Actuarial Fiscal Note


Retirement Systems Impacted by Legislation:

State Police Plan A and Plan B

FUND(S):

Plan A 2161 / Plan B 2162

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Actuarial Note Summary


Impact this measure will have on the liabilities and contributions associated with the retirement system(s).


    This bill is administrative in nature and does not add to the benefits provided under State Police Plan A or Plan B. The bill provides for certain disability re certification expenses to be paid through the respective plans and not directly paid by the State Police. Since the State Police provides funding of both plans through contributions, this is an administrative shift in the source of the funding of the costs and not an increase in costs.
    
    Neither the Normal Cost nor the Actuarial Accrued Liabilities will increase in either State Police Plan A or Plan B due to the provisions of the bill.



Fiscal Detail of Actuarial Impact

Impact on current benefit costs, prior service benefit costs and ongoing contribution requirements following full implementation.


Impact On Following Full Implementation
Increase in Unfunded Actuarial Accrued Liability Initial Impact on Annual Contribution Requirement of System(s) Contribution Increase as a Percentage of Annual Payroll
Total Annual Costs $0.00 $0.00 0.00 %
Normal Cost of System N/A $0.00 0.00 %
Past Service Liabilities $0.00 $0.00 0.00 %
Fiscal Year Past Service
Amortization Period Ends
N/A N/A


Explanation of above estimates:


    There is no increase in either the Normal Cost nor the Actuarial Accrued Liabilities for State Police Plan A and Plan B.
    
    The bill provides the responsibility of the payment of disability re certifications to be transferred from the State Police as the prior employer to CPRB as administrator of the retirement plans. Since the plans are funded through State Police contributions, there is no net increase in costs for these re certifications and potential cost savings through use of CPRB physicians under contract to complete such reviews.
    
    The rehire/reinstatement provisions of the bill spell out administrative requirements for such rehire/reinstatement following the recovery of a prior disabled State Trooper. The provisions provide a maximum of 45 days during which the rehire/reinstatement process must be completed and terminates the disability benefits.

Analysis of Impact on Public Pension Policy:


    The bill is intended to improve current disability re certification procedures. By transferring the medical review responsibilities from State Police physician to CPRB physicians, a greater number of physicians are available at CPRB controlled locations and costs.
    
    The reinstatement provisions are intended to clarify the rehire/reinstatement process.



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The net impact of the provisions of this bill is to control the costs and procedures regarding the re certification of disabled State Police members in either Plan A or Plan B. Initially the costs to the state are expected to be offsetting.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 5,000 5,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 -5,000 -5,000
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    The net impact of the costs of the bill are to transfer existing State Police paid disability medical re certifications to the CPRB as administrator for State Police Plan A and Plan B. Such costs are offsetting and are not expected to increase the costs of such exams. The CPRB expects the wider range of physicians throughout West Virginia available to the CPRB to improve the application of this difficult procedure to disabled members.



Memorandum


    The rehire/reinstatement provisions of th bill should improve these procedures within the State Police processing of recovered State Troopers.



    Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
    Email Address: harry.w.mandel@wv.gov