Further reduction in ACC deficit welcomed

Press Release – Accident Compensation Corporation

ACC’s finances continued to improve in 2010/11, according to information in its Annual Report tabled in Parliament today. The Annual Report shows a net surplus of $3.545 billion for the year, which will be used to reduce ACC’s outstanding deficit.12 October 2011

Further reduction in ACC deficit welcomed

ACC’s finances continued to improve in 2010/11, according to information in its Annual Report tabled in Parliament today. The Annual Report shows a net surplus of $3.545 billion for the year, which will be used to reduce ACC’s outstanding deficit.

“This result reduces ACC’s net deficit from $10.3 billion last year to about $6.8 billion” said ACC Chairman John Judge.

A number of factors have contributed to ACC’s positive performance. These include improved rehabilitation rates for injured people and increased returns on ACC’s investment portfolio.

In 2010/11, ACC assisted more than 93% of its injured clients return to work or their normal lives within a year and more than 70% back to work within three months. Mr Judge said this was the best result ever recorded for this measure.

The annual report also shows a 22% increase in the number of long-term clients returned to independence, compared to the previous year.

“To achieve this we have stepped up programmes that enable injured workers to return to work as quickly and safely as possible. We have also increased our focus on workplace safety and incentivised those companies with good safety records by introducing experience rating” said Mr Judge.

ACC’s investment team had another excellent year and the Annual Report shows that ACC’s reserve’s portfolio delivered an average return of 12.6% over the year.

“This is great news for all New Zealanders concerned for the long term future of the ACC Scheme” Mr Judge said.

However, these significant gains have been tempered in recent months by a worsening global economic situation.

“ACC’s investments make a significant contribution towards keeping levies affordable and towards managing our outstanding long-term claims liability. With the economic outlook now a little clouded, there will be continued pressure to run the organisation efficiently.

“That said, the funding policy we have adopted for each of our accounts means we do now have the ability to ride out any short term financial problems, and we may even be able to reach full funding earlier than our 2019 target.”

“I am reassured by the performance recorded in ACC’s 2011 Annual Report and I would like to thank ACC staff for the progress they have made. But there is still more work to be done if we are to eliminate the deficit by 2019,” he added.

“The reason we must keep chipping away at the deficit is to make sure the Scheme is around to assist future generations of injured New Zealanders and secondly to avoid passing the cost of our claims onto our children and grandchildren.

To ensure the future of the Scheme, ACC must also remain true to its mandate and stick closely to its core tasks and legislation. While this can be unpopular, it is fairer to levy payers.”

The 2011 Annual Report is available on ACC’s website www.acc.co.nz

ENDS

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