Actuarial Fiscal Note

Date Requested:February 12, 2025
Time Requested:07:47 PM

1453	Introduced	HB2109
Agency:	Consolidated Public Retirement Board
CBD Number:	Version:	Bill Number:	Resolution Number:
CBD Subject:	Retirement

Retirement Systems Impacted by Legislation:

EMSRS 2615

FUND(S):

Special Fund

Sources of Revenue:

Creates New Expense

Legislation creates:

EMSRS

Actuarial Note Summary

Impact this measure will have on the liabilities and contributions associated with the retirement system(s).

    HB 2109 updates the definition of “participating public employer” in EMSRS to include any emergency medical services agency licensed under §16-4C-6a that is designated by a county commission to provide emergency response through a county emergency dispatch center.

    According to the Consolidated Public Retirement Board legal counsel, “EMSRS is expressly intended to be a qualified governmental plan under Code Section 401(a) and other applicable provisions of the Code. W. Va. Code § 16-5V-5(c). Therefore, in addition to satisfying the West Virginia statutory requirements for participation in EMSRS, CPRB needs to ensure that any participating employers will not jeopardize the Plan’s status as a governmental plan under the Code. The risk of including non-governmental employers in a governmental plan is to risk losing qualified governmental plan status entirely”.

    If EMSRS were to lose the qualified governmental plan status it could be detrimental to the plan and the plan participants.

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
Impact On	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	999.99 %
Normal Cost of System	N/A	$999,999,999.00	999.99 %
Past Service Liabilities	$999,999,999.00	$999,999,999.00	999.99 %
Fiscal Year Past Service Amortization Period Ends	N/A	9999	N/A

Explanation of above Actuarial estimates:

    According to the Consolidated Public Retirement Board legal counsel, “EMSRS is expressly intended to be a qualified governmental plan under Code Section 401(a) and other applicable provisions of the Code. W. Va. Code § 16-5V-5(c). Therefore, in addition to satisfying the West Virginia statutory requirements for participation in EMSRS, CPRB needs to ensure that any participating employers will not jeopardize the Plan’s status as a governmental plan under the Code. The risk of including non-governmental employers in a governmental plan is to risk losing qualified governmental plan status entirely”.

    Note, the value $999,999,999 displayed above does not indicate an actuarial cost associated with the Bill, it only indicates the Bill could lead to EMSRS losing the qualified governmental plan status, which could be detrimental to the plan and the plan participants.

Analysis of Impact on Public Pension Policy:

    According to the Consolidated Public Retirement Board legal counsel, “EMSRS is expressly intended to be a qualified governmental plan under Code Section 401(a) and other applicable provisions of the Code. W. Va. Code § 16-5V-5(c). Therefore, in addition to satisfying the West Virginia statutory requirements for participation in EMSRS, CPRB needs to ensure that any participating employers will not jeopardize the Plan’s status as a governmental plan under the Code. The risk of including non-governmental employers in a governmental plan is to risk losing qualified governmental plan status entirely”.

    If EMSRS were to lose the qualified governmental plan status it could be detrimental to the plan and the plan participants.

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    EMSRS consists of local governments and does not cover any state employees. For fiscal 2026, funding for EMSRS is through member contributions of 8.50% of payroll and employer contributions of 9.50% of payroll.

    EMSRS does not impact the costs or revenues of state government.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2025 Increase/Decrease (use"-")	2026 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):

Memorandum

    This Actuarial/Fiscal Note is being submitted by the Consolidated Public Retirement Board. It has been reviewed by the CPRB Actuary. Both the Board and the CPRB Actuary are available upon request for questions.

    For the appropriate actuarial disclosures, see the July 1, 2024, funding valuation report for EMSRS, expected to be published in March 2025.

    In particular, future actuarial measurements may differ significantly from current measurements due to System experience differing from that anticipated by the economic and demographic assumptions, changes expected as part of the natural operation of the methodology used for these measurements, and changes in system provisions or applicable law or regulations. An analysis of the potential range of such future differences is beyond the scope of the request addressed here.

    Regarding Actuarial Standards of Practice 51, the risk assessment for EMSRS may be affected by this Bill if EMSRS were to lose the qualified governmental plan status.

    Actuarial Standard of Practice No. 56 provides guidance to actuaries when performing actuarial services with respect to designing, developing, selecting, modifying, using, reviewing, or evaluating models. The CPRB uses third-party software in the performance of annual actuarial valuations and projections.

    Kenneth Woodson Jr., the CPRB Board Actuary, is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries. He meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this Actuarial/Fiscal Note.

Person submitting Fiscal Note: Kenneth M. Woodson Jr.
Email Address: kenneth.m.woodson@wv.gov