Actuarial Fiscal Note

Date Requested:February 21, 2017
Time Requested:11:58 AM
Agency: Municipal Pensions Oversight Board
CBD Number: Version: Bill Number: Resolution Number:
2633 Introduced HB2601
CBD Subject: Retirement

Retirement Systems Impacted by Legislation:



FUND(S):



Sources of Revenue:

Other Fund Muni Pensions Security Fd

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).


    This bill would provide a municipal policemen's or firemen's pension and relief fund board of trustees with the administrative tools to correct errors of underpayments and overpayments to the pension fund by the municipality or member as well as to correct errors of underpayments and overpayments to pensioners by the fund. It is the intent of the statutes to fairly and justly provide retirement benefits to all eligible members. This bill will allow for the errors to be fixed in a way that is accurate for both the fund as well as the pensioner. Liabilities and contributions would not be affected when correct retirements are provided to members.



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 0 N/A


Explanation of above Actuarial estimates:


    The bill allows for the corrections of errors made by municipality payments to pension funds, pension fund payments to pensioners, and member contributions to pension funds. When previous errors are corrected, all parties are satisfied the correct amounts are flowing into and out of the pension plans. Any costs of determining errors are administrative costs born by the trustees at no cost to the funds or by municipalities through annual audits of the municipalities. Those audit costs are not the responsibility of the individual pension plans.

Analysis of Impact on Public Pension Policy:


    The expected impact of the bill is to make sure all members paying into the plans are doing so at the correct levels as well as making sure the municipalities are paying into the pension plans what they are required to do each fiscal year as proscribed by the Municipal Pensions Oversight Board's actuary. Finally the impact of the bill is to make sure all payments to and payments from the pension fund to members and retirees are correct per statute.
    
    Similar language exists for each of the pension plans operated by the Consolidated Public Retirement Board. This bill would provide the same type of errors and omissions language for municipal policemen's and firemen's pension plans.



Fiscal Note Summary


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


    There are not any direct costs associated with the bill on state government. Should the Municipal Pensions Oversight Board find instances where errors have occurred, the Board would then work with the local board of trustees to remedy the problems as allowed by the statute.
    
    The revenues and costs of state government will not be affected by this bill. Insofar as the Municipal Pensions Oversight Board might have to direct a municipal policemen's or firemen's pensions and relief fund to correct an error, the Board's existing staff would be involved in research and discovery of the issue and corrective action.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
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):


    



Memorandum


    Any fiscal impact to the municipal policemen's or firemen's pension and relief fund would be to correctly calculate and remit pensions to members and beneficiaries. Likewise, underpayments and overpayments from municipalities or active members would also be corrected.



    Person submitting Fiscal Note: Blair Taylor, Executive Direcor MPOB
    Email Address: blair.m.taylor@wv.gov