|Date Requested:February 06, 2008
Time Requested:02:23 PM
|Retirement Systems Impacted by Legislation:
Deputy Sheriff Retirement System
Sources of Revenue
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|Other Fund local governments|
Does the proposed legislation create:Neither Program nor Fund
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| An adjustment in the benefits being received by all regular retirees, disability retirees and their beneficiaries. The benefit determination and adjustment is to be made July 1, 2008. Those that have been retired for not less than 3 years but less than 5 years will receive an increase of 2%. Those retired for 5 or more years will receive an increase of 4%. Beneficiaries eligibility will be based upon the original retirement date of the deceased member.
Effective July 1, 2008, the UAAL increase is $1,155,000. The annual funding requirement is 0.2% of payroll, or $75,000 for FY2009. The is not an increase in the Normal Cost as active members are not impacted by the retiree increase. The contribution increase of 0.2% of payroll is payable for FY2009 through FY2029, with the dollar contribution requirement increasing with payroll each year.
|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||$1,155,000.00||$75,000.00||0.00 %|
|Normal Cost of System||N/A||$0.00||0.00 %|
|Past Service Liabilities||$1,155,000.00||$75,000.00||0.00 %|
|Fiscal Year Past Service
Amortization Period Ends
Explanation of above estimates
| The increases in the Normal Cost and Actuarial Accrued Liabilities is based on the July 1, 2007 actuarial valuation data for DSRS. The July 1, 2007 amounts were projected to the July 1, 2008 effective date.
Contributions remain level at 0.2% of payroll for FY2009 through FY2029.
Although DSRS funding minimums are on a level percentage of payroll basis, current contributions have been sufficient to achieve level dollar amortization resulting in a faster funding of the UAAL. On a level dollar basis, an additional $32,000 amortization payment would be required in FY2009, but the contribution requirement would be greatly reduced in FY2018 through FY2029 resulting in significant savings in future interest charges.
If implemented, the current 85.7% funded level would be reduced to 84.8%. The current 10.5% employer contribution rate plus report fees is projected to be sufficient to meet the minimum percentage of payroll funding requirement for the FY2029 amortization target.
Analysis of Impact on Public Pension Policy
| This retiree increase is the first received by DSRS members and has therefore included a “catch up” increase for those retired for 5 or more years. Retiree increases are consistent with other law enforcement plans in West Virginia, including State Police Plans A and B as well as local police plans which all provide some form of automatic retiree COLA inceases.
Most benefits provided under this increase will be paid out over the next 10 to 12 years. It is therefore recommended that a faster funding policy be adopted for retiree increases of this type. A ten year amortization period on a level dollar basis is recommended. The amortization payment would increase to $162,000 for FY2009 through FY2018.
Explain in a clear and concise manner what effect this measure will have on costs and revenues of state government.
|DSRS is a local governmental plan administered statewide by CPRB. State government is not impacted by this plan.|
|Show over-all effect in Item 1 and 2 and, in Item 3, give an explanation of Breakdown by fiscal year, including long-range effect.|
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||0||0||0|
|Repairs and Alterations|
|2. Estimated Total Revenues|
3. Explanation of above estimates (including long-range effect):DSRS is a local governmental plan administered statewide by CPRB. State government is not impacted by this plan.
|Person Submitting Fiscal Note|
|Harry W. Mandel, MAAA, MSPA, EA, Board Actuary|