Actuarial Fiscal Note
Retirement Systems Impacted by Legislation:
Public Employees Retirement System / Higher Education Defined Contribution Plan
FUND(S):
PERS 2510 / Higher Ed TIAACREF & Great West
Sources of Revenue:
General Fund
Legislation creates:
Neither Program nor Fund
Actuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
The information required for the analysis and pricing of this bill includes detailed information on some 11,167 Higher Education Plan members who might be eligible under the terms of the bill. CPRB does not administer the Higher Education Plan and therefore does not have the member and account information necessary to complete an analysis and costs for the Bill.
Based on the information available to the Board Actuary at this time, a reasonable estimate of costs for this bill cannot be completed.
Fiscal Detail of Actuarial Impact
Impact on current benefit costs, prior service benefit costs and ongoing contribution requirements following full implementation.
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 Actuarial estimates:
The bill provides the ability of certain former Higher Education Plan members who are re-employed with a PERS employer within 5 years of termination from Higher Education to transfer Higher Education Plan account balances to PERS for service credits under PERS at a 75% basis. Members have the further option to purchase the remaining 25% service through 1.5% of pay based contributions for the Higher Education Plan service period.
Since CPRB does not have information on current nor prior Higher Education Plan members, including their account information, the actuary does not have sufficient information to project the exposure to transfer and the average cost of transfer.
Analysis of Impact on Public Pension Policy:
Due to the complexity of the transfer provisions of the bill and the impact on both Higher Education Plan and PERS, the Board Actuary recommends that a detailed study be undertaken prior to the consideration of passage of the bill. Funding for such study would require an appropriation of $60,000 for CPRB expenses plus any expense generated by Higher Education to supply CPRB with member census and account information.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The information required for the analysis and pricing of this bill includes detailed information on some 11,167 Higher Education Plan members who might be eligible under the terms of the bill. CPRB does not administer the Higher Education Plan and therefore does not have the member and account information necessary to complete an analysis and costs for the Bill.
Based on the information available to the Board Actuary at this time, a reasonable estimate of costs for this bill cannot be completed.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2009 Increase/Decrease (use"-") |
2010 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
60,000 |
999,999,999 |
Personal Services |
0 |
60,000 |
0 |
Current Expenses |
0 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
0 |
0 |
2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above Fiscal Note estimates (include possible long-range effect):
The bill provides the ability of certain former Higher Education Plan members who are re-employed with a PERS employer within 5 years of termination from Higher Education to transfer Higher Education Plan account balances to PERS for service credits under PERS at a 75% basis. Members have the further option to purchase the remaining 25% service through 1.5% of pay based contributions for the Higher Education Plan service period.
Since CPRB does not have information on current nor prior Higher Education Plan members, including their account information, the actuary does not have sufficient information to project the exposure to transfer and the average cost of transfer.
Memorandum
Due to the complexity of the transfer provisions of the bill and the impact on both Higher Education Plan and PERS, the Board Actuary recommends that a detailed study be undertaken prior to the consideration of passage of the bill. Funding for such study would require an appropriation of $60,000 for CPRB expenses plus any expense generated by Higher Education to supply CPRB with member census and account information.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov