Actuarial Fiscal Note

Date Requested:February 13, 2019
Time Requested:03:40 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
3217 Introduced SB595
CBD Subject: Education (Higher), Education (K12)

Retirement Systems Impacted by Legislation:

TRS 2600

FUND(S):

Special Fund

Sources of Revenue:

Creates New Expense

Legislation creates:

TRS



Actuarial Note Summary


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


    SB 595 states that a person who retires prior to July 1, 2019 under TRS may subsequently become employed by the West Virginia Higher Education Policy Commission, West Virginia Council for Community and Technical College Education, or any state institution of higher education without any loss of retirement annuity or retirement benefits if the person has a break in service of not less than six months following retirement before the subsequent employment commences.
    
    Relative to the total number of participants in TRS, the number of TRS retirees who satisfy the conditions mentioned above is expected to be small. Therefore, we do not expect a material increase in the TRS employer Normal Cost or Unfunded Actuarial Accrued Liability from SB 595.
    



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:


    Relative to the total number of participants in TRS, the number of TRS retirees who satisfy the conditions mentioned in SB 595 is expected to be small. Therefore, we do not expect a material increase in the TRS employer Normal Cost or Unfunded Actuarial Accrued Liability from SB 595.

Analysis of Impact on Public Pension Policy:


    Relative to the total number of participants in TRS, the number of TRS retirees who satisfy the conditions mentioned in SB 595 is expected to be small. Therefore, we do not expect a material increase in the TRS employer Normal Cost or Unfunded Actuarial Accrued Liability from SB 595.
    
    We do not expect SB 595 to change the demographic experience in TRS, however, if future bills broaden the number of TRS retirees who are eligible to return to work without loss of retirement benefits then over time the cumulative impact could change the demographic experience in TRS and possibly the associated cost to TRS.
    



Fiscal Note Summary


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


    SB 595 states that a person who retires prior to July 1, 2019 under TRS may subsequently become employed by the West Virginia Higher Education Policy Commission, West Virginia Council for Community and Technical College Education, or any state institution of higher education without any loss of retirement annuity or retirement benefits if the person has a break in service of not less than six months following retirement before the subsequent employment commences.
    
    Relative to the total number of participants in TRS, the number of TRS retirees who satisfy the conditions mentioned in SB 595 is expected to be small. Therefore, we do not expect a material increase in the TRS employer Normal Cost or Unfunded Actuarial Accrued Liability from SB 595.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2019
Increase/Decrease
(use"-")
2020
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
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):


    Relative to the total number of participants in TRS, the number of TRS retirees who satisfy the conditions mentioned in SB 595 is expected to be small. Therefore, we do not expect a material increase in the TRS employer Normal Cost or Unfunded Actuarial Accrued Liability from SB 595.



Memorandum


    This Actuarial/Fiscal Note is being submitted by the Consolidated Public Retirement Board. It has been reviewed by the CPRB Actuary. Both the Board and the CPRB Actuary are available upon request for questions.



    Person submitting Fiscal Note: Kenneth M. Woodson Jr., Board Actuary, CPRB
    Email Address: kenneth.m.woodson@wv.gov