New York State Court of Appeals
Self-insurance Plans — Withdrawal — Present Value of Claims
Village Ilion, et al. v. County of Herkimer, et al.
Background: The dispute arises out of the administration of a workers’ compensation self-insurance plan administered by the defendant. The defendant chose to terminate the plan. With those claims still open, the municipalities could either, remain as participants and pay an annual assessment of their portion of the tail claim liabilities, or they could withdraw from the plan and pay a lump sum withdrawal fee. At issue is whether a municipality’s liability upon withdrawing from a county self-insurance fund should have been discounted to present value.
Ruling: The Court of Appeals held that the withdrawal fee reflected benefits to be paid in the future and therefore should have been discounted to its current value as of the date it was due.
Martha L. Berry for the appellant; Albert J. Millus Jr. for the respondent