Actuarial Fiscal Note


Retirement Systems Impacted by Legislation:

State Police Plan A & Plan B

FUND(S):

State Police 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).


    The bill increases the surviving dependent scholarship limitation from $7,500 to a per year limitation of $7,500.
    
    Because of the rare occurrence of an eligible surviving dependent, the change will not impact either the Normal Cost nor the Actuarial Accrued Liabilities for State Police Plans.
    
    Upon eligibility, a surviving dependent scholarship cost will increase in the range of $22,500 to $30,000 dependent on 4 or 5 year graduation.



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:


    The scholarship increase contained in the bill does not provide for any pension plan benefit increases that impact either the Normal Cost nor the Actuarial Accrued Liabilities under either State Police Plan A and Plan B.
    
    To be a surviving dependent eligible for the scholarship, you must be a child of a member who died in the line of duty. The scholarship is also limited to a West Virginia institution. Eligibility for the scholarship is therefore extremely rare. Upon eligibility, the individual cost is dependent upon the years to graduation. Based upon a 5 year graduation, the additional scholarship cost is $30,000 per occurance.

Analysis of Impact on Public Pension Policy:


    The bill provides for State Police death benefits which have no relationship to retirement benefits normally provided under the State Police retirement plans.



Fiscal Note Summary


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


    The bill increases the surviving dependent scholarship limitation from $7,500 to a per year limitation of $7,500.
    
    Because of the rare occurrence of an eligible surviving dependent, the change will not impact either the Normal Cost nor the Actuarial Accrued Liabilities for State Police Plans.
    
    Upon eligibility, a surviving dependent scholarship cost will increase in the range of $22,500 to $30,000 dependent on 4 or 5 year graduation.



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 30,000 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 30,000 0
2. Estimated Total Revenues 0 0 0


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


    The scholarship increase contained in the bill does not provide for any pension plan benefit increases that impact either the Normal Cost nor the Actuarial Accrued Liabilities under either State Police Plan A and Plan B.
    
    To be a surviving dependent eligible for the scholarship, you must be a child of a member who died in the line of duty. The scholarship is also limited to a West Virginia institution. Eligibility for the scholarship is therefore extremely rare. Upon eligibility, the individual cost is dependent upon the years to graduation. Based upon a 5 year graduation, the additional scholarship cost is $30,000 per occurance.



Memorandum


    The bill provides for State Police death benefits which have no relationship to retirement benefits normally provided under the State Police retirement plans.



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