House Bill 2751, if enacted, will not have a significant actuarial effect because the changes it proposes do not materially affect the funding or obligations of any public retirement system.  A summary of the changes proposed by the bill is as follows:

• Allows participating departments to include their support staff as members of the System on the same terms as other volunteers who are members of the System. The change would be permissive for participating departments that have not previously enrolled their support staff as members. For those participating departments, there would be no actuarial effect of these sections of H.B. 2751 until elected by the participating departments. While such an election would increase the required contributions for the electing department, such an election is expected to have no material effect on the actuarial condition of the System.  For participating departments that have already been enrolling their support staff as members, the bill would validate and clarify that practice. For those participating departments, there would be no increase in required contributions and no actuarial effect.

• Allow the System board of trustees by board rule to impose an interest charge on contributions that are late due to the correction of an error. This change would have a positive but immaterial effect on the actuarial condition of the System.

• Gives the System board of trustees the responsibility and flexibility to define non-service death benefits by board rule. Also, certain death benefits would be removed by the bill, but could easily be re-implemented by this board rule. There would be no actuarial effect from these changes until board rules are adopted. 

• Gives the System board of trustees the authority not to pay a death benefit to a person convicted of causing that death. Instead the benefit would be payable as if the convicted person had predeceased the decedent. There might be some cases in which this change would result in no change in benefits but only a change in who receives it. In other cases, there would be a positive but immaterial effect on the actuarial condition of the System.

• Authorizes the System board of trustees to designate a medical board to investigate applications for on-duty disability and on-duty death benefits. This administrative change would have no effect on the actuarial condition of the System.

The bill, if enacted, will not have a significant actuarial effect because the changes it proposes do not materially affect the funding or obligations of any public retirement system.

SOURCES: 

Actuarial Analysis by Mark R. Fenlaw and Robert M. May, Actuary, Rudd and Wisdom Inc., March 23, 2009

Actuarial Review by Mr. Martin McCaulay, Deputy Executive Director/Actuary, Pension Review Board, March 23, 2009