FISCAL NOTE
FUND(S):
PERS 2510
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 would allow circuit court appointed mental hygiene commissioners to elect voluntary participation in PERS. Such commissioners are independent contractors or other private employer entity as they may form, and are not public employees of a public employer. As a result, they are governed by the ERISA as private pension provisions of federal law.
PERS is a governmental plan and may only cover employees of governmental employers.
If passed and implemented, PERS would cover private employers and be subject to the requirements of ERISA and the private plan funding requirements under the Internal Revenue Code.
Actual cost of becoming a private plan have not been calculated by the actuary.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2009
Increase/Decrease
(use"-") |
2010
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
999,999,999 |
999,999,999 |
999,999,999 |
| 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):
If PERS were opened to private employer employees by admitting court appointed mental hygiene commissioners to coverage, then PERS would become subject to ERISA and private plan funding rules under the Tax Reform Act of 2006. PERS would then be subject to accelerated funding rules and federal premiums payable to the Pension Benefit Guaranty Corporation for private plan coverage.
Memorandum
This bill should not be passed due to the technical coverage requirements for public employer plans. The bill would convert PERS from a public employer retirement system to a private retirement system.
PERS is a governmental plan for governmental employees and as such is not subject to private employer pension laws. The conversion to a private system would be contrary to the best interests of the State of West Virginia and all public employee members of PERS.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov