Actuarial Fiscal Note
Date Requested:February 03, 2016
Time Requested:09:16 AM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2240 |
Introduced |
HB4348 |
|
|---|
| CBD Subject: |
|
|---|
|
Retirement Systems Impacted by Legislation:
PERS
FUND(S):
PERS
Sources of Revenue:
Other Fund State and Local Govts
Legislation creates:
Neither Program nor Fund
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
The bill provides for a 5% salary reductions for various state officers, appointed positions and members of Boards and Commissions. The salary reduction amounts are not analyzed in this actuarial note.
PERS is a final average pay plan and for most members receiving the pay cut, the 5% reduction does not impact their retirement benefit average pay currently earned.
Due to the relatilve small number of individuals receiving the pay reduction and the final average pay formula in PERS, there is only a minor impact on the PERS plan.
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 |
($10,000.00) |
0.00 % |
| Normal Cost of System |
N/A |
($10,000.00) |
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:
Due to the limited number of members impacted by the salary reduction, the impact of this change is not significant relative to total PERS costs.
Analysis of Impact on Public Pension Policy:
Based on the individuals impacted by the salary reduction, this change in a targeted impact change and not a meaningful payroll change.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The bill provides for a 5% salary reductions for various state officers, appointed positions and members of Boards and Commissions. The salary reduction amounts are not analyzed in this actuarial note.
PERS is a final average pay plan and for most members receiving the pay cut, the 5% reduction does not impact their retirement benefit average pay currently earned.
Due to the relatilve small number of individuals receiving the pay reduction and the final average pay formula in PERS, there is only a minor impact on the PERS plan.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
-5,000 |
-10,000 |
| 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):
Due to the limited number of members impacted by the salary reduction, the impact of this change is not significant relative to total PERS costs.
Memorandum
Based on the individuals impacted by the salary reduction, this change in a targeted impact change and not a meaningful payroll change.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov