Actuarial Fiscal Note

Date Requested:January 17, 2018
Time Requested:11:47 AM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
1864 Comm. Sub. HB3095
CBD Subject: Education (Higher)

Retirement Systems Impacted by Legislation:

TRS

FUND(S):

TRS 2600

Sources of Revenue:

General Fund

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 House Education Committee Substitute (and the bill as introduced) violates §18-7A-28e, known as “2005 Pension Reform”, which prohibits increases to benefits for active members of TRS.
    This Com Sub provides that retirees of TRS shall be permitted to return to work in a full-time capacity for any Institute of Higher Education (including HEPC and CCTC) without affecting his or her retirement benefit. The bill requires a 6-month waiting period between commencing the retirement annuity and returning to employment.
    



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 99.99 %
Normal Cost of System N/A $999,999,999.00 99.99 %
Past Service Liabilities $999,999,999.00 $999,999,999.00 99.99 %
Fiscal Year Past Service
Amortization Period Ends
N/A 999,999,999 N/A


Explanation of above Actuarial estimates:


    The House Education Committee Substitute (and the bill as introduced) violates §18-7A-28e, known as “2005 Pension Reform”, which prohibits increases to benefits for active members of TRS. Current retirees of TRS are prohibited from working more than 7 hours at any Institute of Higher Education without a reduction in their monthly annuity. Thus, allowing retirees to return to work with no limit on the number of hours allowed is providing an additional benefit that is not currently available.

Analysis of Impact on Public Pension Policy:


    The House Education Committee Substitute (and the bill as introduced) violates §18-7A-28e, known as “2005 Pension Reform”, which prohibits increases to benefits for active members of TRS. Current retirees of TRS are prohibited from working more than 7 hours at any Institute of Higher Education without a reduction in their monthly annuity. Thus, allowing retirees to return to work with no limit on the number of hours allowed is providing an additional benefit that is not currently available.



Fiscal Note Summary


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


    The House Education Committee Substitute (and the bill as introduced) violates §18-7A-28e, known as “2005 Pension Reform”, which prohibits increases to benefits for active members of TRS. Current retirees of TRS are prohibited from working more than 7 hours at any Institute of Higher Education without a reduction in their monthly annuity. Thus, allowing retirees to return to work with no limit on the number of hours allowed is providing an additional benefit that is not currently available.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
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):


    The House Education Committee Substitute (and the bill as introduced) violates §18-7A-28e, known as “2005 Pension Reform”, which prohibits increases to benefits for active members of TRS. Current retirees of TRS are prohibited from working more than 7 hours at any Institute of Higher Education without a reduction in their monthly annuity. Thus, allowing retirees to return to work with no limit on the number of hours allowed is providing an additional benefit that is not currently available.



Memorandum


    The House Education Committee Substitute (and the bill as introduced) violates §18-7A-28e, known as “2005 Pension Reform”, which prohibits increases to benefits for active members of TRS. Current retirees of TRS are prohibited from working more than 7 hours at any Institute of Higher Education without a reduction in their monthly annuity. Thus, allowing retirees to return to work with no limit on the number of hours allowed is providing an additional benefit that is not currently available.



    Person submitting Fiscal Note: Melody Bailey, Actuarial Analyst, WVCPRB
    Email Address: melody.j.bailey@wv.gov