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