Report Claims RAND Inflated CA Disability Fund Liability by $6.75 Billion

HARTFORD, CT – January 06, 2026 – A new investigative report alleges that a highly influential 2024 study by the RAND Corporation massively overstated the future liabilities of a critical California disability fund by $6.75 billion, potentially steering state policy toward drastic and unnecessary reforms based on a distorted fiscal reality.

The detailed analysis, published by The Jacobi Journal of Insurance Investigation, directly challenges the findings of RAND's state-commissioned report on California’s Subsequent Injuries Benefits Trust Fund (SIBTF). RAND’s original study projected a staggering $7.9 billion liability, a figure that sent shockwaves through Sacramento and fueled legislative proposals to curtail a program designed to support the state's most severely injured workers.

However, The Jacobi Journal's recalculation places the fund's liability at just $1.25 billion—a figure nearly 84% lower. The dramatic discrepancy stems from what the journal identifies as critical methodological flaws and assumptions inconsistent with historical data and standard actuarial practices. The findings raise serious questions about the integrity of research used to shape public policy and the potential consequences for California's most vulnerable citizens.

A Tale of Two Numbers: The Methodological Divide

The core of The Jacobi Journal's argument lies in two fundamental criticisms of RAND's analytical model. The first concerns a wildly optimistic assumption about how many SIBTF claims result in payment.

RAND’s model projected that a remarkable 91% of all open SIBTF cases would ultimately lead to benefit payouts. This projection, however, was based on a small and nonrepresentative sample of just 42 cases reviewed between 2019 and 2022. The Jacobi Journal contrasts this with a much larger dataset from the California Department of Industrial Relations (DIR)—the very agency that commissioned the RAND study. Historical data covering more than 27,000 cases from 2010 to 2022 shows that, in reality, only 24% to 44% of claims ever result in benefit payments, with many cases being abandoned or failing to meet the complex eligibility criteria.

The second major flaw identified was the inflated valuation of lifetime disability awards. RAND’s modeling placed the average lifetime cost for a worker with a 100% disability rating at $933,000. According to The Jacobi Journal, this figure exceeds actuarially sound benchmarks by over $450,000 per case. The inflation was reportedly driven by a combination of factors:

• Understated Discount Rates: RAND used a low 3% discount rate to calculate the present value of future payments, making the long-term liability appear larger. The Jacobi Journal argues a 7% rate, consistent with California's public pension standards, is more appropriate.
• Elevated Cost-of-Living Adjustments (COLA): The RAND model assumed a high 3.9% annual COLA, while the long-term historical average is closer to 2.6%.
• Omission of Life Expectancy Data: The model failed to account for the statistically reduced life expectancy of severely disabled individuals, a factor that directly impacts the total duration of lifetime benefit payments. The Jacobi Journal notes that this condition was acknowledged within an addendum to RAND’s own report but not incorporated into its primary liability calculation.

“The evidence indicates RAND’s study did more than miscalculate — it misrepresented the economic reality of the SIBTF,” stated Patrick Kelley of The Jacobi Journal's investigative team in the press release. “California lawmakers deserve accurate, transparent, and empirically grounded information before making policy that affects vulnerable constituents.”

Disabled Workers Caught in a Crossfire of Data

Beyond the actuarial debate, the controversy strikes at the heart of a program that serves as a vital safety net. The SIBTF was established to encourage employers to hire workers with pre-existing disabilities. It does so by ensuring that if such a worker suffers a subsequent injury on the job, the employer is only responsible for the new injury, while the SIBTF provides additional compensation for the combined disabling effect of both the old and new conditions.

For thousands of Californians, these benefits are the difference between solvency and financial ruin. The fund often provides lifelong support to individuals whose ability to work has been permanently and severely compromised. The prospect of a $7.9 billion unfunded liability, as presented by RAND, created significant pressure on lawmakers to consider overhauling the program, potentially by tightening eligibility or reducing benefits.

Advocacy groups for injured workers have long feared that a manufactured fiscal crisis could be used to dismantle a program that, while costly, fulfills a crucial social and economic function. The Jacobi Journal's findings give voice to these concerns, suggesting that policy decisions impacting thousands of lives were being considered on the basis of flawed and misleading data.

A Widening Chasm of Expert Opinion

Complicating the narrative further, RAND and The Jacobi Journal are not the only entities analyzing the SIBTF's financial health. The Legislative Analyst's Office (LAO), California's nonpartisan fiscal and policy advisor, has also weighed in, adding another layer of complexity to the debate.

While the LAO acknowledged RAND's $7.9 billion estimate, its own analysis suggested the total liability could be far greater, potentially exceeding $20 billion. The LAO's higher figure stems from a different set of concerns, including the massive backlog of approximately 25,000 unprocessed SIBTF claims and the inclusion of future claims not yet filed but likely to emerge. The LAO has pointed to the program's rapid expansion, noting it “now rivals the size of the standard workers’ compensation system but with looser standards, broader eligibility, and more generous benefits.”

Much of this growth is attributed to the 2020 Todd v. SIBTF decision by the Workers' Compensation Appeals Board, which made it significantly easier for claimants to combine multiple disabilities to reach the 100% permanent disability threshold, unlocking more generous lifetime benefits. This expansion has driven employer assessments to fund the program from $35 million in 2015 to an estimated $850 million in the most recent fiscal year.

This places California's policymakers in an incredibly difficult position. They are now faced with three vastly different assessments: a dire $20 billion-plus warning from the LAO, a contested $7.9 billion liability from RAND, and a far more manageable $1.25 billion estimate from The Jacobi Journal. As of now, the RAND Corporation has not issued a public response to the allegations, and the DIR, which commissioned the original report, has only stated it is studying the findings closely to ensure the program remains sustainable. The challenge for lawmakers will be to cut through the noise and determine which set of numbers, if any, accurately reflects the truth before charting a course for the future of the SIBTF.