TO: | Honorable Allan Ritter, Chair, House Committee on Pensions & Investments |
FROM: | John Keel, Director, Legislative Budget Board |
IN RE: | HB2356 by Deshotel (Relating to age and years of service calculations for state retirement.), As Introduced |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2004 | ($18,217,605) |
2005 | ($39,371,735) |
2006 | ($59,044,616) |
2007 | ($79,099,273) |
2008 | ($94,400,510) |
Fiscal Year | Probable Savings/(Cost) fromGENERAL REVENUE FUND 1 |
Probable Savings/(Cost) fromGR DEDICATED ACCOUNTS 994 |
Probable Savings/(Cost) fromFEDERAL FUNDS 555 |
Probable Savings/(Cost) fromSTATE HIGHWAY FUND 6 |
---|---|---|---|---|
2004 | ($18,217,605) | ($1,911,575) | ($6,531,126) | ($4,985,537) |
2005 | ($39,371,735) | ($4,131,279) | ($14,115,014) | ($10,774,702) |
2006 | ($59,044,616) | ($6,966,285) | ($20,859,162) | ($19,941,235) |
2007 | ($79,099,273) | ($12,024,358) | ($26,865,810) | ($39,926,441) |
2008 | ($94,400,510) | ($13,878,426) | ($32,251,864) | ($45,333,542) |
Fiscal Year | Probable Savings/(Cost) fromOTHER SPECIAL STATE FUNDS 998 |
---|---|
2004 | ($203,162) |
2005 | ($439,072) |
2006 | ($648,860) |
2007 | ($835,707) |
2008 | ($1,003,249) |
State law provides that benefit changes may not be implemented if the result is a period to amortize the unfunded liability of the retirement system by more than 31 years. Based on an Employee Retirement System (ERS) actuarial analysis, the state contribution rate required to achieve a 30-year funding period would increase from 7.02 percent of payroll, as determined by the February 28, 2003 actuarial valuation, to 8.298 percent of payroll as a result of passage of this bill.
The current ERS state contribution rate is 6 percent. The biennial General Revenue cost to increase the state contribution rate from 6 percent to 8.298 percent of payroll is estimated to be $119.2 million; the cost to all funds is estimated to be $208.4 million. The portion of the biennial General Revenue cost attributable to the bill, and associated with a contribution rate increase from 7.02 percent to 8.298 percent of payroll, is estimated to be $57.6 million (as reflected in the Fiscal Impact table).
The passage of this legislation will not effect the current funding holiday from state contributions to the Law Enforcement Custodial Officers Supplemental Retirement Fund (LECOSRF) during the 2004-05 biennium. However, according to an ERS actuarial analysis, beginning in fiscal year 2006 a state contribution is required to achieve a 30-year funding period. The state contribution to LECOSRF would be as follows: 0.393 percent of payroll in fiscal year 2006;1.826 percent of payroll in fiscal year 2007; and,1.873 percent of payroll in fiscal year 2008.
Source Agencies: | 304 Comptroller of Public Accounts, 327 Employees Retirement System
|
LBB Staff: | JK, JO, RR, MS, ZS
|