Actuarial Fiscal Note

Date Requested:January 14, 2023
Time Requested:03:24 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2595 Introduced HB2516
CBD Subject: 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).


    HB 2516 would permit TRS retired teachers to coach without applying the coaching time to the 140-day substitute teacher work limit.
    
    Under current West Virginia State Law, a retired TRS participant can be employed as a substitute teacher for a total of 140 days each year without reducing their retirement benefit, however, if they work more than 140 days in a given year, their retirement benefit would be reduced to the minimum guaranteed benefit during that portion of the year after they exceed the 140-day threshold. Allowing retired TRS participants to be employed as a substitute teacher and not apply their coaching time to the 140-day substitute teacher work limit would create a new benefit for these TRS participants because it potentially would allow them to have substitute teaching time plus coaching time in excess of the 140-day work limit without reducing their retirement benefit.
    
    HB 2516 would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
    



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 9.99 %
Normal Cost of System N/A $999,999,999.00 9.99 %
Past Service Liabilities $999,999,999.00 $999,999,999.00 9.99 %
Fiscal Year Past Service
Amortization Period Ends
N/A 9999 N/A


Explanation of above Actuarial estimates:


    HB 2516 would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
    
    Note, the value $999,999,999 displayed above does not indicate an actuarial cost associated with the Bill, it only indicates the Bill violates West Virginia “2005 Pension Reform”.
    

Analysis of Impact on Public Pension Policy:


    HB 2516 would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.



Fiscal Note Summary


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


    HB 2516 would permit TRS retired teachers to coach without applying the coaching time to the 140-day substitute teacher work limit.
    
    Under current West Virginia State Law, a retired TRS participant can be employed as a substitute teacher for a total of 140 days each year without reducing their retirement benefit, however, if they work more than 140 days in a given year, their retirement benefit would be reduced to the minimum guaranteed benefit during that portion of the year after they exceed the 140-day threshold. Allowing retired TRS participants to be employed as a substitute teacher and not apply their coaching time to the 140-day substitute teacher work limit would create a new benefit for these TRS participants because it potentially would allow them to have substitute teaching time plus coaching time in excess of the 140-day work limit without reducing their retirement benefit.
    
    HB 2516 would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2023
Increase/Decrease
(use"-")
2024
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 999,999,999 999,999,999 999,999,999
Personal Services 999,999,999 999,999,999 999,999,999
Current Expenses 999,999,999 999,999,999 999,999,999
Repairs and Alterations 999,999,999 999,999,999 999,999,999
Assets 999,999,999 999,999,999 999,999,999
Other 999,999,999 999,999,999 999,999,999
2. Estimated Total Revenues 999,999,999 999,999,999 999,999,999


Explanation of above Fiscal Note estimates (include possible long-range effect):


    HB 2516 would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
    
    Note, the value $999,999,999 displayed above does not indicate an actuarial cost associated with the Bill, it only indicates the Bill violates West Virginia “2005 Pension Reform”.
    



Memorandum


    HB 2516 would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
    
    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.
    Email Address: kenneth.m.woodson@wv.gov