| Date Requested:February 17, 2013 Time Requested:01:55 PM |
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| Retirement Systems Impacted by Legislation: PERS and TRS |
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| FUND(S) PERS 2510; TRS 2601 |
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Sources of Revenue You must select Revenue Source(s)! | |||
| Other Fund State & Local Govts | |||
Does the proposed legislation create:
Neither Program nor Fund You must make a selection(s)! | |||
| This Bill provides a one time 3% lifetime benefit increase on July 1, 2013 for retirees and beneficiaries under PERS and TRS. To be eligible, the retiree must be 60 or older with at least 5 years of retirement but not be age 77 and older with 12 or more years of retirement.
For PERS, the UAAL increases by $16,488,000 with a 6 year amortization requirement of $3,388,000 per year through FY 2019. For TRS, the UAAL increases by $31,000,000 with a 6 year amortization requirement of $6,370,000 per year through FY 2019 The retiree improvement is allowable under 2005 Pension Reform. |
| 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 | $47,488,000.00 | $9,758,000.00 | 0.36 % |
| Normal Cost of System | N/A | $0.00 | 0.00 % |
| Past Service Liabilities | $47,488,000.00 | $9,758,000.00 | 0.36 % |
| Fiscal Year Past Service Amortization Period Ends |
N/A | FY2019 | N/A |
Explanation of above estimates |
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| Retirees and beneficiaries who meet the age 70 and 5 year requirement and were not in the 2006 retiree increase, receive a 3% increase in their monthly benefit starting July 1, 2013.
The UAAL amount was calculated through actuarial software by CPRB actuarial staff. |
Analysis of Impact on Public Pension Policy |
| Provides a retiree increase to a limited number of PERS and TRS retirees. The amount is allowable under 2005 Pension Reform limitations and therefore is within current legislative policy limitations. |
Explain in a clear and concise manner what effect this measure will have on costs and revenues of state government.
| This Bill provides a one time 3% lifetime benefit increase on July 1, 2013 for retirees and beneficiaries under PERS and TRS. To be eligible, the retiree must be 60 or older with at least 5 years of retirement but not be age 77 and older with 12 or more years of retirement.
For PERS, the UAAL increases by $16,488,000 with a 6 year amortization requirement of $3,388,000 per year through FY 2019. For TRS, the UAAL increases by $31,000,000 with a 6 year amortization requirement of $6,370,000 per year through FY 2019 The retiree improvement is allowable under 2005 Pension Reform. |
| 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 | 9758000 | 9758000 | |
| Personal Services | |||
| Current Expenses | |||
| Repairs and Alterations | |||
| Assets | |||
| Other | 9758000 | 9758000 | |
| 2. Estimated Total Revenues | |||
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3. Explanation of above estimates (including long-range effect):
Retirees and beneficiaries who meet the age 70 and 5 year requirement and were not in the 2006 retiree increase, receive a 3% increase in their monthly benefit starting July 1, 2013.
The UAAL amount was calculated through actuarial software by CPRB actuarial staff. |
| Provides a retiree increase to a limited number of PERS and TRS retirees. The amount is allowable under 2005 Pension Reform limitations and therefore is within current legislative policy limitations. |
| Person Submitting Fiscal Note |
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| Harry W. Mandel, MAAA, MSPA, EA, Board Actuary |
| harry.w.mandel@wv.gov |