January 13, 2026 — An explosive investigation by The Jacobi Journal has exposed the RAND Corporation’s 2024 report on California’s Subsequent Injuries Benefits Trust Fund (SIBTF) as a financial and political controversy. By overstating the fund’s liability by an estimated $6.75 billion—a 632% error—RAND’s report helped manufacture a fake “crisis” that would have quietly moved the cost of caring for California’s most severely disabled workers off the backs of employers and directly onto the taxpayers.
According to The Jacobi Journal’s actuarial analysis, the SIBTF’s real projected liability is about $1.25 billion—not the $7.9 billion figure used to stampede lawmakers into gutting the fund.
The Real Target: Taxpayers, Not Waste
The SIBTF is a core part of California’s workers’ compensation foundational framework. Employers and their insurers pay into a dedicated fund that provides lifetime, cost‑of‑living‑adjusted benefits to workers who are effectively 100% disabled, keeping these catastrophically injured workers off Medi‑Cal, SSI, and other taxpayer‑funded welfare programs.
The attack on SIBTF through CA AB 1329, driven by RAND’s inflated $7.9 billion claim, wasn’t about stopping abuse of the fund or saving money—it was about shifting responsibility to the taxpayer. If SIBTF benefits are slashed or dismantled, two things happen immediately:
- Corporate liability drops: Employers and carriers see their long‑term disability exposure shrink.
- Taxpayer costs soar: Severely disabled workers are forced onto public assistance, and every California taxpayer becomes the payer of last resort.
This is the real SIBTF scheme: a manufactured financial crisis used to move a private, employer‑funded obligation onto the public balance sheet while politicians posture as “fiscally responsible.”
“Mathematical Malpractice”: How the Numbers Were Rigged
The Jacobi Journal points to two core defects that its actuaries describe as “mathematical malpractice”—errors so extreme they distort decision making and encourage unnecessary corrective measures.
1. An Inflated Payout Rate Built on 42 Cases
RAND’s model assumed that 91% of open SIBTF cases would ultimately result in a benefit payout. That figure came from a tiny, non‑representative sample of just 42 cases out of tens of thousands of files—an approach that would get a freshman flunked in Statistics 101, let alone justify billions in policy shifts.
Historical experience, including dismissed and abandoned claims, shows that only about 24%–44% of cases actually result in payment, meaning well over half never produce an award. By plugging in a 91% payout rate, the forecasted caseload—and the supposed future liability—was artificially blown up by billions.
2. A Fabricated Cost for a Lifetime Award
Rand’s report also pegged the present value of a typical 100% disability award at roughly $933,000. That eye‑popping figure rested on three highly favorable assumptions that all push costs upward:
- Discount rate: RAND used an abnormally low 3% rate, despite a 7% rate referenced in California law and higher rates commonly used for public pensions, which has the predictable effect of inflating present value.
- COLA: RAND paired that low discount with a high 3.9% cost‑of‑living adjustment, a combination actuaries cited by The Jacobi Journal label as “mathematical malpractice” because it maximizes projected liability rather than reflecting long‑term historical averages (around 2.6%).
- Life expectancy: The model did not fully account for evidence that severely disabled individuals have a significantly reduced life expectancy (estimated around 17%), which would reduce the length and cost of payments.
When those assumptions are corrected—using a 7% discount rate, a 2.6% COLA, and reduced life expectancy—the true cost of a 100% award falls to about $418,345, and the total SIBTF liability drops to roughly $1.25 billion.
What Taxpayers Should Demand
For the informed reader, the lesson is clear: this was never about protecting the public purse—it was about protecting corporate and political interests with cooked‑up numbers.
Going forward, taxpayers should insist on:
- Strict adherence to statutory financial assumptions (like the 7% discount rate) before any “crisis” is declared.
- Independent review of government‑funded studies that are used to justify major benefit cuts or cost shifts.
- Keeping employer‑funded liabilities where they belong—inside the workers’ compensation system, not dumped onto the general fund.
The real SIBTF liability—$1.25 billion—is significant but manageable. What is not acceptable is allowing inflated, politically convenient numbers to be used as a weapon against both the disabled and the taxpayers who will be forced to clean up the mess.
