Business
4:54 pm
Fri January 11, 2013

Mo. auditor confirms insolvency of disability fund

There's not enough money in the state's Second Injury Fund to compensate for unpaid obligations.
Credit Andrew Magill / Flickr

A report from the Missouri auditor confirms that a state fund for disabled workers is insolvent.

State Auditor Tom Schweich said Friday that Missouri's Second Injury Fund had barely $3 million as of the end of 2012 but had unpaid obligations of $28 million.

The fund covers workers' compensation claims for employees who have previous injuries or disabilities and then suffer a new job-related injury. Auditors and financial analysts have warned for several years that the fund was on a path toward insolvency. But lawmakers have done nothing to address it.

The fund gets its money from a surcharge on workers' compensation insurance premiums paid by businesses. Auditors trace the fund's financial woes to a 2005 law the capped surcharges at 3 percent.