Full funding?

[MSTRS:Me]

We've all heard the term 'fully funded model'. But who of us actually understand what it means?
I know I don't (think so).
What I do know is that Nick the Prick wants this in place by 2019. But what will that mean for us?
Premiums (levies) will never increase again? Will go down? Will cease altogether?
Will the reserve be so huge that it is self-sustaining? Or simply able to 'subsidise' our contributions?
Can anyone lay it out for the bewildered amongst us?
If this has been answered somewhere else, then apologies. I've not seen it.

[Mom]

I believe that the definition of fully funded in this case is that there will be sufficient funds in hand to cover the costs of future payments for injuries that happen today.

[Ocean1]

It's an insurance term, and therefore a) a good indication as to what class of entity the government see ACC as, and b) not to be trusted.

It means, currently: a) that the future cost of current claims is born by current contributors, and b) whatever they say it means on any given day.

Finally, it's unnescessary in terms of cashflow, (they've got current costs well covered), and there's no way in hell the premiums will be going down again once current contributions have cought up with the (theoretical) ongoing financial risk.

[NONONO]

As far as I'm aware it simply means (put simply) that at any given time there are sufficient funds in the coffers to fund all existing claims (projected into the future).
It's a nonsense and only makes sense in the very twisted world of accountancy.
However, it does mean that the way the scheme is reported to be doing is open to interpretation based on current ideology.
So, if A = current funds and B = projected payouts, you will always have a confounding variable of C (where C = current ideology).
Ha! Bollocks!!

[MSTRS:Me]

So fully funded is a (political) crock. Just another way for the bastards to rape and pillage our wallets.
And of course, being that our beloved pollies are always to be trusted with the cookie jar, the huge reserves is also open to raping and pillaging when/if it suits them.
Fully fucked would be a more accurate way of describing this travesty.

[bogan]

way I see it they need it fully funded to privatize it, otherwise the private companies will be left with the bills for those currently injured. And then one of the reasons they'll use to sway us to privatization will be the much lower levies/rates, of course they'll leave out the fact that now the scheme is fully funded the levie's could be dropped anyway. Which you might say well thats fine, private companies will introduce competition and make our rates cheaper, they will also deny cover every chance they get to increase profits, not give cover to people with existing conditions etc.

Also, if we can afford to pay people to have kids, why can't we also afford to keep em healthy when accident occur, seems a no brainer which one to stop first.

[NinjaNanna]

As I understand it...

Previously our fees paid in any given year covered only that years costs.

Sometime ago they decided this was unfair on future tax payers as they were paying accidents that occured in the past.

Now our fees cover the lifetime cost of any given accident so theoretically future levy payers aren't picking up the bill for todays mistakes.

Obvioulsy when this change was made there was a shortfall as the past accidents haven't had their lifetime cost accounted for.

Full Funding meant that extra fees have to be collected to cover these shortfalls.

As far as I know ACC has been cunning and haven't actually set a specific levy for paying for the "full funding shortfall" if they'd done that then we'd know exactly how much our fees should drop come 2019.

But theoretically they should as we won't be raising funds to cover the shortfalls of the past and only need to collect enough money to cover that years lifetime accident costs.

Odds are they'll never give us the money back - they'll simply say that they won't raise ACC that year and low and behold look the numbers the same.

[Winston001]

By any definition ACC is a public no-fault insurance scheme. Insurance companies (and banks) establish a "float" (Tier 1 capital for a bank) which is calculated on an actuarial basis to cover future obligations. Common sense not accounting magic.

Imagine you are looking at retirement in 20 years. You decide that an annual Gold Coast holiday in retirement is what you'll need and it will cost $5000 each visit. You estimate you'll only do it for 10 years so that means $50,000 is required in kitty. You have two choices - either start taxing yourself to save up that amount, or take a punt that you'll have $5000pa extra income at retirement.

So it is completely logical that ACC sets up a longterm investment fund rather than betting future levies will pay the way.

As a nation we should have done this decades ago with our retirement pensions. Instead it's been pay-as-you-go which means our kids are facing a wall of tax to look after the babyboom generation. That's why Cullen established the NZ Superfund. And why Kiwisaver exists. Its not much compared to Australia but better than nothing.

[Ocean1]

So it is completely logical that ACC sets up a longterm investment fund rather than betting future levies will pay the way.

As a nation we should have done this decades ago with our retirement pensions. Instead it's been pay-as-you-go which means our kids are facing a wall of tax to look after the babyboom generation. That's why Cullen established the NZ Superfund. And why Kiwisaver exists. Its not much compared to Australia but better than nothing.

Pension fund yes. As you say, bloody criminal not to have set up fully funded super scheme to replace the subsidised one we used to have.

ACC? Not logical, annual costs are consistent, all that's needed is a consistent policy set wrt claims and the system's stable and perfectly viable. And like I said, how likely is it that our premiums will return to last years rates in 2019?

[NONONO]

So fully funded is a (political) crock. Just another way for the bastards to rape and pillage our wallets.
And of course, being that our beloved pollies are always to be trusted with the cookie jar, the huge reserves is also open to raping and pillaging when/if it suits them.
Fully fucked would be a more accurate way of describing this travesty.

Thought you said you did'nt understand it? Spot on that man.

[NONONO]

By any definition ACC is a public no-fault insurance scheme. Insurance companies (and banks) establish a "float" (Tier 1 capital for a bank) which is calculated on an actuarial basis to cover future obligations. Common sense not accounting magic.

Imagine you are looking at retirement in 20 years. You decide that an annual Gold Coast holiday in retirement is what you'll need and it will cost $5000 each visit. You estimate you'll only do it for 10 years so that means $50,000 is required in kitty. You have two choices - either start taxing yourself to save up that amount, or take a punt that you'll have $5000pa extra income at retirement.

So it is completely logical that ACC sets up a longterm investment fund rather than betting future levies will pay the way.

As a nation we should have done this decades ago with our retirement pensions. Instead it's been pay-as-you-go which means our kids are facing a wall of tax to look after the babyboom generation. That's why Cullen established the NZ Superfund. And why Kiwisaver exists. Its not much compared to Australia but better than nothing.

"By any definition" surely not.
ACC is not now, nor has it ever been an insurance sheme/scam. Why are the apologists for the NATS and Judge so bloody determined to push this line in the face of the evidence?
Lets not go over all this shit again. Factualy, morally and logically the ACC Futures Coalition won this argument last year. Idealogicaly the Nats can not accept this as it would mean no sell off.

[riffer]

"By any definition" surely not.
ACC is not now, nor has it ever been an insurance sheme/scam. Why are the apologists for the NATS and Judge so bloody determined to push this line in the face of the evidence?

Because they want to create an insurance company.

Lets not go over all this shit again. Factualy, morally and logically the ACC Futures Coalition won this argument last year. Idealogicaly the Nats can not accept this as it would mean no sell off.

Don't you believe it. They've only said no selling the company wholesale in this term. Doesn't at all prevent them selling off parts of the business piece by piece until it's all gone.

[riffer]

Pension fund yes. As you say, bloody criminal not to have set up fully funded super scheme to replace the subsidised one we used to have.

ACC? Not logical, annual costs are consistent, all that's needed is a consistent policy set wrt claims and the system's stable and perfectly viable. And like I said, how likely is it that our premiums will return to last years rates in 2019?

About as likely as those emails that claim to increase the length of my dick by 4 inches in a month are true.

[Ocean1]

About as likely as those emails that claim to increase the length of my dick by 4 inches in a month are true.

Which is why I feel no obligation to play the game by the rules.

When the rules are obviously no form of socially constructive agreement but instructions for some fucking herd animal to be harvseted for maximum return then I'll make up my own rules to match my own agenda.

I can do this with a clear concience because my contribution over the last few decades has been at least two orders of magnitude greater than either my current costs to the system or my likely liability over the next couple.

[NONONO]

Which is why I feel no obligation to play the game by the rules.

When the rules are obviously no form of socially constructive agreement but instructions for some fucking herd animal to be harvseted for maximum return then I'll make up my own rules to match my own agenda.

I can do this with a clear concience because my contribution over the last few decades has been at least two orders of magnitude greater than either my current costs to the system or my likely liability over the next couple.

In all seriousness I love this last post.
Personally I think this has the potential to be a new starting point in the campaign.