Actuarial Fiscal Note
Date Requested:March 05, 2026
Time Requested:09:11 AM |
| Agency: |
Consolidated Public Retirement Board |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2840 |
Comm. Sub2 |
SB676 |
|
|---|
| CBD Subject: |
Retirement |
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|
Retirement Systems Impacted by Legislation:
PERS 2501 and Plan B 2393
FUND(S):
Special Fund
Sources of Revenue:
Creates New Expense
Legislation creates:
PERS and Plan B
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
Committee Substitute for the Committee Substitute for SB 676 would allow Capital Police Officers to transfer from PERS to Plan B. As of July 1, 2025, there are approximately 22 PERS Capital Police Officers and Committee Substitute for the Committee Substitute for SB 676 would give these members the option to transfer all their PERS service to Plan B, if the member provides a make-up contribution to Plan B.
For Capital Police Officers that transfer service from PERS to Plan B, Accrued Benefit means, on behalf of the member three percent per year of the member's final average salary for all credited service in Plan B, including the PERS service transferred to Plan B.
If a PERS Capital Police Officer elects to transfer their PERS service to Plan B, the assets that would transfer from PERS to Plan B are outlined in §15-2A-24(e). Basically, the assets transferred to Plan B would be equal to the PERS actuarial accrued liability of the transferring Capital Police Officers, multiplied by the active funded position of PERS, calculated as of July 1, 2026, using the PERS data, assumptions and plan provisions from the July 1, 2026, PERS funding valuation, and this amount is adjusted by applying interest at 7.25% per year from July 1, 2026 to the asset transfer date. For each Capital Police Officer transferring from PERS to Plan B, the CPRB shall transfer the assets from PERS to Plan B no later than April 30, 2027.
The make-up contribution to Plan B is defined in §15-2A-24(h) as follows:
(1) Compute the contributions made by each Capital Police Officer for eligible years under the Public Employees’ Retirement System (PERS)
(2) Compute the contributions that would have been required under the
Plan B for eligible years.
(3) Compute the difference with interest at 7.25% per year that each Capital Police Officer would have been required to pay had he or she originally participated in Plan B for eligible years.
The Consolidated Public Retirement Board (CPRB) shall provide a quote of the make-up contribution outlined above, to each Capital Police Officer who has timely elected to transfer from PERS to Plan B. The quote shall be provided to the members within 60 days of the board’s receipt of the written request and the employer’s verification of PERS eligible service.
This actuarial/fiscal note determines the actuarial cost to Plan B from this bill under two scenarios, however, the tables in this actuarial/fiscal note show only the numbers from scenario 1.
The actuarial cost to Plan B from the bill was calculated and reviewed by Gallagher Benefit Services, Inc. (Gallagher), with the CPRB Actuary providing a peer review of the Gallagher analysis.
To calculate the actuarial cost under Scenario 1, the data, assumptions, and plan provisions from the July 1, 2025, funding valuations for PERS and Plan B were used, except, the Plan B data was augmented by the 22 PERS Capital Police Officers assumed to transfer from PERS to Plan B on July 1, 2025, and the Plan B Accrued Benefit for the transferring Capital Police Officers is outlined in the bill.
There are many possible scenarios with an actuarial cost different from the results determined in this actuarial/fiscal note. The actuarial cost to Plan B from the bill depends on:
• the future experience of Plan B, which could be different from the current active members in Plan B.
• the number of PERS Capital Police Officers that elect to transfer from PERS to Plan B,
• the date the assets transfer to Plan B.
Scenario 1 Actuarial Cost
We assume all 22 PERS Capital Police Officers would elect to transfer all their service from PERS to Plan B and will provide the make-up contribution to Plan B.
Based on the transfer calculation outlined in §15-2A-24(e), as of July 1, 2025, the estimated assets that would transfer from PERS to Plan B is $3.109 million. The actual assets that would transfer according to §15-2A-24(e) from PERS to Plan B depends on the PERS market value of assets, the PERS active and inactive actuarial accrued liability, and the PERS actuarial accrued liability for the transferring Capital Police Officers, all determined as of July 1, 2026.
It is important to note that the estimated asset transfer amount is based on PERS liabilities, calculated as of July 1, 2025, using the data, assumptions, and plan provisions from the July 1, 2025, funding valuation for PERS. Moreover, the PERS market value of assets, as of July 1, 2025, is provided by the West Virginia Investment Management Board (WVIMB).
The actual assets transferred in the future from PERS to Plan B may be different from the estimated asset transfer amount shown above because the actual assets transferred will be determined as of July 1, 2026, with interest at 7.25% per year from July 1, 2026, to the asset transfer date.
In addition to the assets that would transfer according to §15-2A-24(e), each
transferring PERS Capital Police Officer is required to provide a make-up contribution to Plan B. If all 22 PERS Capital Police Officers elect to transfer their PERS service to Plan B and provide the make-up contribution to Plan B, as of July 1, 2025, the total make-up contributions would increase Plan B assets by approximately $1.189 million.
Measured as of July 1, 2025, the estimated PERS actuarial accrued liability for the 22 PERS Capital Police Officers is $2.631 million. Therefore, as of July 1, 2025, Committee Substitute for the Committee Substitute for SB 676 would increase the PERS Unfunded Actuarial Accrued Liability, based on market value of assets, by about $478,000 ($3.109 million – $2.631 million). The impact from Committee Substitute for the Committee Substitute for SB 676 on the PERS employer Normal Cost and the PERS Unfunded Actuarial Accrued Liability is immaterial.
Measured as of July 1, 2025, the estimated Plan B actuarial accrued liability for the 22 PERS Capital Police Officers is $5.296 million. This liability was calculated as of July 1, 2025, using the data, assumptions, and plan provisions from the July 1, 2025, funding valuation for Plan B, except the transferring Capital Police Officers were included in the Plan B data, and their Accrued Benefit is outlined above. Note, the results will change if the liabilities are calculated at a different date in the future.
Measured as of July 1, 2025, the estimated Plan B market value of assets would increase by $4.298 million ($3.109 million transferred assets from §15-2A-24(e) plus $1.189 million make-up contributions) if all 22 PERS Capital Police Officers transfer their PERS service to Plan B. The increase in Plan B assets will change if the transfer date is different from the assumed transfer date, July 1, 2025.
Therefore, as of July 1, 2025, the Unfunded Actuarial Accrued Liability for Plan B would increase by approximately $.998 million ($5.296 million – $4.298 million) if 22 PERS Capital Police Officers transfer from PERS to Plan B.
Amortizing this amount over 10 years on a level dollar basis would increase the annual Plan B amortization of the unfunded actuarial accrued liability by about $139,000 or 0.32% of Plan B base payroll, under Scenario 1.
Moreover, Committee Substitute for the Committee Substitute for SB 676 would increase the Plan B employer normal cost by about $166,000 per year, however, as a percentage of base payroll is 0.00% of Plan B base payroll. To see this result, from the July 1, 2025, funding valuation for Plan B, the Plan B employer normal cost is 15.01% of Plan B base payroll and as of July 1, 2025, the Plan B employer normal cost is also 15.01% of Plan B base payroll, as a result of Committee Substitute for the Committee Substitute for SB 676, under Scenario 1.
Measured as of July 1, 2025, the amortization for existing unfunded actuarial accrued liability bases, would decrease by 0.26% of Plan B base payroll, because the amortization dollar amounts are not affected by the bill, however, the Plan B base payroll is increasing due to the bill.
Therefore, the total Plan B annual required employer contribution would increase by approximately $305,000 or 0.06% of Plan B base payroll if 22 PERS Capital Police Officers transfer from PERS to Plan B as of July 1, 2025. To see this result, from the July 1, 2025, funding valuation for Plan B, the Plan B total annual required contribution is 25.14% of Plan B base payroll and as of July 1, 2025, the Plan B total annual required contribution is 25.20% of Plan B base payroll, as a result of Committee Substitute for the Committee Substitute for SB 676, under Scenario 1.
Scenario 2 Actuarial Cost
We assume all 22 PERS Capital Police Officers would elect to stay in PERS and not provide the make-up contribution to Plan B. Therefore, only new hires from the Capital Police would join Plan B.
Since new hires for the Capital Police Office have no service when they begin, their initial actuarial accrued liability is zero. However, they would accrue a normal cost under Plan B. If future Capitol Police hired into Plan B share similar demographics to the current Capital Police Officers in PERS, valued a new hire as of July 1, 2025, then the Plan B normal cost of the Capital Police Officer new hires should be close to the current normal cost in Plan B.
Therefore, the Committee Substitute for the Committee Substitute for SB 676, under Scenario 2, is not expected to have a material impact on the unfunded actuarial accrued liability (UAAL) or the recommended employer contribution for Plan B.
Gallagher analyzed the new entrant profile for the Capital Police new hires, by calculating the total Normal Cost for the 22 existing Capital Police Officers currently in the Public Employees’ Retirement System (PERS) as of July 1, 2025, by assuming the 22 Capital Police Officers were new hires with no past service. Based on this analysis, the Normal Cost for new hires from the Capital Police is approximately equal to the existing Normal Cost from Plan B.
Gallagher provided the following comments and disclosures.
Data
We have performed the analysis of the bill for the employees identified by the West Virginia CPRB in the listing we received on February 2, 2026. There were 31 employees listed with names and unique identifiers which we cross-checked against our July 1, 2025, PERS census database to identify the PERS employees impacted.
There were 22 active PERS members of the 31 who were included in the census and are reflected as transfers in this analysis. The remaining 9 were found to be retirees in other West Virginia public systems and are assumed not to be included as transfers to Plan B as members eligible to receive pension benefits.
Assumptions
We have made the following simplifying assumptions in performing the analysis for the Committee Substitute for the Committee Substitute for SB 676:
We have assumed that the transfer of members and assets occurs as of July 1, 2025, and have shown the impact based on the July 1, 2025, valuation results for Plan B.
All 22 members are assumed to elect to transfer from PERS to Plan B and pay “make-up”contributions of the net amount of contributions they would have made to Plan B in excess of the amounts they contributed to PERS. As described in the bill, interest is accumulated at 7.25% per annum on the additional contribution amounts.
It is assumed that employees would have contributed 12% of their base pay to Plan B for all years of service.
PERS historical compensation amounts include both base and overtime compensation. For purposes of determining the appropriate base pay and overtime pay for Plan B, we have assumed that 10% of their PERS compensation is attributed to overtime.
Comments on Analysis
For the Committee Substitute for the Committee Substitute for SB 676, one can review the analysis as a basis for a range of results as of July 1, 2025, of the potential impact of the bill. The Gallagher results reflect the key assumption that all eligible PERS Capitol Police elect to transfer to Plan B and make their “make-up” contributions. Conversely, if no Capitol Police elect to transfer and make their “make-up” contributions, there is no immediate accrued liability impact for Plan B as of July 1, 2025. However, one can approximate the annual cost associated with future new Capitol Police members of Plan B by reviewing the Normal Cost Sensitivity which calculates the normal cost as a percentage of pay assuming that a new entrant has the same demographic information as of 7/1/2025 for these transfers in Plan B (assuming no prior service in the plan).
Disclosures
The results were developed for the West Virginia CPRB by Gallagher using generally accepted actuarial principles and techniques in accordance with all applicable Actuarial Standards of Practice (ASOPs).The purpose of this analysis is to provide an estimated cost impact of the bill for Capital Police Officer transfers from PERS to Plan B based on the July 1, 2025, valuation results for Plan B and PERS. Use of the results in this actuarial/fiscal note for any other purpose may not be appropriate and may result in mistaken conclusions due to failure to understand applicable assumptions, methodologies, or inapplicability of the results for that purpose. Because of the risk of misinterpretation of actuarial results, you should ask Gallagher to review any statement you wish to make on the results contained in this actuarial/fiscal note. Gallagher will not accept any liability for any such statement made without prior review. No third-party recipient of Gallagher’s work product should rely upon Gallagher’s work product absent involvement of Gallagher or without our approval.
Interested parties may refer to the forthcoming July 1, 2025, actuarial valuation report for PERS and Plan B for a detailed explanation regarding data, assumptions, methods, and plan provisions that underlie the results herein. The valuation report also provides the risk information required under ASOP 51 and ASOP 4, the use-of-models disclosures required under ASOP 56, and the statements regarding the reasonableness of the assumptions adopted by the Board required under ASOP 27.
Future actuarial measurements may differ significantly from the current measurements presented in this actuarial/fiscal note due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan’s funded status); and changes in plan provisions or applicable law. An analysis of the potential range of such future measurements is beyond the scope of this project.
Elizabeth Hoalt and David Driscoll meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this actuarial/fiscal note. We are available to answer any questions about the material contained in this actuarial/fiscal note, or to provide explanations or further details as may be appropriate.
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 |
$998,000.00 |
$305,000.00 |
0.06 % |
| Normal Cost of System |
N/A |
$166,000.00 |
0.00 % |
| Past Service Liabilities |
$998,000.00 |
$139,000.00 |
0.06 % |
Fiscal Year Past Service
Amortization Period Ends |
N/A |
2035 |
N/A |
Explanation of above Actuarial estimates:
Note, to be conservative, we have displayed the actuarial cost from only Scenario 1 above, however, other scenarios are possible with very different actuarial costs compared to those displayed. If fewer than 22 PERS Capital Police Officers elect to transfer from PERS to Plan B the actuarial cost to Plan B will be different than the cost displayed.
Measured as of July 1, 2025, the estimated Plan B actuarial accrued liability for the 22 PERS Capital Police Officers is $5.296 million. This liability was calculated as of July 1, 2025, using the data, assumptions, and plan provisions from the July 1, 2025, funding valuation for Plan B, except the transferring Capital Police Officers were included in the Plan B data, and their Accrued Benefit is outlined above. Note, the results will change if the liabilities are calculated at a different date in the future.
Measured as of July 1, 2025, the estimated Plan B market value of assets would increase by $4.298 million ($3.109 million transferred assets from §15-2A-24(e) plus $1.189 million make-up contributions) if all 22 PERS Capital Police Officers transfer their PERS service to Plan B. The increase in Plan B assets will change if the transfer date is different from the assumed transfer date, July 1, 2025.
Therefore, as of July 1, 2025, the Unfunded Actuarial Accrued Liability for Plan B would increase by approximately $.998 million ($5.296 million – $4.298 million) if 22 PERS Capital Police Officers transfer from PERS to Plan B.
Amortizing this amount over 10 years on a level dollar basis would increase the annual Plan B amortization of the unfunded actuarial accrued liability by about $139,000 or 0.32% of Plan B base payroll.
Moreover, Committee Substitute for the Committee Substitute for SB 676 would increase the Plan B employer normal cost by about $166,000 per year, however, as a percentage of base payroll is 0.00% of Plan B base payroll. To see this result, from the July 1, 2025, funding valuation for Plan B, the Plan B employer normal cost is 15.01% of Plan B base payroll and as of July 1, 2025, the Plan B employer normal cost is also 15.01% of Plan B base payroll, as a result of Committee Substitute for the Committee Substitute for SB 676.
Measured as of July 1, 2025, the amortization for existing unfunded actuarial accrued liability bases, would decrease by 0.26% of Plan B base payroll, because the amortization dollar amounts are not affected by the bill, however, the Plan B base payroll is increasing due to the bill.
Therefore, the total Plan B annual required employer contribution would increase by approximately $305,000 or 0.06% of Plan B base payroll if 22 PERS Capital Police Officers transfer from PERS to Plan B as of July 1, 2025. To see this result, from the July 1, 2025, funding valuation for Plan B, the Plan B total annual required contribution is 25.14% of Plan B base payroll and as of July 1, 2025, the Plan B total annual required contribution is 25.20% of Plan B base payroll, as a result of Committee Substitute for the Committee Substitute for SB 676.
Analysis of Impact on Public Pension Policy:
As of July 1, 2025, there are 573 active members in Plan B. In the future the experience of the group of 22 PERS Capital Police Officers, assumed to transfer to Plan B, may be different from the existing Plan B active group experience and may lead to plan gains or losses in the future for the Plan B plan. If there are losses going forward, the Plan B employer contribution rate may increase in the future.
Note that many of the current Capital Police Officers may elect to stay in PERS, due to the required make-up contribution to Plan B. The estimated average make-up contribution for the 22 PERS Capital Police Officers is approximately $54,045.
Regarding Capital Police Officers transferring to Plan B, the following items should be considered:
1. As of FY 2026, the ER contribution rate in PERS is 9.0% of total payroll compared to an ER contribution rate of 34.0% of base payroll for Plan B. If this bill becomes law, then ultimately, all active Capital Police Officers would be in plan B, which would likely increase the ER contribution paid by the State.
2. Also, as of July 1, 2026, Capital Police Officers that are in PERS contribute 4.5% of pay for Tier 1 members and 6.0% for Tier 2 members. Plan B members contribute 12% of base pay (the rate increases to 13.0% of base pay if Plan B is funded below 90%). This difference in member contribution rate between PERS and Plan B may be difficult for the member to make up.
3. Capital Police Officers currently pay into Social Security and State Troopers in Plan B do not. Therefore, the Capital Police Officers that join Plan B would receive a better benefit than their State Trooper counterparts in Plan B.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Committee Substitute for the Committee Substitute for SB 676 would allow Capital Police Officers to transfer from PERS to Plan B. As of July 1, 2025, there are approximately 22 PERS Capital Police Officers and Committee Substitute for the Committee Substitute for SB 676 would give these members the option to transfer all their PERS service to Plan B, if the member provides a make-up contribution to Plan B.
For Capital Police Officers that transfer service from PERS to Plan B, Accrued Benefit means, on behalf of the member three percent per year of the member's final average salary for all credited service in Plan B, including the PERS service transferred to Plan B.
If a PERS Capital Police Officer elects to transfer their PERS service to Plan B, the assets that would transfer from PERS to Plan B are outlined in §15-2A-24(e). Basically, the assets transferred to Plan B would be equal to the PERS actuarial accrued liability of the transferring Capital Police Officers, multiplied by the active funded position of PERS, calculated as of July 1, 2026, using the PERS data, assumptions and plan provisions from the July 1, 2026, PERS funding valuation, and this amount is adjusted by applying interest at 7.25% per year from July 1, 2026 to the asset transfer date. For each Capital Police Officer transferring from PERS to Plan B, the CPRB shall transfer the assets from PERS to Plan B no later than April 30, 2027.
The make-up contribution to Plan B is defined in §15-2A-24(h) as follows:
(1) Compute the contributions made by each Capital Police Officer for eligible years under the Public Employees’ Retirement System (PERS)
(2) Compute the contributions that would have been required under the
Plan B for eligible years.
(3) Compute the difference with interest at 7.25% per year that each Capital Police Officer would have been required to pay had he or she originally participated in Plan B for eligible years.
The Consolidated Public Retirement Board (CPRB) shall provide a quote of the make-up contribution outlined above, to each Capital Police Officer who has timely elected to transfer from PERS to Plan B. The quote shall be provided to the members within 60 days of the board’s receipt of the written request and the employer’s verification of PERS eligible service.
This actuarial/fiscal note determines the actuarial cost to Plan B from this bill under two scenarios, however, the tables in this actuarial/fiscal note show only the numbers from scenario 1.
The actuarial cost to Plan B from the bill was calculated and reviewed by Gallagher Benefit Services, Inc. (Gallagher), with the CPRB Actuary providing a peer review of the Gallagher analysis.
To calculate the actuarial cost under Scenario 1, the data, assumptions, and plan provisions from the July 1, 2025, funding valuations for PERS and Plan B were used, except, the Plan B data was augmented by the 22 PERS Capital Police Officers assumed to transfer from PERS to Plan B on July 1, 2025, and the Plan B Accrued Benefit for the transferring Capital Police Officers is outlined in the bill.
There are many possible scenarios with an actuarial cost different from the results determined in this actuarial/fiscal note. The actuarial cost to Plan B from the bill depends on:
• the future experience of Plan B, which could be different from the current active members in Plan B.
• the number of PERS Capital Police Officers that elect to transfer from PERS to Plan B,
• the date the assets transfer to Plan B.
Scenario 1 Actuarial Cost
We assume all 22 PERS Capital Police Officers would elect to transfer all their service from PERS to Plan B and will provide the make-up contribution to Plan B.
Based on the transfer calculation outlined in §15-2A-24(e), as of July 1, 2025, the estimated assets that would transfer from PERS to Plan B is $3.109 million. The actual assets that would transfer according to §15-2A-24(e) from PERS to Plan B depends on the PERS market value of assets, the PERS active and inactive actuarial accrued liability, and the PERS actuarial accrued liability for the transferring Capital Police Officers, all determined as of July 1, 2026.
It is important to note that the estimated asset transfer amount is based on PERS liabilities, calculated as of July 1, 2025, using the data, assumptions, and plan provisions from the July 1, 2025, funding valuation for PERS. Moreover, the PERS market value of assets, as of July 1, 2025, is provided by the West Virginia Investment Management Board (WVIMB).
The actual assets transferred in the future from PERS to Plan B may be different from the estimated asset transfer amount shown above because the actual assets transferred will be determined as of July 1, 2026, with interest at 7.25% per year from July 1, 2026, to the asset transfer date.
In addition to the assets that would transfer according to §15-2A-24(e), each
transferring PERS Capital Police Officer is required to provide a make-up contribution to Plan B. If all 22 PERS Capital Police Officers elect to transfer their PERS service to Plan B and provide the make-up contribution to Plan B, as of July 1, 2025, the total make-up contributions would increase Plan B assets by approximately $1.189 million.
Measured as of July 1, 2025, the estimated PERS actuarial accrued liability for the 22 PERS Capital Police Officers is $2.631 million. Therefore, as of July 1, 2025, Committee Substitute for the Committee Substitute for SB 676 would increase the PERS Unfunded Actuarial Accrued Liability, based on market value of assets, by about $478,000 ($3.109 million – $2.631 million). The impact from Committee Substitute for the Committee Substitute for SB 676 on the PERS employer Normal Cost and the PERS Unfunded Actuarial Accrued Liability is immaterial.
Measured as of July 1, 2025, the estimated Plan B actuarial accrued liability for the 22 PERS Capital Police Officers is $5.296 million. This liability was calculated as of July 1, 2025, using the data, assumptions, and plan provisions from the July 1, 2025, funding valuation for Plan B, except the transferring Capital Police Officers were included in the Plan B data, and their Accrued Benefit is outlined above. Note, the results will change if the liabilities are calculated at a different date in the future.
Measured as of July 1, 2025, the estimated Plan B market value of assets would increase by $4.298 million ($3.109 million transferred assets from §15-2A-24(e) plus $1.189 million make-up contributions) if all 22 PERS Capital Police Officers transfer their PERS service to Plan B. The increase in Plan B assets will change if the transfer date is different from the assumed transfer date, July 1, 2025.
Therefore, as of July 1, 2025, the Unfunded Actuarial Accrued Liability for Plan B would increase by approximately $.998 million ($5.296 million – $4.298 million) if 22 PERS Capital Police Officers transfer from PERS to Plan B.
Amortizing this amount over 10 years on a level dollar basis would increase the annual Plan B amortization of the unfunded actuarial accrued liability by about $139,000 or 0.32% of Plan B base payroll, under Scenario 1.
Moreover, Committee Substitute for the Committee Substitute for SB 676 would increase the Plan B employer normal cost by about $166,000 per year, however, as a percentage of base payroll is 0.00% of Plan B base payroll. To see this result, from the July 1, 2025, funding valuation for Plan B, the Plan B employer normal cost is 15.01% of Plan B base payroll and as of July 1, 2025, the Plan B employer normal cost is also 15.01% of Plan B base payroll, as a result of Committee Substitute for the Committee Substitute for SB 676, under Scenario 1.
Measured as of July 1, 2025, the amortization for existing unfunded actuarial accrued liability bases, would decrease by 0.26% of Plan B base payroll, because the amortization dollar amounts are not affected by the bill, however, the Plan B base payroll is increasing due to the bill.
Therefore, the total Plan B annual required employer contribution would increase by approximately $305,000 or 0.06% of Plan B base payroll if 22 PERS Capital Police Officers transfer from PERS to Plan B as of July 1, 2025. To see this result, from the July 1, 2025, funding valuation for Plan B, the Plan B total annual required contribution is 25.14% of Plan B base payroll and as of July 1, 2025, the Plan B total annual required contribution is 25.20% of Plan B base payroll, as a result of Committee Substitute for the Committee Substitute for SB 676, under Scenario 1.
Scenario 2 Actuarial Cost
We assume all 22 PERS Capital Police Officers would elect to stay in PERS and not provide the make-up contribution to Plan B. Therefore, only new hires from the Capital Police would join Plan B.
Since new hires for the Capital Police Office have no service when they begin, their initial actuarial accrued liability is zero. However, they would accrue a normal cost under Plan B. If future Capitol Police hired into Plan B share similar demographics to the current Capital Police Officers in PERS, valued a new hire as of July 1, 2025, then the Plan B normal cost of the Capital Police Officer new hires should be close to the current normal cost in Plan B.
Therefore, the Committee Substitute for the Committee Substitute for SB 676, under Scenario 2, is not expected to have a material impact on the unfunded actuarial accrued liability (UAAL) or the recommended employer contribution for Plan B.
Gallagher analyzed the new entrant profile for the Capital Police new hires, by calculating the total Normal Cost for the 22 existing Capital Police Officers currently in the Public Employees’ Retirement System (PERS) as of July 1, 2025, by assuming the 22 Capital Police Officers were new hires with no past service. Based on this analysis, the Normal Cost for new hires from the Capital Police is approximately equal to the existing Normal Cost from Plan B.
Gallagher provided the following comments and disclosures.
Data
We have performed the analysis of the bill for the employees identified by the West Virginia CPRB in the listing we received on February 2, 2026. There were 31 employees listed with names and unique identifiers which we cross-checked against our July 1, 2025, PERS census database to identify the PERS employees impacted.
There were 22 active PERS members of the 31 who were included in the census and are reflected as transfers in this analysis. The remaining 9 were found to be retirees in other West Virginia public systems and are assumed not to be included as transfers to Plan B as members eligible to receive pension benefits.
Assumptions
We have made the following simplifying assumptions in performing the analysis for the Committee Substitute for the Committee Substitute for SB 676:
We have assumed that the transfer of members and assets occurs as of July 1, 2025, and have shown the impact based on the July 1, 2025, valuation results for Plan B.
All 22 members are assumed to elect to transfer from PERS to Plan B and pay “make-up” contributions of the net amount of contributions they would have made to Plan B in excess of the amounts they contributed to PERS. As described in the bill, interest is accumulated at 7.25% per annum on the additional contribution amounts.
It is assumed that employees would have contributed 12% of their base pay to Plan B for all years of service.
PERS historical compensation amounts include both base and overtime compensation. For purposes of determining the appropriate base pay and overtime pay for Plan B, we have assumed that 10% of their PERS compensation is attributed to overtime.
Comments on Analysis
For the Committee Substitute for the Committee Substitute for SB 676, one can review the analysis as a basis for a range of results as of July 1, 2025, of the potential impact of the bill. The Gallagher results reflect the key assumption that all eligible PERS Capitol Police elect to transfer to Plan B and make their “make-up” contributions. Conversely, if no Capitol Police elect to transfer and make their “make-up” contributions, there is no immediate accrued liability impact for Plan B as of July 1, 2025. However, one can approximate the annual cost associated with future new Capitol Police members of Plan B by reviewing the Normal Cost Sensitivity which calculates the normal cost as a percentage of pay assuming that a new entrant has the same demographic information as of 7/1/2025 for these transfers in Plan B (assuming no prior service in the plan).
Disclosures
The results were developed for the West Virginia CPRB by Gallagher using generally accepted actuarial principles and techniques in accordance with all applicable Actuarial Standards of Practice (ASOPs).The purpose of this analysis is to provide an estimated cost impact of the bill for Capital Police Officer transfers from PERS to Plan B based on the July 1, 2025, valuation results for Plan B and PERS. Use of the results in this actuarial/fiscal note for any other purpose may not be appropriate and may result in mistaken conclusions due to failure to understand applicable assumptions, methodologies, or inapplicability of the results for that purpose. Because of the risk of misinterpretation of actuarial results, you should ask Gallagher to review any statement you wish to make on the results contained in this actuarial/fiscal note. Gallagher will not accept any liability for any such statement made without prior review. No third-party recipient of Gallagher’s work product should rely upon Gallagher’s work product absent involvement of Gallagher or without our approval.
Interested parties may refer to the forthcoming July 1, 2025, actuarial valuation report for PERS and Plan B for a detailed explanation regarding data, assumptions, methods, and plan provisions that underlie the results herein. The valuation report also provides the risk information required under ASOP 51 and ASOP 4, the use-of-models disclosures required under ASOP 56, and the statements regarding the reasonableness of the assumptions adopted by the Board required under ASOP 27.
Future actuarial measurements may differ significantly from the current measurements presented in this actuarial/fiscal note due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan’s funded status); and changes in plan provisions or applicable law. An analysis of the potential range of such future measurements is beyond the scope of this project.
Elizabeth Hoalt and David Driscoll meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this actuarial/fiscal note. We are available to answer any questions about the material contained in this actuarial/fiscal note, or to provide explanations or further details as may be appropriate.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
305,000 |
305,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
305,000 |
305,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above Fiscal Note estimates (include possible long-range effect):
The total Plan B annual required employer contribution would increase by approximately $305,000 or 0.06% of Plan B base payroll if 22 PERS Capital Police Officers transfer from PERS to Plan B as of July 1, 2025. To see this result, from the July 1, 2025, funding valuation for Plan B, the Plan B total annual required contribution is 25.14% of Plan B base payroll and as of July 1, 2025, the Plan B total annual required contribution is 25.20% of Plan B base payroll, as a result of Committee Substitute for the Committee Substitute for SB 676, under Scenario 1.
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 Plan B, 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.
Regarding Actuarial Standards of Practice 51, the risk assessment for Plan B may be affected by allowing PERS Capital Police Officers to transfer to Plan B to the extent the experience of this transferring group may be different from the current active population of Plan B, which could lead to gains or losses in the future for the Plan B plan. If losses occur going forward the current Plan B employer contribution rate may increase.
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