilities also include an estimated liability for certain long latent occupational diseases. Due to the nature of the estimated liability for long latent occupational diseases and the extent of related historical claims information currently available, this liability is more uncertain by its nature than other benefit liabilities. As information is accumulated and analyzed, adjustments may be necessary to improve precision.70 WCB 2018 ANNUAL REPORTThe key actuarial assumptions used to value the benefit liabilities as at December 31 are as follows:20182017Discount rate5.75%5.75%Inflation for CPI-indexed benefits2.25%2.25%Inflation for wage-related benefits3.25%3.25%Inflation for healthcare benefits5.25%5.25%An analysis of the components of and changes in benefit liabilities is as follows:20182017Short-Term DisabilityLong-Term DisabilitySurvivor BenefitsHealthcare BenefitsRehabilitation ServicesTotalTotalBalance at beginning of year$ 158,772 $506,737 $ 123,244 $ 318,611 $ 7,000 $1,114,364 $1,106,642 Add: Claim costs incurredCurrent year 49,206 47,049 3,409 52,584 1,047 153,295 158,688 Prior years 14,797 764 4,306 15,285 (2,162) 32,990 27,795 64,003 47,813 7,715 67,869 (1,115) 186,285 186,483 Less: Claim payments madeCurrent year 25,566 1,069 886 21,782 1 49,304 49,326 Prior years 30,428 49,815 12,382 38,335 423 131,383 129,436 55,994 50,884 13,268 60,117 424 180,687 178,762 Balance at end of year$ 166,781 $503,667 $ 117,691 $ 326,363 $ 5,461 $1,119,963 $1,114,364 The liability for short-term disability claims is an estimate of future wage loss payments for claims that have yet to medically plateau or stabilize. The long-term disability liability includes estimated future wage loss payments for those claims that have medically plateaued and stabilized, estimated future pension payments, and estimated future cost of claims relating to certain long latent occupational diseases. The liability for survivor benefits is composed of estimated future pension payments and other services provided to survivors of those who have lost their lives as a result of workplace injuries or illnesses. Healthcare liabilities are the estimated future medical costs for existing claims. The liability for rehabilitation services is composed of the estimated cost of future rehabilitation services which are externally supplied to the WCB.Included in the benefit liabilities balance is $110.1 million ($107.1 million in 2017) for the estimated long latent occupational disease liability including Post-Traumatic Stress Disorder. Also included in the benefit liability is $90.0 million ($91.9 million in 2017) for the future cost of administering existing claims.WCB 2018 ANNUAL REPORT 71Sensitivity of Actuarial AssumptionsThe most significant assumption in the determination of the benefit liabilities is the discount rate. The following table shows the sensitivity of the benefit liabilities to an immediate one per cent increase or decrease in the key assumptions used to determine the liabilities:Change in liability in millions:20182017+/- % change on assumed rates+1.0%-1.0%+1.0%-1.0%Discount rate$ (89)$105$(88)$104Wage inflation rate55 (48)54(47)General inflation rate9 (8)9(8)Healthcare inflation rate39(33)37(31)An increase in the discount rate results in a decrease to the benefit liabilities and vice versa.An increase to any of the inflation rates results in an increase to the benefit liabilities. Each inflation rate affects only those benefits that are directly impacted by that type of inflation. For example, healthcare inflation only affects healthcare liabilities.Claims riskBecause there is no statutory limit on the benefit amount payable or the duration of the risk exposure related to work-related injuries, the WCB bears risk with respect to its future claims costs, which could have material implications for liability estimation. In determining the Board’s claim benefit liabilities, a primary risk is that the actual benefits payments may exceed the estimation of the amount of the liabilities. This may occur due to changes in claim reporting patterns, frequency and/or size of claim payments or duration of claims. Compensable injuries and benefits payable may also change due to legislation or policy changes. With potentially long claim runoff periods, inflation is also a factor because future costs could escalate at a faster rate than expected. Liability Adequacy TestIFRS 4 Insurance Contracts requires an insurer to apply a liability adequacy test that meets specified minimum requirements, as follows:a. the test considers current estimates of all contractual cash flows, and of related cash flows such as claims handling costs, as well as cash flows resulting from embedded options and guarantees; andb. if the test shows that the liability is inadequate, the entire deficiency is recognised in profit or loss.If these minimum requirements are met, there are no further requirements.The current claim benefit liability valuation meets the liability adequacy testing requirements of IFRS 4. Accordingly, a separate annual liability adequacy test is not required.72 WCB 2018 ANNUAL REPORTClaims DevelopmentThe table below compares actual claims liabilities to previous estimates back to the earliest period for which there is material uncertainty about the estimate and timing of claim payments.Injury YearEstimate of cumulative claims2009 & Prior201020112012201320142015201620172018TotalEnd of accident year$ 2,102,346181,728196,690202,359211,487219,081195,543192,331199,311194,3411 year later2,119,756171,672182,934204,976203,221187,526188,020189,192204,883- 2 years later2,220,351170,445193,678200,459180,672180,810184,957190,487-- 3 years later2,240,338183,276190,184184,729177,911178,809184,791--- 4 years later2,368,804181,488175,290183,041176,628178,845---- 5 years later2,428,612169,155171,743181,176176,612----- 6 years later2,306,086166,838169,418180,433------ 7 years later2,288,902166,251169,025------- 8 years later2,288,946166,900-------- 9 years later2,283,212--------- Estimate of cumulative claims$ 2,283,212166,900169,025180,433176,612178,845184,791190,487204,883194,341$3,929,530Cumulative claim payments(1,391,997)(109,639)(105,835)(110,144)(99,177)(94,375)(92,476)(90,642)(85,301)(50,842)(2,230,427)Currrent year unpaid and unreported claims891,21557,26263,19070,28977,43484,47092,31599,846119,583143,4991,699,103Effect of discounting (779,223)Administration cost within benefit liabilities89,992Future dated long latency liability110,091Total benefit liabilities$ 1,119,963WCB 2018 ANNUAL REPORT 7314. BENEFIT LIABILITIES FOR SELF-INSURED EMPLOYERSNote 13 contains a complete description of the components of the benefit liabilities for all employers. An analysis of the portion relating to self-insured employers is as follows:20182017Short-Term DisabilityLong-Term DisabilitySurvivor BenefitsHealthcare BenefitsRehabilitation ServicesTotalTotalBalance at beginning of year$ 18,418 $ 74,208 $ 19,788 $ 55,570$ 164$ 168,148$165,612Add: Claim costs incurredCurrent year 6,738 4,505 822 6,376 9 18,450 18,722Prior years 2,088 (807) (646) 3,859 (193) 4,301 4,609 8,826 3,698 176 10,235 (184) 22,751 23,331Less: Claim payments madeCurrent year 3,462 129 364 2,223- 6,178 6,643Prior years 3,964 3,329 2,209 5,561 (106) 14,957 14,152 7,426 3,458 2,573 7,784 (106) 21,135 20,795Balance at end of year$ 19,818 $ 74,448 $ 17,391$ 58,021$ 86$ 169,764$168,148Included in premiums and claim costs for self-insured employers are payments in the amount of $5.5 million ($5.2 million in 2017) made by self-insured employers directly to injured workers on the WCB’s behalf. These amounts are reported to the WCB for inclusion in these financial statements.Included in the benefit liabilities balance is $47.4 million ($46.0 million in 2017) for self-insured employers’ share of the long latent occupational disease liability and $12.9 million ($13.4 million in 2017) for the future cost of administering existing claims.74 WCB 2018 ANNUAL REPORT15. PREMIUM REVENUEAccounting policyThe operations of the WCB are categorized, in accordance with the Act, into Class E and several classes of self-insured employers.General Employers PoolEmployers registered within Class E are subject to collective liability and premium revenue is estimated by applying applicable industry assessment rates to the employers’ reported assessable payrolls for the current year. Any difference between the estimated premium revenue and the actual premium revenue is credited or charged to income in the year the determination is made.Premium revenue is fully earned and recognized over the period that coverage is provided. Premium revenue reported in the period is recorded net of prevention rebates, uncollectable account write-offs, interest and penalties on overdue amounts and adjustments of premiums for prior periods. The Prevention Rebate Program (PRP) reduces the risk of workplace injury and illness by rewarding employers who have developed and maintained meaningful workplace safety and health management systems. SAFE Work Manitoba administers the PRP, determines employer eligibility and issues the prevention rebate. SAFE Work Certified employers who have met all criteria are eligible for the prevention rebate. The rebate is calculated using the actual payroll associated with the rebate eligibility period. Self-Insured EmployersSelf-insured employers – principally government bodies and railways and their subsidiaries – are subject to individual responsibility for costs attributable to claims arising from their employees, as well as administration expenses incurred on behalf of self-insured employers. As such, premium revenue from self-insured employers is recognized as these costs are incurred. Current costs are collected as billed while future costs are recorded as deferred assessments. 20182017Premiums — Class E employers$ 184,610 $ 208,395 Prevention rebates (5,596)- 179,014 208,395Assessments — Self-insured employers 28,186 27,516 Increase in deferred assessments (Note 7) 3,646 3,097 Total premium revenue$ 210,846 $ 239,008 WCB 2018 ANNUAL REPORT 7516. OPERATING EXPENSES20182017Salaries, employee benefits and training$ 69,413 $ 66,406Information technology service fees 774 4,902Occupancy costs 3,453 3,676Office supplies, services and projects 1,374 756Communications 1,276 1,727Professional fees 2,271 2,450Donations 128 134Amortization of capital assets 5,848 4,907 84,537 84,958Appeal Commission 1,417 1,372Research and Workplace Innovation Program grants 785 844Recoveries from the Government of Canada (2,024) (2,348)SAFE Work Manitoba 6,518 6,062Province of Manitoba Workplace Safetyand Health Department funding (Note 17) 8,309 9,371Total operating expenses$ 99,542$ 100,259Of the total operating expenses, $9.6 million ($9.5 million in 2017) was allocated to self-insured employers based on the current year’s transaction volumes.The WCB administers the Government Employees Compensation Act program for the Government of Canada. The Government of Canada reimburses the WCB for all claims paid out on their behalf plus a recovery of operating expenses.17. RELATED PARTY TRANSACTIONSThe WCB is a statutory corporation created by the Manitoba Legislature. As a corporation of the Province of Manitoba, the WCB applies the exemption for government-related entities in IAS 24 Related Party Disclosures. Pursuant to The Workplace Safety and Health Act of Manitoba, the Province may pay the expenses incurred in the administration of that Act out of the consolidated fund and may, subsequently, recover such portion as it may determine from the WCB under The Workers Compensation Act of Manitoba. For 2018, the amount charged to operations under this provision was $7.8 million ($8.7 million in 2017).Also, under Section 84.(1) of The Workers Compensation Act of Manitoba, the Province may pay the costs incurred in respect of worker advisors and may recover them from the WCB. For 2018, the amount charged to operations under this provision was $0.5 million ($0.7 million in 2017).In addition to the legislated obligations referred to above, included in these financial statements are amounts resulting from routine operating transactions conducted at prevailing market prices with various provincial government controlled ministries, agencies and Crown corporations with which the WCB may be considered related. This includes the provision of assistance, in the form of medical opinions and appeal services, for the Province of Manitoba relating to criminal injury claims. The provincial government is also a self-insured employer under The Workers Compensation Act of Manitoba. Accordingly, the Province of Manitoba was allocated $3.6 million ($3.8 million in 2017) of the total operating expenses (Note 16) based on their transaction volume. Balances resulting from transactions with the Province of Manitoba are included in these financial statements and are settled on normal trade terms.76 WCB 2018 ANNUAL REPORTIncluded in the WCB’s investment portfolio as at December 31, 2018 are guaranteed debentures issued by the Province of Manitoba in the amount of $4.0 million ($2.8 million in 2017).Other Related Party DisclosuresIn addition to the related government entities above, the key management personnel of the WCB (comprised of the WCB executive personnel and the Board of Directors) are deemed related parties. By definition, close family members of the key management personnel are also related parties of the WCB. Any transactions or business relationships are incidental and carried out at normal trade terms.The WCB has a pension plan for the benefit of WCB employees, which is a related party by definition of IAS 24 Related Party Disclosure. Detailed information on transactions with the pension plan are included in Note 12. Key Management Compensation The following table shows total compensation for the executive personnel of the WCB:20182017Short term employee benefits$1,658$1,768Post-employment benefits511515Total key management compensation$2,169$2,283Short term employee benefits include salary, vacation, car allowances, group health and dental benefits, group life insurance, and the employer’s share of contributions to the Canada Pension Plan and employment insurance. Post-employment benefits include the estimated current service cost accrued for pension and other post-employment benefits. The Board of Directors of the WCB is comprised of 10 members appointed by the Government of Manitoba. Members’ remuneration is set out in Order in Council passed by the Lieutenant Governor in Council. For 2018, total compensation paid to the Board of Directors was $0.2 million ($0.1 million in 2017).18. COMMITMENTSThe WCB has signed operating leases for office premises and office equipment expiring at various times until October 30, 2026. The minimum lease obligations over the next five years are:20192020202120222023ThereafterTotal$ 2,057 $ 1,988 $ 2,011 $ 1,998 $ 1,993 $ 2,523 $12,570 19. CONTINGENCIES The WCB is party to various claims and lawsuits related to the normal course of business that are currently being contested. In the opinion of management, the outcome of such claims and lawsuits are not determinable. However, based on the total amount of all such actions, the WCB has concluded that their outcomes, either individually or in aggregate, will not have a material effect on the results of operations or financial position.WCB 2018 ANNUAL REPORT 7720. FUNDING POLICY AND CAPITAL MANAGEMENT The Act establishes the Accident Fund to provide for the payment of compensation, outlays and expenses of the workers compensation system. The Act also requires that sufficient funds be available for the payment of all current and future liabilities, and the maintenance of reserves sufficient to ensure the financial security of the system in the long term. The funding policy is the framework for the management of the Accident Fund to maintain the workers compensation system’s financial security while ensuring sufficient funds are available to meet future benefit payments and maintain rate stability. The WCB is committed to operating on a fully funded basis and is considered 100 per cent funded when assets equal liabilities. The ratio of assets to liabilities is the funding ratio. The funding ratio target for the Accident Fund is 130 per cent. The 130 per cent target provides for 100 per cent funding – sufficient to fully fund all current and future liabilities – plus an additional 30 per cent to protect the system from risks, uncertainties and market volatility. The WCB’s funding ratio is reviewed after the annual financial statements are approved by the Board of Directors. When the funding ratio deviates from the 130 per cent target, the funding policy directs the WCB to return reserves to the funding ratio target. When the funding ratio exceeds the 130 per cent target surplus distributions may be paid. When the funding ratio falls below the 130 per cent target the WCB may approve adjustments in assessment rates in such a manner that will bring the funding ratio back to the 130 per cent target. The WCB’s funding ratio at December 31 is as follows: 20182017Total assets$ 1,942,381 $ 2,007,428 Total liabilities 1,310,266 1,349,109 Funding ratio (assets/liabilities)148.2%148.8%21. COMPARATIVE FIGURES Certain comparative figures and disclosures have been reclassified to conform to the financial statement presentation adopted in the current year.78 WCB 2018 ANNUAL REPORTWCB 2018 ANNUAL REPORT 79Next >