Actuarial Fiscal Note

Retirement Systems Impacted by Legislation:

All CPRB Administered Plans

FUND(S):

All

Sources of Revenue:

General Fund,Other Fund Local Governments

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).

    This Actuarial Note refers to the Strike and Insert Amendment, Senate Pensions on March 5, 2012.

    The provisions of the Bill do not impact the benefits for active or retired members under any system administered by the CPRB. Therefore, there is no change in either the Normal Cost nor Actuarial Accrued Liabilities for any CPRB administered retirement system.

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
Impact On	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:

    This Actuarial Note refers to the Strike and Insert Amendment, Senate Pensions on March 5, 2012.

    The provisions of the Bill do not change any benefits due to any members of any system. There is no impact on the Normal Cost nor Actuarial Accrued Liabilities for any system administered by the CPRB.

Analysis of Impact on Public Pension Policy:

    This Actuarial Note refers to the Strike and Insert Amendment, Senate Pensions on March 5, 2012.

    The Bill provides for Associations representing West Virginia retirees to have the CPRB complete blind mass mailings to CPRB retirees. These mass mailings are expected to include solicitations for membership in the Associations and forms for the collections of dues through retiree payroll deductions and transmission of total dues by the CPRB to the Associations. There are no restrictions on the contents of the mailings that the Associations can process through the CPRB retiree base, and solicitations could include any Associations sponsored products (such as insurance products).

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    This Actuarial Note refers to the Strike and Insert Amendment, Senate Pensions on March 5, 2012.

    The Bill provides for certain Associations representing West Virginia retirees to be able to have the CPRB complete a blind mailing for the Associations. Mailing costs are to be billed to the Associations. Such mailings are assumed to include solicitations for membership and enrollment forms that include withholding authorizations. Mailings are unrestricted and could also include solicitations for insurance products or other “goods and services”.

    Since mailings would be completed to addressees from the various retirement systems for which the CPRB is plan administrator, increased internal administrative costs are expected to be incurred. These could include the following:

     1. Legal charges for the preparation of legal disclosure inserts so that recipient retirees would be informed that the solicitation mailing is being provided under WV State statutes as a service to the Associations and not sanctioned by the CPRB. Litigation fees.

     2. Processing of additional enrollments resulting from the mailings including both membership and dues withholding additions or changes.

     3. Programmer time if “new” Associations take advantage of the provisions of the Bill to establish new membership groups and withholding amounts.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2012 Increase/Decrease (use"-")	2013 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	5,000	5,000	5,000
Personal Services	5,000	5,000	5,000
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):

    This Actuarial Note refers to the Strike and Insert Amendment, Senate Pensions on March 5, 2012.

    As detailed above, an increase in administrative costs is expected to be incurred as a result of the blind mailings. These costs are in addition to the actual mailing costs to be paid by the Associations requesting a mailing.

    The exact costs cannot be determined without knowing the number of mailings to be requested and the effectiveness of the solicitation in gaining new membership.

    Based on a review of the administrative requirements and costs, it is estimated that costs will average in a range of $0 to $20,000 each year. The average of $5,000 has been applied as the increase in administrative costs averaged over the years.

Memorandum

Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov