FOR IMMEDIATE RELEASE                                                        Wednesday, April 30, 2008

Contact: Senator Peter Burling

(603) 271-2642

SENATE COMMITTEE RECOMMENDS RETIREMENT SYSTEM CHANGES

CONCORD – The Senate Executive Departments and Administration Committee voted 6-0 today in favor of legislation to strengthen the finances of the state retirement system and preserve benefits to current and future retirees.

“I’m pleased to announce that we’ve passed a bill that meets the needs of our retired employees while keeping the costs to municipalities and employers as low as possible,” said Senator Peter Burling, (D-Cornish) the chairman of the Senate Executive Departments and Administration Committee.

“What we’ve done is ensure that every retiree will get some type of cost of living adjustment and we’ve gone from a 53 percent increase in the employers’ rate to a 15 percent increase while maintaining the medical subsidies and ensuring the integrity of the entire system,” said Senator Michael Downing (R-Salem), a committee member.

The Senate committee approved several changes to House Bill 1645. The Senate version freezes the 8 percent per year increase in a health insurance subsidy for retirees for four years instead of making the freeze permanent. After four years, the subsidy would grow by 4 percent per year under the Senate bill.

The Senate version eliminates a requirement that police and firefighters work until age 50 instead of age 45 to collect their pensions. It also eliminates changes to the retirement system board of trustees that would have reduced the number of public employees on the board.

The Senate committee approved two cost of living increases and increased the amount. The Senate version creates a cost of living adjustment of 2.5 percent, which would be applied to the first $30,000 or less in benefits received by each retiree. In addition, the Senate committee approved a temporary $1,000 per year supplemental payment for each of the next four years for those whose annual pension is at $20,000 or less. Retirees receiving $20,000 or less would get both the 2.5 percent increase and the $1,000 supplemental payment under the Senate legislation.

-more-

“We’re trying with all our might to focus the benefits of the system on those who rely on it the most. Every senator who has worked on this bill is aware we have people receiving tiny pensions at a time when medical expenses and the cost of living are skyrocketing. The approach taken by the Senate helps us target funds to those who need it the most while we continue to work out long-term solutions to the problems that face the retirement system,” Burling said.

The New Hampshire Retirement System has assets of more than $5 billion. Employees and employers both pay into the system but the bulk of its assets come from investments. There is no immediate threat to retirement benefits, but the fund has fallen below the level required to cover all the retiring baby boomers over the next 20 to 30 years.

The retirement system must provide for the future retirements of 53,000 public employees—teachers, firefighters, police officers and state and local government workers—along with 20,000 already retired members.

House Bill 1465 is one of several efforts to set the state retirement system on firmer financial ground for the future. Last year, the Legislature shifted the system to a universally recognized accounting method and made additional changes to improve its long-term fiscal health.