Actuarial Fiscal Note
Retirement Systems Impacted by Legislation:
PERS and TRS
FUND(S):
PERS 2510; TRS 2601
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 amended Bill provides the potential of significant “double dipping” of retirement benefits in PERS and TRS for certain elected officials. Retroactively effective provisions will result in significant lump sum payments to certain retired members.
Data is not easily available to determine the scope of the payments. It is estimated that total amounts would be well in excess of $1,000,000.
In the opinion of the actuary, the change modifies benefits now payable under PERS and TRS and is therefore a violation of 2005 Pension Reform.
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 significantly increases benefits payable while working for certain members. Exact costs have not been calculated due to the increases being in violation of increases under 2005 Pension Reform for PERS and TRS.
Analysis of Impact on Public Pension Policy:
The bill significantly increases allowable “double dipping” under PERS and TRS for elected public officials.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The amended Bill provides the potential of significant “double dipping” of retirement benefits in PERS and TRS for certain elected officials. Retroactively effective provisions will result in significant lump sum payments to certain retired members.
Data is not easily available to determine the scope of the payments. It is estimated that total amounts would be well in excess of $1,000,000.
In the opinion of the actuary, the change modifies benefits now payable under PERS and TRS and is therefore a violation of 2005 Pension Reform.
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 |
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):
The bill significantly increases benefits payable while working for certain members. Exact costs have not been calculated due to the increases being in violation of increases under 2005 Pension Reform for PERS and TRS.
Memorandum
The bill significantly increases allowable “double dipping” under PERS and TRS for elected public officials.
Person submitting Fiscal Note: Harry W. Mandel, MAAA, MSPA, EA, Board Actuary
Email Address: harry.w.mandel@wv.gov