Actuarial Fiscal Note
Date Requested:January 27, 2020
Time Requested:03:03 PM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2501 |
Introduced |
HB4550 |
|
|---|
| CBD Subject: |
Courts |
|---|
|
Retirement Systems Impacted by Legislation:
PERS 2501 and JRS 2140
FUND(S):
Special Fund
Sources of Revenue:
Creates New Expense
Legislation creates:
PERS and JRS
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
HB 4550 provides an annual salary increase for magistrates from $57,500 to $68,028. The bill also provides an annual salary increase for Family Court Judges from $94,500 to $113,930. These salary increases would change PERS liability and the PERS annual required employer contribution by an immaterial amount.
HB 4550 provides an annual salary increase for justices of the Supreme Court of Appeals from $136,000 to $160,894 and would increase the annual salary of Circuit Court Judges from $126,000 to $149,070. The impact from HB 4550 for the annual salary increases would increase the JRS Actuarial Accrued Liability by $20.2 million, however, due to JRS overfunding there would be no amortization of unfunded liability due to HB 4550 salary increases. HB 4550 would increase the JRS annual employer normal cost by approximately $47,000. However, due to the credit for JRS overfunding that offsets a portion of the JRS employer normal cost, HB 4550 would increase the total annual JRS employer contribution by approximately $14,000.
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 |
$14,000.00 |
0.13 % |
| Normal Cost of System |
N/A |
$14,000.00 |
0.13 % |
| 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:
HB 4550 would increase the Actuarial Accrued Liability of JRS by $20.2 million, however, due to JRS overfunding, there is no amortization of unfunded liability.
HB 4550 would increase the JRS annual employer contribution amount by $14,000 or 0.13% of JRS payroll.
The impact of HB 4550 on PERS is immaterial.
Analysis of Impact on Public Pension Policy:
As written, the costs of the bill would be sustainable by the current employee and employer contribution rates.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
HB 4550 provides an annual salary increase for magistrates from $57,500 to $68,028. The bill also provides an annual salary increase for Family Court Judges from $94,500 to $113,930. These salary increases would change PERS liability and the PERS annual required employer contribution by an immaterial amount.
HB 4550 provides an annual salary increase for justices of the Supreme Court of Appeals from $136,000 to $160,894 and would increase the annual salary of Circuit Court Judges from $126,000 to $149,070. The impact from HB 4550 for the annual salary increases would increase the JRS Actuarial Accrued Liability by $20.2 million, however, due to JRS overfunding there would be no amortization of unfunded liability due to HB 4550 salary increases. HB 4550 would increase the JRS annual employer normal cost by approximately $47,000. However, due to the credit for JRS overfunding that offsets a portion of the JRS employer normal cost, HB 4550 would increase the total annual JRS employer contribution by approximately $14,000.
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 |
14,000 |
14,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
14,000 |
14,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above Fiscal Note estimates (include possible long-range effect):
HB 4550 would increase the Actuarial Accrued Liability of JRS by $20.2 million, however, due to JRS overfunding, there is no amortization of unfunded liability.
HB 4550 would increase the JRS annual employer contribution amount by approximately $14,000 or 0.13% of JRS payroll.
The impact of HB 4550 on PERS is immaterial.
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.
Person submitting Fiscal Note: Kenneth M. Woodson Jr., Board Actuary, CPRB
Email Address: kenneth.m.woodson@wv.gov