Fiscal/Actuarial Note
Date Requested:February 13, 2013
Time Requested:07:04 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2013R1556 Introduced SB96
CBD Subject: WV PUBLIC EMPLOYEES RETIREMENT ACT
Retirement Systems Impacted by Legislation:
PERS
FUND(S)
PERS 2510
Sources of Revenue
You must select Revenue Source(s)!
Other Fund State and Local Gov'ts
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( c ) prohibits increases to active members whenever the PERS funding ratio is less than 85.0% funded. The current funded percentage is 77.6%. See the Pension Committee chairman for details.
    
    The Bill provides for additional military service credits for active PERS members and is therefore in violation of the Statutes.
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 FY2023 N/A
Explanation of above estimates
    The Bill provides additional military service credits to certain active members which will increase both the Normal Cost and Actuarial Accrued Liabilities under PERS. The actual costs have not been determined since the benefit improvement would violate 2005 Pension Reform limitations under Section 5-10-22h(c).
    
Analysis of Impact on Public Pension Policy
    The bill provides limited additional military service credits by re-defining “armed conflicts” applied in current military service calculations.
    
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( c ) prohibits increases to active members whenever the PERS funding ratio is less than 85.0% funded. The current funded percentage is 77.6%. See the Pension Committee chairman for details.
    
    The Bill provides for additional military service credits for active PERS members and is therefore in violation of the Statutes.

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
2013
Increase/Decrease
(use"-")
2014
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 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 provides additional military service credits to certain active members which will increase both the Normal Cost and Actuarial Accrued Liabilities under PERS. The actual costs have not been determined since the benefit improvement would violate 2005 Pension Reform limitations under Section 5-10-22h(c).
    


Memorandum
    The bill provides limited additional military service credits by re-defining “armed conflicts” applied in current military service calculations.
    
    These additional service credits for active Members are in violation of 2005 Pension Reform provisions.
Person Submitting Fiscal Note
Harry W. Mandel, MAAA, MSPA, EA, Board Actuary
Email
harry.w.mandel@wv.gov