Actuarial Fiscal Note

Date Requested:February 15, 2019
Time Requested:11:02 AM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2591 Comm. Sub. SB398
CBD Subject: Courts

Retirement Systems Impacted by Legislation:

PERS 2501 and JRS 2140

FUND(S):

Special Fund

Sources of Revenue:

Creates New Expense

Legislation creates:

PERS and JRS



Actuarial Note Summary

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


    The committee substitute for SB 398 limits the per diem compensation to $430 for each day served by a retired senior judge and retired justice who are recalled and assigned to active service, provided the combined total of per diem compensation and retirement benefits paid to the senior judge or justice during a single calendar year may not exceed the annual salary of a sitting circuit judge. However, for the purpose of maintaining judicial efficacy and continuity in judicial decision-making, a senior judge or justice may receive more than the limits set forth above if the Chief Justice of the Supreme court of Appeals enters an Administrative Order certifying that circumstances necessitate exceeding the limits mentioned above. The committee substitute for SB 398 applies equally to retired senior judges and retired justices in PERS and JRS.
    
    Relative to the total number of participants in PERS, the number of retired senior judges and justices in PERS is very small. As such, we do not expect a material increase in the Normal Cost or the Unfunded Actuarial Accrued Liability from the committee substitute for SB 398 regarding per diem limits for retired senior judges and retired justices in PERS.
    
    Regarding retired senior judges and justices in JRS, we do not expect the per diem limits imposed by the committee substitute for SB 398 to materially impact the demographic experience in JRS or the cost to JRS.
    
    The committee substitute for SB 398 limits the per diem compensation to $200 for each day served by a retired senior magistrate who is recalled and assigned to active service, provided the combined total of per diem compensation and retirement benefits paid to the senior magistrate during a single calendar year may not exceed the annual salary of a sitting magistrate. However, for the purpose of maintaining magisterial efficacy and continuity of magisterial decision-making, a senior magistrate may receive more than the limits set forth above if the Chief Justice of the Supreme court of Appeals enters an Administrative Order certifying that circumstances necessitate exceeding the limits mentioned above. The committee substitute for SB 398 applies to retired senior magistrates in PERS.
    
    Relative to the total number of participants in PERS, the number of retired senior magistrates in PERS is very small. As such, we do not expect a material increase in the Normal Cost or the Unfunded Actuarial Accrued Liability from the committee substitute for SB 398 regarding per diem limits for retired senior magistrates in PERS.
    



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 - N/A


Explanation of above Actuarial estimates:


    Relative to the total number of participants in PERS, the number of retired senior judges and justices in PERS is very small. As such, we do not expect a material increase in the Normal Cost or the Unfunded Actuarial Accrued Liability from the committee substitute for SB 398 regarding per diem limits for retired senior judges and retired justices in PERS.
    
    Regarding retired senior judges and retired justices in JRS, we do not expect the per diem limits imposed by the committee substitute for SB 398 to materially impact the demographic experience in JRS or the cost to JRS.
    
    Finally, relative to the total number of participants in PERS, the number of retired senior magistrates in PERS is very small. As such, we do not expect a material increase in the Normal Cost or the Unfunded Actuarial Accrued Liability from the committee substitute for SB 398 regarding per diem limits for retired senior magistrates in PERS.
    

Analysis of Impact on Public Pension Policy:


    Regarding retired senior judges and justices in JRS, we do not expect the per diem limits imposed by the committee substitute for SB 398 to materially impact the demographic experience in JRS or the cost to JRS.
    
    A new subsection, §51-9-10(a)(14), has been added to the Judges’ Retirement System (JRS) which states “Until State ex. rel. Workman v. Carmichael is overturned by the Court, and the Court fully recognizes that it has no legitimate constitutional authority over the powers of impeachment that solely belong to the Legislature, even in the case of limited judicial review, then the Legislature shall not fund the Judges’ Retirement System as set forth in this article.” Currently, JRS is fully funded but future events could change the funded position of the plan. Therefore, we recommend that the funding of JRS be based on the actuarially required contribution that is determined each year by the CPRB Board Actuary.
    



Fiscal Note Summary


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


    The committee substitute for SB 398 limits the per diem compensation to $430 for each day served by a retired senior judge and retired justice who are recalled and assigned to active service, provided the combined total of per diem compensation and retirement benefits paid to the senior judge or justice during a single calendar year may not exceed the annual salary of a sitting circuit judge. However, for the purpose of maintaining judicial efficacy and continuity in judicial decision-making, a senior judge or justice may receive more than the limits set forth above if the Chief Justice of the Supreme court of Appeals enters an Administrative Order certifying that circumstances necessitate exceeding the limits mentioned above. The committee substitute for SB 398 applies equally to retired senior judges and retired justices in PERS and JRS.
    
    Relative to the total number of participants in PERS, the number of retired senior judges and retired justices in PERS is very small. As such, we do not expect a material increase in the Normal Cost or the Unfunded Actuarial Accrued Liability from the committee substitute for SB 398 regarding per diem limits for retired senior judges and retired justices in PERS.
    
    Regarding retired senior judges and retired justices in JRS, we do not expect the per diem limits imposed by the committee substitute for SB 398 to materially impact the demographic experience in JRS or the cost to JRS.
    
    The committee substitute for SB 398 limits the per diem compensation to $200 for each day served by a retired senior magistrate who is recalled and assigned to active service, provided the combined total of per diem compensation and retirement benefits paid to the senior magistrate during a single calendar year may not exceed the annual salary of a sitting magistrate. However, for the purpose of maintaining magisterial efficacy and continuity of magisterial decision-making, a senior magistrate may receive more than the limits set forth above if the Chief Justice of the Supreme court of Appeals enters an Administrative Order certifying that circumstances necessitate exceeding the limits mentioned above. The committee substitute for SB 398 applies to retired senior magistrates in PERS.
    
    Relative to the total number of participants in PERS, the number of retired senior magistrates in PERS is very small. As such, we do not expect a material increase in the Normal Cost or the Unfunded Actuarial Accrued Liability from the committee substitute for SB 398 regarding per diem limits for retired senior magistrates in PERS.
    



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 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):


    The committee substitute for SB 398 is not expected to materially impact the Normal Cost or Unfunded Actuarial Accrued Liability of PERS or JRS.



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