Actuarial Fiscal Note
Retirement Systems Impacted by Legislation:
Public Employees' Retirement System
FUND(S):
PERS 2510
Sources of Revenue:
Other Fund State & 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).
The bill increases the annual salary limit for temporary employees who are retired under PERS from $15,000 to $20,000. The increase provides parity with temporary legislative employees who already have a $20,000 limitation. Temporary employees may earn up to the salary limit while continuing to draw full PERS retirement benefits. The limitation is 51% of the average state employed PERS members who have an average annual salary of $39,003.
Costs for “double dipping” benefits of this nature are recognized through earlier retirement usage. Such usage is studied as part of the PERS Experience Studies completed every 3 to 5 years. The Board Actuary will not change the current retirement usage assumption due to the bill until the next Experience Study. There is therefore no increase in Normal Cost nor Actuarial Accrued Liabilities attributable to the provisions of the bill at this time.
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 |
$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 Actuarial estimates:
Costs for “double dipping” benefits of this nature are recognized through earlier retirement usage. Such usage is studied as part of the PERS Experience Studies completed every 3 to 5 years. The Board Actuary will not change the current retirement usage assumption due to the bill until the next Experience Study. There is therefore no increase in Normal Cost nor Actuarial Accrued Liabilities attributable to the provisions of the bill at this time.
Any actual cost impact will be incorporated as part of future experience studies for PERS.
Analysis of Impact on Public Pension Policy:
This bill enhances the “double dipping” allowable for PERS retirees who take temporary employment with either the legislature, state agencies or local governmental agencies. The level of “double dipping” is limited to $20,000 of temporary wages each year, about 50% of average PERS compensation for active members. Allowable “double dipping” will have a long term impact on retirement usage.
The legislature should consider its position on “double dipping” when considering the adoption of this bill.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The bill increases the annual salary limit for temporary employees who are retired under PERS from $15,000 to $20,000. The increase provides parity with temporary legislative employees who already have a $20,000 limitation. Temporary employees may earn up to the salary limit while continuing to draw full PERS retirement benefits. The limitation is 51% of the average state employed PERS members who have an average annual salary of $39,003.
Costs for “double dipping” benefits of this nature are recognized through earlier retirement usage. Such usage is studied as part of the PERS Experience Studies completed every 3 to 5 years. The Board Actuary will not change the current retirement usage assumption due to the bill until the next Experience Study. There is therefore no increase in Normal Cost nor Actuarial Accrued Liabilities attributable to the provisions of the bill at this time.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2013
Increase/Decrease
(use"-") |
2014
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| 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):
Costs for “double dipping” benefits of this nature are recognized through earlier retirement usage. Such usage is studied as part of the PERS Experience Studies completed every 3 to 5 years. The Board Actuary will not change the current retirement usage assumption due to the bill until the next Experience Study. There is therefore no increase in Normal Cost nor Actuarial Accrued Liabilities attributable to the provisions of the bill at this time.
Any actual cost impact will be incorporated as part of future experience studies for PERS.
Memorandum
This bill enhances the “double dipping” allowable for PERS retirees who take temporary employment with either the legislature, state agencies or local governmental agencies. The level of “double dipping” is limited to $20,000 of temporary wages each year, about 50% of average PERS compensation for active members. Allowable “double dipping” will have a long term impact on retirement usage.
The legislature should consider its position on “double dipping” when considering the adoption of this bill.
Person submitting Fiscal Note: Harry W. Mandel, MAAA, MSPA, EA, Board Actuary
Email Address: harry.w.mandel@wv.gov