Actuarial Fiscal Note
Date Requested:February 11, 2020
Time Requested:12:30 PM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2037 |
Introduced |
HB4930 |
|
|---|
| CBD Subject: |
Actions, Suits and Liens |
|---|
|
Retirement Systems Impacted by Legislation:
PERS 2501
FUND(S):
Special Fund
Sources of Revenue:
Creates New Expense
Legislation creates:
PERS
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
HB 4930 permits PERS Tier II members to purchase up to five years of military service with a military general discharge under honorable conditions or a military medical discharge. The bill specifically adds those members who do not have an honorable discharge provided they have a general discharge under honorable conditions or a medical discharge. Those with a general discharge, an entry-level separation discharge, an other than honorable conditions discharge, or a dishonorable discharge are not eligible.
Under current state law, a Tier II PERS member may purchase up to five years of military service, provided the member received an honorable discharge. HB 4930 would expand the definition of discharge to include a military general discharge under honorable conditions or a military medical discharge.
The number of PERS Tier II members with a military general discharge under honorable conditions or a military medical discharge that purchase military service is expected to be small compared to the total number of members for PERS. Therefore, the bill should have a de minimis impact on PERS unfunded actuarial accrued liability and the PERS annual employer contribution.
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 |
$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 |
- |
N/A |
Explanation of above Actuarial estimates:
The cost to PERS associated with HB 4930 is expected to be de minimis because the number of Tier II PERS members that purchase military service with a military general discharge under honorable conditions or a military medical discharge is expected to be small compared to the total number of members for PERS.
Analysis of Impact on Public Pension Policy:
Under current state law, PERS Tier II members may purchase up to five years of military service with an honorable discharge from the military. The bill would allow PERS Tier II members to purchase up to five years of military service with a general discharge under honorable conditions or a medical discharge.
The number of Tier II PERS members that purchase military service with a military general discharge under honorable conditions or a military medical discharge is expected to be small compared to the total number of members for PERS.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
HB 4930 permits PERS Tier II members to purchase up to five years of military service with a military general discharge under honorable conditions or a military medical discharge. The bill specifically adds those members who do not have an honorable discharge provided they have a general discharge under honorable conditions or a medical discharge. Those with a general discharge, an entry-level separation discharge, an other than honorable conditions discharge, or a dishonorable discharge are not eligible.
Under current state law, a Tier II PERS member may purchase up to five years of military service, provided the member received an honorable discharge. HB 4930 would expand the definition of discharge to include a military general discharge under honorable conditions or a military medical discharge.
The number of PERS Tier II members with a military general discharge under honorable conditions or a military medical discharge that purchase military service is expected to be small compared to the total number of members for PERS. Therefore, the bill should have a de minimis impact on PERS unfunded actuarial accrued liability and the PERS annual employer contribution.
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 |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
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):
The cost to PERS associated with HB 4930 is expected to be de minimis because the number of Tier II PERS members that purchase military service with a military general discharge under honorable conditions or a military medical discharge is expected to be small compared to the total number of members for PERS.
Memorandum
Under current state law, a Tier II PERS member may purchase up to five years of military service, provided the member received an honorable discharge. HB 4930 would expand the definition of discharge to include a military general discharge under honorable conditions or a military medical discharge.
The number of Tier II PERS members that purchase military service with a military general discharge under honorable conditions or a military medical discharge is expected to be small compared to the total number of members for PERS.
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.
Person submitting Fiscal Note: Kenneth M. Woodson Jr., Board Actuary, CPRB
Email Address: kenneth.m.woodson@wv.gov