Actuarial Fiscal Note

Date Requested:February 24, 2022
Time Requested:12:49 PM

2904	Engrossed	SB670
Agency:	Consolidated Public Retirement Board
CBD Number:	Version:	Bill Number:	Resolution Number:
CBD Subject:

Retirement Systems Impacted by Legislation:

EMSRS 2615

FUND(S):

Other Fund

Sources of Revenue:

Local Governments Creates New Expense

Legislation creates:

EMSRS

Actuarial Note Summary

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

    The bill would allow West Virginia County government employers of 911 operators, that currently participate in PERS, to elect to have their 911 operator new hires to prospectively join EMSRS.

    The new entrant profile for 911 operators is similar to the new entrant profile for EMSRS, therefore, the bill is not expected to impact the EMSRS employer Normal Cost, as a percentage of payroll, or the Unfunded Actuarial Accrued Liability of EMSRS going forward.

    For Fiscal Year 2023, the EMSRS member contribution rate, 8.5% of payroll, and the EMSRS employer contribution rate, 9.5% of payroll, are not expected to change due to the bill.

    However, the 911 group experience may be different from the current EMSRS plan experience and may lead to EMSRS actuarial gains or losses in the future if the 911 operators are allowed to join EMSRS as new entrants.

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	$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 new entrant profile for 911 operators is similar to the new entrant profile for EMSRS, therefore, the bill is not expected to impact the EMSRS employer Normal Cost, as a percentage of payroll, or the Unfunded Actuarial Accrued Liability of EMSRS going forward.

    For Fiscal Year 2023, the EMSRS member contribution rate, 8.5% of payroll, and the EMSRS employer contribution rate, 9.5% of payroll, are not expected to change due to the bill.

    However, the 911 group experience may be different from the current EMSRS plan experience and may lead to EMSRS actuarial gains or losses in the future if the 911 operators are allowed to join EMSRS as new entrants.

Analysis of Impact on Public Pension Policy:

The 911 group experience may be different from the current EMSRS plan experience and may lead to EMSRS actuarial gains or losses in the future if the 911 operators are allowed to join EMSRS as new entrants.

Fiscal Note Summary

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

    EMSRS consists of local government employers and does not cover any state employees. For Fiscal Year 2023, funding for EMSRS is through member contributions of 8.50% of payroll and employer contributions of 9.5% of payroll.

    EMSRS does not impact the costs or revenues of state government.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2022 Increase/Decrease (use"-")	2023 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):

EMSRS does not impact the costs or revenues of state government.

Memorandum

    This Actuarial/Fiscal Note is being submitted by the Consolidated Public Retirement Board. It has been reviewed by the CPRB Actuary.

    For the appropriate actuarial disclosures, see the July 1, 2021, funding valuation report for EMSRS, expected to be published in March 2022.

    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.

    Regarding Actuarial Standards of Practice 51, the risk assessment for EMSRS may be affected by allowing 911 operator new entrants to join EMSRS to the extent that the 911 group experience may evolve differently from the current EMSRS experience which could ultimately increase future contributions to EMSRS.

    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. Both the Board and the CPRB Board Actuary are available to answer any questions on the material contained in this actuarial/fiscal note.

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