Outlook Report February 2021
This Outlook Report provides the status of the projected to be $2.030 billion, $500 million less than the
Unemployment Insurance Trust Fund and updated previous estimate of $2.530 billion on tax rate schedule G.
projections for the 2021 through 2025 outlook period. Benefit payments are projected to be $2.342 billion, $443
million less than the previous estimate of $2.785 billion.
As required by MGL Chapter 151A, Section 14F, DUA Revision was due to decreases in weeks compensated and
publishes quarterly outlooks for the Trust Fund based on insured unemploment caused by a lower average annual
forecasts for total unemployment rate, annual wage and unemployment rate from the previous rate. The projected
salary growth rate, and annual labor force. DUA also 2022 year-end balance at -$4.378 billion is $615 million
provides monthly reports updating the status of the Trust higher than the previous estimate of -$4.993 billion, primarily
Fund. the result of the higher 2021 year-end balance. Interest
bearing loans will be needed from the federal UI account
New economic assumptions from Moody’s Analytics Data throughout 2022. Interest due on advances is estimated at
Services, released in January 2021, used in these projections around $122 million due in September 2022.
showed lower average annual unemployment rates as
compared to the assumptions used in the October 2020 The new legislation, also, provides for an employer surcharge
Outlook Report. The 2021 average annual unemployment to pay the interest on federal advances that cannot be paid
rate improved from 7.2 percent to 6.5 percent followed by a from the state’s UI Trust Fund and authorizes the
5.2 percent annual rate in 2022, which is two-tenths of a Commonwealth to issue bonds to restore trust fund solvency
percentage point lower from the previous rate used. Total in 2022. The report estimates a bond of $6 billion issued by
labor force decreased in 2021 to 2024 posting an average November 9, 2022 would payoff the federal advances and
annual decrease of 76,146. The annual wage and salary restore trust fund solvency. The 2022 year-end balance with
growth rates are higher in 2021 but lower in 2022 to 2024. the bond fund is expected to be solvent at $1.622 billion.
The outlook presented is for the regular UI program based on For 2023 rate schedule G is projected to trigger for employer
2020 claims activities and preliminary 2021 employer contributions as the fund is still insolvent at the end of third
experience rates. quarter 2022 when rates are determined. With a $15,000
taxable wage base, employer contributions projected at
Recently enacted legislation, House 90, sets 2021 and 2022 $2.674 billion are $152 million higher than the previous
employer contributions on tax rate schedule E. For 2021, with estimate of $2.522 billion. The projected lower
a $15,000 taxable wage base, employer contributions are unemployment rate generates benefit payments estimated at
projected at $2.037 billion, $414 million less than the $1.273 billion that are $294 million less than the projection
previous estimate of $2.451 billion on tax rate schedule G released in October. The year-end 2023 private contributory
released in the October 2020 Outlook Report. Estimated account balance will continue to be solvent and is projected
benefit payments of $3.735 billion are $1.086 billion lower at $3.044 billion. Federal interest earned on the balance is
than the previous estimate of $4.821 billion. A seven-tenths estimated to be $21 million.
of a percentage point improvement on the annual average
unemployment rate generated fewer weeks claimed and The solvent account balance and higher payrolls are now
compensated. The 2021 year-end balance, projected at - projected to trigger schedule C for 2024 employer payrolls.
$4.066 billion is $672 million better than the previous Employer contributions are estimated at $1.666 billion and
projection of -$4.738 billion. benefit payments projected to be $1.229 billion. Year-end
2024 private contributory account balance is projected at
Massachusetts will need to borrow from the federal UI $3.513 billion.
account throughout the year. Advances will be interest-free
through September 6, 2021. Massachusetts borrowed a total For 2025, employer payrolls are projected to remain on tax
of $2.201 billion in 2020 and $10.8 million in January 2021. rate schedule C and generate $1.663 billion in employer
Interest on federal advances from September 7 through contributions. Benefit payments are projected at $1.311
September 30, 2021, totaling $6 million must be paid by billion and a year-end balance solvent at $3.871 billion.
September 30, 2021.
Employer payrolls, as set by legislature, will remain on tax
rate schedule E in 2022. Employer contributions are
This report is submitted to the Legislature in accordance with the provisions of Chapter 151A, section 14F of the General Laws.
For more information please call: (617) 626-6600
 Unemployment Insurance Trust Fund Report February 2021
ECONOMIC ASSUMPTIONS
DUA utilizes independent economic forecasts as the basis for unemployment rate showed the highest improvement from 7.2
its estimates of income and expenditure for the percent to 6.5 percent followed by a 5.2 percent
Massachusetts Unemployment Insurance program. Moody’s unemployment rate in 2022, a decrease of two-tenths of a
Analytics Data Services January 2021 forecasts were used in percentage point from the September projection. The annual
the simulations for this report. The current assumptions, average unemployment rates for 2023 and 2024 improved by
along with assumptions used to produce the simulation five-tenths and four-tenths of a percentage point, respectively.
estimates published in the August and October 2020 Outlook
Reports are provided in Table 1. The annual labor force projections for 2021 to 2024 showed an
average annual decrease of 76,146 from the Moody’s Analytics
The January 2021 Moody’s Analytics Data Services Annual Data Services projections released in September 2020. The
Wage and Salary Growth Rate forecasts for 2021 was revised 2021 labor force showed the largest decrease of 131,302 and
up but revised down in 2022 to 2024 from the rates released the smallest in 2023 of 53,104. The labor force is projected to
in September. In 2021, up by three and three-tenths of a be 3,803,782 in 2025.
percentage point, from 1.9 percent to 5.2 percent, the 2022
rate decreased from 5.3 percent to 4.1, from 5.9 percent to 4.8 The expected recovery in the labor force, annual
percent in 2023 and a small decrease in 2024. unemployment rates and annual wage increases are
estimated to restore the private contributory account to a 0.66
The projected annual average total unemployment rates for average high cost multiple in 2025.
2021 to 2024 were all revised down by two-tenths to seven-
tenths of a percentage point. The 2021 annual average
Table 1: Moody’s Analytics Data Services Forecasts, Three Most Recent Reports
Wage & Salary Growth (%) Total Unemployment Rate (%) Labor Force
20-Jul 20-Sep 21-Jan 20-Jul 20-Sep 21-Jan 20-Jul 20-Sep 21-Jan
2021 1.3 1.9 5.2 7.0 7.2 6.5 3,780,216 3,806,995 3,675,693
2022 5.3 5.3 4.1 5.6 5.4 5.2 3,782,917 3,807,749 3,742,078
2023 6.1 5.9 4.8 4.3 4.1 3.6 3,795,038 3,821,512 3,768,408
2024 4.8 4.9 4.7 4.1 3.8 3.4 3,817,861 3,844,555 3,790,048
2025 NA NA 4.7 NA NA 3.5 NA NA 3,803,782
Source: Moody's Analytics Data Services
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 Unemployment Insurance Trust Fund Report February 2021
UNEMPLOYMENT INSURANCE TRUST FUND BALANCE
As of January 31, 2021, the preliminary Massachusetts at 1.01 percent of total payrolls. Interest on federal advances,
Unemployment Insurance Trust Fund ending balance was - totaling $122 million will be required in the fall of 2022.
$2.516 million. The private contributory account balance was
at -$2.645 billion and the governmental contributory account Current outlooks now indicate the trust fund will continue to be
balance was $129 million. The private contributory account solvent in 2023 with a year-end private account balance
balance was $43 million less than the projection of -$2.602 estimated at $3.044 billion.
billion at the end of January.
Year-end 2024 private contributory account balance remains
The 2021 year-end private contributory account balance will solvent and is estimated to be $3.513 billion.
continue to be insolvent and is projected to be -$4.066 billion,
an increase of $672 million from the projection of -$4.738 Continuing to recover from the prolonged effects of the Covid-19
billion released in the January 2021 Outlook Report. The pandemic, the 2025 year-end private contributory account
difference was primarily due to a reduction in benefit balance is estimated to be $3.871 billion.
payments caused by a seven-tenths of a percentage point
improvement in the annual average unemployment rate. In Debt service costs will be assessed annually on private
January, a total $10.8 million was borrowed from the federal contributory accounts through an additional tax. Theses costs
unemployment account and additional federal advances will will be estimated when bonds are issued.
be needed for the remainder of the year. The federal
advances will be interest-free through September 6, 2021. The chart below shows actual 2020 and projected quarterly
Interest of $5.9 million on federal advances from September private UI Private Trust Fund balances through 2025.
7 through September 30, 2021 must be paid by September
30, 2021.
For 2022, an estimated $6 billion bond pays off the federal
advances by November 9, 2022 and restores solvency
resulting in a year-end positive balance of $1.622 billion.
Projected employer contributions at 0.87 percent of total
payroll are $312 million less than benefit payments estimated
2025 Estimated
$3.871B
2024 Estimated
$3.513B
2023 Estimated
$3.044B
2022 Estimated
Actual 2020 $1.622B
-$2.368B 2021 Estimated
-$4.066B
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 Unemployment Insurance Trust Fund Report February 2021
BENEFIT OUTLAYS
The updated simulation for the outlook period shows Massachsetts triggered on the federal/state Extended Benefit
decreases in benefit payments as compared to the projections (EB) program in May 2020 due to the rapid increase in UI
released in the October 2020 Outlook Report. claims. EB costs will be federally funded 100 percent for
private contributory employers and private non-profit
Benefit payments for 2021 are now estimated to be $3.375 reimbursable employers through September 6, 2021.
billion, $1.086 billion less than the previous estimate of $4.821
billion. An improvement of seven-tenths of a percentage point In 2022, benefit payments are projected to be $2.342 billion, a
in the annual average unemployment rate, from 7.2 to 6.5 decrease of $443 million from the previously released estimate
percent, generated fewer weeks compensated and insured of $2.785 billion. As in the previous year, weeks compensated
unemployment causing the reduced benefit payments. In and insured unemployment are projected to be less due a lower
addition, the average weekly benefit amount is projected to be annual average unemployment rate.
less.
For 2023, benefit payments are projected to be $1.273 billion,
Preliminary benefit payments for the month of January 2021 of $294 million lower than the previous estimate of $1.567 billion.
$345.3 million was $206.5 million more than in January 2020 A decrease in the unemployment rate from the rate used in the
and $24.9 million higher than the projection. Initial claims and previous simulation resulted in fewer insured unemployment
continued weeks claimed were 226 percent and 147 percent and weeks compensated generating less benefit payments.
higher than last year, respectively.
Benefit payments are projected to be $1.229 billion in 2024,
The federal CARES Act of 2020 which ended in December $165 million less than the previous estimate of $1.394 billion.
26, 2020 has been extended as the American Rescue Plan As in the previous year, a projected lower annual
Act of 2021 (ARPA) through September 6, 2021 for all unemployment rate reduced week compensated and insured
programs, namely the Pandemic Unemployment Assistance unemployment resulting in less benefit payments.
(PUA); the Pandemic Emergency Unemployment
Compensation (PEUC); and the Federal Pandemic With the unemployment rate projected to be higher in 2025
Unemployment Compensation (FPUC) which adds $300 to a than in 2024, benefit payments are expected to increase to
claimants’ average weekly benefit amount; among others. $1.311 billion.
Covid-19 related claims are charged to solvency through the
extension.
Actual 2020
$5.927B 2021 Estimated
$3.735B
2022 Estimated 2025 Estimated
$2.342B 2023 Estimated $1.311B
$1.273B 2024 Estimated
$1.229B
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 Unemployment Insurance Trust Fund Report February 2021
EMPLOYER CONTRIBUTIONS
Updated projections for employer contributions for 2021 to Employer contributions are expected to be $2.674 billion, an
2024, based on preliminary 2021 employer experience rates, increase of $152 million from the previous estimate of $2.522
are lower in 2021 and 2022 than the previous estimates on a billion as the average contribution are higher.
higher tax schedule.
For 2024, tax rate schedule C is now projected to trigger for
For 2021, tax rate schedule E was set by legislation for employer payrolls generating $1.666 billion in contributions.
employer payrolls and with a $15,000 taxable wage base is
projected to generate $2.037 billion in employer contributions. Tax rate schedule C remains projected to t