Insurers Have Been Draining Funds from New Jersey’s Pensions for 15 Years

Link: https://www.ai-cio.com/news/insurers-draining-funds-new-jerseys-pensions-15-years/

Excerpt:

Insurance firms have been siphoning off money from New Jersey’s pension funds for the past 15 years thanks to a policy decision that shifted financial obligations for employee injuries to pension funds, according to an investigation by acting state Comptroller Kevin Walsh.

A report on the investigation said that a 2006 policy adopted by the Division of Workers’ Compensation (DWC) encourages injured employees to accept continuing medical monitoring and coverage instead of cash settlements. The report said the approach, which puts the financial burden on pension funds to pay workers rather than on insurance firms, has provided “a windfall to insurers and financially harms the pension funds.”

At least 114 public employees received both an accidental disability pension and a medical monitoring settlement between 2016 and 2019, according to the report. However, it said the exact cost to the pension funds was unknown because there are no records or data on what insurers would have paid in the absence of medical monitoring settlements.

Author(s): Michael Katz

Publication Date: 8 February 2021

Publication Site: ai-CIO

NJ Pensions Funding WC Insurers

Excerpt:

The New Jersey State Comptroller released a report examining a practice within the state’s Division of Workers’ Compensation (DWC) that allows state, school and local government employees injured on the job to seek weekly benefits, a lump sum settlement or continuing medical coverage, in addition to an accidental disability pension.

As deleterious as this practice may be for the state pension fund, eliminating it will only cost taxpayers more when the bigger picture is considered.

The DWC’s policies encourage workers’ compensation petitioners to settle claims that undermine New Jersey’s pension funds, provide windfalls to workers’ compensation insurance providers, including joint insurance funds and private insurance companies, and provide medical monitoring and coverage to employees without evaluating whether these benefits are justified by the nature of the injury. 

Author: John Bury

Publication Date: 4 February 2021

Publication Site: Burypensions