|Date Requested:March 07, 2005
Time Requested:01:07 PM
| 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 clarifies several definitions applied in the administration of PERS. Clarifications generally reflect current administration and are not changes to PERS benefits. They are intended to reduce future disputes regarding the meanings of those provisions.
The Bill strengthens re-certifications of disability retirements prior to age 60. It also adds definition for substantial gainful employment for disability purposes.
The Bill clarifies that for beneficiary purposes, Insurable Interest refers to the spouse of the member or dependent children of the member. This is consistent with prior PERS administration and clarifies that the term is defined as common in pensions and not individual insurance policy based.
The modifications do not impact either the Normal Cost nor the Actuarial Accrued Liabilities of PERS. The modifications do not change the contribution requirements for PERS. The Bill is intended to maintain current costs for PERS, and failure to pass could increase PERS costs.
|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):
Although the Bill does not impact the actuarial valuation results for PERS, the changes are necessary to control the actual experience costs of PERS relative to the actuarial assumptions. The changes are intended to make sure that proper PERS benefits are provided and to end or limit possible abuses occurring following disability retirement. The insurable interest change is intended to re-establish PERS prior procedures and to eliminate possible impact of an adverse administrative hearing decision in respect to beneficiary benefits from PERS.
The intent of the Bill is to prevent liability increases in PERS due to adverse interpretations of PERS provisions relative to historical administration of the Plan.
|The Bill is necessary to maintain the administrative integrity of the PERS system. Failure to pass could increase the costs of the system.|