Actuarial Fiscal Note
Date Requested:January 12, 2024
Time Requested:02:27 PM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1312 |
Introduced |
SB263 |
|
|---|
| 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 263 allows JRS Tier 2 Judges to retire and receive an actuarially reduced retirement benefit upon attaining age sixty-five and serving as a sitting judge for a period of not less than twelve full years.
Currently, a JRS Tier 2 Judge can retire with an unreduced benefit at age sixty-five with sixteen years of credited service, which includes at least fourteen years of Contributory Service, or retire at any age with 24 years of credited service which includes at least fourteen years of Contributory Service.
This bill would allow a JRS Tier 2 judge to retire at age sixty-five with twelve years of service as a judge, however, their retirement benefit would be actuarially reduced based on the number of years until the judge would have received sixteen years of credited service. Since the retirement benefit is actuarially reduced, there is no impact to the unfunded actuarial accrued liability (UAAL) or the annual contribution requirement for JRS.
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 Actuarial estimates:
This bill would allow a JRS Tier 2 judge to retire at age sixty-five with twelve years of service as a judge, however, their retirement benefit would be actuarially reduced based on the number of years until the judge would have received sixteen years of credited service. Since the retirement benefit is actuarially reduced, there is no impact to the unfunded actuarial accrued liability (UAAL) or the annual contribution requirement for JRS.
Analysis of Impact on Public Pension Policy:
This bill would allow a JRS Tier 2 judge to retire at age sixty-five with twelve years of service as a judge, however, their retirement benefit would be actuarially reduced based on the number of years until the judge would have received sixteen years of credited service. Since the retirement benefit is actuarially reduced, there is no impact to the unfunded actuarial accrued liability (UAAL) or the annual contribution requirement for JRS.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB 263 allows JRS Tier 2 Judges to retire and receive an actuarially reduced retirement benefit upon attaining age sixty-five and serving as a sitting judge for a period of not less than twelve full years.
Currently, a JRS Tier 2 Judge can retire with an unreduced benefit at age sixty-five with sixteen years of credited service, which includes at least fourteen years of Contributory Service, or retire at any age with 24 years of credited service which includes at least fourteen years of Contributory Service.
This bill would allow a JRS Tier 2 judge to retire at age sixty-five with twelve years of service as a judge, however, their retirement benefit would be actuarially reduced based on the number of years until the judge would have received sixteen years of credited service. Since the retirement benefit is actuarially reduced, there is no impact to the unfunded actuarial accrued liability (UAAL) or the annual contribution requirement for JRS.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
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 Fiscal Note estimates (include possible long-range effect):
This bill would allow a JRS Tier 2 judge to retire at age sixty-five with twelve years of service as a judge, however, their retirement benefit would be actuarially reduced based on the number of years until the judge would have received sixteen years of credited service. Since the retirement benefit is actuarially reduced, there is no impact to the unfunded actuarial accrued liability (UAAL) or the annual contribution requirement for JRS.
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.
For the appropriate actuarial disclosures, see the July 1, 2023, funding valuation report for JRS, expected to be published on March 31, 2024.
In particular, future actuarial measurements may differ significantly from the current measurements shown in this actuarial/fiscal note due to plan experience differing from that anticipated by the economic and demographic assumptions, changes expected as part of the natural operation of the methodology used for these measurements, and changes in plan provisions, applicable law, and regulations.
Kenneth Woodson Jr., the CPRB Board Actuary, is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries. He meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this Actuarial/Fiscal Note.
Person submitting Fiscal Note: Kenneth M. Woodson Jr.
Email Address: kenneth.m.woodson@wv.gov