Actuarial Fiscal Note

Date Requested:February 03, 2020
Time Requested:11:23 AM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2466 Introduced SB673
CBD Subject: Public Safety

Retirement Systems Impacted by Legislation:

PERS 2501 TRS 2600

FUND(S):

Special Fund

Sources of Revenue:

Creates New Expense

Legislation creates:

PERS and TRS


Actuarial Note Summary

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


    For PERS and TRS current annuitants with at least 20 years of credited service, SB 673 would provide a benefit increase of $2 per month for each year of credited service.
    
    This bill would violate the West Virginia Statute §5-10-22h, known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for inactive participants of PERS if the new benefits increase the Actuarial Accrued Liability (AAL) of PERS by more than 1% based on the most recent actuarial funding valuation.
    


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 $9,999,999,999,999.00 $999,999,999,999.00 999,999,999,999.00 %
Normal Cost of System N/A $999,999,999,999.00 999,999,999,999.00 %
Past Service Liabilities $999,999,999,999.00 $999,999,999,999.00 9,999,999,999,999.00 %
Fiscal Year Past Service
Amortization Period Ends		 N/A 999999999999 N/A


Explanation of above Actuarial estimates:


    This bill would violate the West Virginia Statute §5-10-22h, known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for inactive participants of PERS if the new benefits increase the Actuarial Accrued Liability (AAL) of PERS by more than 1% based on the most recent actuarial funding valuation.

Analysis of Impact on Public Pension Policy:


    This bill would violate the West Virginia Statute §5-10-22h, known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for inactive participants of PERS if the new benefits increase the Actuarial Accrued Liability (AAL) of PERS by more than 1% based on the most recent actuarial funding valuation.


Fiscal Note Summary


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


    For PERS and TRS current annuitants with at least 20 years of credited service, SB 673 would provide a benefit increase of $2 per month for each year of credited service.
    
    This bill would violate the West Virginia Statute §5-10-22h, known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for inactive participants of PERS if the new benefits increase the Actuarial Accrued Liability (AAL) of PERS by more than 1% based on the most recent actuarial funding valuation.
    


Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")		 2021
Increase/Decrease
(use"-")		 Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 1,000,000,000,000,000,000 1,000,000,000,000,000,000 1,000,000,000,000,000,000
Personal Services 1,000,000,000,000,000,000 1,000,000,000,000,000,000 1,000,000,000,000,000,000
Current Expenses 1,000,000,000,000,000,000 1,000,000,000,000,000,000 1,000,000,000,000,000,000
Repairs and Alterations 1,000,000,000,000,000,000 1,000,000,000,000,000,000 1,000,000,000,000,000,000
Assets 1,000,000,000,000,000,000 1,000,000,000,000,000,000 1,000,000,000,000,000,000
Other 1,000,000,000,000,000,000 1,000,000,000,000,000,000 1,000,000,000,000,000,000
2. Estimated Total Revenues 1,000,000,000,000,000,000 1,000,000,000,000,000,000 1,000,000,000,000,000,000


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


    For PERS and TRS current annuitants with at least 20 years of credited service, SB 673 would provide a benefit increase of $2 per month for each year of credited service.
    
    This bill would violate the West Virginia Statute §5-10-22h, known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for inactive participants of PERS if the new benefits increase the Actuarial Accrued Liability (AAL) of PERS by more than 1% based on the most recent actuarial funding valuation.
    


Memorandum


    For PERS and TRS current annuitants with at least 20 years of credited service, SB 673 would provide a benefit increase of $2 per month for each year of credited service.
    
    This bill would violate the West Virginia Statute §5-10-22h, known as “2005 Pension Reform”, which prohibits the increase of existing benefits or the creation of new benefits for inactive participants of PERS if the new benefits increase the Actuarial Accrued Liability (AAL) of PERS by more than 1% based on the most recent actuarial funding valuation.
    
    The CPRB Board and the CPRB Board Actuary are available to discuss this Actuarial/Fiscal Note.
    


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