|Date Requested:March 23, 2005
Time Requested:03:21 PM
| FUND(S) |
TDC Account 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
Under the TDC statutes if an employee serves in the state legislature, his employer is responsible for contributing 7.5% of what the employee would have earned had he been working for the employer during that time. The bill changes the beginning date of this provision from 2003 to 1994. According to TDC records, this bill will affect one member only. The amount that the bill requires the employer to pay toward this member’s account balance is $3,700. Under the School Aid Formula the state will reimburse a portion of this amount to the employer; the average portion reimbursed is approximately 80%. The bill does not specify when this amount is to be paid.
The bill also contains clean up language which allows for a terminated member’s nonvested employer account be remitted to a suspension account if the employer is currently participating in the TDC; and that if the employer is no longer participating in the TDC, the terminated member’s nonvested employer account balance shall be returned to the employer. These provisions will have no cost impact.
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||0||3,700||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 requires that employer contributions be paid into a member’s TDC account on salary forgone during the time the member was serving as a state legislator beginning July 1, 1994. The bill does not require that interest be paid on the amounts and does not give a date by which the back contributions must be made. Therefore the bill has been priced as costing the employer $3,700, which is 7.5% of the actual salary forgone by the member while the member was serving in the state legislature. While the county employer makes this contribution, under the School Aid Formula, the state will reimburse the employer for an average of approximately 80% of this amount, which comes to approximately $3,000.
|It is recommended that a date by which these back contributions must be made be specified in the bill.|