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ACC Experience Rating Programme (ERP)

The ACC public consultation to introduce the Experience Rating Programme (ERP) into the work account ran from 1 October to 29 October 2010. The outcome seems to be balanced and fair.

The ACC Workplace Safety Management Programme (WSMP) discounts (primary level 10%, secondary level 15% and tertiary level 20%) have been retained as well as the introduction of the new 'no claims discount' of 10% if a business generates no weekly compensation or fatal claims. For those in the WSMP the effective levy discount could be as much as 30%.

However, the news is not this good for all stakeholders.

The ACC estimates that around 7,000 NZ small businesses will receive a 10% loading under the new ERP, effectively a 10% increase to their levy rate. This will add cost to small businesses in high-risk industries that have not stepped up to effectively manage health and safety and are not in WSMP and are already paying a comparatively high levy rate.

The focus of the ACC has certainly changed. Whereas WSMP encouraged excellence in health and safety systems, the ERP introduces a new element when those systems translate to actual safety performance and workers are not injured.

Most PF Olsen contractors participate in the WSMP or the WSD (a junior version of the same product). Some have held the accreditation for four successive terms or since inception and it has become an integral part of the 'way they do things' – in other words, their culture. They have also worked on injury prevention and injury management so their procedures and practice are well-developed. This means that many will meet 'the experience period' criteria and have automatic qualification for the 10% no claims discount. Indeed, some of our contractors have outstanding records.

At PF Olsen's recent Safe Start Up breakfasts, two contractor groups really stood out…

  1. S&R Logging Ltd, winner of the 2010 Performance Award, has a record 18 years without lost time.

    Simon Walker receives his award on behalf of S&R Logging Ltd from Don Huse, OTPP Board Director. Like many other PF Olsen contractors the new ERP will be seen as a reward for all their hard work.

  2. Forest Distribution Ltd (FDL), winner of the outstanding safety achievement award, recently achieved 17 months lost time injury (LTI) free. That represents 450,000 hours of work, 98,500 loads delivered, and 11.6 million kms travelled. They additionally had 100% negative results in connection with the Random Drug Testing Programme on all tests completed during 2010.

    The experience period, noted above, is the historical period of three years from 1 April 2007 – 31 March 2010. Effectively, a no claims discount or loading will be applied to a business' levy rate (excluding residual portion) based on their number of fatality claims or compensation days paid within the period. The following table illustrates:

    Discount or Loading (level)Criteria
    10% no claims discount No compensation days or fatal claims
    No adjustment Between 1 and 70 compensation days
    10% levy loading Exceed 70 compensation days or any fatal claim

    So the injuries of the past are going to catch up with those that have previously managed to conceal them in the general pot while good performers (those that have worked hard on safety performance) receive a 10% 'no claims bonus'.

    These initiatives are a tangible way to make the connection between good health and safety performance and a better bottom line result for contractors and forest owners alike.