FISCAL NOTE
Date Requested: February 08, 2023
Time Requested: 05:02 PM |
| Agency: |
Senate, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3393 |
Introduced |
SB582 |
|
|---|
| CBD Subject: |
Retirement |
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|
FUND(S):
General
Sources of Revenue:
General Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The proposed bill would do the following:
1. Modify the definition of “Employee” for the purpose of the bill to allow an employee of the Legislature whose term of employment is otherwise classified as temporary to be entitled to credited service in accordance with provisions of §5-10-14 of this code after 5 consecutive calendar years rather than 7 consecutive calendar years of service;
2. Allow for employees of the Legislature with terms of employment classified as temporary or employed for regular or interim session services in 5 calendar years to earn 1 month of service credit for any 10 days of service employed in the interim of any regular session to earn a month of service credit regardless of the months those dates of service are worked;
3. Allow for employees under the modified 5 consecutive year qualifying event to earn 6 months of service credit for 60-day regular session of service, and 3 months of service credit for every 30-day regular session of service prior to 1971;
4. Modify the years of service required from 7 years to 5 years to allow for employees of the State Legislature whose term of employment is otherwise classified as temporary and employed for the regular sessions as either temporary employees or full-time employees or a combination to receive a service credit of 12 months for each regular session served;
5. Modify the years of service required from 7 consecutive years to 5 consecutive years to allow for legislative employees to automatically receive service credits provided for in the same code section for all regular and interim session days worked;
6. Reduce the consecutive service years requirement from 13 years to 7 years to allow for the purchase of service credits at the rate of 12 months for each 60-day session of service;
7. Modify the retroactive applications of this code section to mirror the time frame reductions for qualification from 7 to 5 years and from 13 to 7 years;
8. Reduce the term of employment from 7 to 5 years to become eligible to elect to participate in the state retirement system by written notification of the employee;
9. Increase the annual compensation limit of a legislative per-diem or temporary employee who returns to work while receiving a retirement annuity from $20,000 to $30,000; and
10. Removes the prohibition that a former Legislative employee may not be reemployed until after 60 days of retirement.
In summary, and for the purpose of conducting the fiscal impact analysis to the Legislature, this bill reduces the years of employment for legislative employees to receive service credit and participate in the retirement system. These changes would result in the Legislature incurring increased costs due to those currently employed who would then become eligible to participate in the state retirement system, purchase years of service credits, and cause the employer to pay CPRB the employer match portion against wages earned in those prior years. The fiscal impact to the Legislature is focused on these costs for the employer match based on the number of employees and years of service of those currently employed, the average daily rate of pay for per-diems employed by the Legislature in the years impacted, and the CPRB employer match rates for each corresponding year.
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 |
353,682 |
103,930 |
88,265 |
| Personal Services |
353,682 |
103,930 |
88,265 |
| 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 estimates (including long-range effect):
All increased costs are related to personal services expenses or payroll costs. The greatest cost increase occurs in the first year as there are currently 31 employees with 5 years of service and 27 employees with 7 years of service who would become eligible in the current year under the provisions of this bill. The majority of these costs are one time costs incurred for the CPRB employer match portion based on wages earned in each of the 5-7 years of prior service for those employees. After this first year, these matches would only occur for employees who meet the 5 or 7 year requirements in future years and the current year match for the 58 employees (31 with 5 years and 27 with 7 years) who were eligible to participate in the prior year and assumed to have done so for the purpose of this analysis.
It should be noted that these cost estimates consider all eligible employees will elect to participate in the year they become eligible to do so under these bill provisions, but it cannot be determined with certainty if all will elect to do so or if some may wait or not elect to participate at all. Based on the average per-diem daily pay rates for each year affected, the CPRB employer match rates, and the number of current employees eligible under these new provisions, these cost estimates were calculated under the pretense that all who become eligible will participate at the time of eligibility.
These costs may be lower and can fluctuate if some elect not to participate or wait to do so in a different year. Additionally, this analysis does not contemplate past employees not currently employed who if became reemployed with prior years of service may be eligible under these provisions and cause an increase to the above estimates.
2023 Impact - 31 5-year employees and 27 7-year employees newly eligible = $353,682
2024 Impact - 8 5-year employees newly eligible and the single year match for 58 prior year eligible employees = $103,930
Full (2025) - 5 5-year employees newly eligible and the single year match for 66 prior eligible employees = $88,265
Memorandum
This bill in several instances removed the "consecutive year" provision and it was assumed for the purpose of this analysis that the omission to remove this in a few places where all other references throughout were removed indicates the intention not include the consecutive year requirements. If these consecutive year requirements were required, there is the potential this restricts some employees currently identified as eligible under the bill provisions to be ineligible, potentially reducing the above estimates. However, the majority of those identified appear to work for consecutive years.
As average daily rates of pay were used, there is the potential these estimates may fluctuate up or down depending on the actual daily pay rates of the specific employees electing to participate in the state retirement system and the employer match that would result under these bill provisions.
Person submitting Fiscal Note: Justin Robinson
Email Address: justin.robinson@wvlegislature.gov