|Date Requested:March 18, 2005
Time Requested:04:06 PM
| FUND(S) |
TDC fund 2191
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 Teachers Defined Contribution Plan (TDC) participation by River Valley Child Development Services, Inc. (“RVCDS”). Employees first hired on or after July 1, 2005 would no longer be eligible to enter TDC. Current TDC members would be granted a one time option to remain in TDC or to terminate membership in TDC in favor of a new retirement program to be established by RVCDS.
RVCDS members in TRS are not impacted by the provisions of the Bill, and remain in TRS without an option to move into the new retirement program.
Any TDC members impacted by the legislation would not have a fiscal impact on the State of West Virginia since members are only entitled to their vested account balance. Any additional forfeitures that might result under TDC due to the election to transfer to the new retirement program would revert to the benefit of RVCDS through an eventual credit against any ongoing TDC contributions for members electing to remain in TDC.
|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 RVCDS from participation in TDC. Withdrawing TDC members would be entitled to only their vested account balance from TDC.
RVCDS is required to establish a new retirement program for electing TDC members and all new hires. The cost comparison between TDC and the new program cannot be determined until after the new program is adopted. It is noted that any cost differences are the responsibility of RVCDS and not the State of West Virginia. There is therefore no cost to the State for the provisions of the Bill.
|The Bill requires a projection of benefits to TDC members comparing benefits with the benefits available under the new retirement program being established. The individual projection for the member shall be the basis of a one time, irrevocable election to either remain in TDC or to transfer to the new program. There is no information regarding the new retirement program, making it impossible to project benefits under the new program until it has been adopted by RVCDS. Additionally, since TDC is a defined contribution program, there are no benefits guaranteed under TDC and any projections of benefits are dependent on investment return assumptions applied in the projections.|