HB594 (2008) Detail

Granting group II retirement system status to certain positions in the department of corrections.


HB 594-FN – AS AMENDED BY THE HOUSE

02Jan2008… 2616h

2007 SESSION

07-0908

10/01

HOUSE BILL 594-FN

AN ACT granting group II retirement system status to certain positions in the department of corrections.

SPONSORS: Rep. Matthew Quandt, Rock 13; Rep. Marshall Quandt, Rock 13

COMMITTEE: Executive Departments and Administration

ANALYSIS

This bill grants group II status to certain positions in the department of corrections. Persons employed in those positions with service prior to the effective date shall be eligible for split benefits.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

02Jan2008… 2616h

07-0908

10/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT granting group II retirement system status to certain positions in the department of corrections.

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

1 Department of Corrections; Authorization for Transfer to Group II.

I. Pursuant to the provision of RSA 100-A:3, IX, the following positions in the department of corrections classified as group I positions are deemed to have met the requirement of RSA 100-A:1, VII(b) and shall be transferred to group II status in the New Hampshire retirement system:

Position Title Position Number

Carpentry Supervisor I 12978

Carpentry Supervisor I 15470

Carpentry Supervisor I 41483

Electrician Supervisor II 12940

Electrician Supervisor II 41481

Electronic Technician I 16917

Electronic Technician I 18798

License Plate Shop Manager 8T424

Maintenance Mechanic II 15448

Plumber Supervisor I 41482

Warehouseman 41514

II. The provisions of RSA 100-A:3, II-b shall apply to positions transferred by this act.

2 Effective Date. This act shall take effect 60 days after its passage.

LBAO

LBAO

07-0908

Amended 01/29/08

HB 594 FISCAL NOTE

AN ACT granting group II retirement system status to certain positions in the department of corrections.

FISCAL IMPACT:

      The Retirement System and the Department of Corrections state this bill, as amended by the House (Amendment #2007-2616h), will increase state expenditures by an indeterminable amount in FY 2008 and each year thereafter. There is no fiscal impact on county and local expenditures or state, county, and local revenue.

METHODOLOGY:

    The Retirement System states this bill, as amended, will transfer eleven identified Department of Corrections’ positions from group I retirement status to group II retirement status. The System’s actuary states the employer contribution percentages for FY 2008-2009 are set and will not be impacted by any changes contained in this bill. The System’s actuary provides an estimated fiscal impact of this bill for FY 2010 through FY 2012. The System’s actuary states the group I payroll will decrease and group II payroll will increase by $401,801. Additionally, the group I unfunded accrued liabilities will decrease by $153,062 and the group II unfunded liabilities will increase by $241,110. Assuming an annual rate of return of 8.5 percent, wage inflation at 4.5 percent a year, and using the entry-age normal cost valuation method the System’s actuary determined this bill will have the following impact:

 

FY 2010

FY 2011

FY 2012

Police Group II

$92,587

$96,753

$101,107

Employees Group I

$(59,058)

$(61,716)

$(64,493)

Increase In Employer Contribution

$33,529

$35,037

$36,614

    The Department of Corrections determined the move of the eleven identified positions will increase the Department’s expenditures. The Department used the following information when determining the fiscal impact of this bill: payroll increase of 2.5% each year, the employer contribution percentages in effect in FY 2008 and FY 2009 for group I (8.74%) and group II (18.21%), Social Security at 6.20%, and Medicare at 1.45%. For Group II members, the Department does not contribute the 6.20% for Social Security, only the 1.45% for Medicare. The Department estimates the following impact on its expenditures:

 

FY 2008*

FY 2009

FY 2010

FY 2011

FY 2012

Payroll

$104,695

$429,249

$439,980

$450,980

$462,254

Group I benefit expenditures (retirement, FICA)

(17,159)

(70,354)

(72,113)

(73,916)

(75,763)

Group II benefit expenditures (retirement, Medicare only)

20,583

84,390

86,500

88,663

90,879

Increase in Expenditures

3,424

$14,036

$14,387

$14,747

$15,116

    *FY 2008 is calculated for only 3 months in the year.