Fiscal/Actuarial Note
Date Requested:April 13, 2013
Time Requested:01:52 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
Amendment SB507
CBD Subject: House pensions amendment
Retirement Systems Impacted by Legislation:
PERS and TRS
FUND(S)
PERS 2510; TRS 2601
Sources of Revenue
You must select Revenue Source(s)!
Other Fund State & local Govts
Does the proposed legislation create:
You must make a selection(s)!
Neither Program nor Fund

    The amended Bill provides the potential of significant “double dipping” of retirement benefits in PERS and TRS for certain elected officials. Retroactively effective provisions will result in significant lump sum payments to certain retired members.
    
    Data is not easily available to determine the scope of the payments. It is estimated that total amounts would be well in excess of $1,000,000.
    
    In the opinion of the actuary, the change modifies benefits now payable under PERS and TRS and is therefore a violation of 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 $999,999,999.00 $999,999,999.00 99.99 %
Normal Cost of System N/A $999,999,999.00 99.99 %
Past Service Liabilities $999,999,999.00 $999,999,999.00 99.99 %
Fiscal Year Past Service
Amortization Period Ends
N/A N/A
Explanation of above estimates
    The bill significantly increases benefits payable while working for certain members. Exact costs have not been calculated due to the increases being in violation of increases under 2005 Pension Reform for PERS and TRS.
Analysis of Impact on Public Pension Policy
    The bill significantly increases allowable “double dipping” under PERS and TRS for elected public officials.
Fiscal Note Summary

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

    The amended Bill provides the potential of significant “double dipping” of retirement benefits in PERS and TRS for certain elected officials. Retroactively effective provisions will result in significant lump sum payments to certain retired members.
    
    Data is not easily available to determine the scope of the payments. It is estimated that total amounts would be well in excess of $1,000,000.
    
    In the opinion of the actuary, the change modifies benefits now payable under PERS and TRS and is therefore a violation of 2005 Pension Reform.

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 999999999 999999999
Personal Services
Current Expenses
Repairs and Alterations
Assets
Other
2. Estimated Total Revenues
3. Explanation of above estimates (including long-range effect):
    The bill significantly increases benefits payable while working for certain members. Exact costs have not been calculated due to the increases being in violation of increases under 2005 Pension Reform for PERS and TRS.


Memorandum
    The bill significantly increases allowable “double dipping” under PERS and TRS for elected public officials.
Person Submitting Fiscal Note
Harry W. Mandel, MAAA, MSPA, EA, Board Actuary
Email
harry.w.mandel@wv.gov