Actuarial Fiscal Note
Retirement Systems Impacted by Legislation:
Public Employees Retirement System
FUND(S):
2510
Sources of Revenue:
General Fund,Other Fund State and local govts
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).
This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h prohibits benefit increases to active members while PERS funded percentage is under 85%. As of the latest July 1, 2010 Actuarial Valuation for PERS, the funded percentage is currently 74.6%. Based on the funded percentage, the additional benefits provided to active members under this bill are currently prohibited.
See the Pension Committee chairman for details.
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 |
$999,999.00 |
$999,999.00 |
99.99 % |
Normal Cost of System |
N/A |
$999,999.00 |
99.99 % |
Past Service Liabilities |
$999,999.00 |
$999,999.00 |
99.99 % |
Fiscal Year Past Service Amortization Period Ends |
N/A |
|
N/A |
Explanation of above Actuarial estimates:
The bill as drafted would provided free PERS service credits for up to five years of service in the Peace Corp. This additional benefit to active members is prohibited under current Pension Reform restrictions.
Analysis of Impact on Public Pension Policy:
Although the Peace Corp might be considered public service, it is not of the same nature as military service whose members risk their lives for the safety and freedom of our country during their tour of duty.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h prohibits benefit increases to active members while PERS funded percentage is under 85%. As of the latest July 1, 2010 Actuarial Valuation for PERS, the funded percentage is currently 74.6%. Based on the funded percentage, the additional benefits provided to active members under this bill are currently prohibited.
See the Pension Committee chairman for details.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2011 Increase/Decrease (use"-") |
2012 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
999,999 |
999,999 |
Personal Services |
0 |
0 |
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 as drafted would provided free PERS service credits for up to five years of service in the Peace Corp. This additional benefit to active members is prohibited under current Pension Reform restrictions.
Memorandum
Although the Peace Corp might be considered public service, it is not of the same nature as military service whose members risk their lives for the safety and freedom of our country during their tour of duty.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov