Actuarial Fiscal Note


Retirement Systems Impacted by Legislation:

PERS and TRS

FUND(S):

PERS 2510; TRS 2601

Sources of Revenue:

Other Fund State & local Govts

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 amended Bill provides the potential of significant “double dipping” of retirement benefits in PERS and TRS for certain elected officials. Retroactively effective provisions will result in significant lump sum payments to certain retired members.
    
    Data is not easily available to determine the scope of the payments. It is estimated that total amounts would be well in excess of $1,000,000.
    
    In the opinion of the actuary, the change modifies benefits now payable under PERS and TRS and is therefore a violation of 2005 Pension Reform.



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


Explanation of above estimates:


    The bill significantly increases benefits payable while working for certain members. Exact costs have not been calculated due to the increases being in violation of increases under 2005 Pension Reform for PERS and TRS.

Analysis of Impact on Public Pension Policy:


    The bill significantly increases allowable “double dipping” under PERS and TRS for elected public officials.



Fiscal Note Summary


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


    The amended Bill provides the potential of significant “double dipping” of retirement benefits in PERS and TRS for certain elected officials. Retroactively effective provisions will result in significant lump sum payments to certain retired members.
    
    Data is not easily available to determine the scope of the payments. It is estimated that total amounts would be well in excess of $1,000,000.
    
    In the opinion of the actuary, the change modifies benefits now payable under PERS and TRS and is therefore a violation of 2005 Pension Reform.



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 0 999,999,999 999,999,999
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 significantly increases benefits payable while working for certain members. Exact costs have not been calculated due to the increases being in violation of increases under 2005 Pension Reform for PERS and TRS.



Memorandum


    The bill significantly increases allowable “double dipping” under PERS and TRS for elected public officials.



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