|Date Requested:February 22, 2005
Time Requested:11:06 AM
| FUND(S) |
PERS fund 2510
Sources of Revenue
Legislation creates:Neither Program nor Fund
Effect this measure will have on costs and revenues of state government.
| Actuarial Note Regarding Pension Legislation
The Bill allows for the withdrawal from the Public Employees Retirement System (PERS) participation of the Jobs for West Virginia’s Graduates agency (the “Agency”). New employees would not be eligible for PERS membership. Current PERS members would be granted a one time option to remain in PERS or to terminate membership in PERS in favor of a new retirement program to be established by the Agency.
Assets attributable to the Agency’s participation in PERS was calculated on a spin-off basis to equal $67,539. After withdrawal, members electing to terminate PERS membership in favor of the new Agency retirement program would only be entitled to their PERS termination benefits. If all members elected to withdraw, the termination liabilities in PERS would total $42,166. On this basis, the withdrawal termination benefits for the Agency would be fully funded and no additional PERS liabilities would remain.
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||0||0||0|
|Repairs and Alterations||0||0||0|
|2. Estimated Total Revenues||0||0||0|
3. Explanation of above estimates (including long-range effect):
The Bill allows for the withdrawal of the Agency from participation in PERS. Any PERS member electing to remain in PERS would result in no change in PERS liabilities. Withdrawing members would be entitled to only their termination benefits from PERS. If all members elected to terminate, the active funded level in PERS is sufficient to fully fund the Agency termination benefits and no adverse cost impact on remaining PERs employers would result.
|The Bill requires a projection of benefits to PERS members comparing PERS benefits with the benefits available under the new retirement program being established by the Agency. The individual projection for the member shall be the basis of a one time, irrevocable election to either remain in PERS or to transfer to the new program. There is no indication of who shall be responsible for providing the projections of benefits to the members. There is no information regarding the new retirement program, which may be planned but has not yet adopted, making it impossible to project benefits under the new program. Additionally, the new program as conceptualized by the Agency will be a defined contribution program whose benefits will be tied to both voluntary participation and participation level. It will be almost impossible to provide a “meaningful and accurate” projection of comparative benefits.|