Date Requested: May 10, 2017
Time Requested: 03:09 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
4003 Introduced SB1001
CBD Subject: Governor -- Bills Requested By


FUND(S):

TRS 2600

Sources of Revenue:

General Fund,Other Fund State & Local Governments

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 one-time salary increase of $808 per year for all classroom teachers as of July 1, 2017, in addition to any other salary increases already provided.
    The effect of this bill is to increase the calculated state contribution for FY2018 as a result of increases in the amortization payments associated with the increase in Unfunded Actuarial Accrued Liability of TRS, as well as an increase in Normal Cost. The estimated increase in the FY2018 Employer Contribution is $3,459,000, or approximately 0.22% of payroll.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 3,459,000 3,459,000
Personal Services 0 0 0
Current Expenses 0 3,459,000 3,459,000
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):


    The additional pay provided to teachers results in an increase in the UAAL and Normal Cost of the plan. The additional Normal Cost of $640,000 must be paid each year beginning in FY2018, in addition to the annual amortization payment of the UAAL of $2,819,000.
    The costs presented in the Note are based on the July 1, 2016 Actuarial Valuation for Funding for TRS, including asset smoothing adopted by the CPRB on March 8, 2017, and assume that all actuarial assumptions will be met in all future years.
    



Memorandum


    Note that any direct cost to the state to pay the additional $808 per teacher salary is NOT considered in this Note, and should be priced by the Department of Education. Only the impact of the $808 on pension costs is contemplated in this Actuarial/Fiscal Note.
    
    This Actuarial/Fiscal Note is being submitted by the Consolidated Public Retirement Board. It has been reviewed by a qualified actuary, and a letter of certification is available from CPRB upon request.
    



    Person submitting Fiscal Note: Melody Bailey, Actuarial Analyst, WV CPRB
    Email Address: melody.j.bailey@wv.gov