MEMORANDUM
TO: Senator Michael Rodrigues, Chair, Senate Committee on Ways and Means
Representative Aaron Michlewitz, House Committee on Ways and Means
Senator Patricia D. Jehlen, Chair, Joint Committee on Labor and Workforce Development
Representative Stephen Hay, Vice Chair, Joint Committee on Labor and Workforce Development
Michael D. Hurley, Senate Clerk
Steven T. James, House Clerk
FROM: Richard A. Jeffers
DATE: March 5, 2020
SUBJECT: FEBRUARY 2020 UNEMPLOYMENT INSURANCE TRUST FUND REPORT
The attached February Unemployment Insurance Trust Fund Report provides information on the trust fund status through
the end of January 2020, revised projections for the private contributory account for 2020 through 2023 and new
projections for 2024. The projections are based on the January 2020 Moody’s Analytics Data Services forecasts, 2019
claims and payments activities and 2020 employer experience rates.
The report highlights include:
The January 2020 preliminary private contributory account balance was $1.602 billion, $16 million more than previously
projected as employer contributions were larger than expected.
Employer contribution projections for 2020 are based on a $15,000 taxable wage base and as triggered on rate schedule
E.
The revised 2020 outlook for benefit payments is $1.271 billion; employer contributions are estimated at $1.738 billion and
the year-end private contributory account balance is expected to be $2.106 billion.
Revised economic assumptions include lower annual average unemployment rates that result in benefit payments
exceeding employer contributions in 2022 through 2024.
Under the current economic assumptions the projections indicate that no borrowing from the federal unemployment
account will be required through the 2024 outlook period.
cc: Distribution List
 Outlook Report February 2020
HIGHLIGHTS
This Outlook Report provides the status of the For 2021 rate schedule D is projected to trigger for
Unemployment Insurance Trust Fund and updated employer contributions. With a $15,000 taxable wage
projections for the 2020 through 2024 outlook period. base, employer contributions are projected to be $1.558
billion and benefit payments are estimated at $1.468
As required by MGL Chapter 151A, Section 14F, DUA billion. Year-end 2021 private contributory account
publishes quarterly outlooks for the Trust Fund based on balance is projected at $2.235 billion, $456 million more
forecasts for total unemployment rate, annual wage and than the previous estimate due to a projected decrease in
salary growth rate, and annual labor force. DUA also benefit payments and a carryover from the 2020 higher
provides monthly reports updating the status of the Trust year-end balance.
Fund.
Tax rate schedule D is again projected to trigger for 2022
New economic assumptions from Moody’s Analytics Data employer payrolls. Employer contributions are estimated
Services used in these projections show lower average at $1.512 billion and benefits payments at $1.633 billion.
annual unemployment rates for 2020 to 2023, as Year-end 2022 private contributory account balance is
compared to the assumptions used in the October 2019 projected at $2.154 billion.
Outlook Report. For 2020, the average annual
unemployment rate improved from 3.3 percent to 2.9 Tax rate schedule D is now projected to trigger for 2023
percent followed by a 3.3 percent annual rate in 2021, employer payrolls. Employer contributions are estimated
which is four-tenths of a percentage point lower than the at $1.505 billion, a decrease of $117 million from the
previous rate used. Total labor force decreased in 2020 to previous projection of $1.622 billion on a higher tax
2023 posting an average annual decrease of 22,189. The schedule E. Benefit payments projected at $1.736 billion
annual wage and salary growth rate is lower in 2019, 2022 is in-line with the previous estimate of $1.724 billion with a
and 2023 but higher in 2021. 2023 year-end balance of $1.960 billion.
The outlook presented is for the regular UI program based For 2024, tax rate schedule D is projected to trigger for
on 2020 employer experience rates and 2019 benefit employer payrolls and generate $1.506 billion in
payments, and employer contributions. contributions. Benefit payments are projected at $1.754
billion and a year-end balance of $1.745 billion.
Tax rate schedule E triggered for 2020 employer
contributions and a taxable wage base remaining at Based on the current economic assumptions and statutory
$15,000. provisions, no borrowing from the federal unemployment
account is anticipated throughout the 2020 to 2024
The revised 2020 year-end projections indicate employer outlook period.
contributions, based on rate schedule E and a $15,000
taxable wage base, will be $1.738 billion, $76 million more
than the previous estimate of $1.662 billion. Estimated
benefit payments of $1.271 billion are $146 million lower
than the previous estimate of $1.417 billion first released
in the October 2019 Outlook Report. The difference is
due to a projected decrease in the annual average
unemployment rate resulting in less weeks compensated
and insured unemployment. As a result, the private
contributory account year-end balance estimated at
$2.106 billion is $235 million higher than the previous
estimate of $1.871 billion. The projected 2020 ending
balance is $504 million more than last year’s ending
balance of $1.602 billion.
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 2020
ECONOMIC ASSUMPTIONS
DUA utilizes independent economic forecasts as the basis improvement of four-tenths of a percentage point, from 3.3
for its estimates of income and expenditure for the percent to 2.9 percent and from 3.7 percent to 3.3 percent,
Massachusetts Unemployment Insurance program. respectively. This is followed by three-tenths of a
Moody’s Analytics Data Services January 2020 forecasts percentage point reduction in the average annual
were used in the benefit financing simulations for this unemployment rate in 2022 now at 3.7 percent.
report. The current assumptions, along with assumptions
used to produce the simulation estimates published in the The annual labor force projections for 2020 to 2023 showed
August and October 2019 Outlook Reports are provided in an average annual decrease of 22,189 from the Moody’s
Table 1. Analytics Data Services projections released in September
2019. The 2020 labor force showed the smallest decrease
The January 2020 Moody’s Analytics Data Services Annual of 17,303. The labor force is projected to be 3,907,533 in
Wage and Salary Growth Rates forecasts for 2020, 2022 2024.
and 2023 were revised down while the 2021 rate was up
from 2.4 percent to 2.9 percent.
The projected annual average total unemployment rates for
2020 to 2023 were all lower than the rates used in the
October 2019 Outlook Report. In 2020 and 2021, an
Table 1: Moody’s Analytics Data Services Forecasts, Three Most Recent Reports
Wage & Salary Growth (%) Total Unemployment Rate (%) Labor Force
19-Jul 19-Sep 20-Jan 19-Jul 19-Sep 20-Jan 19-Jul 19-Sep 20-Jan
2020 4.8 4.4 4.0 3.3 3.3 2.9 3,862,652 3,869,901 3,852,598
2021 2.6 2.4 2.9 3.7 3.7 3.3 3,874,718 3,881,134 3,860,770
2022 3.4 3.6 3.3 4.0 4.0 3.7 3,899,021 3,904,519 3,880,616
2023 3.6 3.8 3.6 4.0 4.0 3.9 3,919,649 3,924,159 3,896,972
2024 NA NA 3.7 NA NA 3.9 NA NA 3,907,533
Source: Moody's Analytics Data Services
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 Unemployment Insurance Trust Fund Report February 2020
UNEMPLOYMENT INSURANCE TRUST FUND BALANCE
As of January 31, 2020, the preliminary Massachusetts estimate of $1.540 billion. However, the increase in the
Unemployment Insurance Trust Fund ending balance was projected ending balance is primarily a carryover from the
$1.744 billion. The private contributory account balance higher year-end balances of the previous two years as
was at $1.602 billion and the governmental contributory benefit payments were higher than employer contributions.
account balance was $142 million. The private
contributory account balance is $16 million more than the The 2023 year-end account balance is estimated to be
latest projection of $1.586 billion for the month of January. $1.960 billion. However, with projected benefit payments
being higher than employer contributions, this 2023 year-end
The private contributory account is projected to have a balance is $194 million less than the 2022 year-ending
balance of $2.106 billion at the end 2020, a reserve of balance.
$2.235 billion in 2021 and a projected balance of $2.154
billion by the end of 2022. The 2024 year-end private contributory account balance is
estimated at $1.745 billion, 0.75 percent of total wages.
The 2020 year-end private contributory account balance
of $2.106 billion is $235 million higher than the previous It is anticipated that no borrowing from the federal
estimate of $1.871 billion first published in the January unemployment account will be required throughout the
2020 Outlook Report. The difference in the year-end outlook period.
balance is the result of expected decreases in benefit
payments. The revised 2020 annual average The chart below shows the 2019 actual and projected
unemployment rate improved by four-tenths of a quarterly private UI Fund balance through 2024.
percentage point resulting in less insured unemployment
and weeks compensated. Year-end reserves as a
percent of total wages are expected to be 0.99 percent.
The year-end 2021 account balance is expected to be
$2.235 billion, a $456 million increase from the previous
estimate of $1.779 billion. The increase was due to a
decrease in the annual average unemployment rate
generating fewer insured unemployment and weeks
compensated resulting in less benefit payments coupled
with a carryover of the 2020 higher year-end balance.
The year-end 2022 private account balance is expected to
be $2.154 billion, $614 million higher than the previous
2021 Estimated
$2.235B
2022 Estimated
2020 Estimated $2.154B
$2.106B
2023 Estimated
$1.960B
2024 Estimated
2019 Actual $1.745B
$1.602B
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 Unemployment Insurance Trust Fund Report February 2020
BENEFIT OUTLAYS
The updated simulation for the outlook period shows For 2022, benefit payments are projected to be $1.633
decreases in benefit payments in 2020 to 2022 and a small billion, a decrease of $75 million from the previous estimate
increase in 2023. of $1.708 billion first released in October 2019. As in the
previous years, the reduction in payment was the result of
Preliminary benefit payments in January 2020 totaled less insured unemployment and weeks compensated
$138.8 million, a $12.5 million decrease from the January caused by a projected lower average annual unemployment
2019 payment of $151.3 million and $5.3 million less than rate.
the projection of $144.1 million.
Benefit payments are projected to be $1.736 billion in 2023,
Initial claims in the month of January 2020 were 8.6 at just $12 million higher is in-line with the previous estimate
percent lower and weeks compensated were 13.6 percent of $1.724 billion
less than in January 2019. The average weekly benefit
amount of $531.86 in January 2020 was $15.81 or 3.1 In 2024, benefit payments are predicted to be $1.754 billion,
percent more than the $516.05 amount in the same month a small increase of $18 million from the 2023 projected
in 2019. benefit payments as the annual average unemployment rate
holds steady at 3.9 percent.
Benefit payments for 2020 are now estimated to be $1.271
billion, $146 million less than the previous estimate of
$1.417 billion first released in the October 2019 Outlook
Report. The difference is due to projected decreases in
total weeks compensated and insured unemployment
generated by four-tenths of a percentage point
improvement in the annual average unemployment rate.
In 2021, benefit payments are projected to be $1.468
billion, $120 million lower than the previous estimate of
$1.588 billion. The revision, as in the previous year, is due
to a decrease in the projected annual average
unemployment rate resulting in fewer insured
unemployment and weeks compensated.
2024 Estimated
$1.754B
2023 Estimated
$1.736B
2022 Estimated
$1.633B
2021 Estimated
$1.4686B
2020 Estimated
2019 Actual $1.271B
$1.257B
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 Unemployment Insurance Trust Fund Report February 2020
EMPLOYER CONTRIBUTIONS
Updated projections for employer contributions showed For 2023, tax rate schedule D is now projected to trigger
increases in 2020 to 2022 and decreases in 2023. for employer payrolls generating $1.505 billion in
contributions. This is a decrease of $117 million from the
Employer contributions in the month of January 2020 previous projection first released in October 2019 of $1.622
totaled $138.7 million, an increase of $15.2 million from the billion on tax rate schedule E.
January 2019 contributions of $123.5 million and $11.1
million more than projected. For 2024 employer payrolls are expected to remain on tax
rate schedule D and generate $1.506 billion in employer
For 2020 rate schedule E triggered for employer contributions
contributions and with a $