FISCAL NOTE
FUND(S):
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.
This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h ( c ) prohibits increases in active member benefits unless PERS is at least 85% funded on the latest actuarial valuation date. As of July 1, 2008, PERS funded percentage was 84.2% therefore failing the funded level test. See the Pension Committee chairman for details. Amendment of 2005 Pension Reform to allow the change could adversely impact the State’s credit rating.
The bill expands the armed conflicts currently restricting active military service credits to include Granada, Lebanon and Panama Canal. Dates provided for such conflicts exceed the scope normally considered. The addition of the armed conflicts will increase the UAAL and Normal Cost for PERS due to military service.
The actuary has not completed a cost analysis of the amount of the increase since the change violate 2005 Pension Reform.
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 |
0 |
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):
The actuary has not calculate the increase in the UAAL nor the Normal Cost for the additional Armed Conflict service being provided under the bill.
Memorandum
This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation. Section 5-10-22h ( c ) prohibits increases in active member benefits unless PERS is at least 85% funded on the latest actuarial valuation date. As of July 1, 2008, PERS funded percentage was 84.2% therefore failing the funded level test. Failure to restrict benefits as provided under 2005 Pension Reform could have an adverse impact on the financial credit rating of the State of West Virginia.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov