Consultants show long‑range projections for WA Cares Fund, cite 2060 as key transition year

Consultants told the subcommittee their long‑horizon modeling focuses on fiscal year 2060 as the point where benefit outflows are expected to start exceeding premiums.

Jonathan Camp summarized Makita's projections and said the 75‑year solvency probability in the base‑case analysis was roughly "about a 96% probability of solvency 75 years in the future." The team showed median 2060 balances of approximately $136,000,000,000 for the recommended 50/50 allocation and about $155,000,000,000 for a 100% equity allocation in their simulations.

Makita also emphasized distributional outcomes: under poorer return outcomes (the 85th percentile of adverse scenarios) the optimal allocation would shift toward more fixed income (about 70% fixed income, 30% equity), and under still worse scenarios it would shift further toward fixed income. Camp said those percentiles illustrate the trade‑offs between pursuing higher median balances and protecting against downside outcomes.

An inflation stress test that increased benefit growth markedly reduced the projected 2060 median for the 50/50 allocation from about $136 billion to roughly $110 billion and caused 75‑year solvency probabilities to fall dramatically in some scenarios. The consultants told the subcommittee that such stress outcomes are examples where "other levers besides just your investment returns likely would be pulled on" (for example, premiums or benefit provisions) if costs exceed projections.

Members and consultants agreed the long‑range results hinge on many assumptions and that the allocation should be periodically revisited as experience accrues.