FISCAL NOTE
FUND(S):
PERS 2510; TRS 2601
Sources of Revenue:
Other Fund State & Local Govts
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The benefit increases to retired members of PERS and TRS exceed the limitation contained in 2005 Pension Reform.
For PERS, the Section 5-10-22h retiree increase limitation is $57,357,000. The increased benefits would increase the UAAL by $83,542,000.
For TRS, the Section 18-7A-28e retiree increase limitation is $97,125,000. The increased benefits would increase the UAAL by $173,627,000.
See the Pension Committee chairman for details.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2013 Increase/Decrease (use"-") |
2014 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
52,846,000 |
52,846,000 |
Personal Services |
0 |
0 |
0 |
Current Expenses |
0 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
52,846,000 |
52,846,000 |
2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The bill provides a 5% benefit increase to all PERS and TRS retirees as of July 1, 2013 who have been retired at least 5 years up to a maximum increase of $125 per month. Increased liabilities were valued applying actuarial software by CPRB. Amortization payments were funded over 6 years as provided in 2005 Pension Reform requirements for a qualifying improvement.
The increases provided in this bill exceed the benefit improvement limitations as specified in 2005 Pension Reform for PERS and TRS retirees and qualifying beneficiaries.
Memorandum
The retiree increase for both PERS and TRS retirees exceeds the maximum one year retiree increase under 2005 Pension Reform limitations as set by the legislature.
It is assumed that the eligibillity date will be amended from July 1, 2012 to July 1, 2013.
Person submitting Fiscal Note: Harry W. Mandel, MAAA, MSPA, EA, Boaard Actuary
Email Address: harry.w.mandel@wv.gov