Fiscal/Actuarial Note
Date Requested:March 11, 2013
Time Requested:02:18 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2013R2674 Introduced HB2891
CBD Subject: SCHOLARSHIPS FOR DEPENDENTS
Retirement Systems Impacted by Legislation:
State Police Plan A & Plan B
FUND(S)
State Police Plan A 2161; Plan B 2162
Sources of Revenue
You must select Revenue Source(s)!
General Fund
Does the proposed legislation create:
You must make a selection(s)!
Neither Program nor Fund

    The bill increases the surviving dependent scholarship limitation from $7,500 to a per year limitation of $7,500.
    
    Because of the rare occurrence of an eligible surviving dependent, the change will not impact either the Normal Cost nor the Actuarial Accrued Liabilities for State Police Plans.
    
    Upon eligibility, a surviving dependent scholarship cost will increase in the range of $22,500 to $30,000 dependent on 4 or 5 year graduation.
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 $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 estimates
    The scholarship increase contained in the bill does not provide for any pension plan benefit increases that impact either the Normal Cost nor the Actuarial Accrued Liabilities under either State Police Plan A and Plan B.
    
    To be a surviving dependent eligible for the scholarship, you must be a child of a member who died in the line of duty. The scholarship is also limited to a West Virginia institution. Eligibility for the scholarship is therefore extremely rare. Upon eligibility, the individual cost is dependent upon the years to graduation. Based upon a 5 year graduation, the additional scholarship cost is $30,000 per occurance.
Analysis of Impact on Public Pension Policy
    The bill provides for State Police death benefits which have no relationship to retirement benefits normally provided under the State Police retirement plans.
Fiscal Note Summary

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

    The bill increases the surviving dependent scholarship limitation from $7,500 to a per year limitation of $7,500.
    
    Because of the rare occurrence of an eligible surviving dependent, the change will not impact either the Normal Cost nor the Actuarial Accrued Liabilities for State Police Plans.
    
    Upon eligibility, a surviving dependent scholarship cost will increase in the range of $22,500 to $30,000 dependent on 4 or 5 year graduation.

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 0 30000 0
Personal Services
Current Expenses
Repairs and Alterations
Assets
Other 0 30000 0
2. Estimated Total Revenues
3. Explanation of above estimates (including long-range effect):
    The scholarship increase contained in the bill does not provide for any pension plan benefit increases that impact either the Normal Cost nor the Actuarial Accrued Liabilities under either State Police Plan A and Plan B.
    
    To be a surviving dependent eligible for the scholarship, you must be a child of a member who died in the line of duty. The scholarship is also limited to a West Virginia institution. Eligibility for the scholarship is therefore extremely rare. Upon eligibility, the individual cost is dependent upon the years to graduation. Based upon a 5 year graduation, the additional scholarship cost is $30,000 per occurance.


Memorandum
    The bill provides for State Police death benefits which have no relationship to retirement benefits normally provided under the State Police retirement plans.
Person Submitting Fiscal Note
Harry W. Mandel, MAAA, MSPA, EA, Board Actuary
Email
harry.w.mandel@wv.gov