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SD 3850

Unemployment Insurance Trust Fund April 2026 Report

194th Legislature (2025-2026)

Massachusetts’ Unemployment Insurance Trust Fund faces ongoing pressure through 2030 as projected balances dip, with rising employer contributions and COVID-19 recovery assessments

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Bill Summary · SD 3850

Summary of Bill SD 3850 (Session 194th) — Massachusetts Unemployment Insurance Trust Fund April 2026 Report

Note: This document summarizes the April 2026 Quarterly Outlook Report on the Massachusetts Unemployment Insurance Trust Fund (UITF). It describes the fund’s status, projections, and related fiscal mechanisms as outlined in the report. The bill’s formal legislative text is not provided here; this summary reflects the substantive content and implications contained in the April 2026 outlook.

1) Purpose and Intent

  • Provide an updated, five-year outlook for Massachusetts’ Unemployment Insurance Trust Fund (UITF), focusing on the private contributory UI program.
  • Assess solvency, inflows (employer contributions and other funds), and outflows (benefits paid) through 2030.
  • Inform policymakers and stakeholders about expected fund balance, required employer contribution rates, and any ongoing financial mechanisms related to pandemic-era COVID-19 borrowing and recovery costs.

2) Key Provisions and Changes

  • UI Trust Fund status as of March 31, 2026:

    • End-of-quarter cash balance: $889 million.
    • This balance is below the prior quarter’s projection ($971 million) and shows ongoing volatility in the UITF.

  • Projections through 2030:

    • The report models balance, inflows, and outflows using private-sector wage data, unemployment rates, and labor force projections (Moody’s, QCEW, LAUS, ACS, CPI-W).
    • Expected dynamics:
    • Contributions: Projected to rise over 2026-2030, with annual totals around $1.81 billion (2026) and increasing in subsequent years (e.g., 2027: $2.114B; 2028: $2.420B; 2029: $2.441B; 2030: $2.467B).
    • Benefit outlays: Projected to total around $2.53 billion for 2026, with declines in 2027 and a gradual increase again through 2030.
    • Net effect: The balance is forecast to swing from positive balances in 2025 to ongoing pressure in the late 2020s and into 2030, with the projection showing potential negative balances in some quarters (final year-end balances: 2027Q4: $195M; 2028Q1: -$201M; 2030Q4: -$594M).

  • Financial drivers and assumptions:

    • Wage and salary growth, unemployment rate, and labor force size drive projections.
    • The report notes adjustments to projection parameters (e.g., recipiency rate and income replacement rate) and benchmarks to align forecasts with observed data.
    • The COVID-19 Recovery Assessment (a separate employer charge) continues to be a feature of the financing structure to stabilize near-term tax rates.

  • COVID-19 Recovery Assessment and federal advances:

    • An agreement resolved outstanding pandemic-related UI overdraws; the first payment under that agreement ($203.417 million) is reflected in the April 2026 projections.
    • The Commonwealth previously borrowed from the federal UI program (Title XII) and issued UI Improvement Act bonds (August 2022) to repay advances and fund a trust deposit; COVID-19 Recovery Assessments are scheduled for 2026-2030 and are designed to be at least 125% of annual debt service while bonds remain outstanding.
    • Estimated COVID-19 Recovery Assessments by year (approximate, in $ millions): 2026: $334; 2027: $318; 2028: $301; 2029: $284; 2030: $122.

  • Experience-rated contribution framework:

    • Employer contributions are based on an employer’s experience rate, which depends on the employer’s UI benefit charges and credits.
    • The report references Schedule E (in effect for 2026) and provides an Experience Rate Table that assigns contribution rates according to reserve percentages and employer-specific positive reserve brackets.

  • Data sources and methodology:

    • Projections rely on Moody’s Analytics forecasts, QCEW, LAUS, ACS, CPI-W, and internal DUA data.
    • The projection model uses a cash-basis treatment for contributions (since Aug. 2024) and incorporates exogenous inflows/outflows.

3) Who or What is Affected

  • Private contributory employers in Massachusetts:

    • Experience-rated UI contributions (rates and totals) are affected by the UITF solvency projections and the Schedule E framework.
    • COVID-19 Recovery Assessments (temporary surcharge) affect employer costs from 2026 onward while bonds remain outstanding.

  • Unemployed workers and UI beneficiaries:

    • Benefit payments continue to be funded by employer contributions; changes in projected outlays influence fund sufficiency and may inform policy decisions about rate adjustments or measures to stabilize funding.

  • State government and UI administration (DUA):

    • Ongoing administration of the UITF, inclusion of COVID-era adjustments, and implementation of the projection-based rate schedules.

4) Procedural and Timeline Considerations

  • statutory framework:

    • Projections are required by MGL Chapter 151A, Section 14F, to cover 2026-2030 and to report on solvency, contributions, and benefit outlays; the report also projects interest on federal loans and any FUTA credit reductions when applicable.

  • Reporting cadence:

    • The April 2026 Quarterly Outlook is part of ongoing quarterly updates, with monthly UI Trust Fund status updates also published.

  • Notable dates and figures:

    • March 31, 2026: UITF balance reported at $889 million.
    • January 17, 2025: Resolution of pandemic overdraw liabilities (first payment under agreement: $203,417,383.54) reflected in projections.
    • 2026-2030: Projected COVID-19 Recovery Assessments and bond-related costs remain in effect.

If you’d like, I can extract specific numeric tables (e.g., exact quarterly balance projections, or the Schedule E contribution rates) into a concise reference sheet.

Compiled from official sources — confirm details with the bill’s official record.

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