Actuarial Fiscal Note
Retirement Systems Impacted by Legislation:
All systems administered by CPRB
FUND(S):
All pension funds
Sources of Revenue:
General Fund
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 allows an annuitant of any system who is a public safety officer to elect up to $3,000 annually to be paid directly and pre-tax for certain health insurance benefits.
The change is administrative in nature and does not increase the benefits available under any plan administered by the CPRB. There is no impact on either the Normal Cost nor the Actuarial Accrued Liabilities of any 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 |
$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:
There is no change in the benefit entitlement for any active member or retiree. The bill does not increase either the Normal Cost nor Actuarial Accrued Liabilities of any plan.
Analysis of Impact on Public Pension Policy:
The federal Pension Reform Act added the ability to voluntarily elect direct pre-tax payment of certain health insurance premiums up to $3,000 annually by certain public safety officers. This bill provides the opportunity for public safety officers under the retirement plans administered by the CPRB to take advantage of this expanded federal tax benefit.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill will not impact the Normal Cost nor Actuarial Accrued Liabilities for any plan administered by the CPRB.
The bill will expand the administrative cost of the CPRB as it relates to notifications, forms processing, eligibility verification and payroll processing of the elections.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2007
Increase/Decrease
(use"-") |
2008
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
25,000 |
20,000 |
20,000 |
| Personal Services |
25,000 |
20,000 |
20,000 |
| 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):
The above is the estimated annual administrative costs and expenses to be incurred by the CPRB to implement and administer the provisions of the bill.
Memorandum
The federal Pension Reform Act added the ability to voluntarily elect direct pre-tax payment of certain health insurance premiums up to $3,000 annually by certain public safety officers. This bill provides the opportunity for public safety officers under the retirement plans administered by the CPRB to take advantage of this expanded federal tax benefit.
Person submitting Fiscal Note: Harry W. Mandel, MAAA, MSPA, Board Actuary
Email Address: HMandel@wvadmin.gov