FISCAL NOTE
FUND(S):
TRS - Account 2601
Sources of Revenue:
General Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The Bill amends TRS to allow for the purchase of up to four years of prior CETA service. The documented service may be purchased through the payment of both the member and employer contributions that would have been required for the service, plus compound interest to the repayment date.
The current Bill differs from prior CETA service provisions which expired March 31, 2003. First, it allows the purchase of up to four years instead of two years. Second, there is no transitional employment time period following the CETA service. Third, there is no sunset provision for purchasing the service.
The Bill provides for the purchase of service under TRS for service not now provided. In that both member and employer contributions are required, generally, most purchased service will be paid for by the member and no increase in the TRS Unfunded Actuarial Accrued Liability will result.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2004
Increase/Decrease
(use"-") |
2005
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 estimates (including long-range effect):
Generally, the costs of the additional service under TRS for CETA employment will be paid by the member. Some actuarial gain or loss could occur in each individual case, but should balance out in total.
Memorandum
The Bill does not contain a sunset provision for CETA service purchase. Without a date by which CETA service must be purchased, eligible members are likely to “anti-select” the purchase of CETA service. It is recommended that a cut off date by which the service purchase must be added to the Bill to limit anti-selection.
It is also assumed in this fiscal analysis that the compound interest being charged will be at the current Actuarial Valuation interest rate assumptions for TRS.
Person submitting Fiscal Note: Amy Langenbrunner
Email Address: ALangenbrunner@gwmail.state.wv.us