Actuarial Fiscal Note
Date Requested:February 19, 2020 Time Requested:10:13 AM |
Agency: |
Consolidated Public Retirement Board |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
3257 |
Introduced |
SB801 |
|
CBD Subject: |
State Personnel |
---|
|
Retirement Systems Impacted by Legislation:
TRS 2600
FUND(S):
Special Fund
Sources of Revenue:
Creates New Expense
Legislation creates:
TRS
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
SB 801 permits TRS Tier I members to purchase up to five years of military service, provided if not originally submitted timely, during the time period July 1, 2020 through June 30, 2021, the member submits a request to purchase military service and pays for the military service within 48 months of July 1, 2020. The bill also extends the period to pay for military service for TRS Tier II members employed before July 1, 2020 who submitted a timely request to purchase military service.
This bill would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
Under current West Virginia State Law, a TRS Tier I member was allowed to purchase military service provided during the time period July 1, 2015 through June 30, 2016, the member submitted a request to purchase military service and paid for the military service within 48 months of July 1, 2015. SB 801 would extend the window to submit a request to purchase and pay for military service and therefore increase existing benefits for active TRS 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 |
$999,999,999.00 |
$999,999,999.00 |
9.99 % |
Normal Cost of System |
N/A |
$999,999,999.00 |
9.99 % |
Past Service Liabilities |
$999,999,999.00 |
$999,999,999.00 |
9.99 % |
Fiscal Year Past Service Amortization Period Ends |
N/A |
9999 |
N/A |
Explanation of above Actuarial estimates:
This bill would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
Under current West Virginia State Law, a TRS Tier I member was allowed to purchase military service provided during the time period July 1, 2015 through June 30, 2016, the member submitted a request to purchase military service and paid for the military service within 48 months of July 1, 2015. SB 801 would extend the window to submit a request to purchase and pay for military service and therefore increase existing benefits for active TRS members.
Analysis of Impact on Public Pension Policy:
This bill would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
Under current West Virginia State Law, a TRS Tier I member was allowed to purchase military service provided during the time period July 1, 2015 through June 30, 2016, the member submitted a request to purchase military service and paid for the military service within 48 months of July 1, 2015. SB 801 would extend the window to submit a request to purchase and pay for military service and therefore increase existing benefits for active TRS members.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB 801 permits TRS Tier I members to purchase up to five years of military service, provided if not originally submitted timely, during the time period July 1, 2020 through June 30, 2021, the member submits a request to purchase military service and pays for the military service within 48 months of July 1, 2020. The bill also extends the period to pay for military service for TRS Tier II members employed before July 1, 2020 who submitted a timely request to purchase military service.
This bill would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
Under current West Virginia State Law, a TRS Tier I member was allowed to purchase military service provided during the time period July 1, 2015 through June 30, 2016, the member submitted a request to purchase military service and paid for the military service within 48 months of July 1, 2015. SB 801 would extend the window to submit a request to purchase and pay for military service and therefore increase existing benefits for active TRS members.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2020 Increase/Decrease (use"-") |
2021 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
999,999,999 |
999,999,999 |
999,999,999 |
Personal Services |
999,999,999 |
999,999,999 |
999,999,999 |
Current Expenses |
999,999,999 |
999,999,999 |
999,999,999 |
Repairs and Alterations |
999,999,999 |
999,999,999 |
999,999,999 |
Assets |
999,999,999 |
999,999,999 |
999,999,999 |
Other |
999,999,999 |
999,999,999 |
999,999,999 |
2. Estimated Total Revenues |
999,999,999 |
999,999,999 |
999,999,999 |
Explanation of above Fiscal Note estimates (include possible long-range effect):
This bill would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
Under current West Virginia State Law, a TRS Tier I member was allowed to purchase military service provided during the time period July 1, 2015 through June 30, 2016, the member submitted a request to purchase military service and paid for the military service within 48 months of July 1, 2015. SB 801 would extend the window to submit a request to purchase and pay for military service and therefore increase existing benefits for active TRS members.
Memorandum
This bill would violate the West Virginia Statute §18-7A-28e (c), known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for active members of the Teachers’ Retirement System until the limitation sunsets on July 1, 2034.
Under current West Virginia State Law, a TRS Tier I member was allowed to purchase military service provided during the time period July 1, 2015 through June 30, 2016, the member submitted a request to purchase military service and paid for the military service within 48 months of July 1, 2015. SB 801 would extend the window to submit a request to purchase and pay for military service and therefore increase existing benefits for active TRS members.
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