Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - June 26, 2000
Contact: Governor's Communications Office, 360-902-4136
Alt Contact: Tammy Firkins, Department of Labor and Industries, 360-902-5407
Locke announces $200 million workers' comp refund for employers
OLYMPIA - Gov. Gary Locke today announced that Washington employers soon will receive workers' compensation premium refund checks totaling $200 million.
"This is great economic news for our state," Locke said. "Employers can use this money to expand their businesses, buy new equipment and create new jobs."
Locke said employers would begin receiving refund checks this summer.
This is the second $200 million dividend employers have received in two years. The first $200 million dividend was issued in January 1999.
About 130,000 employers will share in the refund. Each employer will receive 30.8 percent of premiums they were assessed for the Accident Fund during the fiscal year that ended June 30, 1999.
The state is able to issue the dividend because of continued excellent returns on stock market investments during fiscal year 1999, lower-than-expected costs associated with injured workers' claims, and low medical inflation, Locke said.
The Accident Fund is the largest of four funds that make up the State Fund of the workers' compensation system. The State Fund in Washington is managed by the Department of Labor and Industries and covers about 1.9 million workers.
Accident Fund premiums are paid solely by employers. The premiums provide benefits for workers hurt on the job, such as lost wages and disability benefits.
"Despite recent fluctuations in the stock market and the $200 million dividend, the state's workers' compensation system will remain financially strong with sufficient reserves to meet anticipated benefit costs," said Gary Moore, director of Labor and Industries.
Currently, only about 15 percent of State Fund assets are invested in the stock market. More than 80 percent of the assets are in high-quality bonds.
Only employers who do not owe money to Labor and Industries or another state or federal agency will receive the full refund. Employers due less than a $10 refund will receive credit to their accounts.
A 1998 performance audit of the state's workers' compensation system - headed by Michigan State University Professor Edward Welch - reported that Washington pays higher-than-average benefits at lower-than-average cost.