Actuarial Fiscal Note
Date Requested:January 17, 2023
Time Requested:04:39 PM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1643 |
Introduced |
HB2134 |
|
|---|
| CBD Subject: |
|
|---|
|
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 2134 would allow TRS Tier 2 members, that is, TRS members hired on or after July 1, 2015, to convert unused sick leave or annual leave into additional benefit service credits. The conversion would be applied based on two days retirement service credit for each one day of accrued annual or sick leave.
The exact details of the conversion calculation are in the West Virginia Code of State Rules §162-4-4.12. HB 2134 would permit TRS Tier 2 members to convert unused leave into additional benefit service credits at the same rate as their TRS Tier 1 counterparts.
West Virginia Statute §18-7A-28e, “WV 2005 Pension Reform”, prohibits TRS active member benefit increases or the creation of new benefits for TRS active members until the restrictions sunset on July 1, 2034. Therefore, HB 2134 would violate “WV 2005 Pension Reform” because it would create a new active member benefit for TRS Tier 2 members.
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 |
9.90 % |
| Normal Cost of System |
N/A |
$999,999,999.00 |
9.90 % |
| Past Service Liabilities |
$999,999,999.00 |
$999,999,999.00 |
9.90 % |
Fiscal Year Past Service
Amortization Period Ends |
N/A |
9999 |
N/A |
Explanation of above Actuarial estimates:
HB 2134 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 2134 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 2134 would allow TRS Tier 2 members, that is, TRS members hired on or after July 1, 2015, to convert unused sick leave or annual leave into additional benefit service credits. The conversion would be applied based on two days retirement service credit for each one day of accrued annual or sick leave.
The exact details of the conversion calculation are in the West Virginia Code of State Rules §162-4-4.12. HB 2134 would permit TRS Tier 2 members to convert unused leave into additional benefit service credits at the same rate as their TRS Tier 1 counterparts.
West Virginia Statute §18-7A-28e, “WV 2005 Pension Reform”, prohibits TRS active member benefit increases or the creation of new benefits for TRS active members until the restrictions sunset on July 1, 2034. Therefore, HB 2134 would violate “WV 2005 Pension Reform” because it would create a new active member benefit for TRS Tier 2 members.
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 2134 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 2134 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