Actuarial Fiscal Note
Date Requested:January 10, 2020
Time Requested:01:08 PM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1640 |
Introduced |
SB246 |
|
|---|
| CBD Subject: |
Retirement |
|---|
|
Retirement Systems Impacted by Legislation:
JRS 2140
FUND(S):
Special Fund
Sources of Revenue:
Creates New Expense
Legislation creates:
JRS
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
SB 246 would allow Family Court Judges to participate in the Judges’ Retirement System (JRS). There are 47 active Family Court Judges currently participating in the Public Employees’ Retirement System (PERS) and to value SB 246 we assume all 47 Family Court Judges would elect to transfer all their service as a Family Court Judge from PERS to JRS. Upon transferring from PERS to JRS, each Family Court Judge member would transfer their corresponding PERS accumulated contributions plus any shortfall accumulated contributions to the JRS Fund as if the member contributed based on JRS member contribution rates for all transferred service. Each active Family Court Judge would enter JRS as a Tier II member.
SB 246 would increase the actuarial accrued liability for JRS by approximately $8.2 million. JRS is currently overfunded and if Family Court Judges were included in JRS then JRS would continue to be over funded for the foreseeable future. As a result, there is no amortization of unfunded liability due to SB 246. As written, SB 246 would increase the FY 2021 JRS annual required employer contribution by approximately $375,000.
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 |
$375,000.00 |
3.46 % |
| Normal Cost of System |
N/A |
$375,000.00 |
3.46 % |
| Past Service Liabilities |
$0.00 |
$0.00 |
0.00 % |
Fiscal Year Past Service
Amortization Period Ends |
N/A |
- |
N/A |
Explanation of above Actuarial estimates:
SB 246 would increase the actuarial accrued liability for JRS by approximately $8.2 million. JRS is currently overfunded and if Family Court Judges were included in JRS then JRS would continue to be over funded for the foreseeable future. As a result, there is no amortization of unfunded liability due to SB 246. As written, SB 246 would increase the FY 2021 JRS annual required employer contribution by approximately $375,000 or 3.46% of JRS payroll.
Analysis of Impact on Public Pension Policy:
As written, the costs of the bill would be sustainable by the current employee and employer contribution rates.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB 246 would allow Family Court Judges to participate in the Judges’ Retirement System (JRS). There are 47 active Family Court Judges currently participating in the Public Employees’ Retirement System (PERS) and to value SB 246 we assume all 47 Family Court Judges would elect to transfer all their service as a Family Court Judge from PERS to JRS. Upon transferring from PERS to JRS, each Family Court Judge member would transfer their corresponding PERS accumulated contributions plus any shortfall accumulated contributions to the JRS Fund as if the member contributed based on JRS member contribution rates for all transferred service. Each active Family Court Judge would enter JRS as a Tier II member.
SB 246 would increase the actuarial accrued liability for JRS by approximately $8.2 million. JRS is currently overfunded and if Family Court Judges were included in JRS then JRS would continue to be over funded for the foreseeable future. As a result, there is no amortization of unfunded liability due to SB 246. As written, SB 246 would increase the FY 2021 JRS annual required employer contribution by approximately $375,000.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
375,000 |
375,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
375,000 |
375,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above Fiscal Note estimates (include possible long-range effect):
SB 246 would increase the actuarial accrued liability for JRS by approximately $8.2 million. JRS is currently overfunded and if Family Court Judges were included in JRS then JRS would continue to be over funded for the foreseeable future. As a result, there is no amortization of unfunded liability due to SB 246. As written, SB 246 would increase the FY 2021 JRS annual required employer contribution by approximately $375,000.
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