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For immediate release: April 30, 2009
BWC Board of Directors vote to update State-Fund Investment Policy Statement
Safety-based rate reform programs also approved
COLUMBUS – The Bureau of Workers’ Compensation (BWC) Board of Directors today approved
a comprehensive update to the State Insurance Fund’s investment policy statement (IPS).
The new IPS will provide further diversification within both fixed income and equity
investments.
“Sound, safe investments are paramount to maintaining a strong state fund,” said
BWC Administrator Marsha Ryan. “By diversifying these investments we will reduce our
portfolio risk, be less susceptible to market volatility and anticipate enhanced returns
in the future.”
The State Insurance Fund portfolio will remain 100 percent passively managed. Mercer
Investment Consulting, Inc. has been working with BWC’s Board of Directors and staff
to perform a year-long analysis of the current IPS, and the benefits of modifying it
to meet the current needs of the State Insurance Fund. With the updated IPS, the State
Insurance Fund investment portfolio will be comprised of 70 percent bonds and 30 percent
equities. BWC investment staff, with Mercer Investment Consulting will prepare a proposed
implementation plan for the new asset allocation strategy which is expected to be presented
to the Board of Directors’ Investment Committee on May 28.
Additionally, the Board of Directors approved several components of BWC’s comprehensive
rate reform plan. These include the creation of a Group Retrospective Rating Program that
will provide employers with a new performance based program to promote and achieve workplace
safety. The program allows BWC-certified sponsoring organizations to create homogeneous
groups that are focused on safety and claims management. Members of these groups join
forces to improve safety and manage claim costs and can receive retrospective premium
adjustments based on the combined performance of their group.
The Group Retrospective Rating Program will become active July 1. Sponsors must enroll
members and submit their application for the upcoming policy year by June 26.
More information and a list of certified sponsors is available online at ohiobwc.com
or by calling the employer programs unit at 614-466-6773.
Other rule changes include:
- A 100-percent cap on increases to an employer’s experience modifier (EM)
for employers with an individual EM of 1.01 or higher and who agree to follow
the 10-Step Business Plan for safety;
- Limiting the financial incentives paid from the Drug Free Workplace Program
(DFWP) to non group-rated employers only. Effective July 1 group-rated employers
will receive up to a 77 percent premium discount. With this new rule, these
group-rated employers will no longer be permitted to stack DFWP discounts on
top of their group premium discounts. All Ohio employers are eligible and encouraged
to participate in the DFWP to benefit from the educational and safety benefits
associated with the program;
- Eliminating the Premium Discount Program (PDP+) which was found to be underutilized
and ineffective in the recent study by Deloitte Consulting LLC. BWC will retain the
10-Step Business Plan for safety as a key safety strategy for employers to develop
a culture where all members of the organization actively manage workplace safety and
health.
“We’ve made great strides toward improvements to ensure each employer pays the appropriate
premiums that match their individual risk,” added Ryan. “The average base rate for private
employers is now lower than it has been in over 30 years. Additionally, the introduction
of new alternative rating programs and the modification of existing offerings are placing
a renewed emphasis on the importance of safety education and training in Ohio workplaces.”
The next Board of Directors meeting will be held Friday, May 29, 2009 at 8 a.m.
in Room 3, Level 2 of the William Green Building, located at 30 W. Spring St., Columbus
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