Actuarial Fiscal Note

Date Requested:January 19, 2026
Time Requested:03:59 PM

1903	Introduced	HB4514
Agency:	Consolidated Public Retirement Board
CBD Number:	Version:	Bill Number:	Resolution Number:
CBD Subject:	Retirement

Retirement Systems Impacted by Legislation:

DSRS 2150

FUND(S):

Other Fund

Sources of Revenue:

Local Governments Creates New Expense

Legislation creates:

DSRS

Actuarial Note Summary

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

    The purpose of this bill is to change the definition of “Final Average Salary” in DSRS. Currently, when a participant of DSRS retirees the “Final Average Salary” is defined as the average of the highest five consecutive plan years of compensation received for deputy sheriff employment during the last ten years. This bill would change the definition of “Final Average Salary” to the average of the highest three plan years, not necessarily consecutive, of compensation received for deputy sheriff employment during the last ten years.

    Measured as of July 1, 2025, HB 4514 would increase the actuarial accrued liability of DSRS by approximately $7.7 million. Amortizing this amount over 10 years on a level dollar basis would increase the annual recommended employer contribution for DSRS by approximately $1.070 million, or 1.34% of FY 2026 payroll.

    Moreover, HB 4514 would increase the DSRS employer normal cost by about $381,000, or 0.48% of FY 2026 payroll. Therefore, measured as of July 1, 2025, the total FY 2026 recommended employer contribution for DSRS would increase by about $1.451 million, or 1.82% of FY 2026 payroll.

    To calculate the cost to DSRS from HB 4514, we have only considered future retirees of DSRS. We assume current retirees of DSRS are not impacted by HB 4514.

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	$7,692,000.00	$1,451,000.00	1.82 %
Normal Cost of System	N/A	$381,000.00	0.48 %
Past Service Liabilities	$7,692,000.00	$1,070,000.00	1.34 %
Fiscal Year Past Service Amortization Period Ends	N/A	2035	N/A

Explanation of above Actuarial estimates:

    Measured as of July 1, 2025, HB 4514 would increase the actuarial accrued liability of DSRS by approximately $7.7 million. Amortizing this amount over 10 years on a level dollar basis would increase the annual recommended employer contribution for DSRS by approximately $1.070 million, or 1.34% of FY 2026 payroll.

    Moreover, HB 4514 would increase the DSRS employer normal cost by about $381,000, or 0.48% of FY 2026 payroll. Therefore, measured as of July 1, 2025, the total FY 2026 recommended employer contribution for DSRS would increase by about $1.451 million, or 1.82% of FY 2026 payroll.

    To calculate the cost to DSRS from HB 4514, we have only considered future retirees of DSRS. We assume current retirees of DSRS are not impacted by HB 4514.

Analysis of Impact on Public Pension Policy:

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	2026 Increase/Decrease (use"-")	2027 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	20,000	0	0
Personal Services	0	0	0
Current Expenses	20,000	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):

    DSRS consists of county governments and does not cover any state employees. For fiscal 2026, funding for DSRS is through member contributions of 8.50% of payroll and employer contributions of 17.00% of payroll.

    DSRS does not impact the costs or revenues of state government. However, additional costs of approximately $20,000 would be incurred by the CPRB in making the required changes to the computer software used to administer pension benefits. The bill does not provide a source of funding for this additional cost.

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, 2025, funding valuation report for DSRS, expected to be published in April 2026.

    In particular, future actuarial measurements may differ significantly from the current measurements shown in this actuarial/fiscal note due to plan 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 plan provisions, applicable law, and regulations.

    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