Actuarial Fiscal Note

Date Requested:January 14, 2019
Time Requested:02:30 PM
Agency: Consolidated Public Retirement Board
CBD Number: Version: Bill Number: Resolution Number:
2167 Introduced HB2366
CBD Subject: Governor -- Bills Requested By

Retirement Systems Impacted by Legislation:

JRS 2140


General Fund

Sources of Revenue:

Increases Existing Expenses

Legislation creates:


Actuarial Note Summary

Impact this measure will have on the liabilities and contributions associated with the retirement system(s).

    HB 2366 introduces a new article in the West Virginia Code, §51-11. The new article would create the West Virginia Intermediate Court of Appeals, effective July 1, 2020. According to HB 2366 the new Intermediate Court of Appeals would have a Northern District and a Southern District, with each district consisting of three judges. The six new judges created by the Intermediate Court of Appeals would have the option to elect within 30 days of taking office to not participate in the Judges’ Retirement System (JRS) and to participate in the Public Employees’ Retirement System (PERS) instead. As the benefit is more valuable in JRS compared to PERS, we assume all 6 new judges will participate in JRS.
    As of the effective date, July 1, 2020, the actuarial accrued liability for the six new judges would be zero, as they do not have past service as of this date. Currently and for the foreseeable future, JRS is overfunded to the point that the employer normal cost is set equal to the member portion of the normal cost which is currently 7.0% of member pay. As written, HB 2366 would provide an annual salary of $130,000 for each judge of the Intermediate Court of Appeals and therefore as of the effective date, July 1, 2020 the employer normal cost for each new judge would be 7.0% of $130,000 or $9,100. The total employer normal cost for the 6 new judges would be six times $9,100 or $54,600.
    Based on an annual growth rate of 2.95% (July 2018 annual CPI-U increase) the total estimated payroll of JRS for FY2021 is $10,849,000. Therefore, the increase in the total employer normal cost as a percentage of pay is 0.50%.

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 $0.00 $54,600.00 0.50 %
Normal Cost of System N/A $54,600.00 0.50 %
Past Service Liabilities $0.00 $0.00 0.00 %
Fiscal Year Past Service
Amortization Period Ends
N/A - N/A

Explanation of above estimates:

    The creation of six new Intermediate Court of Appeals judges would not increase the unfunded liability of the JRS plan as of the effective date, July 1, 2020 because each new judge would start out with zero actuarial accrued liability. During the first year of the new Intermediate Court of Appeals, July 1, 2020 through June 30, 2021, HB 2366 would increase the total employer normal cost for the JRS plan by $54,600 which due to the overfunded position of the JRS plan represents 7% of the total pay for the six new judges.
    Going forward for the foreseeable future, we expect the increase in total employer normal cost from HB 2366 to be 7% of the total pay for the six new judges.
    Currently, the member contribution rate of JRS is 7% of pay and due to the overfunded status of JRS, the current employer contribution rate is set equal to the member contribution rate, 7% of pay.

Analysis of Impact on Public Pension Policy:

    As written, the costs of the bill would be sustainable by the current employee and employer contribution rates.

Fiscal Note Summary

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

    JRS is completely funded by the State of West Virginia, therefore the summary of the State costs associated with HB 2366 would be the same as Actuarial Note Summary section above.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 54,600
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 54,600
2. Estimated Total Revenues 0 0 0

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

    The effective date is July 1, 2020, therefore, the first year to incur cost is FY2021 and equals 7% of the salary of the six new Intermediate Court judges.


    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.

    Person submitting Fiscal Note: Kenneth M. Woodson Jr., Board Actuary, CPRB
    Email Address: