Actuarial Fiscal Note
Retirement Systems Impacted by Legislation:
Public Employees Retirement System
FUND(S):
PERS 2510
Sources of Revenue:
General Fund,Other Fund Local governments in PERS
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(c) prohibits increases in benefits to active members if PERS is less than 85% funded, determined in the last actuarial valuation for PERS. The funded percentage of PERS in the latest actuarial valuation is less than the 85% requirement for active benefit improvements.
See the Pension Committee chairman for details.
(Note: 9's entered for costs indicate there are costs that were not calculated.)
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 |
FY2022 |
N/A |
Explanation of above Actuarial estimates:
This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation.
A full actuarial determination of the costs of the benefits provided under the bill has not been completed for this reason. Costs are estimated to be significant.
Analysis of Impact on Public Pension Policy:
The bill violates 2005 Pension Reform restriction on active member benefit increases.
The bill expands free military service credits by removing the “armed conflict” requirement in current statutes. This is a change in public pension policy previously adopted by the West Virginia legislature.
Cost for the increased benefits would result in a significant increase in the employer contribution percentage required from all PERS employers. Under PERS funding, the additional military benefits would be funded by PERS employers only, both state agencies and local governments.
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(c) prohibits increases in benefits to active members if PERS is less than 85% funded, determined in the last actuarial valuation for PERS. The funded percentage of PERS in the latest actuarial valuation is less than the 85% requirement for active benefit improvements.
See the Pension Committee chairman for details.
(Note: 9's entered for costs indicate there are costs that were not calculated.)
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2012
Increase/Decrease
(use"-") |
2013
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
999,999,999 |
999,999,999 |
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):
This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation.
A full actuarial determination of the costs of the benefits provided under the bill has not been completed for this reason. Costs are estimated to be significant.
Memorandum
The bill violates 2005 Pension Reform restriction on active member benefit increases.
The bill expands free military service credits by removing the “armed conflict” requirement in current statutes. This is a change in public pension policy previously adopted by the West Virginia legislature.
Cost for the increased benefits would result in a significant increase in the employer contribution percentage required from all PERS employers. Under PERS funding, the additional military benefits would be funded by PERS employers only, both state agencies and local governments.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA,MSPA,EA
Email Address: Harry.W.Mandel@wv.gov