Actuarial Fiscal Note
Date Requested:January 31, 2020 Time Requested:01:54 PM |
Agency: |
Consolidated Public Retirement Board |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2313 |
Introduced |
HB4627 |
|
CBD Subject: |
Retirement |
---|
|
Retirement Systems Impacted by Legislation:
PERS 2501 and 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, HB 4627 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 |
$99,999,999,999,999.00 |
$999,999,999,999.00 |
999,999,999,999.00 % |
Normal Cost of System |
N/A |
$9,999,999,999,999.00 |
999,999,999,999.00 % |
Past Service Liabilities |
$9,999,999,999,999.00 |
$9,999,999,999,999.00 |
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, HB 4627 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 |
999,999,999,999,999 |
999,999,999,999,999 |
999,999,999,999,999 |
Personal Services |
999,999,999,999,999 |
999,999,999,999,999 |
999,999,999,999,999 |
Current Expenses |
999,999,999,999,999 |
999,999,999,999,999 |
999,999,999,999,999 |
Repairs and Alterations |
999,999,999,999,999 |
999,999,999,999,999 |
999,999,999,999,999 |
Assets |
999,999,999,999,999 |
999,999,999,999,999 |
999,999,999,999,999 |
Other |
999,999,999,999,999 |
999,999,999,999,999 |
999,999,999,999,999 |
2. Estimated Total Revenues |
999,999,999,999,999 |
999,999,999,999,999 |
999,999,999,999,999 |
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, HB 4627 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, HB 4627 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