Fiscal/Actuarial Note
Date Requested:January 13, 2014
Time Requested:10:25 AM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2014R1191 Introduced HB4117
CBD Subject: ELIMINATE THE PARTICIPATION OF NEWLY ELECTED
Retirement Systems Impacted by Legislation:
PERS
FUND(S)
PERS 2510
Sources of Revenue
You must select Revenue Source(s)!
Other Fund State and Local Govts
Does the proposed legislation create:
You must make a selection(s)!
Neither Program nor Fund

    The bill eliminates legislators first serving after 2016 from elibibility to participate in PERS. The bill has no impact on the current Normal Cost nor Actuarial Accrued Liabilities of PERS.
    
    Starting in 2017, the bill will reduce new legislators benefit costs by 14% of payroll.
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
    There is no increase in either the Normal Cost nor the Actuarial Accrued Liabilities for PERS and the change does not impact benefits for current members.
    
    For new legislators starting in 2017, they will not be eligible for PERS participation and will therefore have a reduced benefit cost, currentlly 14% of payroll.
Analysis of Impact on Public Pension Policy
    Eliminates new legislators from PERS participation eliminating state provided retirement benefits.
    
    The Bill language is inconsistent in whether the change is effective for 2016 or after 2016.
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 eliminates legislators first serving after 2016 from elibibility to participate in PERS. The bill has no impact on the current Normal Cost nor Actuarial Accrued Liabilities of PERS.
    
    Starting in 2017, the bill will reduce new legislators benefit costs by 14% of payroll.

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
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services
Current Expenses
Repairs and Alterations
Assets
Other
2. Estimated Total Revenues
3. Explanation of above estimates (including long-range effect):
    There is no increase in either the Normal Cost nor the Actuarial Accrued Liabilities for PERS and the change does not impact benefits for current members.
    
    For new legislators starting in 2017, they will not be eligible for PERS participation and will therefore have a reduced benefit cost, currentlly 14% of payroll.


Memorandum
    Eliminates new legislators from PERS participation eliminating state provided retirement benefits.
    
    The Bill language is inconsistent in whether the change is effective for 2016 or after 2016.
Person Submitting Fiscal Note
Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email
harry.w.mandel@wv.gov