The bill provides for a reduction in the PERS benefit formula for new members first hired July 1, 2013 and after. The final average pay in the formula is reduced from final 3 year average to final 10 year average in the last 15 years.

The Normal Cost and Actuarial Accrued Liabilities for all current member is unchanged.

The Normal Cost for those hired July 1, 2013 and after is expected to be 1.24% of payroll less than the Normal Cost for current members. The savings is dependent on the rate at which new hires enter PERS on and after July 1, 2013.

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 |

The expected reduction 1.24% of annual pay in the Employer Normal Cost is based upon projections from the PERS July 1, 2012 Actuarial Valuation. New hires were projected to be consistent with current average participant demographics. The value of the reduction from Final 3 Year Average Pay to Final 10 Year Average Pay is based on a 4% average salary increase assumption.

This bill reduces the recognition of inflation in the PERS benefit formula. The change provides a 12% reduction in expected benefits for new hires on and after July 1, 2013.

The bill provides for a reduction in the PERS benefit formula for new members first hired July 1, 2013 and after. The final average pay in the formula is reduced from final 3 year average to final 10 year average in the last 15 years.

The Normal Cost and Actuarial Accrued Liabilities for all current member is unchanged.

The Normal Cost for those hired July 1, 2013 and after is expected to be 1.24% of payroll less than the Normal Cost for current members. The savings is dependent on the rate at which new hires enter PERS on and after July 1, 2013.

Effect of Proposal | Fiscal Year | ||
---|---|---|---|

2013 Increase/Decrease (use" -") |
2014 Increase/Decrease (use" -") |
Fiscal Year (Upon Full Implementation) | |

1. Estmated Total Cost | 0 | -685,000 | -2,100,000 |

Personal Services | 0 | 0 | 0 |

Current Expenses | 0 | 0 | 0 |

Repairs and Alterations | 0 | 0 | 0 |

Assets | 0 | 0 | 0 |

Other | 0 | -685,000 | -2,100,000 |

2. Estimated Total Revenues | 0 | 0 | 0 |

The expected reduction 1.24% of annual pay in the Employer Normal Cost is based upon projections from the PERS July 1, 2012 Actuarial Valuation. New hires were projected to be consistent with current average participant demographics. The value of the reduction from Final 3 Year Average Pay to Final 10 Year Average Pay is based on a 4% average salary increase assumption.

This bill reduces the recognition of inflation in the PERS benefit formula. The change provides a 12% reduction in expected benefits for new hires on and after July 1, 2013.