To aid the $8 billion New Hampshire Retirement System’s funding issues, an agency has formed to determine solutions, Fosters.com reports.
The 17-member authority, known as the Decennial Commission, is calling for the state to reinstate a measure that was eliminated in 2012 after being utilized for more than 30 years—a local government- and school district-specific employer contribution subsidy.
The NHRS pension plan is currently 61.8% funded, with Fosters reporting that the system is estimated to be $5 billion underfunded. The system is funded by contributions from public employees, the employer cities and towns, and returns on investments. When the state ceased its contributions in 2012, the funding responsibilities fell on the communities of the retired employees. Had state contributions continued to pay 35% contributions, the NHRS reports public employee contributions would be $80 million less in 2016.
“This subsidy was eliminated as part of the changes made to the retirement system and the state funding contribution in 2011 subsequent to the economic downturn,” Commission member Sen. David Watters said in a preliminary report obtained by Fosters. “Municipalities have claimed that this ‘downshifting’ of retirement contribution costs was not adequately offset and was a retreat on state obligations to the pension obligations to these employees.”
According to Marty Karlon, NHRS public information officer, the recommendations are non-binding until they become laws. Fosters notes that the Commission reportedly met 15 times between the end of August and the end of the year and issued a preliminary report. A final report should be ready soon.
Additional recommendations from the preliminary report are a one-time $500 payment to all pensioners this year and additional years when “funds are available” to reflect the cost of living, a 20-hour work week limit for pensioners with post-retirement jobs for system employers, and the deferral of the 10% pension reductions for teachers and school employees from the current age 65 to age 67, Fosters adds.