FISCAL NOTE
FUND(S):
PERS 2510
Sources of Revenue:
General Fund,Other Fund Local governments in PERS
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 benefits to active members if PERS is less than 85% funded, determined in the last actuarial valuation for PERS. The funded percentage of PERS in the latest actuarial valuation is less than the 85% requirement for active benefit improvements.
See the Pension Committee chairman for details.
(Note: 9's entered for costs indicate there are costs that were not calculated.)
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2012
Increase/Decrease
(use"-") |
2013
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):
This Bill as drafted violates WV Statutes under 2005 Pension Reform Legislation.
A full actuarial determination of the costs of the benefits provided under the bill has not been completed for this reason. Costs are estimated to be significant.
Memorandum
The bill violates 2005 Pension Reform restriction on active member benefit increases.
The bill expands free military service credits by removing the “armed conflict” requirement in current statutes. This is a change in public pension policy previously adopted by the West Virginia legislature.
Cost for the increased benefits would result in a significant increase in the employer contribution percentage required from all PERS employers. Under PERS funding, the additional military benefits would be funded by PERS employers only, both state agencies and local governments.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA,MSPA,EA
Email Address: Harry.W.Mandel@wv.gov