Actuarial Fiscal Note

Date Requested:February 10, 2026
Time Requested:04:57 PM

1254	Introduced	SB29
Agency:	Consolidated Public Retirement Board
CBD Number:	Version:	Bill Number:	Resolution Number:
CBD Subject:	Courts; Magistrates

Retirement Systems Impacted by Legislation:

PERS 2501; 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 bill provides the following annual salary increases, beginning July 1, 2026:

    • The pay for a Family Court Judge increases from $103,950 to $113,950,
    • The pay for a Justice of the Supreme Court of Appeals increases from
    $149,600 to $154,600,
    • The pay for a Circuit Court Judge increases from $138,600 to $143,600, and
    • The pay for a Judge of the Intermediate Court of Appeals increases from
    $142,500 to $147,500.

    The bill also provides the following annual salary increases, beginning July 1, 2027:

    • The pay for a Family Court Judge increases from $113,950 to $118,950,
    • The pay for a Justice of the Supreme Court of Appeals increases from
    $154,600 to $159,600,
    • The pay for a Circuit Court Judge increases from $143,600 to $148,600, and
    • The pay for a Judge of the Intermediate Court of Appeals increases from
    $147,500 to $152,500.

    In addition to pay increases for Judges, SB 29 would provide the following plan changes to the Judges’ Retirement System (JRS):

    1. On or after July 1, 2025, the JRS employee contribution rate is set in statute at 7.0% of pay,
    2. SB 29 would also suspend JRS ER contributions until the JRS funded percentage is at or below 125%.

    Gallagher Benefit Services, Inc. (Gallagher) prepares the actuarial funding valuation for JRS each year and as part of the valuation, JRS salary increases are expected to keep pace with the cumulative CPI-U, since the prior JRS salary increase. As of July 1, 2025, the cumulative CPI-U, since the prior JRS salary increase, is 13.67%. Therefore, a JRS salary increase of less than 13.67% would generate a JRS plan gain, while a JRS salary increase greater than 13.67% would generate a JRS plan loss. A salary increase of 13.67% would not generate a gain or loss from a salary increase.

    Based on the relative salary increases from the bill, we would expect a JRS plan gain from the salary increases, except for the Family Court Judge salary increase which would not generate a large gain or loss from the salary increase.

    While the JRS funded percentage is at least 100%, the annual JRS recommended ER contribution is the Employer Normal Cost, plus amortization of plan provision changes; however, due to JRS over funding, on July 1, 2014, the JRS funding credit was established. While JRS is over funded, this credit is designed to reduce the annual JRS recommended ER contribution to zero but require that the annual JRS recommended ER contribution be no less than the estimated employee (EE) member contributions for the given fiscal year (accumulated with CPI-U since the most recent pay increase for JRS members).

    Since July 1, 2014, the annual JRS recommended ER contribution has been equal to the estimated EE member contributions for the given fiscal year (accumulated with CPI-U since the most recent pay increase for JRS members).

    With and without the bill, the JRS funding credit is large enough to reduce the FY 2027 JRS recommended ER contribution to zero, and therefore the FY 2027 JRS recommended ER contribution is equal to the estimated FY 2027 EE member contributions (accumulated with CPI-U since the most recent pay increase for JRS members). Hence, after applying the JRS funding credit, the bill would reduce the estimated FY 2027 JRS recommended ER contribution by about $94,000, the difference between the estimated EE contributions for FY 2027 with the bill using the actual pay increase percentage and the estimated EE contributions for FY 2027 without the bill, using the accumulated CPI-U since the prior JRS pay increase.

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	($94,000.00)	-0.57 %
Normal Cost of System	N/A	($94,000.00)	-0.57 %
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:

    The pay increases from SB 29 are expected to create a gain to the JRS plan. However, since the JRS plan funded percentage is at least 100%, no gain base is established due to the pay increases.

    With and without the bill, the JRS funding credit is large enough to reduce the FY 2027 JRS recommended ER contribution to zero, and therefore the FY 2027 JRS recommended ER contribution is equal to the estimated FY 2027 EE member contributions (accumulated with CPI-U since the most recent pay increase for JRS members). Hence, after applying the JRS funding credit, the bill would reduce the estimated FY 2027 JRS recommended ER contribution by about $94,000, the difference between the estimated EE contributions for FY 2027 with the bill using the actual pay increase percentage and the estimated EE contributions for FY 2027 without the bill, using the accumulated CPI-U since the prior JRS pay increase.

Analysis of Impact on Public Pension Policy:

    Currently, the JRS member contribution rate is set by the CPRB Board, where the rate must be between 7.0% per year and 10.5% per year as set in the West Virginia Statute. While JRS is overfunded, this rate has been set at 7.0% per year.

    On or after July 1, 2025, SB 29 would set this rate at 7.0% in West Virginia Statute. Therefore, the bill would remove the flexibility of the CPRB Board to set the JRS member rate within the range of existing state law. If SB 29 becomes law and this rate needs to be adjusted, then legislative action would be required to change the JRS member contribution rate.

    Finally, the bill provides an employer contribution holiday, while the JRS funding percentage exceeds 125%. For the foreseeable future, JRS is expected to have a funded percentage of more than 125% and the funding credit is expected to reduce the annual JRS recommended ER contribution to the estimated EE member contributions for the given fiscal year (accumulated with CPI-U since the most recent pay increase for JRS members). Therefore, each year during the contribution holiday, the State of West Virginia would save the annual actuarial recommended contribution, which is $1,364,000 for FY 2027.

    However, if a contribution holiday persists for many years and adverse experience eliminates the contribution credit over time, then, JRS may need to begin employer contributions again, and budgeting the employer contribution may be difficult after a $0 employer contribution for many years.

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	0	-469,000	148,000
Personal Services	0	0	0
Current Expenses	0	0	0
Repairs and Alterations	0	0	0
Assets	0	0	0
Other	0	-469,000	148,000
2. Estimated Total Revenues	0	0	0

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

    The bill would provide an employer contribution holiday, while the JRS funding percentage exceeds 125%. For FY 2027, the annual JRS recommended ER contribution is $1,364,000. Therefore, the state of West Virginia would save this amount for FY 2027.

    JRS pay increases from SB 29 would increase the payroll for Judges by approximately $895,000 for FY 2027.

    For FY 2027, the estimated net savings to the state of West Virginia from SB 29 are ($469,000) = ($1,364,000) + $895,000.

    The bill would provide an employer contribution holiday, while the JRS funding percentage exceeds 125%. For FY 2028, the estimated recommended annual actuarial contribution required for JRS is $1,402,000. Therefore, the state of West Virginia would save this amount for FY 2028.

    JRS pay increases from SB 29 would increase the payroll for Judges by approximately $1,550,000 for FY 2028.

    For FY 2028, the estimated net cost to the state of West Virginia from SB 29 is $148,000 = ($1,402,000) + $1,550,000.

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 reports for PERS and JRS, expected to be published in April 2026.

    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.

    Regarding Actuarial Standards of Practice 51, SB 29 may change the risk assessment for JRS, if a contribution holiday persists for many years and adverse experience eliminates the contribution credit over time, then, JRS may need to begin employer contributions again, and budgeting the employer contribution may be difficult after a $0 employer contribution for many years.

    Actuarial Standard of Practice No. 56 provides guidance to actuaries when performing actuarial services with respect to designing, developing, selecting, modifying, using, reviewing, or evaluating models. Gallagher uses third-party software in the performance of annual actuarial valuations and projections.

    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