Fiscal/Actuarial Note
Date Requested:January 12, 2011
Time Requested:05:08 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2011R1092 Introduced HB2283
CBD Subject: PERS CREDIT FOR PEACE CORPS VOLUNTEER
Retirement Systems Impacted by Legislation:
Public Employees Retirement System
FUND(S)
2510
Sources of Revenue
You must select Revenue Source(s)!
General Fund,Other Fund State and local govts
Does the proposed legislation create:
You must make a selection(s)!
Neither Program nor Fund

    This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h prohibits benefit increases to active members while PERS funded percentage is under 85%. As of the latest July 1, 2010 Actuarial Valuation for PERS, the funded percentage is currently 74.6%. Based on the funded percentage, the additional benefits provided to active members under this bill are currently prohibited.
    
    See the Pension Committee chairman for details.
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 $999,999.00 $999,999.00 99.99 %
Normal Cost of System N/A $999,999.00 99.99 %
Past Service Liabilities $999,999.00 $999,999.00 99.99 %
Fiscal Year Past Service
Amortization Period Ends
N/A N/A
Explanation of above estimates
    The bill as drafted would provided free PERS service credits for up to five years of service in the Peace Corp. This additional benefit to active members is prohibited under current Pension Reform restrictions.
Analysis of Impact on Public Pension Policy
    Although the Peace Corp might be considered public service, it is not of the same nature as military service whose members risk their lives for the safety and freedom of our country during their tour of duty.
Fiscal Note Summary

Explain in a clear and concise manner what effect this measure will have on costs and revenues of state government.

    This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h prohibits benefit increases to active members while PERS funded percentage is under 85%. As of the latest July 1, 2010 Actuarial Valuation for PERS, the funded percentage is currently 74.6%. Based on the funded percentage, the additional benefits provided to active members under this bill are currently prohibited.
    
    See the Pension Committee chairman for details.

Fiscal Note Detail
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
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 999999 999999
Personal Services
Current Expenses
Repairs and Alterations
Assets
Other
2. Estimated Total Revenues
3. Explanation of above estimates (including long-range effect):
    The bill as drafted would provided free PERS service credits for up to five years of service in the Peace Corp. This additional benefit to active members is prohibited under current Pension Reform restrictions.


Memorandum
    Although the Peace Corp might be considered public service, it is not of the same nature as military service whose members risk their lives for the safety and freedom of our country during their tour of duty.
Person Submitting Fiscal Note
Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email
harry.w.mandel@wv.gov