Actuarial Fiscal Note

Date Requested:April 07, 2025
Time Requested:11:31 AM

1903	Amendment	HB2167
Agency:	Consolidated Public Retirement Board
CBD Number:	Version:	Bill Number:	Resolution Number:
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).

    The purpose of the Bill is to provide funding to TRS for West Virginia public charter schools that elect to join the Teachers’ Retirement System (TRS). Also, the Bill provides funding to West Virginia public charter schools that do not join TRS.

    More specific, the Bill modifies §18-9A-6a of the West Virginia Statute as follows:

    If a West Virginia public charter school elects to participate in the Teachers’ Retirement System and Teacher’s Defined Contribution retirement plans provided by the Consolidated Public Retirement Board, the West Virginia Department of Education shall calculate the amount of retirement funding which is attributable to the students enrolled in the charter school and provide an allocation on behalf of the charter school directly to the Consolidated Public Retirement Board in the same manner in which the allocations are provided to the Consolidated Public Retirement Board on behalf of the county boards of education, at 99% of the allocation.

    If a West Virginia public charter school does not elect to participate in the Teacher’s Retirement System and Teachers’ Defined Contribution retirement plans, an allocation shall be made directly to the public charter school distributed in the same manner as those school districts participating in the Teachers’ Retirement System and Teachers’ Defined Contribution retirement plans, again at 99% of the allocation. For the purposes of this subsection, the amount of retirement funding which is attributable to the students enrolled in the charter school shall include amounts attributable from both the teachers’ retirement fund allowance and the allowance for the reduction of any unfunded liability of the teachers’ retirement fund. If a distribution of the allowance for the reduction of any unfunded liability of the teachers’ retirement fund to a public charter school opting out of Teacher’s Retirement System and Teachers’ Defined Contribution retirement plan participation cannot be made in the same manner as those school districts participating in the Teachers’ Retirement System and Teachers’ Defined Contribution retirement plans, an alternate method of calculating the amounts attributable to those students may be used.

    In this actuarial/fiscal note we only consider the impact on TRS. We do not address the impact of the Bill on the Public Employee Insurance Agency (PEIA).

    The Bill is not expected to impact the TRS unfunded actuarial accrued liability or the TRS annual required employer contribution, because we do not expect West Virginia public charter schools to join TRS as a result of this Bill.

    Moreover, the West Virginia Department of Education (WVDE) estimates that the Bill would provide $3,678,000 funding to West Virginia public charter schools that choose not to join TRS. This loss of TRS funding, from reallocating funding to public charter schools that do not join TRS would need to be replaced by additional TRS funding from the State of West Virginia.

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
Impact On	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	2034	N/A

Explanation of above Actuarial estimates:

    The Bill is not expected to impact the TRS unfunded actuarial accrued liability or the TRS annual required employer contribution, because we do not expect West Virginia public charter schools to join TRS as a result of this Bill.

    Moreover, the West Virginia Department of Education (WVDE) estimates that the Bill would provide $3,678,000 funding to West Virginia public charter schools that choose not to join TRS. This loss of TRS funding, from reallocating funding to public charter schools that do not join TRS would need to be replaced by additional TRS funding from the State of West Virginia.

Analysis of Impact on Public Pension Policy:

The West Virginia Department of Education (WVDE) estimates that the Bill would provide $3,678,000 funding to West Virginia public charter schools that choose not to join TRS. This loss of TRS funding, from reallocating funding to public charter schools that do not join TRS would need to be replaced by additional TRS funding from the State of West Virginia.

Fiscal Note Summary

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

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2025 Increase/Decrease (use"-")	2026 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	3,678,000	3,678,000
Personal Services	0	0	0
Current Expenses	0	0	0
Repairs and Alterations	0	0	0
Assets	0	0	0
Other	0	3,678,000	3,678,000
2. Estimated Total Revenues	0	0	0

Explanation of above Fiscal Note estimates (include possible long-range effect):

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.

    For the appropriate actuarial disclosures, see the July 1, 2024 funding valuation report for TRS, expected to be published in April 2025.

    In particular, future actuarial measurements may differ significantly from current measurements due to System experience differing from that anticipated by the economic and demographic assumptions, changes expected as part of the natural operation of the methodology used for these measurements, and changes in system provisions or applicable law or regulations. An analysis of the potential range of such future differences is beyond the scope of the request addressed here.

    Kenneth Woodson Jr., the CPRB Board Actuary, is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries. He meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this Actuarial/Fiscal Note.

Person submitting Fiscal Note: Kenneth M. Woodson Jr.
Email Address: kenneth.m.woodson@wv.gov