01/31/08 0259s

14May2008… 1702h

2008 SESSION

08-2663

10/09

SENATE BILL 463

COMMITTEE: Executive Departments and Administration

AMENDED ANALYSIS

This bill:

I. Establishes a procedure for supplemental allowances paid from the special account.

II. Eliminates the 8 percent annual increase on the medical subsidy.

III. Makes various other changes to the administration of the retirement system, eligibility and funding of benefits, and investment of retirement system assets.

IV. Implements various recommendations of the commission to make recommendations to ensure the long-term viability of the New Hampshire retirement system established in 2007, 355 (HB 876-FN-LOCAL).

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

01/31/08 0259s

14May2008… 1702h

08-2663

10/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eight

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

1 Definition of Earnable Compensation; Other Compensation. Amend RSA 100-A:1, XVII to read as follows:

XVII. “Earnable compensation” shall mean for all members the full base rate of compensation paid plus any overtime pay, holiday and vacation pay, sick pay, longevity or severance pay, cost of living bonus, additional pay for extracurricular and instructional activities or for other extra or special duty, [and other compensation paid to the member by the employer,] plus the fair market value of non-cash compensation paid to, or on behalf of, the member such as meals or living quarters if subject to federal income tax. However, earnable compensation in the final 12 months of creditable service prior to termination of employment shall be limited to 1-1/2 times the higher of the earnable compensation in the 12-month period preceding the final 12 months or the highest compensation year as determined for the purpose of calculating average final compensation, but excluding the final 12 months. Any compensation received in the final 12 months of employment in excess of such limit shall not be subject to member or employer contributions to the retirement system and shall not be considered in the computation of average final compensation. Provided that, the annual compensation limit for members of governmental defined benefit pension plans under section 401(a)(17) of the United States Internal Revenue Code of 1986, as amended, shall apply to earnable compensation for all employees, teachers, permanent firemen, and permanent policemen who first become eligible for membership in the system on or after July 1, 1996. Earnable compensation shall not include compensation in any form paid later than 120 days after the member’s termination of employment from a retirement eligible position, with the limited exceptions of disability related severance pay paid to a member or retiree no later than 120 days after a decision by the board of trustees granting the member or retiree disability retirement benefits pursuant to RSA 100-A:6 and of severance pay which a member was entitled to be paid within 120 days after termination but which, without the consent of the member and not through any fault of the member, was paid more than 120 days after the member’s termination. The member shall have the burden of proving to the board of trustees that any severance payment paid later than 120 days after the member’s termination of employment is earnable compensation and meets the requirements of an asserted exception to the 120-day post-termination payment requirement.

2 Membership. Amend RSA 100-A:3, V to read as follows:

V. A member shall cease to be a member if (a) [he or she is absent from service for more than 2 years; (b)] he or she withdraws his or her accumulated contributions; or [(c)] (b) he or she becomes a beneficiary or dies. [Notwithstanding the foregoing,] The board of trustees shall continue the membership of a member while in the armed forces of the United States provided such member does not withdraw his or her accumulated contributions.

3 Return of Member Contributions; Group I. Amend RSA 100-A:11, I(a) to read as follows:

(a) If a group I member ceases to be an employee or teacher for reasons other than retirement or death and if he or she has not elected to receive a vested deferred retirement allowance under RSA 100-A:10, the amount of his or her accumulated contributions shall be paid within 3 months after his or her written request therefor, provided that the member may not file a written request for such payment until at least 30 days from the date the member ceases to be an employee or a teacher and provided that the member may not again become a group I member during said 30-day period. If a group I member ceases to be a an active member because of absence from service for more than [2 years, his or her accumulated contributions shall be paid within 3 months after the board is notified to that effect] 180 days, without requesting return of the amount of his or her accumulated contributions, the retirement system shall retain his or her accumulated contributions. The annual return credited on inactive, vested members shall be paid pursuant to RSA 100-A:16, II(g). The board shall hold and invest such accumulated contributions on behalf of the inactive member, provided that the annual return credited on the inactive member’s accumulated contributions shall be 2 percentage points less than either the assumed rate of return determined under RSA 100-A:16, II(h) or the actual rate of return, whichever is lower, for the immediately preceding fiscal year as reported in the comprehensive annual financial report (CAFR), provided the rate of return shall not be less than zero. The inactive member’s total accumulated contributions shall be paid within 3 months after his or her written request therefor. In the event an inactive member who has not withdrawn his or her contributions under this section returns to become an active member in service, his or her previous service shall count toward that member’s creditable service to the extent that his or her accumulated contributions have remained in the retirement system.

4 Return of Member Contributions; Group II. Amend RSA 100-A:11, II(a) to read as follows:

(a) If a group II member ceases to be a permanent policeman or permanent fireman for reasons other than retirement or death and if he or she has not elected to receive a vested deferred retirement allowance under RSA 100-A:10, the amount of his or her accumulated contributions shall be paid within 3 months after his or her written request therefor. If a group II member ceases to be a an active member because of absence from service for more than [2 years, his or her accumulated contributions shall be paid within 3 months after the board is notified to that effect] 180 days, without requesting return of the amount of his or her accumulated contributions, the retirement system shall retain his or her accumulated contributions. The annual return credited on inactive, vested members shall be paid pursuant to RSA 100-A:16, II(g). The board shall hold and invest such accumulated contributions on behalf of the inactive member, provided that the annual return credited on the inactive member’s accumulated contributions shall be 2 percentage points less than either the assumed rate of return determined under RSA 100-A:16, II(h) or the actual rate of return, whichever is lower, for the immediately preceding fiscal year as reported in the comprehensive annual financial report (CAFR), provided the rate of return shall not be less than zero. The inactive member’s total accumulated contributions shall be paid within 3 months after his or her written request therefor. In the event an inactive member who has not withdrawn his or her contributions under this section returns to become an active member in service, his or her previous service shall count toward that member’s creditable service to the extent that his or her accumulated contributions have remained in the retirement system.

5 Medical Benefits; Group II; Payment by Retirement System; 8 Percent Increase. Amend RSA 100-A:52, II to read as follows:

II. However, for the fiscal year beginning July 1, 1990, the maximum amount payable by the retirement system under this subdivision on account of each person qualified under paragraph I who is not entitled to Medicare benefits, shall be $101.50 per month, and on account of each person qualified under paragraph I who is entitled to Medicare benefits, shall be $64 per month. As of July 1, 1991, and on each July 1 [thereafter] until and including July 1, 2008, the maximum amount payable by the retirement system as provided in this paragraph shall be increased by 8 percent, compounded on previous increases. After July 1, 2008, the rate payable under this paragraph may be increased only by the passage of appropriate legislation.

6 Medical Benefits; Group I Teachers and Political Subdivision Employees; Payment by Retirement System; 8 Percent Increase Removed. Amend RSA 100-A:52-a, II to read as follows:

II. [However,] For [the] each fiscal year beginning on or after July 1, [2000] 2008, the maximum amount payable by the retirement system under this subdivision on account of each person qualified under paragraph I who is not entitled to Medicare benefits, and on account of each person qualified under paragraph I who is entitled to Medicare benefits, shall be the same as the amount provided in RSA 100-A:52, II for group II retirees. [As of July 1, 2000 and on each July 1 thereafter, the maximum amount payable by the retirement system as provided in this paragraph shall be increased by 8 percent, compounded on previous increases.]

7 Medical Benefits; Group I Employees; Payment by Retirement System; 8 Percent Increase Removed. Amend RSA 100-A:52-b, III to read as follows:

III. [However,] For [the] each fiscal year beginning on or after July 1, [2000] 2008, the maximum amount payable by the retirement system under this subdivision on account of each person qualified under paragraph I who is not entitled to Medicare benefits, and on account of each person qualified under paragraph I who is entitled to Medicare benefits, shall be the same as the amount provided in RSA 100-A:52, II for group II retirees. [As of July 1, 2000 and on each July 1 thereafter, the maximum amount payable by the retirement system as provided in this paragraph shall be increased by 8 percent, compounded on previous increases.]

8 New Paragraph; Board of Trustees; Administration; Review of Medical Benefit Subsidy Rates; Biennial Report. Amend RSA 100-A:14 by inserting after paragraph XV the following new paragraph:

XVI. The board of trustees shall review the medical benefit subsidy amount in effect under RSA 100-A:52, II, RSA 100-A:52-a, II, and RSA 100-A:52-b, III to make a prudent determination whether the amount may be increased, including consideration of different rates of growth to the medical subsidy for each subgroup, if those rates are actuarially supported. The board shall, on or before the December 1 preceding each biennial session of the legislature, commencing on or before December 1, 2010, report to the governor, the speaker of the house of representatives, the senate president, and the chairpersons of the house and senate finance and executive departments and administration committees on its review and determination under this paragraph.

9 New Subparagraph; Method of Financing; Transfer from Special Account. Amend RSA 100-A:16, II by inserting after subparagraph (i) the following new subparagraph:

(j) Notwithstanding RSA 100-A:16, II(h)(5) and (7), there shall be a one-time transfer of $250,000,000 not later than June 30, 2008 from the special account to the state annuity accumulation fund, provided however that if the employers’ obligation to fund the 401(h) subtrust under RSA 100-A:53, RSA 100-A:53-b, RSA 100-A:53-c, and RSA 100-A:53-d ceases as a result of a final court order, the transfer of $250,000,000 plus any interest accrued shall be returned to the special account. The sum transferred shall be credited proportionally to each member subgroup based on the proportion of the funds transferred into each special account subgroup from the special medical account, as identified by the retirement system, on June 30, 2007.

10 Medical Benefits; Method of Financing; Group II. Amend RSA 100-A:53, I to read as follows:

I. The benefits provided under RSA 100-A:52 shall be provided by a 401(h) subtrust of the New Hampshire retirement system. Beginning July 1, 2009, the 401(h) subtrust shall be funded by allocating to the subtrust the lesser of:

(a) 25 percent of [future] group II employer contributions made for group II [in accordance with RSA 100-A:16 to the subtrust until such time as the benefits are fully funded. Thereafter the subtrust shall receive only that portion of each year’s contribution as is necessary to keep the benefits fully funded.]; or

(b) The percentage of group II employer contributions made for group II determined by the actuary to be the minimum rate necessary to maintain the benefits provided under RSA 100-A:52.

11 Medical Benefits; Method of Financing; Group I Teachers. Amend RSA 100-A:53-b, I to read as follows:

I. The benefits provided under RSA 100-A:52-a shall be provided by a 401(h) subtrust of the New Hampshire retirement system. Beginning July 1, 2009, the 401(h) subtrust shall be funded by allocating to the subtrust the lesser of:

(a) 25 percent of [future] group I teacher employer contributions made for group I teachers [in accordance with RSA 100-A:16 to the subtrust until such time as the benefits are fully funded. Thereafter the subtrust shall receive only that portion of each year’s contribution as is necessary to keep the benefits fully funded.]; or

(b) The percentage of group I employer contributions made for group I teachers determined by the actuary to be the minimum rate necessary to maintain the benefits provided under RSA 100-A:52-a.

12 Medical Benefits; Method of Financing; Group I Political Subdivision Employees. Amend RSA 100-A:53-c, I to read as follows:

I. The benefits provided under RSA 100-A:52-a shall be provided by a 401(h) subtrust of the New Hampshire retirement system. Beginning July 1, 2009, the 401(h) subtrust shall be funded by allocating to the subtrust the lesser of:

(a) 25 percent of [future] group I employer contributions made for group I political subdivision employees [in accordance with RSA 100-A:16 to the subtrust until such time as the benefits are fully funded. Thereafter the subtrust shall receive only that portion of each year’s contribution as is necessary to keep the benefits fully funded.]; or

(b) The percentage of group I employer contributions made for group I political subdivision employees determined by the actuary to be the minimum rate necessary to maintain the benefits provided under RSA 100-A:52-a.

13 Medical Benefits; Method of Financing; Group I State Employees. Amend RSA 100-A:53-d, I to read as follows:

I. The benefits provided under RSA 100-A:52-b shall be provided by a 401(h) subtrust of the New Hampshire retirement system. Beginning July 1, 2009, the 401(h) subtrust shall be funded by allocating to the subtrust the lesser of:

(a) 25 percent of [future] group I employer contributions made for group I state employees [in accordance with RSA 100-A:16 to the subtrust until such time as the benefits are fully funded. Thereafter the subtrust shall receive only that portion of each year’s contribution as is necessary to keep the benefits fully funded.]; or

(b) The percentage of group I employer contributions made for group I state employees determined by the actuary to be the minimum rate necessary to maintain the benefits provided under RSA 100-A:52-b.

14 Commission on Retiree Health Care Benefits Funding Model. There is established a commission to propose a retiree health care benefits funding model.

I. The members of the commission shall be as follows:

(a) Three members of the house of representatives, one of whom shall be from the executive departments and administration committee and one of whom shall be from the finance committee, appointed by the speaker of the house of representatives.

(b) Two members of the senate, appointed by the president of the senate.

(c) The chairperson of the New Hampshire retirement system board of trustees, or designee.

(d) Two representatives of group I of the retirement system, appointed by the governor.

(e) Two representatives of group II of the retirement system, appointed by the governor.

(f) Two representatives of municipal and school employers in the retirement system, appointed by the governor.

(g) Six public members with recognized expertise in finance, financial management, health care finance, health care delivery, or the governance and oversight of large endowments or public funds, appointed by the governor.

(h) One retired member of the retirement system currently receiving benefits, appointed jointly by the speaker of the house of representatives and the president of the senate.

II. Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.

III. The commission shall study and recommend to the general court by December 1, 2008, the detailed design for a preferential tax vehicle for employees who do not qualify for the existing medical subsidy, to make contributions that would provide funds for post-employment medical expenses. Among the duties, the commission shall:

(a) Analyze the models in use by other states.

(b) Collect information from experts in the field.

(c) Consider different vehicles for such a plan including governmental trusts, Voluntary Employee Benefit Associations (VEBAs), 401(h), trusts, and Health Savings Accounts.

(d) Consider the following principles, in designing a recommended plan that:

(1) Allows for member and employer contributions.

(2) Utilizes tax advantaged contributions, earnings, and benefit distributions.

(3) Includes pre-funding for cost-effectiveness, security, and to satisfy the Governmental Accounting Standards Board and the Internal Revenue Service.

(4) Permits employer contributions through negotiated matches for currently active members.

(5) Permits additional voluntary member contributions.

(6) Is administratively efficient.

(7) Is available and integrated with other benefits.

(8) Allows unused sick and vacation leave to be contributed toward the medical subsidy.

(9) Is viable long term.

(e) Additionally, in designing a recommended plan, consider the following possibilities:

(1) Bonding to assist in the establishment of the trust and/or the transfer of medical subsidy eligible active members and/or retirees to the new health care funding model.

(2) Integrating the new trust with the existing subsidy-eligible state employees and the benefits provided by RSA 21-I:30.

(3) Moving all subsidy-eligible retirees into the new plan, bringing the current 401(h) subtrust funding with them, if permitted.

(4) Analyzing alternative retiree health care insurance programs for political subdivision retirees and Medicare retirees that would reduce the overall costs of medical care.

(f) Seek technical assistance as necessary from the New Hampshire retirement system and from other independent financial, investment, actuarial, and retirement experts.

IV. The members of the commission shall elect a chairperson from among the members. The first meeting of the commission shall be called by the first-named house member. The first meeting of the commission shall be held within 30 days of the effective date of this section. Ten members of the commission shall constitute a quorum.

V. The commission shall report its findings and its initial recommendations for proposed legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the chairpersons of the house and senate executive departments and administration and finance committees, the governor, and the state library on or before December 1, 2008. The commission shall issue a final report of its findings and recommendations for additional legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the chairpersons of the house and senate executive departments and administration and finance committees, the governor, and the state library on or before December 1, 2009.

VI. The commission is authorized to accept and expend private sector grants, gifts, or donations of any kind for the purpose of the duties required in this section. Any moneys collected shall be continually appropriated to the commission for the purposes of this section.

15 Maximum Retirement Benefit. Amend RSA 100-A:6-a to read as follows:

100-A:6-a Maximum Retirement Benefit. Notwithstanding any other provision of this chapter to the contrary, [any] for members who commenced service before July 1, 2009, a member’s initial calculation of the retirement benefit granted under the provisions of RSA 100-A:5 or RSA 100-A:6 shall not exceed 100 percent of the member’s highest year of earnable compensation. For members who commenced service on or after July 1, 2009 a member’s initial calculation of the retirement benefit granted under the provisions of RSA 100-A:5 or RSA 100-A:6 shall not exceed 100 percent of the member’s highest year full base rate of compensation. This provision shall not limit the application of supplemental allowances under RSA 100-A:41-a.

16 Administration; Board Members. Amend RSA 100-A:14, I to read as follows:

I. The administration of this system is vested in a board of [14] 12 trustees. The state treasurer shall be an ex officio voting member of the board. The governor and council shall appoint [2] 4 trustees, to be known as non-member trustees, who shall be qualified persons with [business] investment and/or financial 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 [11] 7 members of the board shall consist of [2 employees, 2 teachers, 2 permanent policemen, 2 permanent firemen] one employee, one teacher, one permanent police member, one permanent firefighter, one member of the senate who shall be appointed annually by the senate president, 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, and one person representing management in local government. 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, the New Hampshire state permanent firemen’s association, and the New Hampshire Local Government Center shall each annually nominate from their members a panel of 5 persons, all of whom except for the panel of the Local Government Center 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 appoint one person [annually] biennially to the board[, except for the panel of the Local Government Center, which shall have one person appointed every 2 years]. Members appointed to the board in the manner aforesaid shall serve for a term of 2 years. 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.

17 Application; Board of Trustees Membership. Members of the board of trustees for the retirement system on the effective date of this section shall serve for the remainder of their terms. In order to conform to RSA 100-A:14, I as amended by this act, the 4 employee, teacher, permanent policeman, and permanent fireman member positions whose trustees’ terms are the first to expire after the effective date of this section shall not be appointed, and those positions shall be eliminated from the board of trustees.

18 Board of Trustees; Voting by Chairperson. Amend RSA 100-A:14, IV to read as follows:

IV. Each trustee shall be entitled to one vote in the board of trustees[, provided, however, that the chairman shall be non-voting except in the event of a tie vote]. Seven trustees shall constitute a quorum for the transaction of any business. Seven votes shall be necessary for any resolution or action by the board at any meeting.

19 New Section; Committees of the Board of Trustees. Amend RSA 100-A by inserting after section 14 the following new section:

100-A:14-a Committees of the Board of Trustees.

I. The board of trustees shall establish committees to include but not be limited to the following standing committees:

(a) Investment.

(b) Audit.

(c) Benefits.

(d) Legislative.

(e) Personnel.

II. Each committee shall consist of members of the board of trustees. A majority of members of the investment committee shall have experience in the field of institutional investment or finance other than their experience as trustees of the New Hampshire retirement system. At least one member of the audit committee shall be experienced in the field of public accounting.

III. Except as otherwise provided in this chapter, each committee shall make its recommendations to the full board for final approval.

IV. The investment committee shall recommend an investment policy and investment consultants to the full board for approval. The investment committee shall review investment performance, choose fund managers, and make investments and deposits on behalf of the board. The investment committee shall establish an advisory committee to advise the investment committee in its investment decisions. The advisory committee shall consist of non-board members who have experience as investment or finance professionals or those with experience in the oversight of pension funds similar to the retirement system funds.

V. The audit committee shall assist the board to undertake the audit and reporting requirements required by RSA 100-A:15, VI. The audit committee may establish an advisory committee to assist it in its auditing functions. The advisory committee shall consist of non-board members who are certified public accountants and others working in public accounting.

VI. The benefits committee shall be responsible for reviewing member and beneficiary recommendations from the hearings examiner.

VII. The legislative committee shall assess the impact on the retirement system of proposed legislation and assist in the development of proposed legislation involving the New Hampshire retirement system.

VIII. The personnel committee shall consider personnel and compensation issues and recommend policies to the board.

IX. Committee members shall be appointed by majority vote of the board of trustees. At all times, the investment committee shall have a majority of members who are qualified as having experience in investment or finance, other than their role as trustees of the New Hampshire retirement system.

20 Management of Funds. Amend RSA 100-A:15 to read as follows:

100-A:15 Management of Funds.

I. The members of the board of trustees shall be the trustees of the several funds created hereby and shall set all policies relative to investment of those funds. The trustees shall appoint and oversee an investment committee that shall have full power to invest and reinvest such funds[, and] in accordance with the policies set by the board. The board of trustees shall have the powers, privileges, and immunities of a corporation. [The members of the board of trustees shall also have the power to invest and reinvest such funds in participation units in the public deposit investment pool established pursuant to RSA 383:22.] Said [trustees] investment committee shall have full power to hold, purchase, sell, assign, transfer, and dispose of any of the securities and investments in which any of the funds created hereby have been invested, as well as the proceeds of such investments in accordance with the policies set by the board. All of the assets and proceeds, and income therefrom, of the New Hampshire retirement system, and all contributions and payments made thereto, shall be held, invested or disbursed in trust [solely in the interest of the members and beneficiaries of the system for the exclusive purpose of providing those benefits and defraying those reasonable administrative expenses provided for under this chapter. In the management, investment, and reinvestment of system assets so held in trust hereunder, the system’s board of trustees shall exercise the judgment and care under the circumstances then prevailing, which persons of prudence, discretion, and intelligence, acting in a like capacity and familiar with such matters, would use in the conduct of a pension plan of like character and with like aims as the system, and by diversifying investments of the system so as to minimize the risk of large losses to the trust fund].

I-a.(a) A trustee or other fiduciary shall discharge duties with respect to the retirement system:

(1) Solely in the interest of the participants and beneficiaries;

(2) For the exclusive purpose of providing benefits to participants and beneficiaries and paying reasonable expenses of administering the system;

(3) With the care, skill, and caution under the circumstances then prevailing which a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an activity of like character and purpose;

(4) Impartially, taking into account any differing interests of participants and beneficiaries;

(5) Incurring only costs that are appropriate and reasonable; and

(6) In accordance with a good-faith interpretation of the law governing the retirement system.

(b) In investing and managing assets of the retirement system pursuant to subparagraph (a), a trustee with authority to invest and manage assets:

(1) Shall consider among other circumstances:

(A) General economic conditions;

(B) The possible effect of inflation or deflation;

(C) The role that each investment or course of action plays within the overall portfolio of the retirement system;

(D) The expected total return from income and the appreciation of capital;

(E) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and

(F) The adequacy of funding for the system based on reasonable actuarial factors;

(2) Shall diversify the investments of the retirement system unless the trustee or investment committee member reasonably determines that, because of special circumstances, it is clearly prudent not to do so;

(3) Shall make a reasonable effort to verify facts relevant to the investment and management of assets of a retirement system; and

(4) May invest in any kind of property or type of investment consistent with this section.

(c) The board of trustees shall adopt a statement of investment objectives and policies for the retirement system as provided in subparagraph VII(c).

I-b. Paragraph I-a shall apply to all board members and other fiduciaries, as well as staff and vendors to the extent they exercise any discretionary authority or discretionary control respecting management of the retirement system or exercise any authority or control respecting management or disposition of its assets, or they render investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the retirement system, or have any authority or responsibility to do so, or they have any discretionary authority or discretionary responsibility in the administration of the retirement system.

I-c. The fiduciary obligations of the members of the board of trustees are paramount to any other interest a trustee may have arising from another role or position that he or she holds, including the position which qualified the person for appointment to the board of trustees.

II. The board of trustees shall:

(a) [Have the authority to empower an investment committee of its members to make investments and deposits between meetings of the board.] Have the authority to hire actuarial services. The compensation for actuarial services required by the board of trustees shall be a charge upon the funds of the New Hampshire retirement system.

(b) Have the full power and authority to delegate to any agent providing services to the New Hampshire retirement system, within or without the state, the power and discretion to make any necessary decisions and to take any action necessary to effect decisions with the same legal effect as if performed by the board of trustees. The payment for these services shall be a charge upon the funds of the New Hampshire retirement system.

(c) Have the [further] authority to hire investment [counsel] consultants. The compensation for investment [counsel] consultant services [and the compensation for actuarial services required by the board of trustees in performing the duties required by RSA 100-A:14] shall be a charge upon the funds of the New Hampshire retirement system.

II-a. The investment committee shall:

[(c)] (a) Appoint and employ a custodian of the several funds of the retirement system, and such custodian, as an agent of the [board] investment committee, shall be compensated and such compensation shall be a charge upon the funds of the retirement system.

[(d)] (b) Have the full power and authority to delegate to any agent, within or without the state, [who may or may not be the custodian of stocks and securities,] the power and discretion to make any necessary decisions with regard to the purchase or sale of any legal object of investment and to take any action necessary to effect decisions by or on behalf of the New Hampshire retirement system with the same legal effect as if performed by the [board of trustees of the New Hampshire retirement system] investment committee. The [board of trustees] investment committee shall have the power to authorize the payment of compensation to an agent or agents for investment management services.

(c) Report to the board of trustees at least quarterly on the management, investment, and reinvestment activities of the investment committee.

III. Except as otherwise provided in this section, no trustee, no advisory committee member, and no employee of the board of trustees shall have any personal interest in the gains or profits of any investment made by the board; nor shall any trustee, advisory committee member, or employee of the board, directly or indirectly, for himself or herself or as an agent, in any manner use the same except to make such current and necessary payments as are authorized by the board; nor shall any trustee, advisory committee member, or employee of the board become an endorser or surety, or in any manner an obligor, for money loaned to or borrowed from the board.

IV. The board of trustees is authorized to engage the services of legal counsel [for special investment, federal, and tax matters, and to engage outside counsel for other matters]. The payment for services provided in this paragraph shall be a charge upon the funds of the New Hampshire retirement system.

V. The board of trustees shall adopt rules pursuant to RSA 541-A relative to procedures to be followed in establishing and modifying investment objectives and guidelines[, and in selecting investment managers, investment products and investment participations]. The investment policies shall not be subject to rulemaking under RSA 541-A.

VI.(a) The funds of the New Hampshire retirement system shall be audited annually[. The board of trustees shall complete, not later than 120 days after the close of the fiscal year, unless the fiscal committee and the governor and council for good cause shall extend such period, a comprehensive annual financial report concerning the preceding fiscal year that details the financial condition and operation of the system during that period in a manner consistent with generally accepted accounting principles] and said audit shall be conducted in accordance with prevailing standards and practices of governmental auditing specified by authoritative national standard setting bodies. The audit committee shall prepare for board review and approval a comprehensive annual financial report concerning the preceding fiscal year that details the financial condition and operation of the system during that period in a manner consistent with generally accepted accounting principles. The board shall approve the comprehensive annual financial report not later than 120 days after the close of the fiscal year. The fiscal committee and the governor and council for good cause may extend such period. Said report subsequently shall be audited by the legislative budget assistant who may designate a certified public accountant not employed in the state service to conduct the annual audit and may accept the findings and report of the certified public accountant as fulfilling the provisions of this paragraph, provided that in either case said audit shall be conducted in accordance with prevailing standards and practices of governmental auditing specified by authoritative national standard setting bodies. [The cost of such audit shall be a charge upon the funds of the New Hampshire retirement system.]

(b) The audit committee shall cause a performance audit not less frequently than every 3 years.

(c) Copies of all audits and reports shall be forwarded to the governor, the senate president, and the speaker of the house of representatives. The cost of all audits and reports shall be a charge upon the funds of the New Hampshire retirement system.

VII. The [board of trustees shall complete a comprehensive annual investment report at the same time that the annual financial report under paragraph VI is completed.] investment committee shall prepare for board review and approval a comprehensive annual investment report. The board shall approve the comprehensive annual investment report at the same time that it approves the annual financial report under paragraph VI. The investment report shall be submitted to the president of the senate, the speaker of the house, and the governor. The report shall include, but shall not be limited to:

(a) A description of the [board’s] investment committee’s philosophy for investing the assets of the system, including an analysis of any significant changes in philosophy which have occurred from the prior annual report.

(b) An analysis of the return on investment, by investment category.

(c) [Anticipated future uses of and approaches to the management, investment, and reinvestment of system assets under the principles of paragraph I.] An annual investment policy statement which shall incorporate the following:

(1) A clear statement of investment objectives including the adoption of a reasonable and sound average annual rate of return the retirement system is attempting to earn. The rate of return utilized for the statement of investment objectives shall be same as the assumed rate of return set by the trustees for the biennial actuarial calculation.

(2) A detailed breakdown of the asset structure most likely to enable the fund to reach its long range objective within appropriate risk parameters. The details should include all relevant subcategories among equities, debt, and alternative investments and identify the appropriate benchmarks for each performance analysis. The policy should establish an acceptable range for each allocation as well as a specific target allocation.

(3) Identification of how outcomes are measured and benchmarks are developed and who is responsible for the various decision levels in the investment process between the board of trustees, the investment committee, the retirement system’s staff, investment consultants, and portfolio managers. The policy statement should specify the minimum frequency to review outcomes and responsibilities, in order to determine whether decisions as to asset mix and manager selection added value to the fund. Investment managers should be under constant review by the investment committee and the retirement system.

(d) Any suggested changes in legislation which the board may seek in order to better serve the members of the system. This is not intended to preclude the board of trustees from seeking additional legislation as needs arise between annual reports.

VIII. The management, investment, and reinvestment practices for the assets held in trust by the board pursuant to this section shall be subject to review by the legislature.

IX. Not later than January 1, 2010, the board of trustees shall report to the governor, the senate president, and the speaker of the house of representatives on the operation of the audit, investment, and other committees.

21 Supplemental Allowances. RSA 100-A:41-a is repealed and reenacted to read as follows:

100-A:41-a Supplemental Allowances.

I. Any retired member of the New Hampshire retirement system or any of its predecessor systems, who has been retired for at least 12 months, or any beneficiary of such member who is receiving an allowance, shall be entitled to receive supplemental allowances on the retired member’s latest anniversary date.

II. No later than May 31 of each year, the board of trustees shall determine the amount of a supplemental allowance to be issued as a separate payment to eligible members or their beneficiaries on or after the July 1 thereafter. Supplemental allowances under this paragraph shall not become a permanent addition to the base retirement allowance. The actuary shall certify the amount of the supplemental allowance which may be granted to each member classification subgroup based on the funds available in the special account for each member classification subgroup. No supplemental allowance shall be granted for any year for which the funds available in the special account are insufficient to pay for the cost of the supplemental allowance. The supplemental allowance shall be determined as follows:

(a) The minimum allowance shall be $500 for the fiscal year ending June 30, 2009, and shall be adjusted each July 1 thereafter by the change in the Consumer Price Index-Urban for the year prior to the year in which the allowance is granted.

(b) The amount of the supplemental allowance shall be 2.5 percent of the member’s or beneficiary’s current base retirement allowance. The supplemental allowance shall not exceed 2.5 percent of the prior year’s median retirement allowance for all members or their beneficiaries within each member classification subgroup as determined by the actuary.

III. No supplemental allowance shall be granted or increased if such grant or increase would reduce the funds in the respective component of the special account to an amount less than zero.

22 Commission Established. There is established a commission to study the feasibility of authorizing, and the depletion schedules for, future COLAs to be issued at different rates to or within each subgroup within the special account.

23 Membership and Compensation.

I. The members of the commission shall be as follows:

(a) Three members of the house of representatives, appointed by the speaker of the house of representatives.

(b) Two members of the senate, appointed by the president of the senate.

(c) The chairperson of the New Hampshire retirement system, or designee.

(d) Three persons with relevant knowledge, appointed by the governor.

II. Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the committee.

24 Duties. The commission shall study the feasibility of authorizing, and the depletion schedules for, future COLAs to be issued at different rates to or within each subgroup within the special account. The commission shall consider proposals for defined benefit and defined contribution plans for COLAs. The study shall examine the possibility of issuing COLAs, funded from the special account, beginning 2012 with such COLAs becoming permanent additions to the beneficiary’s base retirement allowance. The commission may request assistance from the retirement system and the actuary to aid in its study.

25 Chairperson; Quorum. The members of the commission shall elect a chairperson from among the members. The first meeting of the commission shall be called by the first-named house member. The first meeting of the commission shall be held within 45 days of the effective date of this section. Five members of the commission shall constitute a quorum.

26 Report. The commission shall report its findings and its initial recommendations for proposed legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the chairpersons of the house and senate finance and executive departments and administration committees, the governor, and the state library on or before December 1, 2008. The commission shall issue a final report of its findings and recommendations for additional legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the chairpersons of the house and senate finance and executive departments and administration committees, the governor, and the state library on or before December 1, 2009.

27 New Section; Temporary Contribution Amounts and Ratification. Amend RSA 100-A by inserting after section 53-d the following new section:

100-A:53-e Temporary Contribution Amounts and Ratification.

I. Notwithstanding the provisions of RSA 100-A:53, 100-A:53-b, 100-A:53-c, and 100-A:53-d, for the period beginning July 1, 2000, and ending June 30, 2007, 33-1/3 percent of group II employer contributions, group I teacher contributions, group I employer contributions, and group I state employer contributions shall be allocated to the 401(h) subtrust of the New Hampshire retirement system in order to pay for the benefits provided under RSA 100-A:52, 100-A:52-a, and 100-A:52-b, subject to applicable limits under the Internal Revenue Code.

II. At the end of each fiscal year specified in paragraph I, the state annuity accumulation

fund of the New Hampshire retirement system shall be reimbursed from the special account established in RSA 100-A:16, II(h) for the amount of funds allocated to the 401(h) subtrust for that year.

III. Actions taken by the New Hampshire retirement system in accordance with this

section are hereby ratified.

28 Medical Benefits Financing; Group II. Amend RSA 100-A:53, II–IV to read as follows:

II. The special account established in RSA 100-A:16, II(h), for group II members, shall be augmented as of July 1, 1988, by $23,700,000 resulting from a one-time write-up of the valuation assets as of June 30, 1987. At the end of each fiscal year beginning with the year ending June 30, 1989, and ending with the fiscal year ending June 30, 2007, the state annuity accumulation fund of the New Hampshire retirement system shall be reimbursed from the special account established in RSA 100-A:16, II(h) for the amount of funds allocated to the 401(h) subtrust for that year, and such reimbursement shall continue until the benefits provided through the subtrust are fully funded or until the total accumulated reimbursement equals the sum of:

(a) The initial special account amount as of June 30, 1988, of $52,800,000;

(b) The additional special account amount as of June 30, 1993, which shall be determined by the actuary as an amount which shall be sufficient to provide benefits under RSA 100-A:52 for persons who meet the requirements of RSA 100-A:52, I(f);

(c) The additional special account amount as of June 30, 1993, of $1,200,000 to provide benefits under RSA 100-A:52 for persons who meet the requirements of RSA 100-A:52, I(g); and

(d) Future accumulated interest per year on the balance of the reimbursement funds remaining in the special account.

III. Except as provided in RSA 100-A:54, II, all contributions made to the retirement system to provide medical benefits under RSA 100-A:52 shall be maintained in a separate account, the 401(h) subtrust, and such funds shall not be used for or diverted to any purpose other than to provide said medical benefits. Similarly, none of the funds accumulated to provide the retirement benefits set forth in this chapter, including the special account established under RSA 100-A:16, II(h), may be used or diverted to provide medical benefits under RSA 100-A:52. The funds, if any, accumulated to provide medical benefits under RSA 100-A:52 may be invested pursuant to the provisions of RSA 100-A:15.

[IV. A separate account shall be established and maintained for each retired member who is a key employee, as defined under section 416(i) of the Internal Revenue Code, at any time during the plan year or any previous plan year during which contributions are made hereunder on behalf of such member for the purposes of RSA 100-A:52.]

29 Medical Benefits Financing; Group I Teachers. Amend RSA 100-A:53-b, II to read as follows:

II. All contributions made to the retirement system to provide medical benefits under RSA 100-A:52-a shall be maintained in a separate account, the 401(h) subtrust. All funds and accumulated interest shall not be used for or diverted to any purpose other than to provide said medical benefits. Similarly, none of the funds accumulated to provide the retirement benefits set forth in this chapter, including the special account established under RSA 100-A:16, II(h), may be used or diverted to provide medical benefits under RSA 100-A:52-a. The funds, if any, providing medical benefits under RSA 100-A:52-a may be invested pursuant to the provisions of RSA 100-A:15.

30 Medical Benefits Financing; Group I Political Subdivision Employees. Amend RSA 100-A:53-c, II to read as follows:

II. All contributions made to the retirement system to provide medical benefits under RSA 100-A:52-a shall be maintained in a separate account, the 401(h) subtrust. All funds and accumulated interest shall not be used for or diverted to any purpose other than to provide said medical benefits. Similarly, none of the funds accumulated to provide the retirement benefits set forth in this chapter, including the special account established under RSA 100-A:16, II(h), may be used or diverted to provide medical benefits under RSA 100-A:52-a. The funds, if any, providing medical benefits under RSA 100-A:52-a may be invested pursuant to the provisions of RSA 100-A:15.

31 Medical Benefits Financing; Group I State Employees. Amend RSA 100-A:53-d, II to read as follows:

II. All contributions made to the retirement system to provide medical benefits under RSA 100-A:52-b shall be maintained in a separate account, the 401(h) subtrust. All funds and accumulated interest shall not be used for or diverted to any purpose other than to provide said medical benefits. Similarly, none of the funds accumulated to provide the retirement benefits set forth in this chapter, including the special account established under RSA 100-A:16, II(h), may be used or diverted to provide medical benefits under RSA 100-A:52-a. The funds, if any, providing medical benefits under RSA 100-A:52-b may be invested pursuant to the provisions of RSA 100-A:15.

32 New Paragraph; Application; Transfers. Amend RSA 100-A:55 by inserting after paragraph II the following new paragraph:

III. No transfers shall be made from the special account established under RSA 100-A:16, II(h) to the 401(h) subtrust for the purpose of funding the provisions of RSA 100-A:52-b or for any other purpose.

33 Service Retirement; Group II. Amend RSA 100-A:5, II to read as follows:

II. Group II Members.

(a) Any group II member in service, who commenced service before July 1, 2009, who has attained age 45 and completed 20 years of creditable service, or who has attained age 60 regardless of the number of years of creditable service, and a group II member who commenced service on or after July 1, 2009, who has attained age 50 and completed 25 years of creditable service, or who has attained age 60 regardless of the number of years of creditable service, may retire on a service retirement allowance upon written application to the board of trustees setting forth at what time not less than 30 days nor more than 90 days subsequent to the filing thereof the member desires to be retired, notwithstanding that during such period of notification the member may have separated from service.

(b) Upon service retirement, a group II member shall receive a service retirement allowance which shall consist of:

(1) A member annuity which shall be the actuarial equivalent of his accumulated contributions at the time of retirement; and

(2) For members who commenced service before July 1, 2009, a state annuity which, together with his or her member annuity, shall be equal to 2-1/2 percent of his or her average final compensation multiplied by the number of years of his or her creditable service not in excess of 40 years, or for members who commenced service on or after July 1, 2009, a state annuity which, together with his or her member annuity, shall be equal to 2 percent of his or her average final compensation multiplied by the number of years of his or her creditable service not in excess of 50 years.

(c)(1) Notwithstanding any provision of RSA 100-A to the contrary, any group II member who commenced service before July 1, 2009 and has retired on or after the effective date of this subparagraph after attaining the age of 45 with at least 20 years of creditable service, and any group II member who commenced service on or after July 1, 2009 and has retired on or after the effective date of this subparagraph after attaining the age of 50 with at least 25 years of creditable service, shall receive a minimum annual service retirement allowance of $10,000. If such group II member has elected to convert the retirement allowance into an optional allowance for the surviving spouse under RSA 100-A:13, the surviving spouse shall be entitled to a proportional share of the $10,000.

(2) [Repealed.]

(3) [Repealed.]

34 Ordinary Disability Retirement; Group II. Amend RSA 100-A:6, II(b) to read as follows:

(b) Upon ordinary disability retirement, the group II member shall receive an ordinary disability retirement allowance which shall consist of: a member annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his or her ordinary disability retirement; and a state annuity which, together with his or her member annuity, for members who commenced service before July 1, 2009, shall be equal to 2-1/2 percent of his or her average final compensation at the time of [his] ordinary disability retirement multiplied by the number of years of his or her creditable service not in excess of 40 at the time of [his] ordinary disability retirement, or for members who commenced service on or after July 1, 2009, shall be equal to 2 percent of his or her average final compensation at the time of ordinary disability retirement multiplied by the number of years of his or her creditable service not in excess of 50 at the time of ordinary disability retirement, provided, however, that such allowance shall not be less than 25 percent of the member’s final compensation at the time of his or her disability retirement.

35 Accidental Disability Retirement; Group II. Amend RSA 100-A:6, II(d) to read as follows:

(d) Upon accidental disability retirement, the group II member shall receive an accidental disability retirement allowance equal to 2/3 of his or her average final compensation at the time of [his] disability retirement.

(1) For members who commenced service before July 1, 2009, any group II member who has more than 26-2/3 years of service, a supplemental disability retirement allowance shall be paid. Such supplement shall be equal to 2-1/2 percent of his or her average final compensation multiplied by the number of years of his or her creditable service in excess of 26-2/3 but not in excess of 40 years.

(2) For members who commenced service on or after July 1, 2009, any group II member who has more than 33-1/3 years of service, a supplemental disability retirement allowance shall be paid. Such supplement shall be equal to 2 percent of his or her average final compensation multiplied by the number of years of his or her creditable service in excess of 33-1/3 but not in excess of 50 years.

(3) An accidental disability retirement allowance together with a supplemental disability retirement allowance, as provided in this subparagraph, shall not exceed 100 percent of the disability retiree’s average final compensation.

36 Vested Deferred Retirement; Group II. Amend RSA 100-A:10, II(b) to read as follows:

(b) For members who commenced service before July 1, 2009, upon the member’s attainment of age 45, provided the member would then have completed 20 years of creditable service, otherwise the subsequent date on which such 20 years would have been completed, or for members who commenced service on or after July 1, 2009, upon the member’s attainment of age 50, provided the member would then have completed 25 years of creditable service, otherwise the subsequent date on which such 25 years would have been completed, or at any time after age 60, a group II member who meets the requirement of subparagraph (a) may make application on a form prescribed by the board of trustees and receive a vested deferred retirement allowance which shall consist of: (1) A member annuity which shall be the actuarial equivalent of accumulated contributions on the date the member’s retirement allowance commences; and (2) A state annuity which, together with the member annuity, shall be equal to a service retirement allowance based on the member’s average final compensation and creditable service at the time the member’s service is terminated.

37 Split Benefits; Minimum Age. Amend RSA 100-A:19-b, II to read as follows:

II. For a member who commenced service before July 1, 2009 and, who has completed 20 or more years of combined creditable service, one year shall be deducted from age 60 for each year of creditable group II service, provided that the age shall not be less than 45 years. For a member who commenced service on or after July 1, 2009 and, who has completed 25 or more years of combined creditable service, one year shall be deducted from age 60 for each year of creditable group II service, provided that the age shall not be less than 50 years.

38 Split Benefits; Reduced Early Retirement; Minimum Age. Amend RSA 100-A:19-d to read as follows:

100-A:19-d Reduced Early Retirement. Notwithstanding any other provision of law, any retirement system member who has creditable service in both group I and group II with at least 10 years combined creditable service, and who has attained an age which is at least 45 for members who commenced group II service prior to July 1, 2009 or at least 50 for members who commenced group II service on or after July 1, 2009 and is within 10 years of the minimum age set forth in RSA 100-A:19-b, may elect to retire and have benefits commence immediately as a reduced split-benefit service retirement allowance. Application shall be as provided in RSA 100-A:5, I(c). The allowance shall be determined as a split-benefit service retirement allowance in accordance with RSA 100-A:19-c, and the total combined split-benefit service allowance shall be reduced by the percentages shown in RSA 100-A:5, I(c), based on the total combined length of creditable service, for each month by which the date on which benefits commence precedes the month after which the member attains the minimum age set forth in RSA 100-A:19-b.

39 Financing; Group II Member Payroll Deduction. Amend RSA 100-A:16, I(a) to read as follows:

(a) The member annuity savings fund shall be a fund in which shall be accumulated the contributions deducted from the compensation of members to provide for their member annuities together with any amounts transferred thereto from a similar fund under one or more of the predecessor systems. Such contribution shall be, for each member, dependent upon the member’s employment classification at the rate determined in accordance with the following table:

Employees 5.00

Teachers 5.00

Permanent Policemen 9.30

Permanent Firemen 9.30

The board of trustees shall certify to the proper authority or officer responsible for making up the payroll of each employer, and such authority or officer shall cause to be deducted from the compensation of each member, except group II members who commenced service before July 1, 2009 with creditable service in excess of 40 years, or group II members who commenced service on or after July 1, 2009 with creditable service in excess of 50 years, as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), on each and every payroll of such employer for each and every payroll period, the percentage of earnable compensation applicable to such member. No deduction from earnable compensation under this paragraph shall apply to any group II member who commenced service before July 1, 2009 with creditable service in excess of 40 years, or group II member who commenced service on or after July 1, 2009 with creditable service in excess of 50 years, as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), and this provision for such members shall not affect the method of determining average final compensation as provided in RSA 100-A:1, XVIII. [In determining the amount earnable by a member in a payroll period, the board may consider the rate of compensation payable to such member on the first day of a payroll period as continuing throughout the payroll period and it may omit deduction from compensation for any period less than a full payroll period if such person was not a member on the first day of the payroll period, and to facilitate the making of deductions it may modify the deduction required of any member by such an amount as shall not exceed 1/10 of one percent of the annual earnable compensation upon the basis of which such deduction is made.] The amounts deducted shall be reported to the board of trustees. Each of such amounts, when deducted, shall be paid to the retirement system at such times as may be designated by the board of trustees and credited to the individual account, in the member annuity savings fund, of the member from whose compensation the deduction was made.

40 New Section; Decennial Retirement Commission. Amend RSA 100-A by inserting after section 56 the following new section:

100-A:57 Decennial Retirement Commission.

I. There shall be established decennially on or about July 1, beginning in 2017, a commission to make recommendations to ensure the long-term viability of the New Hampshire retirement system.

II. The members of the commission shall be as follows:

(a) Three members of the house of representatives, appointed by the speaker of the house of representatives.

(b) Two members of the senate, appointed by the president of the senate.

(c) The chairman of the New Hampshire retirement system board of trustees, or designee.

(d) Two representatives of group I of the retirement system, appointed by the governor.

(e) Two representatives of group II of the retirement system, appointed by the governor.

(f) Two representatives of municipal and school employers in the retirement system, appointed by the governor.

(g) Four public members with recognized expertise in finance, financial management, or the governance and oversight of large endowments or public funds, appointed by the governor.

(h) One retired member of the retirement system receiving benefits at the time of appointment, appointed jointly by the speaker of the house of representatives and the president of the senate.

III. Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.

IV. The commission shall:

(a) Study the previous decade’s history of funding, benefits, and investment results of the New Hampshire retirement system.

(b) Review the structure and governance of the New Hampshire retirement system.

(c) Analyze the financial status of the retirement system, and the challenges facing the system in the upcoming decade.

(d) Assess any changes to general accounting standards and their potential effect on the retirement system.

(e) Make recommendations for ensuring the long-term viability of the retirement system, including an appropriate funding methodology.

(f) Monitor the sustainability and affordability of cost of living increases for plan participants.

(g) Study other matters deemed necessary by the commission.

(h) Seek technical assistance as necessary from the New Hampshire retirement system and from other independent financial, investment, actuarial, and retirement experts. Subject to available appropriations, the commission may employ support staff for the purposes of its duties.

V. The governor, in consultation with the president of the senate and the speaker of the house of representatives, shall designate a chairperson from among the members. The first meeting of the commission shall be called by the chairperson. The first meeting of the commission shall be held within 45 days of the designation of the chairperson.

VI. The commission shall report its findings and any recommendations for proposed legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the governor, and the state library on or before the December 1 next following.

41 New Paragraph; Employer Contributions; Funding of Retirement Allowance. Amend RSA 100-A:16 by inserting after paragraph III the following new paragraph:

III-a. Upon the retirement of a member, the retirement system shall:

(a) Calculate for the member the retirement allowance which would result from the sum of the following amounts:

(1) The total of the employer contributions attributable to the member.

(2) The total of the member’s contribution to the retirement system.

(3) The earnings on the contributions under subparagraphs (1) and (2), and anticipated post-retirement earnings.

(b) Determine the difference from the allowance determined under subparagraph (a) compared to the actual retirement allowance payable to the member, and determine the cost of terminally funding the difference.

(c) Certify the cost determined in subparagraph (b) to the employer and assess upon the employer such cost for payment to the retirement system at such times and in such manner as the board of trustees may prescribe. Each such employer is hereby authorized to appropriate the sums necessary for the payment of such assessments.

42 Effective Date.

I. Sections 8, 10-13, 15, 33-39, and 41 of this act shall take effect July 1, 2009.

II. Sections 19, 20, and 40 of this act shall take effect 60 days after its passage.

III. Sections 16 and 17 of this act shall take effect June 30, 2009.

IV. The remainder of this act shall take effect upon its passage.

LBAO

08-2663

Amended 05/23/08

SB 463 FISCAL NOTE

FISCAL IMPACT:

METHODOLOGY:

• SB463 at GenCourtMobile

Bill Text Revisions

SB463 Revision: 12267 Date: Jan. 1, 2008, midnight

Docket

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