Supplement: WV SB270 | 2022 | Regular Session
For additional supplements on West Virginia SB270 please see the Bill Drafting List
Bill Title: Relating to employment benefits for public safety personnel
Status: 2022-01-27 - To Finance [SB270 Detail]
Download: West_Virginia-2022-SB270-.html
SB 270 would provide enhanced death and disability benefits to law enforcement officers, correctional officers, or firefighters that are PERS members.
The enhanced disability benefit would be payable to law enforcement officers, correctional officers, or firefighters that are PERS members that become totally disabled as a result of performing their duties from employment, that is, their disability is a total duty related disability. The enhanced disability benefit would equal to 90% of the average full monthly compensation for the 12-month contributory period preceding the member's disability award, or the shorter period if the member has not worked 12 months, and payable for life.
The enhanced pre-retirement death benefit would be payable to a surviving spouse of a PERS member who is a law enforcement officer, correctional officer, or firefighter that dies while performing his or her duties, that is, the surviving spouse would receive a duty related pre-retirement enhanced death benefit. The enhanced pre-retirement death benefit would be an annuity for the lifetime of the surviving spouse, payable immediately upon the death of the PERS member, in an amount equal to the greater of:
1. Two-thirds of the annual compensation received in the preceding twelve-month period by the deceased member, or
2. If the member dies after his or her normal retirement age, the monthly amount which the spouse would have received had the member retired the day before his or her death, elected a J&S 100% with the spouse as the joint annuitant and then died.
In addition, the surviving spouse of a PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter, would receive $100 monthly for each dependent child. Moreover, any dependent child is entitled to receive a scholarship to be applied to the career development education of that person. This sum, up to but not exceeding $7,500 per year, shall be paid from the fund to any higher education institution in the state of West Virginia, career-technical education provider in the state of West Virginia, state or other entity in the state of West Virginia approved by the board, to offset the expenses of tuition, room and board, books, fees or other costs incurred in a course of study at any of these institutions so long as the recipient makes application to the board on an approved form and under rules provided by the board and maintains scholastic eligibility as defined by the institution or the board.
Finally, SB 270 would provide any PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter and who dies as a result of any service-related illness or injury after the effective date of the bill is entitled to a lump sum burial benefit of $5,000.
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
The data, plan provisions and assumptions are from the 2020 PERS actuarial funding valuation, except for PERS law enforcement officers, correctional officers, or firefighters members in the analysis we assume the rates of duty related disability and duty related in-service deaths are the same as the corresponding assumptions from Plan B. That is, for law enforcement officers, correctional officers, or firefighters members in PERS, we assume 85% of the disabilities are from duty-related causes. Therefore, as the actuarial valuation projects disabilities into the future for this group , 85% of the projected disabilities would receive the enhance disability benefit and the other 15% would receive the current disability benefit in PERS. For the law enforcement officers, correctional officers, or firefighters in PERS, it is assumed that 70% of the in-service deaths are duty related. Therefore, as the actuarial valuation projects in-service deaths into the future for this group, 70% of the in-service deaths would result in the spouse receiving an enhance death benefit and the other 30% would receive the current in-service death benefit in PERS. Also, the discount rate used in the analysis is 7.25% per year, the inflation rate assumption is 2.75% per year and updated merit salary increase assumptions were used as approved by the CPRB Board on September 1, 2021.
For non-uniformed service active members in PERS, all projected disabilities and in-service deaths would receive the current PERS plan benefits for disability and in-service death.
The analysis included 1,924 uniformed service members that are currently active in PERS. Of the 1,924 members, 1,590 are correctional officers and 334 are police and firefighters.
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
The data, plan provisions and assumptions are from the 2020 PERS actuarial funding valuation, except for PERS law enforcement officers, correctional officers, or firefighters members in the analysis we assume the rates of duty related disability and duty related in-service deaths are the same as the corresponding assumptions from Plan B. That is, for law enforcement officers, correctional officers, or firefighters members in PERS, we assume 85% of the disabilities are from duty-related causes. Therefore, as the actuarial valuation projects disabilities into the future for this group , 85% of the projected disabilities would receive the enhance disability benefit and the other 15% would receive the current disability benefit in PERS. For the law enforcement officers, correctional officers, or firefighters in PERS, it is assumed that 70% of the in-service deaths are duty related. Therefore, as the actuarial valuation projects in-service deaths into the future for this group, 70% of the in-service deaths would result in the spouse receiving an enhance death benefit and the other 30% would receive the current in-service death benefit in PERS. Also, the discount rate used in the analysis is 7.25% per year, the inflation rate assumption is 2.75% per year and updated merit salary increase assumptions were used as approved by the CPRB Board on September 1, 2021.
For non-uniformed service active members in PERS, all projected disabilities and in-service deaths would receive the current PERS plan benefits for disability and in-service death.
The analysis included 1,924 uniformed service members that are currently active in PERS. Of the 1,924 members, 1,590 are correctional officers and 334 are police and firefighters.
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
SB 270 would provide enhanced death and disability benefits to law enforcement officers, correctional officers, or firefighters that are PERS members.
The enhanced disability benefit would be payable to law enforcement officers, correctional officers, or firefighters that are PERS members that become totally disabled as a result of performing their duties from employment, that is, their disability is a total duty related disability. The enhanced disability benefit would equal to 90% of the average full monthly compensation for the 12-month contributory period preceding the member's disability award, or the shorter period if the member has not worked 12 months, and payable for life.
The enhanced pre-retirement death benefit would be payable to a surviving spouse of a PERS member who is a law enforcement officer, correctional officer, or firefighter that dies while performing his or her duties, that is, the surviving spouse would receive a duty related pre-retirement enhanced death benefit. The enhanced pre-retirement death benefit would be an annuity for the lifetime of the surviving spouse, payable immediately upon the death of the PERS member, in an amount equal to the greater of:
1. Two-thirds of the annual compensation received in the preceding twelve-month period by the deceased member, or
2. If the member dies after his or her normal retirement age, the monthly amount which the spouse would have received had the member retired the day before his or her death, elected a J&S 100% with the spouse as the joint annuitant and then died.
In addition, the surviving spouse of a PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter, would receive $100 monthly for each dependent child. Moreover, any dependent child is entitled to receive a scholarship to be applied to the career development education of that person. This sum, up to but not exceeding $7,500 per year, shall be paid from the fund to any higher education institution in the state of West Virginia, career-technical education provider in the state of West Virginia, state or other entity in the state of West Virginia approved by the board, to offset the expenses of tuition, room and board, books, fees or other costs incurred in a course of study at any of these institutions so long as the recipient makes application to the board on an approved form and under rules provided by the board and maintains scholastic eligibility as defined by the institution or the board.
Finally, SB 270 would provide any PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter and who dies as a result of any service-related illness or injury after the effective date of the bill is entitled to a lump sum burial benefit of $5,000.
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
The data, plan provisions and assumptions are from the 2020 PERS actuarial funding valuation, except for PERS law enforcement officers, correctional officers, or firefighters members in the analysis we assume the rates of duty related disability and duty related in-service deaths are the same as the corresponding assumptions from Plan B. That is, for law enforcement officers, correctional officers, or firefighters members in PERS, we assume 85% of the disabilities are from duty-related causes. Therefore, as the actuarial valuation projects disabilities into the future for this group , 85% of the projected disabilities would receive the enhance disability benefit and the other 15% would receive the current disability benefit in PERS. For the law enforcement officers, correctional officers, or firefighters in PERS, it is assumed that 70% of the in-service deaths are duty related. Therefore, as the actuarial valuation projects in-service deaths into the future for this group, 70% of the in-service deaths would result in the spouse receiving an enhance death benefit and the other 30% would receive the current in-service death benefit in PERS. Also, the discount rate used in the analysis is 7.25% per year, the inflation rate assumption is 2.75% per year and updated merit salary increase assumptions were used as approved by the CPRB Board on September 1, 2021.
For non-uniformed service active members in PERS, all projected disabilities and in-service deaths would receive the current PERS plan benefits for disability and in-service death.
The analysis included 1,924 uniformed service members that are currently active in PERS. Of the 1,924 members, 1,590 are correctional officers and 334 are police and firefighters.
In addition to the increase in the PERS annual employer cost of $1,700,000 or 0.11% of payroll for FY 2023, there is a one-time $25,000 expense to setup the administrative software for the enhanced benefits for law enforcement officers, correctional officers, or firefighters.
This Actuarial/Fiscal Note is being submitted by the Consolidated Public Retirement Board. It has been reviewed by the CPRB Actuary. Both the Board and the CPRB Actuary are available upon request for questions.
For the appropriate actuarial disclosures, see the July 1, 2020 funding valuation report for PERS.
In particular, future actuarial measurements may differ significantly from current measurements due to System experience differing from that anticipated by the economic and demographic assumptions, changes expected as part of the natural operation of the methodology used for these measurements, and changes in system provisions or applicable law or regulations.
Kenneth Woodson Jr., the CPRB Board Actuary, is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries. He meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this Actuarial/Fiscal Note.
Person submitting Fiscal Note: Kenneth M. Woodson Jr.
Email Address: kenneth.m.woodson@wv.gov
Bill Title: Relating to employment benefits for public safety personnel
Status: 2022-01-27 - To Finance [SB270 Detail]
Download: West_Virginia-2022-SB270-.html
Actuarial Fiscal Note
| Date Requested:January 26, 2022 Time Requested:10:48 AM |
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Retirement Systems Impacted by Legislation:
PERS 2501FUND(S):
Special FundSources of Revenue:
Creates New ExpenseLegislation creates:
PERSActuarial Note Summary
Impact this measure will have on the liabilities and contributions associated with the retirement system(s).
SB 270 would provide enhanced death and disability benefits to law enforcement officers, correctional officers, or firefighters that are PERS members.
The enhanced disability benefit would be payable to law enforcement officers, correctional officers, or firefighters that are PERS members that become totally disabled as a result of performing their duties from employment, that is, their disability is a total duty related disability. The enhanced disability benefit would equal to 90% of the average full monthly compensation for the 12-month contributory period preceding the member's disability award, or the shorter period if the member has not worked 12 months, and payable for life.
The enhanced pre-retirement death benefit would be payable to a surviving spouse of a PERS member who is a law enforcement officer, correctional officer, or firefighter that dies while performing his or her duties, that is, the surviving spouse would receive a duty related pre-retirement enhanced death benefit. The enhanced pre-retirement death benefit would be an annuity for the lifetime of the surviving spouse, payable immediately upon the death of the PERS member, in an amount equal to the greater of:
1. Two-thirds of the annual compensation received in the preceding twelve-month period by the deceased member, or
2. If the member dies after his or her normal retirement age, the monthly amount which the spouse would have received had the member retired the day before his or her death, elected a J&S 100% with the spouse as the joint annuitant and then died.
In addition, the surviving spouse of a PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter, would receive $100 monthly for each dependent child. Moreover, any dependent child is entitled to receive a scholarship to be applied to the career development education of that person. This sum, up to but not exceeding $7,500 per year, shall be paid from the fund to any higher education institution in the state of West Virginia, career-technical education provider in the state of West Virginia, state or other entity in the state of West Virginia approved by the board, to offset the expenses of tuition, room and board, books, fees or other costs incurred in a course of study at any of these institutions so long as the recipient makes application to the board on an approved form and under rules provided by the board and maintains scholastic eligibility as defined by the institution or the board.
Finally, SB 270 would provide any PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter and who dies as a result of any service-related illness or injury after the effective date of the bill is entitled to a lump sum burial benefit of $5,000.
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
The data, plan provisions and assumptions are from the 2020 PERS actuarial funding valuation, except for PERS law enforcement officers, correctional officers, or firefighters members in the analysis we assume the rates of duty related disability and duty related in-service deaths are the same as the corresponding assumptions from Plan B. That is, for law enforcement officers, correctional officers, or firefighters members in PERS, we assume 85% of the disabilities are from duty-related causes. Therefore, as the actuarial valuation projects disabilities into the future for this group , 85% of the projected disabilities would receive the enhance disability benefit and the other 15% would receive the current disability benefit in PERS. For the law enforcement officers, correctional officers, or firefighters in PERS, it is assumed that 70% of the in-service deaths are duty related. Therefore, as the actuarial valuation projects in-service deaths into the future for this group, 70% of the in-service deaths would result in the spouse receiving an enhance death benefit and the other 30% would receive the current in-service death benefit in PERS. Also, the discount rate used in the analysis is 7.25% per year, the inflation rate assumption is 2.75% per year and updated merit salary increase assumptions were used as approved by the CPRB Board on September 1, 2021.
For non-uniformed service active members in PERS, all projected disabilities and in-service deaths would receive the current PERS plan benefits for disability and in-service death.
The analysis included 1,924 uniformed service members that are currently active in PERS. Of the 1,924 members, 1,590 are correctional officers and 334 are police and firefighters.
Fiscal Detail of Actuarial Impact
Impact on current benefit costs, prior service benefit costs and ongoing contribution requirements following full implementation.
| Impact On | Following Full Implementation | ||
|---|---|---|---|
| Increase in Unfunded Actuarial Accrued Liability | Initial Impact on Annual Contribution Requirement of System(s) | Contribution Increase as a Percentage of Annual Payroll | |
| Total Annual Costs | $2,700,000.00 | $1,700,000.00 | 0.11 % |
| Normal Cost of System | N/A | $1,300,000.00 | 0.08 % |
| Past Service Liabilities | $2,700,000.00 | $400,000.00 | 0.03 % |
| Fiscal Year Past Service Amortization Period Ends | N/A | 2032 | N/A |
Explanation of above estimates:
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
The data, plan provisions and assumptions are from the 2020 PERS actuarial funding valuation, except for PERS law enforcement officers, correctional officers, or firefighters members in the analysis we assume the rates of duty related disability and duty related in-service deaths are the same as the corresponding assumptions from Plan B. That is, for law enforcement officers, correctional officers, or firefighters members in PERS, we assume 85% of the disabilities are from duty-related causes. Therefore, as the actuarial valuation projects disabilities into the future for this group , 85% of the projected disabilities would receive the enhance disability benefit and the other 15% would receive the current disability benefit in PERS. For the law enforcement officers, correctional officers, or firefighters in PERS, it is assumed that 70% of the in-service deaths are duty related. Therefore, as the actuarial valuation projects in-service deaths into the future for this group, 70% of the in-service deaths would result in the spouse receiving an enhance death benefit and the other 30% would receive the current in-service death benefit in PERS. Also, the discount rate used in the analysis is 7.25% per year, the inflation rate assumption is 2.75% per year and updated merit salary increase assumptions were used as approved by the CPRB Board on September 1, 2021.
For non-uniformed service active members in PERS, all projected disabilities and in-service deaths would receive the current PERS plan benefits for disability and in-service death.
The analysis included 1,924 uniformed service members that are currently active in PERS. Of the 1,924 members, 1,590 are correctional officers and 334 are police and firefighters.
Analysis of Impact on Public Pension Policy:
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB 270 would provide enhanced death and disability benefits to law enforcement officers, correctional officers, or firefighters that are PERS members.
The enhanced disability benefit would be payable to law enforcement officers, correctional officers, or firefighters that are PERS members that become totally disabled as a result of performing their duties from employment, that is, their disability is a total duty related disability. The enhanced disability benefit would equal to 90% of the average full monthly compensation for the 12-month contributory period preceding the member's disability award, or the shorter period if the member has not worked 12 months, and payable for life.
The enhanced pre-retirement death benefit would be payable to a surviving spouse of a PERS member who is a law enforcement officer, correctional officer, or firefighter that dies while performing his or her duties, that is, the surviving spouse would receive a duty related pre-retirement enhanced death benefit. The enhanced pre-retirement death benefit would be an annuity for the lifetime of the surviving spouse, payable immediately upon the death of the PERS member, in an amount equal to the greater of:
1. Two-thirds of the annual compensation received in the preceding twelve-month period by the deceased member, or
2. If the member dies after his or her normal retirement age, the monthly amount which the spouse would have received had the member retired the day before his or her death, elected a J&S 100% with the spouse as the joint annuitant and then died.
In addition, the surviving spouse of a PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter, would receive $100 monthly for each dependent child. Moreover, any dependent child is entitled to receive a scholarship to be applied to the career development education of that person. This sum, up to but not exceeding $7,500 per year, shall be paid from the fund to any higher education institution in the state of West Virginia, career-technical education provider in the state of West Virginia, state or other entity in the state of West Virginia approved by the board, to offset the expenses of tuition, room and board, books, fees or other costs incurred in a course of study at any of these institutions so long as the recipient makes application to the board on an approved form and under rules provided by the board and maintains scholastic eligibility as defined by the institution or the board.
Finally, SB 270 would provide any PERS member who is employed as a law-enforcement officer, correctional officer, or firefighter and who dies as a result of any service-related illness or injury after the effective date of the bill is entitled to a lump sum burial benefit of $5,000.
For PERS, the enhanced death and disability benefits for law enforcement officers, correctional officers, or firefighters that are PERS members, would increase the actuarial accrued liability for PERS by approximately $2.7 million, calculated as of July 1, 2020. Amortizing this liability increase over 10 years on a level dollar basis would increase the annual required employer contribution for PERS by approximately $400,000. The enhanced death and disability benefits would also increase the PERS employer normal cost by about $1.3 million per year. Therefore, the total PERS annual employer contribution would increase by approximately $1.7 million due to the enhanced benefits.
The data, plan provisions and assumptions are from the 2020 PERS actuarial funding valuation, except for PERS law enforcement officers, correctional officers, or firefighters members in the analysis we assume the rates of duty related disability and duty related in-service deaths are the same as the corresponding assumptions from Plan B. That is, for law enforcement officers, correctional officers, or firefighters members in PERS, we assume 85% of the disabilities are from duty-related causes. Therefore, as the actuarial valuation projects disabilities into the future for this group , 85% of the projected disabilities would receive the enhance disability benefit and the other 15% would receive the current disability benefit in PERS. For the law enforcement officers, correctional officers, or firefighters in PERS, it is assumed that 70% of the in-service deaths are duty related. Therefore, as the actuarial valuation projects in-service deaths into the future for this group, 70% of the in-service deaths would result in the spouse receiving an enhance death benefit and the other 30% would receive the current in-service death benefit in PERS. Also, the discount rate used in the analysis is 7.25% per year, the inflation rate assumption is 2.75% per year and updated merit salary increase assumptions were used as approved by the CPRB Board on September 1, 2021.
For non-uniformed service active members in PERS, all projected disabilities and in-service deaths would receive the current PERS plan benefits for disability and in-service death.
The analysis included 1,924 uniformed service members that are currently active in PERS. Of the 1,924 members, 1,590 are correctional officers and 334 are police and firefighters.
Fiscal Note Detail
| Effect of Proposal | Fiscal Year | ||
|---|---|---|---|
| 2022 Increase/Decrease (use"-") |
2023 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) | |
| 1. Estmated Total Cost | 0 | 1,725,000 | 1,700,000 |
| Personal Services | 0 | 0 | 0 |
| Current Expenses | 0 | 25,000 | 0 |
| Repairs and Alterations | 0 | 0 | 0 |
| Assets | 0 | 0 | 0 |
| Other | 0 | 1,700,000 | 1,700,000 |
| 2. Estimated Total Revenues | 0 | 0 | 0 |
Explanation of above estimates (including long-range effect):
In addition to the increase in the PERS annual employer cost of $1,700,000 or 0.11% of payroll for FY 2023, there is a one-time $25,000 expense to setup the administrative software for the enhanced benefits for law enforcement officers, correctional officers, or firefighters.
Memorandum
This Actuarial/Fiscal Note is being submitted by the Consolidated Public Retirement Board. It has been reviewed by the CPRB Actuary. Both the Board and the CPRB Actuary are available upon request for questions.
For the appropriate actuarial disclosures, see the July 1, 2020 funding valuation report for PERS.
In particular, future actuarial measurements may differ significantly from current measurements due to System experience differing from that anticipated by the economic and demographic assumptions, changes expected as part of the natural operation of the methodology used for these measurements, and changes in system provisions or applicable law or regulations.
Kenneth Woodson Jr., the CPRB Board Actuary, is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries. He meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this Actuarial/Fiscal Note.
Person submitting Fiscal Note: Kenneth M. Woodson Jr.
Email Address: kenneth.m.woodson@wv.gov