Schedule 2: 2020 actual administration rates

At the beginning of each year, we set a provisional administration rate, which we use to determine your monthly administration charges for that year.

When we complete our year-end financials, we look at actual experience over the year and then determine what your actual administration rate should have been. At that time, we will either charge you or credit you the difference between the provisional and actual rates as a one-time adjustment.

The WSIB has committed to allocate any COVID-19 related claim costs on a Schedule-wide basis. Schedule 2 organizations will receive a credit at the organization level for allowed COVID-19 claims costs. These COVID-19 costs could then be allocated to all Schedule 2 organizations by including the total amount as a charge in the Schedule 2 admin rate.

For 2020, because the administration expenses were lower than projected, we will provide Schedule 2 organizations with a credit.

See the tables for details about the 2020 administration rate adjustment.

If you have any questions about this update, please contact your Schedule 2 Account Service Representative or the Schedule 2 general revenue enquiry number at 416-344-3646 or toll-free at 1-800-387-0750.

2020 actual administration rate for provincially regulated organizations

Your 2020 actual administration rate decreased to 22.07% from the provisional rate of 22.2%. As a result, you will receive a one-time credit adjustment.

Costs allocated to Organizations

Provisional ($000s)

Actual ($000s)

Adjustment ($000s)

WSIB administration

54,696 

   50,943 

(3,753)

Legislative obligations

3,140 

 2,429

(711)

Ministry of Labour - Prevention & Occupational Health & Safety Act

23,078 

 23,641 

563

Other expenses collectively charged *

3,344 

 4,671

1,327

Total costs

84,258 

 81,684

(2,574) 

Total benefits

379,509 

 379,914

405

COVID-19 %                        0.57%  

Actual administration rate (Costs/Benefits) x 100%+COVID-19%

22.2%

 22.07%

-0.13%

* Includes bankruptcies, net interest gain/loss, interest on delayed benefits and benefit overpayments

2020 actual administration rate for federally regulated organizations

Your 2020 actual administration rate decreased to 15.83% from the provisional rate of 16.1%. As a result, you will receive a one-time credit adjustment. 

Costs allocated to Organizations Provisional ($000s) Actual ($000s) Adjustment ($000s)
WSIB administration                                3,852                      3,999                                     147
Legislative obligations                                  221                           191                                   (30) 
Ministry of Labour - Prevention & Occupational Health & Safety Act                                       0                                0                                         0
Other expenses collectively charged *                                   236                          367                                    131
Total costs                                4,309                      4,557                                     248
Total benefits                              26,768                     29,860                                 3,092
COVID-19 %                        0.57%  
Administration rate (Costs/Benefits) x 100% + COVID-19 %                                16.1%                    15.83%                               -0.27%

* Includes bankruptcies, net interest gain/loss, interest on delayed benefits and benefit overpayments

2020 actual administration rate for organizations covered under the Government Employees Compensation Act 

Your 2020 actual administration rate decreased to 15.72% from the provisional administration rate of 16.0%. As a result, you will receive a one-time credit adjustment.  

Costs allocated to Organizations Provisional ($000s) Actual ($000s) Adjustment ($000s)

WSIB administration

9,881 

8,435

(1,446)

Legislative obligations

568

403

(165)

Ministry of Labour - Prevention & Occupational Health & Safety Act

0

0

0

Other expenses collectively charged *

538

707

169

Total costs

10,987

9,545

(1,442)

Total benefits

61,167 

63,269

2,102

COVID-19 %                         0.57%  

Administration rate (Costs/Benefits) x 100% + COVID-19 %

16.0%

15.72%

-0.28%

* Includes net interest gain/loss, interest on delayed benefits, and benefit overpayments

Schedule 2: The rate-setting cycle 

Schedule 2 organizations pay the full costs of their WSIB claims and an administration fee to manage their claims.

To calculate the administration fee for Schedule 2 organizations, we estimate the annual costs of running the Schedule 2 system at the beginning of each year. That’s when we provide Schedule 2 organizations with an estimated or “provisional” administration rate.

The following year, we provide organizations with their actual rate based on final data from the previous year. At the time we either charge or credit organizations any difference between the provisional and actual administration rates as a one-time adjustment.

1.    We communicate the Provisional Administration Rate for 2021 based on best estimates for the upcoming year. This is usually communicated by February. The rate is charged to organizations on their monthly statements.

Early 2021: Provisional Administration Rates – Set at the end of each year based on forecasts for the year ahead and used to charge organizations on a monthly basis for the following year. For example, the 2021 Provisional Administration Rates were set in 2020 and posted online in early 2021. This was the rate used to charge employers in 2021.

2.    A latest forecast for 2021 is shared with organizations to be transparent and provide an updated picture on how estimates are performing. This is usually communicated by February.

Early 2022: Latest Forecast – This is communicated at the beginning of the next year based on updated information about the prior year. It is a way to be transparent and keep organizations informed about what to expect their actual rate will be. For example, when the 2022 Provisional Administration Rates are communicated, this will be accompanied by an update with the latest forecast of the 2021 Administration Rates.

3.    The Actual Administration Rate for 2021 is determined and we either charge or credit organizations to make up for any difference between the estimated and final rates.

August 2022: Actual Administration Rates – This is communicated in August based on final financial figures of the year before. An adjustment may be made to reflect differences between the Provisional Administration Rate that was billed to organizations and the Actual Administration Rates. The Actual Administration Rate for 2021 will be communicated in the summer of 2022.
Note: A special treatment for COVID-19 claims was adopted for 2020 and 2021 (see this page for more details). 

Schedule 2 administration rates: Understanding the basics

Schedule 2 organizations are self-insured and are therefore liable to fund all benefit payments for their injured workers and the associated administrative costs. Schedule 2 organizations are classified under three groups for the purpose of billing the administration charges:
•    Provincially-regulated organizations;
•    Federally-regulated organizations; and
•    Organizations covered under the Government Employees Compensation Act (GECA).

The WSIB bills organizations in these groups each month for their benefit payments and the associated administration expenses using the applicable administration rate.

Outlined below are the steps involved in determining the Administration Rates.

Step 1 – Determining Administrative Expenses for Schedule 2 Organizations
The WSIB takes the total Schedule 2 expenses and allocates them among the three groups of organizations proportionally based on the benefit costs of each group.* The WSIB also allocates collective expense items applicable to Schedule 2 organizations (such as interest on delayed payments, benefit overpayments and more).**

*Note: Costs related to prevention division expenses, the Occupational Health and Safety Act and Ministry of Labour are only allocated to provincially-regulated organizations
**Note: Bankruptcy costs are not allocated to GECA Employers.

Step 2 – Determining the Administration Rate for Each Organization Group
The WSIB determines expenses for each of the three Schedule 2 groups of organizations and determines the Administration Rate to charge.

This is done by using the following formula: 

Employer group administration rate

In 2020 and 2021, a charge to cover the Schedule 2 COVID-19 costs will be added to the administration rate.

Remember: Because the Administration Rate is a percentage of administration expenses divided by benefits paid, when benefit payments for a group go up, the Administration Rate goes down and when benefit payments go down, the Administration Rate rises. It is important that organizations consider the Administration Rate as a whole instead of focusing solely on expenses or benefits in isolation.

Benefit payments and admin rates

Communicating the administration rates

We have three key communications about Schedule 2 Administration Rates:

1.    Provisional Administration Rates – Set at the end of the previous year based on forecasts for the year ahead and used to charge employers on a monthly basis. For example, the 2021 Provisional Administration Rates were set in 2020 and posted online in early 2021.

2.    Latest Forecast – Communicated at the same time as Provisional Administration Rates based on updated information about the year prior. For example, when the 2022 Provisional Administration Rates are communicated, this is accompanied by an update with the Latest Forecast of the 2021 Administration Rates.

3.    Actual Administration Rates – Communicated in August of the next year based on final financial figures. An adjustment may be made to reflect differences between the Provisional Administration Rate that was billed to employers and the Actual Administration Rate. The Actual Administration Rate for 2021 will be communicated in the summer of 2022.

For more information 

Hopefully, this helped you understand how Schedule 2’s Administration Rates are determined.

If you have questions about your administration rate, you can contact the Schedule 2 Employer Service Centre at 416-344-3646 or toll-free at 1-800-387-0750.