News

PACE trustees hear about improved outlook

Trustees of the Property and Casualty Coverage for Education (PACE) Trust heard a number of indicators this week that fiscal 2012-13 is shaping up to be a much better year than the previous one.

During their regular meeting Dec. 2 in Salem, trustees heard separate reports from an outside actuary and auditor. Paired with reports on the trust's finances, underwriting and investments, the outlook for PACE is moving in a good direction.

  "When I look at financial statements I'm more interested in the direction than the position," auditor James Marta told trustees.

Specifically, Marta and Kevin Wick (Price Waterhouse Coopers), who provided the actuarial review, outlined the following:

  • Net unpaid claims are estimated at $21.1 million, with a payment curve extending to 2024. (Some claims incurred this year may not be reported or paid for years to come).
  • The pool's gross loss history has varied from $6 million to $11 million annually since 2007, but has been shielded from higher volatility by paying for reinsurance.
  • About 63 percent of the pool's risk is associated with general liability coverage.
  • To be completely funded, the pool would need $19 million to $23 million in assets, instead of the $10 million to $15 million it has typically had.
  • Total net assets for the fiscal year ending June 30, 2013, were $12.2 million, a $1.7 million increase over the previous year.
  • Net estimated incurred claims for 2012-13 were $9.7 million – about $1 million less than the year before.      

Mike Doherty, chief financial officer of the Special Districts Association of Oregon (SDAO), told trustees that property claims for the current fiscal year have been lower than expected.

"We are heading back in the right direction," he said.

He said staff had solicited insurance quotes for increased coverage for cyber liability, but that premium costs exceeded the potential for benefits.

Staff said PACE essentially provides full coverage now for cyber liability.

Lisa Freiley, OSBA’s director of legal, labor and PACE services, said planning is proceeding for PACE Day on April 25 in Eugene.