HB 1530-FN-LOCAL – AS INTRODUCED
2010 SESSION
10/01
HOUSE BILL 1530-FN-LOCAL
AN ACT redefining earnable compensation of members of the New Hampshire retirement system.
SPONSORS: Rep. Kurk, Hills 7; Rep. Hawkins, Hills 18
COMMITTEE: Executive Departments and Administration
This bill changes the definition of earnable compensation for retirement system members by limiting compensation to the full base rate of compensation paid during a year.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
10-2567
10/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT redefining earnable compensation of members of the New Hampshire retirement system.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Retirement System; Definition of Earnable 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 any military differential pay, plus the fair market value of non-cash compensation paid to, or on behalf of, the member for meals or living quarters if subject to federal income tax, but excluding other compensation except cash incentives paid by an employer to encourage members to retire, supplemental pay paid by the employer while the member is receiving workers' compensation, and teacher development pay that is not part of the contracted annual salary]. 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 Application. The definition of earnable compensation for retirement system members as amended by section 1 of this act shall apply to compensation paid by retirement system employers beginning July 1, 2011.
3 Effective Date. This act shall take effect July 1, 2010.
LBAO
10-2567
11/16/09
HB 1530-FN-LOCAL - FISCAL NOTE
AN ACT redefining earnable compensation of members of the New Hampshire retirement system.
FISCAL IMPACT:
The New Hampshire Retirement System states this bill may decrease state, county, and local expenditures by an indeterminable amount in FY 2012 and each year thereafter. There will be no fiscal impact on state, county, or local revenue.
METHODOLOGY:
The New Hampshire Retirement System states this bill amends the definition of ‘earnable compensation’ for determining retirement contributions and benefits to exclude all compensation paid to each member on or after July 1, 2011 except the member’s full base rate of compensation paid. The System states participating employers currently report earnable compensation as a gross amount without a breakdown of the various components of that compensation, so that is has no way to determine what amount of previously reported earnable compensation would now be subject to exclusion from that calculation. The System does assume participating employers (state, county, and local governmental entities) that pay compensation in addition to base pay (overtime, vacation, holiday, sick, longevity, differential, etc) will see a decrease in expenditures as employer contributions will be calculated on a reduced earnable compensation amount. However, the lack of detailed historical data on the different types of pay that make up reported earnable compensation does not provide the System or its actuary with enough information to isolate projected base pay and make a specific estimate of cost savings.