Actuarial Fiscal Note

Date Requested:February 18, 2016
Time Requested:03:06 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2780 Introduced SB631
CBD Subject: Education (Higher), Retirement

Retirement Systems Impacted by Legislation:

Teachers Retirement System

FUND(S):

TRS

Sources of Revenue:

General Fund,Other Fund Local school districts

Legislation creates:

Neither Program nor Fund



Actuarial Note Summary

Impact this measure will have on the liabilities and contributions associated with the retirement system(s).


    The bill applys only to employees of higher education institutions who are grandfathered active memebers of the Teachers Retirement System. This actuarial/fiscal note appies only to the impact on TRS for 308 such members.
    
    TRS members who are part of a Higher Education Severance Plan shall have their retirement date impacted by the Severance Plan. If a member is age 65 or older on the retirement date selected under the Severance Plan, the Higher Education institution providing the serverance benfits shall not be required to fund the actuarial loss due to the retirement of the members. Any actuarial loss due to the severance plan retirement shall be included in the normal contribution calculations for all gains and losses due to actuarial assumptions.
    
    



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:


    The retirement benefits under TRS due to such a TRS member retirement being included under a severance plan is unchanged from the regular retirement benefit the member would receive without the severance plan. There is therefore no increase in benefits under TRS.

Analysis of Impact on Public Pension Policy:


    For members who retire who meet the requirements of being at least age 65 and eligible for unreduced benefits, the funding of the actuarial loss, if any, is trandferred from the instiution of higher education as an immediate liability to a loss under the retirement age actuarial assumption and included in the SAF contribution calcuation with all other actuarial assumption gains for losses.



Fiscal Note Summary


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


    The bill applys only to employees of higher education institutions who are grandfathered active memebers of the Teachers Retirement System. This actuarial/fiscal note appies only to the impact on TRS for 308 such members.
    
    TRS members who are part of a Higher Education Severance Plan shall have their retirement date impacted by the Severance Plan. If a member is age 65 or older on the retirement date selected under the Severance Plan, the Higher Education institution providing the serverance benfits shall not be required to fund the actuarial loss due to the retirement of the members. Any actuarial loss due to the severance plan retirement shall be included in the normal contribution calculations for all gains and losses due to actuarial assumptions



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
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):


    The retirement benefits under TRS due to such a TRS member retirement being included under a severance plan is unchanged from the regular retirement benefit the member would receive without the severance plan. There is therefore no increase in benefits under TRS.



Memorandum


    For members who retire who meet the requirements of being at least age 65 and eligible for unreduced benefits, the funding of the actuarial loss, if any, is trandferred from the instiution of higher education as an immediate liability to a loss under the retirement age actuarial assumption and included in the SAF contribution calcuation with all other actuarial assumption gains for losses.



    Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
    Email Address: harry.w.mandel@wv.gov