FISCAL NOTE
FUND(S):
PERS 2510 / TRS 2601
Sources of Revenue:
General Fund,Other Fund State and Local Govts
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill provides a 13th check one time $600 payment effective July 1, 2011 to current retirees with 20 or more years of service and who are currently receiving no more than $7,200 annual annuity. Beneficiaries of deceased members who would have met the requirement get the equivalent adjusted one time payment based on the survivor benefit being paid.
PERS: 770 retirees and beneficiaries will receive $454,000.
TRS: 1,388 retirees and beneficiaries will receive $818,000.
Total benefits - 2,158 retirees and beneficiaries will receive $1,272,000.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2011
Increase/Decrease
(use"-") |
2012
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
262,000 |
262,000 |
| 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):
Since the benefit is a one time 13th check payment, there is no impact on the Normal Cost. The Actuarial Accrued Liability increase is equal to the total of the expected 13th check payments for PERS and TRS. Since the amount is being paid in a single payment, Funding of the entire payment is actuarially recommended at $1,272,000. Under the Actuarially Required Contribution, the payment may be funded over 6 years in the amount of $262,000 for FY2012 through FY2017. The payment breaks down to $94,000 for PERS and $168,000 for TRS.
Memorandum
The benefit improvement for retirees meets the restrictions under 2005 Pension Reform for both PERS and TRS.
The benefit payment date in the bill of July 25, 2011 conflicts with the processing of regular pension payments. Modification to July 27, 2011 is recommended to eliminate the conflict.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov