Actuarial Fiscal Note
Retirement Systems Impacted by Legislation:
TRS
FUND(S):
2601
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).
Retirees in the Teachers Retirement System currently are allowed to take part time employment with a higher education employer without reducing their annuity benefit. The Bill deletes the part time limitation and allows full time higher education employment without a reduction in their annuity benefits.
Re-employment of a TRS retiree into higher education is limited currently by the part time status resulting in minor “double dipping” of benefits and employment. The Bill expands allowable “double dipping” to include full time employment.
The bill does not impact the TRS retirement benefits to which the member is entitled.
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:
The Bill does not change the benefit to which the TRS retiree is eligible. There is therefore no increase in either the Normal Cost nor the Actuarial Accrued Liabilities under TRS.
The Bill may in the long term encourage additional “double dipping” which can impact member behavior. Such behavioral changes will impact the experience for the TRS system if such changes in behavior become material to the overall plan. The Actuary does not believe that the behavioral changes will materially impact the costs of the Plan.
Analysis of Impact on Public Pension Policy:
This Bill provides for additional “double dipping” for certain TRS retirees who gain employment with an higher education employer.
Other current legislation has attempted to limit or eliminate “double dipping” in public employment. This bill should be evaluated as to the intent of the legislature regarding the “double dipping” issue.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Retirees in the Teachers Retirement System currently are allowed to take part time employment with a higher education employer without reducing their annuity benefit. The Bill deletes the part time limitation and allows full time higher education employment without a reduction in their annuity benefits.
Re-employment of a TRS retiree into higher education is limited currently by the part time status resulting in minor “double dipping” of benefits and employment. The Bill expands allowable “double dipping” to include full time employment.
The bill does not impact the TRS retirement benefits to which the member is entitled.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2014
Increase/Decrease
(use"-") |
2015
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):
The Bill does not change the benefit to which the TRS retiree is eligible. There is therefore no increase in either the Normal Cost nor the Actuarial Accrued Liabilities under TRS.
The Bill may in the long term encourage additional “double dipping” which can impact member behavior. Such behavioral changes will impact the experience for the TRS system if such changes in behavior become material to the overall plan. The Actuary does not believe that the behavioral changes will materially impact the costs of the Plan.
Memorandum
This Bill provides for additional “double dipping” for certain TRS retirees who gain employment with an higher education employer.
Other current legislation has attempted to limit or eliminate “double dipping” in public employment. This bill should be evaluated as to the intent of the legislature regarding the “double dipping” issue.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv,gov