Actuarial Fiscal Note


Retirement Systems Impacted by Legislation:

PERS

FUND(S):

PERS 2510

Sources of Revenue:

Other Fund State and Local Gov'ts

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 as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h( c ) prohibits increases to active members whenever the PERS funding ratio is less than 85.0% funded. The current funded percentage is 77.6%. See the Pension Committee chairman for details.
    
    The Bill provides for additional military service credits for active PERS members and is therefore in violation of the Statutes.



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 $999,999.00 $999,999.00 99.99 %
Normal Cost of System N/A $999,999.00 99.99 %
Past Service Liabilities $999,999.00 $999,999.00 99.99 %
Fiscal Year Past Service
Amortization Period Ends
N/A FY2023 N/A


Explanation of above estimates:


    The Bill provides additional military service credits to certain active members which will increase both the Normal Cost and Actuarial Accrued Liabilities under PERS. The actual costs have not been determined since the benefit improvement would violate 2005 Pension Reform limitations under Section 5-10-22h(c).
    

Analysis of Impact on Public Pension Policy:


    The bill provides limited additional military service credits by re-defining “armed conflicts” applied in current military service calculations.
    



Fiscal Note Summary


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


    This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h( c ) prohibits increases to active members whenever the PERS funding ratio is less than 85.0% funded. The current funded percentage is 77.6%. See the Pension Committee chairman for details.
    
    The Bill provides for additional military service credits for active PERS members and is therefore in violation of the Statutes.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 999,999 999,999
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


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


    The Bill provides additional military service credits to certain active members which will increase both the Normal Cost and Actuarial Accrued Liabilities under PERS. The actual costs have not been determined since the benefit improvement would violate 2005 Pension Reform limitations under Section 5-10-22h(c).
    



Memorandum


    The bill provides limited additional military service credits by re-defining “armed conflicts” applied in current military service calculations.
    
    These additional service credits for active Members are in violation of 2005 Pension Reform provisions.



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