SB404 (2006) Detail

(New Title) relative to retirement benefits, service credits, and administration of the Manchester employees’ contributory retirement system.


CHAPTER 115

SB 404 – FINAL VERSION

03/16/06 1316s

2006 SESSION

06-3053

10/01

SENATE BILL 404

AN ACT relative to retirement benefits, service credits, and administration of the Manchester employees’ contributory retirement system.

SPONSORS: Sen. Martel, Dist 18; Sen. D'Allesandro, Dist 20; Sen. Odell, Dist 8; Sen. Roberge, Dist 9; Rep. Pilotte, Hills 16; Rep. Vaillancourt, Hills 15; Rep. Infantine, Hills 13; Rep. Gonzalez, Hills 17; Rep. F. Sullivan, Hills 12

COMMITTEE: Public and Municipal Affairs

AMENDED ANALYSIS

This bill makes changes to the Manchester employees’ contributory retirement system including:

I. Clarifying the calculation of benefits and optional benefits.

II. Providing for the correction, collection, and compromise of overpayments of benefits.

III. Establishing credit for service in other public retirement systems.

IV. Requiring spousal acknowledgments.

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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/16/06 1316s

06-3053

10/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Six

AN ACT relative to retirement benefits, service credits, and administration of the Manchester employees’ contributory retirement system.

Be it Enacted by the Senate and House of Representatives in General Court convened:

115:1 Manchester Retirement System; Retirement Benefits. Amend 1973, 218:12, IV, as amended by 2002, 194:1, to read as follows:

IV. Notwithstanding any provision of this act, the maximum pension payment payable to any member or beneficiary shall be limited to such extent as may be necessary to comply with the requirements of sections 401(a)(16), 401(a)(17), and 415 of the Code. The retirement benefits payable hereunder shall be made in the form, at such time and otherwise in compliance with the distribution and rollover requirements of sections 402(c), 401(a)(9), and 401(a)(31) of the Code. Member contributions and benefit upgrade purchases shall be made in conformity with section 415 of the Code.

115:2 Manchester Retirement System; Optional Benefit. Amend 1973, 218:12, VI, as amended by 2002, 194:1, 2004, 159:1, and 2005, 40:4, to read as follows:

VI. Prior to a member’s termination of employment, a member may elect, under rules of the board, to receive a retirement benefit of 2 percent of the member’s average final earnings for all years of service or any portion thereof, provided that the member shall be responsible for payment of 50 percent of the benefit based on methods and assumptions adopted by the board. The retirement system shall be responsible for the payment of the remaining 50 percent of the cost associated with the retirement benefit based on methods and assumptions adopted by the board.

115:3 Manchester Retirement System; Overpayments. Amend 1973, 218:23, as amended by 2002, 194:1, to read as follows:

218:23 Exclusive Benefit of Members and Beneficiaries.

I. All contributions made by the city to the retirement system shall be for the exclusive purpose of providing benefits to the retirement system members and their beneficiaries, and no part of the assets of the retirement system shall revert to the city or other contributors, except if a contribution is made to the retirement system by the city under mistake of fact, such contribution shall be returned within one year after its payment and in the event of the termination of the retirement system, excess funds shall be returned to the city as provided in section 27 of this act.

II. If any change or error in the records or in the computation of a member’s or beneficiary’s benefit or refund results in any member or beneficiary receiving from the retirement system more, in an overpayment, or less than the member or beneficiary would have been entitled to receive had the records or computation been correct, the retirement system shall have the power to correct such error and, as far as practicable, to adjust the payments in such a manner that the actuarial equivalent of the benefit to which such member or beneficiary was correctly entitled shall be paid. An overpayment shall constitute a debt owed by the recipient to the retirement system and the board is authorized to use any and all legal and/or equitable actions to collect the overpayment and any accrued interest. The retirement board is authorized to enter into written agreements with recipients of overpayments to provide for installment payments to recover overpayments, the amount of accrued interest, and interest on any unpaid balance. The retirement board is authorized to compromise any disputed overpayment. Interest shall accrue on overpayments at the rate or rates established by the retirement board; provided, however, that no interest shall accrue if the retirement board has exercised its adjustment authority or under other circumstances in which the board, in its discretion, determines that interest shall not accrue.

115:4 Manchester Retirement System; Service Buybacks. Amend 1973, 218:10, III, as amended by 2002, 194:1, to read as follows:

III. A member who ceases to be a member, withdraws his or her member contributions pursuant to section 11 of this act, and later becomes a member again, may make a request after the member’s return to city employment for service buyback of prior service credit for the previous time served as a member. [No benefits other than the right to withdraw member contributions pursuant to section 11 of this act shall accrue with respect to such previous period of service until the member shall have completed 5 years of continuous service in the current period of employment.] If a service buyback is not made, the member’s benefit shall be based solely on the member’s years of service and final average earnings after the break in service.

115:5 New Sections; Service Credit; Spousal Acknowledgment. Amend 1973, 218 as amended by 2002, 194 and 2005, 41 by inserting after section 28 the following new sections:

218:29 Credit for Service in Other Public Retirement Systems.

I. Notwithstanding any provision of this chapter to the contrary, any member of the Manchester Employees’ Contributory Retirement System, in service on or after June 30, 2006, who was formerly a member of a public employees’ retirement system elsewhere in the United States, shall be allowed to purchase credit for such service as creditable service in the Manchester Employees’ Contributory Retirement System; provided, however, that creditable service in the Manchester Employees’ Contributory Retirement System which is purchased under this paragraph shall not be deemed creditable service for the purpose of eligibility for medical and surgical benefits as a retired employee under section 28. For such members, only creditable service performed in the city of Manchester as a member of the Manchester Employees’ Contributory Retirement System shall be counted as creditable service for the purpose of eligibility for medical and surgical benefits as a retired employee under section 28. For the purposes of this section, “public employees’ retirement system” shall include any retirement system established and maintained by the United States government, the members of which are federal government employees. For the purposes of this section, any military service not otherwise authorized pursuant to section 10, paragraph I shall not be included as creditable service in a public employees’ retirement system. The member shall meet the following conditions to purchase credit under this section:

(a) The member has terminated employment and active membership in the other public system and has become a member of the Manchester Employees’ Contributory Retirement System; and

(b) The member applies for service credit, on a form designated by the board; and

(c) The member provides such information and certification from the other public employer and other public retirement system as the board may require; and

(d) The member pays to the Manchester Employees’ Contributory Retirement System the full cost for buy-in of creditable service as provided in section 10, paragraph VI, including prepayment of any actuarial calculation fee as determined by the board; and

(e) The amount of creditable service purchased shall be either the full length of service rendered in the other system or a pro-rata portion of such service purchasable with the maximum amount which the member is permitted to withdraw from the other system; and

(f) In no case shall the creditable service purchased exceed the service time rendered in the other public system, or include any service period for which the member remains eligible for benefits in the other public system.

II. Upon certification by the Manchester Employees’ Contributory Retirement System of eligibility for other public system service credit, and upon payment by the member of the cost of such credit, and with the approval of the board of trustees, the member shall receive credit for such other public system service.

III. In no case shall other public employees’ retirement system service purchased as creditable service in the Manchester Employees’ Contributory Retirement System under the provisions of this section be deemed to be creditable city service for the purposes of eligibility for longevity or other benefits solely within the discretion of the city of Manchester.

218:30 Spousal Acknowledgment. Any application for any type of benefit under this act, including but not limited to retirement benefits, return of contributions, or disability retirement allowances shall include a statement made by the spouse of the member, if any, acknowledging that the spouse has read and understands the provisions of this act concerning the benefits and payments options and the benefit and payments options, if any, the member has elected to receive. Such statements shall be signed in the presence of a notary public or retirement system employee.

115:6 Effective Date. This act shall take effect upon its passage.

Approved: May 9, 2006

Effective: May 9, 2006