Date Requested: February 19, 2015
Time Requested: 03:27 PM
Agency: Municipal Pensions Oversight Board
CBD Number: Version: Bill Number: Resolution Number:
2967 Introduced SB515
CBD Subject: Municipalities


FUND(S):

WV Municipal Pensions Security Fund

Sources of Revenue:

Other Fund Fund 9076 Dept 0946

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    SB515 grants explicit authority for the Municipal Pensions Oversight Board to invest the funds held in the Municipal Pensions Security Fund with either the Board of Treasury Investments or the Investment Management Board. The Oversight Board would have the ability to invest the fire and casualty premium tax funds it receives from the WV Insurance Commission in fixed income funds within either investment organization. The Municipal Pensions Oversight Board spends from collections and interest earned on the collections. Allowing the funds to be invested at both investment boards would allow the Oversight Board to diversify the funds it holds for as much as 37 months before distributions to municipal pension funds. All interest earned is charged against the opperations of the Board with any earnings left over being allocated directly to municipal pension funds. Oversight Board staff project interest earnings of 2.75% on its fund balances would cover the annual costs of operating the Oversight Board.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
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 0 625,000 625,000


Explanation of above estimates (including long-range effect):


    There are no administrative costs to the Oversight Board to invest its funds with both the Board of Treasury Investments and the Investment Management Board. The Oversight Board, or one of its committees would direct how much of the collections are invested at each board. All earnings accrue to the fund and would be first used to offset administrative costs to operate the Board with all excess being allocated to policemen's and firemen's pension and relief funds each year. If the investment firms averaged a 2.5% rate of return, the operational costs of the Board would be covered by the interest earned. The $625,000 figure above is based on interest being earned at that rate of 2.5% on the Boards average holdings.



Memorandum


    



    Person submitting Fiscal Note: Blair M Taylor
    Email Address: Blair.M.Taylor@wv.gov