Actuarial Fiscal Note
Date Requested:February 20, 2019
Time Requested:12:54 PM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3083 |
Introduced |
SB544 |
|
|---|
| CBD Subject: |
Public Safety, Salaries |
|---|
|
Retirement Systems Impacted by Legislation:
DPS-A 2392 and DPS-B 2393
FUND(S):
Special Fund
Sources of Revenue:
Creates New Expense
Legislation creates:
DPS-A, and DPS-B
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
SB 544 would provide a $3,000 per year salary increase for three years (FY2020 through FY2022) for West Virginia State Police.
The increase in salaries for West Virginia State Police would increase the actuarial accrued liability for State Police Plan B by approximately $13.8 million. The unfunded liability would be amortized on a level dollar basis for the remaining amortization period (until June 30, 2026) leading to an increase in the annual amortization amount of $2.5 million. The change in normal cost from the salary increases would increase the annual employer contribution by an additional $600,000. Therefore, the increase in total employer contribution for State Police Plan B in the first year would be approximately $3.1 million.
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 |
$13,800,000.00 |
$3,100,000.00 |
10.00 % |
| Normal Cost of System |
N/A |
$600,000.00 |
1.95 % |
| Past Service Liabilities |
$13,800,000.00 |
$2,500,000.00 |
8.05 % |
Fiscal Year Past Service
Amortization Period Ends |
N/A |
2026 |
N/A |
Explanation of above Actuarial estimates:
The increase in salaries for West Virginia State Police would increase the actuarial accrued liability for State Police Plan B by approximately $13.8 million. The unfunded liability would be amortized on a level dollar basis for the remaining amortization period (until June 30, 2026) leading to an increase in the annual amortization amount of $2.5 million. The change in normal cost from the salary increases would increase the annual employer contribution by an additional $600,000. Therefore, the increase in total employer contribution for State Police Plan B in the first year would be approximately $3.1 million.
Analysis of Impact on Public Pension Policy:
The increase in salaries for West Virginia State Police would increase the actuarial accrued liability for State Police Plan B by approximately $13.8 million. The unfunded liability would be amortized on a level dollar basis for the remaining amortization period (until June 30, 2026) leading to an increase in the annual amortization amount of $2.5 million. The change in normal cost from the salary increases would increase the annual employer contribution by an additional $600,000. Therefore, the increase in total employer contribution for State Police Plan B in the first year would be approximately $3.1 million.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB 544 would provide a $3,000 per year salary increase for three years (FY2020 through FY2022) for West Virginia State Police.
The increase in salaries for West Virginia State Police would increase the actuarial accrued liability for State Police Plan B by approximately $13.8 million. The unfunded liability would be amortized on a level dollar basis for the remaining amortization period (until June 30, 2026) leading to an increase in the annual amortization amount of $2.5 million. The change in normal cost from the salary increases would increase the annual employer contribution by an additional $600,000. Therefore, the increase in total employer contribution for State Police Plan B in the first year would be approximately $3.1 million.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
3,100,000 |
3,100,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
3,100,000 |
3,100,000 |
| 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 increase in salaries for West Virginia State Police would increase the actuarial accrued liability for State Police Plan B by approximately $13.8 million. The unfunded liability would be amortized on a level dollar basis for the remaining amortization period (until June 30, 2026) leading to an increase in the annual amortization amount of $2.5 million. The change in normal cost from the salary increases would increase the annual employer contribution by an additional $600,000. Therefore, the increase in total employer contribution for State Police Plan B in the first year would be approximately $3.1 million.
Memorandum
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., Board Actuary, CPRB
Email Address: kenneth.m.woodson@wv.gov