Special Bulletin 222C Workers' Compensation Actuarial Tables for

78 Pages·2012·0.81 MB·English

by  Joe Cavalcante

Special Bulletin 222C

Workers’ Compensation
Actuarial Tables for Aggregate
Trust Fund Deposits
5% Interest
New York State
Workers’ Compensation Board
March 2012
Andrew M. Cuomo, Governor
Robert E. Beloten, Chair
i

Foreword

The revised tables in this bulletin apply only to compensation cases where the accident occurred
on or after January 1, 2001. The earlier tables in the 1983 Special Bulletin 222B apply to cases
where the accident occurred prior to January 1, 2001.
Chapter 6 of the Laws of 2007 amended Workers’ Compensation Law § 27 to change the
discount rate applicable to new deposits into the Aggregate Trust Fund on claims made after
July 1, 2007, involving accidents or deaths occurring on or after January 1, 2001. The rate
changed from the 6% rate applicable to prior accident dates to an “industry standard rate” to be
determined by a regulation promulgated by the Superintendent of Financial Services.
Regulation No. 119 adopting 11 NYCRR § 151-2.2 set the industry standard rate at 5%.
These tables were approved by an actuarial advisory committee that included Reuben Epstein of
the New York State Insurance Fund and Martin Heagen and Ziv Kimmel of the New York
Compensation Insurance Rating Board. On behalf of the New York State Workers’
Compensation Board, I wish to take this opportunity to express my appreciation to these
individuals and their staffs for their efforts in preparing these tables.

Robert E. Beloten, Chair
New York State Workers' Compensation Board
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Section Page
Explanation and Examples
Example 1: Death Case – Award to Widow or Widower and One Child 2
Example 2: Death Case – Award to Widow or Widower and Six Children 3
Example 3: Schedule Disability Case 4
Example 4: Permanent Partial Non-Schedule Disability Case 5
Example 5: Interest Due on Award Affirmed on Appeal 6
Example 6: Death Case – Award to Orphan Children 7
Example 7: Death Case – Award to Brothers, Sisters and Grandchildren 8
Example 8: Death Case – Third Party Recovery – Award to Widow and No Children 9
Example 9: Social Security Offset with a Widow and No Children 10
Example 10: Deposit of a Capped PPD into the ATF 11
Example 11: Refund of a Capped PPD Deposit from the ATF 12
Tables
Survivorship Annuitants’ Table of Mortality 13
Combined Death and Remarriage Table of the Dutch Royal Insurance Institution 15
Table I – Widow or Widower Where There are No Children 17
Table I-A – Reduction from Table I Due to Youngest Child 18
Table I-B – Reduction from Table I Due to Second Youngest Child 20
Table I-C – Reduction from Table I Due to Third Youngest Child 22
Table I-D – Reduction from Table I Due to Fourth Youngest Child 24
Table IV – Youngest Child 26
Table V – Second Youngest Child 28
Table VI – Third Youngest Child 30
Table VII – Fourth Youngest Child 32
Table VIII – Fifth Youngest Child 34
Table IX – Children at 66 2/3% 36
Table IX-A – Brothers, Sisters and Grandchildren at 25% 37
Table IX-B – Children with Widow Remarried 38
Table X – Parent or Grandparent 39
Table XI – Life Awards 40
Table XII – Present Value of $1 per Annum for Duration Given 41
Table XIII – Present Value of an Annuity Certain of $1 per Week 59
Table XIV – Suspension of 66 2/3% Payments to Children, No Widow 62
Table XIV-A – Suspension of 25% Payments to Brothers, Sisters and Grandchildren 63
Table XIV-B – Suspension of 30% Payments to Children with Widow Remarried 64
Table XV – Suspension of Payments to Widow and No Children 65

Formulae for Workers’ Compensation Tables Special Bulletin 222C 75
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WORKERS' COMPENSATION EXAMPLES

Example No. 1
Death Case
Award to Widow or Widower and One Child

To find the value as of 1-28-11 of an award to a widow or widower and one child with birth dates as
given below where the injured employee had received annual wages of $60,000, was killed 9-1-10, and
compensation benefits had been paid regularly to the dependents to 1-28-11.

Dependents Date of Nearest Age Nearest Age
Birth
Widow . . . . . . . . . . . . . . . . . . . . . . . . . 5-22-71 39 40
Child . . . . . . . . . . . . . . . . . . . . . . . . . . 1-5-00 11 12

From Value as of Value as of 1 Year
Table 9-1-10 9-1-11 Decrease
Widow’s Portion of Benefit: I $887.66 $894.39
Widow without children
Less: Reduction a/c I-A 235.68 225.04
youngest child

Widow’s Portion 651.98 669.35
Child’s Portion of Benefit IV 277.34 259.84

Total Tabular Value to 929.32 929.19 -0.13
Widow and 1 Child
*Less: Decrease to 1-28-11 -0.05
149/365 X (-.13)

Tabular Value 1-28-11 929.27

Multiply by Number of
577.07
$100 Annual Wages**

Present Value of Future Payments as
of 1-28-11*** $536,253.84

* Increase to 1-28-11:
From 9-1-10 to 1-28-11 is 149 days.
Since the decrease from 9-1-10 to 9-1-11 is $0.13, the decrease for 149/365 of a year is $ 0.05.

** Reduced to $577.07 since the maximum weekly wage base from 7/1/2010- 6/30/2011 was $1,109.75.

*** Subject to Social Security offset if applicable.
3

WORKERS' COMPENSATION EXAMPLES

Example No. 2
Death Case
Award to Widow or Widower and Six Children

To find the present value as of the date of death of the injured employee of an award to a widow and six children with
birth dates as given below where the employee was killed 7-1-09 and received annual wages of $40,000.

Dependents Date of Birth Nearest Age
Widow 9-7-76 33
Youngest Child 2-6-07 2
2nd Youngest Child 11-11-04 5
3rd Youngest Child 4-27-03 6
4th Youngest Child 3-11-02 7
5th Youngest Child 7-13-99 10
6th Youngest Child 1-21-97 12

From Value Value
Table
Widow’s Portion of Benefit as of 7-1-09:
Widow without Children I $808.23
Less:
Reduction a/c Youngest Child I-A $285.26
Reduction a/c 2nd Youngest Child I-B 8.89
Reduction a/c 3rd Youngest Child I-C .41
Reduction a/c 4th Youngest Child I-D .02
Reduction a/c 5th and 6th Youngest Children (Values
always
zero)
Total Reduction 294.58
Widow’s Portion 513.65
Children’s Portion of Benefits as of 7-1-09:
Youngest Child IV $402.50
2nd Youngest Child V 63.44
3rd Youngest Child VI 42.12
4th Youngest Child VII 4.99
5th Youngest Child VIII 0.30
6th Youngest Child (Values 0.00
always
zero)
Total Children’s Portion $513.35
Total Tabular Value to Widow $1,027.00
and Four Children
Present Value of Death Benefits as of 7-1-09:
Total Tabular Value multiplied by number $410,800.00
of $100 of Compensable Annual Wages
(1,027.00 x 400)*

*Subject to Social Security offset, if applicable.
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WORKERS' COMPENSATION EXAMPLES

Example No. 3
Schedule Disability Case

A married employee lost his arm 11-15-09 and was given an award of $600 per week for 312 weeks
from that date. Compensation was regularly paid to 4-18-10, on which date an advance lump sum award of
$30,000 was made. What is the effect of this award by the following plans?

(a) Payments can be suspended for how many weeks?

(b) Weekly compensation rate can be reduced to what amount?

(c) Payments will terminate on what date if this amount is deducted from the end of the award?

From Table XXIV it is found that 22 weeks have been paid to 4-18-10 so that on that date 290 weeks
remain unpaid.

Plan (a): To determine the suspension period, we will convert the lump sum into a result which we will then
compare to the present value of a $1 weekly benefit rate from Table XIII through interpolation. In order
to convert, take the lump sum and divide it by the weekly benefit rate and then interpolate the suspension
time by using the closest present values to your result. In this case, take the $30,000 lump sum and divide
it by $600 per week to get a result of $50 at $1 per week. From Table XIII, $50 lies between the present
value for 51 weeks and the present value for 52 weeks.

From Table XIII, the present value for 51 weeks ………………………………...........49.7797
From Table XIII, the present value for 52 weeks ………………………………........... 50.7323
Increase for 1 week…………………………………………………………………0.9526
The present value for unknown number of weeks …………………………………....... 50.0000
The present value for weeks ............................................................................................. 49.7797
Difference 0.2203
0.2203 ∕ 0.9526 = 0.23
Payments should therefore be suspended for 51.23 weeks from 4-18-10 (=51 weeks + .23 weeks).

Plan (b): From Table XIII, the present value of the remaining 290 weeks is 253.8869 X $600 or $152,332.14. Of
this amount $30,000 or 19.69% of the present value was reduced by the lump sum award. All future
payments may therefore be reduced by 0.1969 X $600 or by $118.16 so that $481.84 is the new weekly
rate.

Plan (c): As in Plan (b) the present value of the 290 weeks remaining is found to be $152,332.14 Of this amount
$30,000 is now paid so that the remaining present value is $122,332.14 at $600 per week or $203.8869 at
$1 per week. From Table XIII, $203.8869 lies between the present value for 226 weeks and the present
value for 227 weeks.

From Table XIII, the present value for 226 weeks ………………………………........203.6216
From Table XIII, the present value for 227 weeks ………………………………........204.4304
Increase for 1 week ................................................................................................. 0.8088

The present value for unknown number of weeks ........................................................ 203.8869
The present value for 226 weeks ................................................................................... 203.6216
Difference 0.2653

0.2653 ∕0.8088 = 0.33
Payments will therefore terminate 226 weeks after 4-18-10 on 8-24-14 with a final
additional payment of $198.00 representing 0.33 weeks.
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WORKERS' COMPENSATION EXAMPLES

Example No. 4
Permanent Partial Non-Schedule Disability Case

To find the present value on 6-15-07 of a life award of $400 per week made to an
employee born 8-13-80 if payments had been made to 6-15-07.

From Table XI the tabular value at age 27 for each $1 of annual compensation is 16.751.
The annual compensation benefit is 52 X $400 or $20,800. The present value of annual
compensation benefits is therefore $20,800 X 16.751 or $348,420.80.

(Note. - This method is sufficiently accurate for reserve purposes. If an exact value is needed such
as for purposes of a lump sum settlement, an interpolation must be made between anniversary dates
of the accident. A similar interpolation for a fatal case is illustrated in Example No. 1.)
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WORKERS' COMPENSATION EXAMPLES

Example No. 5
Interest Due on Award Affirmed on Appeal

Calculate the amount of interest due on an award in the following situation: The WCB judge granted a
claimant on 4-22-11 an award of 40 percent loss of use of arm (124.8 weeks beginning with the date of injury, 7-7-
10) at $739.83 per week. The insurance carrier, deciding to continue to controvert the case, appealed the 4-22-11
decision and opted not to pay anything. On 11-1-11 the court confirmed the 4-22-11 award and directed the
insurance carrier to make payments from 7-7-10 to 11-1-11 plus interest.

The total amount of interest due in the above case is determined by two separate calculations: (1)
Calculation of the amount of interest for the period 4-22-11 (date of award) to 11-1-11 (date of payment) on the
amount of compensation benefits which were due and unpaid for the period 7-7-10 (date of injury) to 4-22-11 (date
of award); and (2) Calculation of the amount of interest on compensation benefits payable in periodic installments
during the period 4-22-11 (date of award) to 11-1-11 (date of payment).

(1) From 7-7-10 to 4-22-11 = 41 2/7 wks. = 41.2857 wks.
Multiplied by weekly compensation rate = X $739.83
Product-Compensation Benefits due and unpaid
for period 7-7-10 to 4-22-11 = $30,544.40
Interest on $1 for 1 week at 5% per annum (.05/52) is .00096
The interest period 4-22-11 to 11-1-11 = 27 4/7 wks. = 27.571 wks.
We have $30,544.40 X .00096 X 27.5714
= $808.47 interest on accrued compensation for period 7-7-10 to 4-22-11.

(2) From 4-22-11 to 11-1-411 = 27.5714 wks. during which period compensation benefits are payable in
periodic installments. The interest period on each installment decreases progressively. The interest period on the first
weekly installment of compensation for the week 4-22-11 to 4-29-11, assuming that the installment is payable at the
end of the first week, is 26.5714 wks. (or 1 week less than the total period from date of award to date of payment).
Similarly, the interest period on the second installment of compensation benefits is 25.5714 weeks (or 2 weeks less
than the total period from date of award to date of payment). The total amount of interest due on periodic
installments in any case may therefore be computed by using the formula*:

Interest = (avg. interest period per payment) X (# of payments) X (weekly interest factor) X (weekly indemnity rate)
(26.5714+.5714)
In this case Interest = X 27 X .00096 X $739.83
2
= $260.25 interest on periodic installments from 4-22-11 to 11-1-11.

Total amount on interest due to 11-1-11 is $808.47 + $260.25 = $1,068.72

* You may also use a first principles approach by applying the following computation on weekly payments
starting one week after the 4-22-11 award for all of the payments to 11-1-11:

Interest = ∑((weeklyinterest factor) X (weekly indemnity rate) X (duration ) )
inweeks
This will also produce an answer of $260.25 for the second interest component of this example.
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WORKERS' COMPENSATION EXAMPLES

Example No.6
Death Case

Award to Orphan Children

To find the present value as of the date of death of the injured employee of an award to four orphan children
with birth dates as given below where the employee was killed 12-15-10 and received annual wages of
$56,000.

Dependents Date of Nearest Age Value Column in Table
Birth 12-15-10 IX
Youngest Child 8-14-08 2 837.48 1
2nd Youngest Child 5-20-06 5 29.42 2
3rd Youngest Child 11-2-04 6 1.43 3
4th Youngest Child 9-16-03 7 0.07 4
Total Tabular Value 868.40
Multiply by the Number of $100 of X $560.00
Annual Wages
Present Value of Death Benefits as of $486,304.00
12-15-10
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WORKERS' COMPENSATION EXAMPLES

Example No.7
Death Case

Award to Brothers, Sisters and Grandchildren

Find the present value of the award as of the date of death of an employee, brother to four orphan children
with birth dates as given below, where the employee was killed 12-15-10 and received annual wages of
$50,000.

Dependents Date of Birth Nearest Age Value Column in Table
12-15-10 IX-A
Youngest Child 8-14-10 0 329.31 1
2nd Youngest Child 12-20-08 2 314.06 2
3rd Youngest Child 11-2-06 4 205.74 3
4th Youngest Child 9-16-05 5 21.46 4
Total Tabular Value 870.57
Multiply by the Number of $100 of X $500.00
Annual Wages
Present Value of Death Benefits as of $435,285.00
12-15-10