Actuarial Fiscal Note

Date Requested:February 12, 2018
Time Requested:08:38 AM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2436 Introduced HB4449
CBD Subject: State Personnel

Retirement Systems Impacted by Legislation:

PERS 2501, TRS 2600, JRS 2140, TDC 2190, DSRS 2150, EMSRS 2615, MPFRS 2390, SPTA 2392, SPTB 2393

FUND(S):

General Fund

Sources of Revenue:

local governments, county school boards, state police, judiciary

Legislation creates:

PERS, TRS, TDC, SPTA, SPTB, JRS, DSRS, EMSRS, MPFRS



Actuarial Note Summary

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


    The bill as introduced provides that if a participating public employer fails to make an employee or employer contribution for 60 days after it is due, the state auditor, county commission, or sheriff may withhold that payment from any amounts due the employer and remit it to the CPRB. In addition, if the employer knowingly and willfully fails to make the contribution, the responsible public official shall be guilty of misdemeanor larceny (felony larceny if the amount is $1000 or more) and, if convicted, fined not more than $2,500 and/or imprisoned not more than 1 year (not more than 10 years if felony larceny).
    It is not expected that any penalties imposed by the passage of this legislation would make a measurable difference to the funded status of any of the plans administered by CPRB, nor to any present or future liabilities of the plans, and so would not change any associated costs. However, the bill would likely decrease the number of employers who do not make contributions in a timely fashion. Around 12 employers are delinquent on contributions in any given month, with some delinquent on a year or more of contributions, and can be anywhere from a couple of months to over a year late.
    



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 9999 N/A


Explanation of above Actuarial estimates:


    It is not expected that any penalties imposed by the passage of this legislation would make a measurable difference to the funded status of any of the plans administered by CPRB, nor to any present or future liabilities of the plans, and so would not change any associated costs. However, the bill would likely decrease the number of employers who do not make contributions in a timely fashion. Around 12 employers are delinquent on contributions in any given month, with some delinquent on a year or more of contributions, and can be anywhere from a couple of months to over a year late.

Analysis of Impact on Public Pension Policy:


    It is not expected that any penalties imposed by the passage of this legislation would make a measurable difference to the funded status of any of the plans administered by CPRB, nor to any present or future liabilities of the plans, and so would not change any associated costs. However, the bill would likely decrease the number of employers who do not make contributions in a timely fashion. Around 12 employers are delinquent on contributions in any given month, with some delinquent on a year or more of contributions, and can be anywhere from a couple of months to over a year late.



Fiscal Note Summary


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


    It is not expected that any penalties imposed by the passage of this legislation would make a measurable difference to the funded status of any of the plans administered by CPRB, nor to any present or future liabilities of the plans, and so would not change any associated costs. However, the bill would likely decrease the number of employers who do not make contributions in a timely fashion. Around 12 employers are delinquent on contributions in any given month, with some delinquent on a year or more of contributions, and can be anywhere from a couple of months to over a year late.



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 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):


    It is not expected that any penalties imposed by the passage of this legislation would make a measurable difference to the funded status of any of the plans administered by CPRB, nor to any present or future liabilities of the plans, and so would not change any associated costs. However, the bill would likely decrease the number of employers who do not make contributions in a timely fashion. Around 12 employers are delinquent on contributions in any given month, with some delinquent on a year or more of contributions, and can be anywhere from a couple of months to over a year late.



Memorandum


    It is not expected that any penalties imposed by the passage of this legislation would make a measurable difference to the funded status of any of the plans administered by CPRB, nor to any present or future liabilities of the plans, and so would not change any associated costs. However, the bill would likely decrease the number of employers who do not make contributions in a timely fashion. Around 12 employers are delinquent on contributions in any given month, with some delinquent on a year or more of contributions, and can be anywhere from a couple of months to over a year late.



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