FISCAL NOTE
Date Requested: January 15, 2019
Time Requested: 02:41 PM |
| Agency: |
Legislative Services - Joint Committee |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1633 |
Introduced |
HB2431 |
|
|---|
| CBD Subject: |
Retirement |
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|
FUND(S):
General Fund
Sources of Revenue:
General Fund
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to provide that a person newly elected or appointed as a member of the State Legislature after 2020 will not be eligible for pension benefits based on legislative service. This would allow the Legislature to avoid the future employer match expense for those members who would have qualified and chose to participate in the state retirement system after 2020. Currently, the rate of the employer match expense incurred by the Legislature for retirement contributions is 10% of the members annual compensation.
Since this bill would only prevent newly elected members after 2020 from being eligible for retirement benefits based on legislative service, the bill provides a cost avoidance rather than a true reduction in expenses, meaning it would only prospectively reduce the expenses associated with the 10% employer matching of pension contributions based on member compensation. Any member who was elected prior to 2020 and who qualified based on years of service and chose to participate in the state retirement system would still cause the Legislature to incur the expense for the employer match and this bill would not reduce those expenses. Further, it is possible, based on the language of the bill, that members who were serving prior to 2020 and seeking to participate in the state retirement system would be allowed to count service prior to 2020 and service after 2020 toward meeting the eligibility requirement for participation as they would not wholly be considered "newly elected".
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
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 estimates (including long-range effect):
Based on the language of this bill, it provides for a cost avoidance for members elected or appointed after 2020. Any members vested in the retirement system prior to 2020 or earning years of service towards the vesting requirement prior to 2020 would still be eligible to receive retirement benefits through the state pension system and therefore would still cause the Legislature to incur the cost of the employer match of 10% the members annual compensation.
Memorandum
There is some vagueness regarding the language of this bill in how it defines "newly elected member". For instance, it is unclear if someone who served as a member prior to 2020 who had a break in service and was elected again after 2020 would be considered a "newly elected member" and subsequently excluded from eligibility. Also, it is unclear if a member elected in 2018 was re-elected in 2020 would be considered a "newly elected member" without a break in service as a member of the Legislature. It is unclear, based on the language of the bill, how this applies to interrupted legislative service and whether its applicability is limited to first-time members elected to the Legislature after 2020.
Person submitting Fiscal Note: Justin Robinson
Email Address: justin.robinson@wvlegislature.gov