Pittsburgh Hopes Lump Sums Save on Claims in Long Run

Pittsburgh, saddled with more than 1,000 workers’ compensation claims, is trying to settle some of the claims now so it can save money later.

At a cost of $23.3 million this year, Pittsburgh “has one of the largest budget percentages dedicated to workers’ compensation of any place we’ve seen,” said Dean Kaplan of Philadelphia-based Public Financial Management Inc.

Now, the city is starting to make lump-sum settlements to avoid shelling out money over several years.

“Clearly, the city can’t afford to settle all of these claims at what everybody thinks they should get,” said Kaplan, a member of the city’s state-run financial recovery team. “But there are people who might want to settle at fairly favorable terms.”

Only 14 of Pittsburgh’s estimated 1,099 workers’ compensation claims were settled this year, as of Aug. 1. The cost of the settlement was $652,000, but that could save Pittsburgh $9.3 million over the expected life spans of the employees. The average settlement cost $50,000 and the average age of the workers was 47.