Fiscal Note
BILL # SB 1087 TITLE: appropriation; unfunded liability; corrections;
CORP
SPONSOR: Livingston STATUS: As Amended by Senate APPROP
PREPARED BY: Molly Murphy
Description
The bill appropriates $502.8 million from the General Fund and $15.0 million from non-General Fund sources in FY 2022
to the Public Safety Personnel Retirement System (PSPRS) to be deposited in multiple state PSPRS employer group
accounts to eliminate the current unfunded accrued liability. The $15.0 million of non-General Fund monies is allocated
from the Game and Fish Fund to the Game and Fish Department as part of eliminating that agency's unfunded liability.
The bill also appropriates $548.6 million from the General Fund in FY 2022 to PSPRS to be deposited in several state
Corrections Officer Retirement Plan (CORP) employer accounts to eliminate the current unfunded accrued liability.
Estimated Impact
The PSPRS/CORP employer contribution rates have 2 components. The first component is the normal cost, which is the
immediate cost associated with the benefit being earned. The second component is the unfunded liability, which
represents prior benefits earned by members that are unfunded due to changes in the plan's actuarial performance or
assumptions. The bill's appropriation would eliminate the current unfunded liability for various state PSPRS/CORP
employer groups, which would reduce the employer contribution rates paid by those state agencies. Given the timing of
PSPRS/CORP actuarial valuations, the employer contribution rates would be reduced beginning in FY 2024.
The bill would increase General Fund spending by $1.05 billion one-time in FY 2022 and increase non-General Fund
spending by $15.0 million one-time in FY 2022. Beginning in FY 2024, we estimate that annual PSPRS/CORP employer
contributions would be reduced by $123.6 million, with $99.2 million of those savings accruing to the General Fund and
$24.4 million of those savings accruing to non-General Fund sources.
Table 1 includes the deposit by employer group, the resulting contribution rate decrease, and the General Fund and non-
General Fund savings by employer group.
Table 1
Employer Group
General Fund
Deposit
Non-General
Fund Deposit
Contribution Rate
Percentage Change GF Savings
Non-GF
Savings Total
PSPRS - State Agencies
DPS 420,559,600
47.71% 41,671,800 11,036,400 52,708,200
Game & Fish 82,243,000 15,000,000 122.89% - 9,848,200 9,848,200
Total 502,802,600 15,000,000 41,671,800 20,884,600 62,556,400
CORP - State Agencies
Dept. of Corrections 474,635,300
13.51% 51,979,500 524,100 52,503,600
Juvenile Corrections 73,940,800
47.72% 5,542,100 2,997,600 8,539,700
Total 548,576,100 0 57,521,600 3,521,700 61,043,300
(Continued) - 2 -
Analysis
Based on data provided by PSPRS, by appropriating a total amount of $1.07 billion to the various PSPRS/CORP employer
groups as listed in Table 1, the employer groups' contribution rates would decrease by the percentages listed. These
contribution rate changes were then applied to the agencies' PSPRS/CORP salary bases, which reflect the amounts and
fund sources as reported in FY 2023 agency budget requests.
Given the timing of PSPRS/CORP actuarial valuations, the employer savings amounts displayed in Table 1 would occur
beginning in FY 2024. Any estimate of savings beyond FY 2024 would depend on the long-term actuarial performance of
the PSPRS/CORP plans, such as annual investment returns.
Local Government Impact
None, as the bill's appropriation would only impact the state PSPRS/CORP employer groups listed in Table 1 and would
not impact local government PSPRS/CORP contribution rates.
1/26/22