COMMITTEE REACHES AGREEMENT ON RETIREMENT SYSTEM CHANGES

FOR IMMEDIATE RELEASE                                                                Tuesday, June 3, 2008

Contact: Senate President Sylvia Larsen

(603) 271-2111

House Speaker Terie Norelli

(603) 271-3661

COMMITTEE REACHES AGREEMENT ON RETIREMENT SYSTEM CHANGES

CONCORD – A committee of House and Senate members reached agreement today on legislation that will strengthen the state retirement system and protect municipalities from a potential 53 percent increase in their payments to the system.

“In one legislative term, we’ve gone a long way toward creating a sound, stable and viable retirement system for the long term, securing the future of our retirees and protecting our taxpayers from a significant increase,” said House Speaker Terie Norelli (D-Portsmouth).

The compromise creates a new independent investment committee, made up of five members who will be selected based on their knowledge of and experience in dealing with investments.

The goal is to improve the performance of the New Hampshire Retirement System’s investments. 

House and Senate members also worked to provide extra assistance to retirees with the smallest pensions.

"We wanted to do our best for our retirees with the smallest pensions, now and in the future. We want to provide a dignified retirement to the 73 percent of retirees earning less than $21,000 for their pensions," said Rep. Anne-Marie Irwin, (D-Peterborough), who chaired the conference committee.

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. 

“This has been a multi-phase process involving many stakeholders and legislative leaders and we’re grateful for the contributions everyone made to this effort. Stabilizing the foundation of our retirement system and keeping our promises to retirees was a critical task for the Legislature this year. We have a result we can be proud of,” said Senate President Sylvia Larsen (D-Concord).                                                       

Major points in the agreement include:

• Creating a new five-member independent investment committee with stringent standards for membership that require expertise and experience with investments.

• Transferring $250 million from the special account to the main body of the retirement system fund, reducing an overwhelming 53 percent rate increase to the municipalities to a 15 percent increase.

• Freezing the medical subsidy for four years then increasing it by four percent per year thereafter. In the interim, retirees would get a $500 per person contribution toward their health insurance costs with a $1,000 contribution for a couple.

• Retaining the current structure of the board of trustees but adding new standards to ensure every member of the board has some knowledge of business or money management.

• Establishing two committees – one to study the future of subsidies for retiree health insurance and another to study how best to provide cost of living increases in the future.

• Providing a 1.5 percent cost of living increase each year on the first $30,000 of a retiree’s pension until the new COLA committee makes its report and new legislation is enacted.

• Providing an additional annual payment of $1,000 to those receiving pensions of less than $20,000 and another $500 per year for those who retired before 1993.

• Placing a cap on what any retiree can earn for a pension at $120,000 per year for new hires starting in 2009.