CHAPTER 178
HB 1633-FN – FINAL VERSION
07Mar2006… 0862h
11May2006… 1833eba
2006 SESSION
10/03
HOUSE BILL 1633-FN
COMMITTEE: Executive Departments and Administration
This bill makes various changes to the New Hampshire retirement system concerning service of members, determination of benefits, and administration of RSA 100-A.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
07Mar2006… 0862h
11May2006… 1833eba
06-2485
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Six
AN ACT relative to membership, eligibility, and financing of the New Hampshire retirement system.
Be it Enacted by the Senate and House of Representatives in General Court convened:
178:1 Membership; Employment. Amend the introductory paragraph of RSA 100-A:3, I(a) to read as follows:
I.(a) Any person who becomes an employee, teacher, permanent policeman, or permanent fireman after the date of establishment, working in a position for an employer under this chapter as determined by common law standards, shall become a member of the retirement system as a condition of employment; except that membership shall be optional in the case of elected officials, officials appointed for fixed terms, unclassified state employees, or those employees of the general court who are eligible for membership in the retirement system. Elected officials and officials appointed for fixed terms shall, however, be eligible for membership in the retirement system only under the following conditions:
178:2 Restoration to Service. Amend RSA 100-A:7 to read as follows:
100-A:7 Restoration to Service. If a disability beneficiary or any other beneficiary is restored to service, the beneficiary’s retirement allowance shall cease, the beneficiary shall again become a member of the retirement system and the beneficiary shall contribute at the percentage payable pursuant to RSA 100-A:16, I(a). Anything herein to the contrary notwithstanding, any credit for membership service and for any prior service on the basis of which the beneficiary’s creditable service was computed at the time of the beneficiary’s former retirement shall be restored to full force and effect; [but if the beneficiary is restored to membership after the attainment of age 50 in the case of a group I member, or age 45 in the case of a group II member,] upon subsequent retirement [within a period of 3 years after such restoration to membership], the beneficiary shall receive a retirement allowance based on the beneficiary’s [service as a member since the beneficiary’s last restoration to membership, plus a retirement allowance equal to the retirement allowance to which the beneficiary was entitled at the time of such restoration, except that the total retirement allowance upon such subsequent retirement shall not be a greater proportion of the beneficiary’s average final compensation than the proportion to which the beneficiary would have been entitled had he remained in service during the period of the beneficiary’s prior retirement] combined creditable service and the member’s average final compensation.
178:3 New Section; Rollover Distributions; Direct Transfer. Amend RSA 100-A by inserting after section 11 the following new section:
100-A:11-a Eligible Rollover Distributions; Direct Transfer. The distribution of benefits and return of accumulated contributions under this chapter shall be in conformance with the requirements of Internal Revenue Code section 401(a)(31) to the extent that the Code section applies to a qualified governmental plan within the meaning of Internal Revenue Code sections 401(a) and 414(d).
178:4 Administration; Board Subcommittees Deleted. Amend RSA 100-A:14, I to read as follows:
I. The administration of this system is vested in a board of 13 trustees. The state treasurer shall be an ex officio voting member of the board. The governor and council shall appoint 2 trustees, to be known as non-member trustees, who shall be qualified persons with business experience and not be members of the system, and who shall serve for a term of 2 years and until their successors are appointed and qualified, except that the original appointment of one of the non-member trustees shall be for a term of one year. The remaining 10 members of the board shall consist of 2 employees, 2 teachers, 2 permanent policemen, 2 permanent firemen, one member of the senate who serves on the insurance committee and who shall be appointed annually by the senate president, and one member of the house of representatives who serves on the executive departments and administration committee and who shall be appointed annually by the speaker of the house. Whenever a vacancy occurs, the senate president or the speaker of the house shall fill the vacancy in the same manner by appointing a senate or a house member who shall serve for the unexpired term. The New Hampshire state employees’ association, the New Hampshire education association, the New Hampshire police association, and the New Hampshire state permanent firemen’s association shall each annually nominate from their members a panel of 5 persons, all of whom shall be active members of the retirement system, or one of the 4 predecessor systems, no later than May 31 of each year, and the panels so named shall be filed with the secretary of state no later than June 10 of each year. From each of the above named panels the governor and council shall originally appoint 2 persons, and thereafter one annually to the board. Members appointed to the board in the manner aforesaid shall serve for a term of 2 years, except that the original appointments of one of the persons from each panel shall be for a term of one year. Each member so appointed shall hold office until his or her successor shall be appointed and qualified. Whenever a vacancy occurs, the governor and council shall fill the vacancy by appointing a member who shall serve for the unexpired term from the same panel from which the former member was appointed. The governor shall designate one of the non-member trustees to serve as chairman of said board of trustees. [The chairman, the senate member, the house member, and the 4 group I members shall constitute one subcommittee and the chairman, the senate member, the house member, and the 4 group II members shall constitute another subcommittee. Each subcommittee shall, relative to the members of their respective group, consider policy problems and make recommendations relative to the same to the board of trustees and make recommendations to the board of trustees concerning applications under the provisions of RSA 100-A:6. For the purposes of transacting any business, 4 members of a subcommittee shall constitute a quorum.]
178:5 Financing; State Annuity Accumulation Fund. Amend RSA 100-A:16, II(g) to read as follows:
(g) All interest and dividends earned on the funds of the retirement system shall be credited to the state annuity accumulation fund. The board of trustees shall allow interest at such rate or rates as it shall determine from time to time on the individual accounts of members in the member annuity savings fund and shall annually transfer such interest amount from the state annuity accumulation fund. Such interest shall be compounded [monthly or more frequently as the board of trustees may determine] at an annual rate and shall be [allowed] prorated and credited to the member annuity savings fund to the date of processing upon termination of active service for any reason including withdrawal, retirement, or death.
178:6 Political Subdivisions; Modifications. Amend RSA 100-A:22 to read as follows:
100-A:22 Modifications. Membership in the retirement system shall be optional for officers and employees of the employer who are in the service of the employer on the date when participation becomes effective, and any such officer or employee who elects to join the retirement system within one year thereafter shall be credited with prior service covering such periods of prior service rendered to such employer for which the employer is willing to make accrued liability contributions. If the employer is unable or unwilling to make such contributions, a member in service may petition the board of trustees for periods of prior service rendered to such employer. Upon payment by the member of the amount determined in accordance with RSA 100-A:3, VI(b) and with the approval of the board, the member shall receive credit for such prior service. Thereafter, service for such employer on account of which contributions are made by the employer and member shall also be considered as creditable service. However, in no event shall prior service purchased as creditable service under this section be used as creditable service for the purpose of eligibility for medical benefits under RSA 100-A:52, RSA 100-A:52-a, or RSA 100-A:52-b. Membership shall be compulsory for all employees entering the service of such employer after the date participation becomes effective. Municipalities may, by action of their city council or board of selectmen, exempt their chief administrative officer, [as an unclassified employee] at the time of initial hiring or appointment, from compulsory membership provided herein. The chief fiscal officer of the employer, and the heads of its departments, shall submit to the board of trustees such information and shall cause to be performed with respect to the employees of such employer, who are members of the retirement system, such duties as shall be prescribed by the trustees in order to carry out the provisions of this chapter.
178:7 Supplemental Allowances. RSA 100-A:41-a, II is repealed and reenacted to read as follows:
II. No later than May 31 of each year, the fiscal committee of the general court may approve COLAs for the July 1 thereafter upon certification from the actuary of the amount of the COLA which may be granted to each member classification based on the funds available in the special account for each member classification. The actuary shall look at each member classification component of the special account separately and shall certify to the fiscal committee the funds available, and any other information required by the committee, including but not limited to any change in the Consumer Price Index-Urban for the year prior to the year in which the allowance is granted. Any such supplemental allowance when granted by the fiscal committee of the general court shall become a permanent addition to the beneficiary’s base retirement allowance, and shall be included in the monthly annuity paid to the retired member, or to the member’s beneficiary if the member is deceased and the beneficiary is receiving an allowance under RSA 100-A:8, 100-A:9, 100-A:12, 100-A:13, 100-A:19, the provisions of former RSA 100-A:16, I(c)(2) relative to additional contributions, or similar provisions of predecessor systems.
178:8 New Paragraph; Creditable Service; Purchase of Nonqualified Service Credit. Amend RSA 100-A:4 by inserting after paragraph VI the following new paragraph:
VII. Notwithstanding any provision of this section, a member in active service in the retirement system who currently has at least 5 years of creditable service in the state, shall be entitled to receive credit for not less than one month nor more than 5 years of nonqualified service credit within the meaning of section 415(n) of the United States Internal Revenue Code of 1986, as amended, upon payment by the member of the full actuarial cost of such credit and upon approval of the board, subject to the following:
(a) Credit shall not be granted until the active member has fully paid for the nonqualified service in a lump sum or by installment payments as permitted by the board. The actuarial cost shall be the product of the member’s annual rate of compensation at the time of buy-in, multiplied by the sum of the member and employer contribution rates in effect with respect to the member at the time of buy-in, multiplied by the number of years of nonqualified service credit bought. The member’s payment shall be credited to the member annuity savings fund.
(b) “Nonqualified service credit” means time that is not otherwise purchasable under this chapter.
(c) Requests concerning the purchase of nonqualified service credit pursuant to this paragraph shall be limited to 2 such requests per member per calendar year.
178:9 Repeal. RSA 100-A:47-a, relative to appointment, duties, and compensation of the director of finance, is repealed.
178:10 Effective Date. This act shall take effect 60 days after its passage.
Approved: May 25, 2006
Effective: July 24, 2006