Actuarial Fiscal Note
Date Requested:March 12, 2021
Time Requested:11:19 AM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3121 |
Introduced |
HB3087 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
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).
HB 3087 would permit TRS members to be credited with five years of service if that member is to be subsequently employed as a teacher by a public charter school in the State of West Virginia: provided,that subsequent public charter school service must continue a minimum of five years or the member will revert to their earned service prior to the credit and their annuity shall reflect such reversion.
HB 3087 would allow a member who retired under the provisions of West Virginia Statute §18-7A-25 or §18-7A-25b, and took subsequent employment with a public charter school in the state of West Virginia, to receive their full retirement benefit.
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 is eligible for an unreduced retirement benefit at the earlier of:
• Age 60 and 5 years of service, or
• Age 55 and 30 years or service, or
• Any age and 35 years of service.
A TRS Tier II member is eligible for an unreduced retirement benefit at age 62 and 10 years of service.
HB 3087 would allow a TRS member to retire earlier than current TRS provisions permit, provided the TRS member is subsequently employed as a teacher by a West Virginia public charter school. By allowing a TRS member to retire earlier than current TRS provisions allow would create a new benefit 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:
HB 3087 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.
HB 3087 would allow a TRS member to retire earlier than current TRS provisions permit, provided the TRS member is subsequently employed as a teacher by a West Virginia public charter school. By allowing a TRS member to retire earlier than current TRS provisions permit, would create a new benefit for active TRS members.
Analysis of Impact on Public Pension Policy:
HB 3087 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.
HB 3087 would allow a TRS member to retire earlier than current TRS provisions permit, provided the TRS member is subsequently employed as a teacher by a West Virginia public charter school. By allowing a TRS member to retire earlier than current TRS provisions permit, would create a new benefit for active TRS members.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
HB 3087 would permit TRS members to be credited with five years of service if that member is to be subsequently employed as a teacher by a public charter school in the State of West Virginia: provided,that subsequent public charter school service must continue a minimum of five years or the member will revert to their earned service prior to the credit and their annuity shall reflect such reversion.
HB 3087 would allow a member who retired under the provisions of West Virginia Statute §18-7A-25 or §18-7A-25b, and took subsequent employment with a public charter school in the state of West Virginia, to receive their full retirement benefit.
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 is eligible for an unreduced retirement benefit at the earlier of:
• Age 60 and 5 years of service, or
• Age 55 and 30 years or service, or
• Any age and 35 years of service.
A TRS Tier II member is eligible for an unreduced retirement benefit at age 62 and 10 years of service.
HB 3087 would allow a TRS member to retire earlier than current TRS provisions permit, provided the TRS member is subsequently employed as a teacher by a West Virginia public charter school. By allowing a TRS member to retire earlier than current TRS provisions allow would create a new benefit for active TRS members.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
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.
HB 3087 would allow a TRS member to retire earlier than current TRS provisions permit, provided the TRS member is subsequently employed as a teacher by a West Virginia public charter school. By allowing a TRS member to retire earlier than current TRS provisions permit, would create a new benefit 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.
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.
Email Address: kenneth.m.woodson@wv.gov