FISCAL NOTE
Date Requested: February 02, 2016
Time Requested: 02:36 PM |
| Agency: |
Consolidated Public Retirement Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1301 |
Introduced |
HB4187 |
|
|---|
| CBD Subject: |
Retirement, State Personnel |
|---|
|
FUND(S):
Public Employee Health Insurance Fund
Sources of Revenue:
Other Fund Public Employee Health
Legislation creates:
A New Program,A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This Bill does not increase benefits under the retirement systems administered by the Consolidated Public Retirement Board. The Bill does require the CPRB to calculate and certify the cost savings under PERS and TRS resulting from Tier 2 benefit savings under SB 529 adopted effective in 2015. Cost savings certified by the CPRB are to be appropriated in the general budget and applied to pay for employee health insurance costs under PEIA. Savings are from appropriations in the state budget and are not paid from the retirement plans' assets.
Initial cost savings are estimated as follows:
FY 2018 $ 2,300,000 2023 $22,500,000
2019 $ 8,800,000 2024 $25,200,000
2020 $12,700,000 2025 $27,800,000
2021 $16,200,000 2026 $30,100,000
2022 $19,500,000 2027 $32,200,000
Required annual appropriation continue to increase annaully until Tier 2 members have replaced all tier 1 members in PERS and TRS. Ultimate annual costs for all Tier 2 members is $53,000,000.
Note that all amounts are in FY2017 dollars and are subject to inflationary growth.
CPRB cost for required administration is estimated at $50,000 to $75,000 annuallyand must be appropriated from the general budget appropriation. They may not be paid from the PERS or TRS trust funds for retirement benefits.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
54,000,000 |
| 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):
There are no increases in either the Normal Cost nor the Past Service amounts under PERS or TRS.
Savings are projected to increase annually as Tier 2 members replace prior Tier 1 members. Ultilmate costs in 2017 dollars estimated at $53,000,000 annually. CPRB administrative fees to determine the annual savingss is estimated at $50,000 to $75,000.
For annual estimates over the first 10 years see section above.
Memorandum
The Bill applies anticipated cost savings due to SB 529 (2015) and requires such savings to provide PEIA health insurance costs. Such costs are not pension related and are new costs for PEIA benefits.
Person submitting Fiscal Note: Harry W. Mandel, Board Actuary, MAAA, MSPA, EA
Email Address: harry.w.mandel@wv.gov