CHAPTER 261
HB 1483-FN – FINAL VERSION
15Mar2012… 0091h
05/16/12 2326s
6June2012… 2488EBA
2012 SESSION
08/10
HOUSE BILL 1483-FN
AN ACT repealing the retirement system special account and repealing the assessments for excess benefits paid by employers in the retirement system.
SPONSORS: Rep. Hawkins, Hills 18
COMMITTEE: Special Committee on Public Employee Pensions Reform
This bill repeals the retirement system special account.
This bill also repeals the provisions establishing the assessments for excess benefits to be paid by employers in the retirement system.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
15Mar2012… 0091h
05/16/12 2326s
6June2012… 2488EBA
12-2606
08/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT repealing the retirement system special account and repealing the assessments for excess benefits paid by employers in the retirement system.
Be it Enacted by the Senate and House of Representatives in General Court convened:
261:1 Terminal Funding; Special Account Reference Removed. Amend RSA 100-A:1, XXX to read as follows:
XXX. “Terminal funding” shall mean providing the full present value of the total liability for benefit improvement. [Unless otherwise specified, the source of terminal funding shall be the special account established under RSA 100-A:16, II(h).]
261:2 Terminal Funding; Special Account Reference Removed. Amend RSA 100-A:12, I-a and II to read as follows:
I-a. In addition to any other provision of this section, upon the death of a retired group II member of the New Hampshire retirement system or any predecessor system, who retired pursuant to RSA 100-A:5, II with at least 20 years of creditable service or pursuant to RSA 100-A:6, II(a) prior to April 1, 1987, there shall be paid to the member’s spouse at the time of retirement, if surviving, an allowance to continue until the spouse’s death or remarriage equal to 50 percent of the service or ordinary disability retirement allowance payable to the retired member prior to the member’s death. The total cost of terminally funding the benefits provided by this paragraph shall be funded from the [special account established under RSA 100-A:16, II(h)] state annuity accumulation fund.
II. Upon the death of a group II member who has retired on or after April 1, 1987, or upon the death of a group II member who has filed an application for retirement benefits with the board of trustees after January 1, 1991, there shall be paid to the person nominated by the member by written designation filed with the board, if living, otherwise to the retired member’s estate, in addition to the amount payable under RSA 100-A:11 a lump sum of $3,600 if the member retired before July 1, 1988, and if the member is married on the date of such member’s retirement, there shall be paid to such surviving spouse an allowance to continue until the spouse’s death or remarriage equal to 50 percent of the member’s service, ordinary disability, or accidental disability retirement allowance payments. For any person who is a group II member as of June 30, 1988, and who retires on or after July 1, 1988, the lump sum payment shall be $10,000. For any person who becomes a member of group II on or after July 1, 1988, and on or prior to July 1, 1993, the lump sum payment shall be $3,600. It is the intent of the legislature that future group II members shall be included only if the total cost of such inclusion can be terminally funded [by reimbursement from the special account established under RSA 100-A:16, II(h)].
261:3 Method of Financing; Special Account Removed. Amend RSA 100-A:16, II(b) to read as follows:
(b) The contributions of each employer for benefits under the retirement system on account of group II members shall consist of a percentage of the earnable compensation of its members to be known as the “normal contribution,” and an additional amount to be known as the “accrued liability contribution;” provided that beginning with state fiscal year 2013 and for each state fiscal year thereafter, any employer shall pay the full amount of such total contributions. The rate percent of such normal contribution, including contributions on behalf of group II members whose group II creditable service is in excess of 40 years, in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuations, except as provided in [subparagraphs (h) and] subparagraph (i).
261:4 Method of Financing; Special Account Removed. 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 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. The rate of interest shall be 2 percentage points less than either the most recent board of trustees approved 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) as approved and accepted by the board of trustees by December 1 of each year, provided the rate shall not be less than zero. Such interest shall be compounded at an annual rate and shall be 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.
261:5 Supplemental Allowances; Special Account Reference Removed. Amend RSA 100-A:41-a, II-III to read as follows:
II. The board of trustees shall pay the supplemental allowance [to the extent funds are available in each member classification component of the special account]. Any such supplemental allowance 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.
III.(a) The payment of any such supplemental allowance shall be contingent on terminal funding of the total actuarial cost thereof. [Such terminal funding shall be from the special account established under RSA 100-A:16, II(h).]
(b) [No supplemental allowance shall reduce the funds in the respective component of the special account to an amount less than zero.
(c)] Cost of living adjustments shall be retroactive to the member’s eligibility date pursuant to paragraph I.
261:6 Additional Temporary Supplemental Allowances; Special Account Reference Removed. Amend RSA 100-A:41-d to read as follows:
100-A:41-d Additional Temporary Supplemental Allowances.
I. The additional supplemental allowance in this paragraph shall apply only for the fiscal year beginning July 1, 2008, the state fiscal year beginning July 1, 2009, and the state fiscal year beginning July 1, 2010. Any retired member of the New Hampshire retirement system or any of its predecessor systems who has been retired for at least 12 months and whose annual retirement allowance is based on at least 15 years of service and is $20,000 or less, or any beneficiary of such member who is receiving an allowance, shall be entitled to receive an additional supplemental allowance, in addition to the provisions of RSA 100-A:41-a, on the retired member’s latest anniversary date. The amount of the additional temporary supplemental allowance under this paragraph shall be $1,000[, paid from the respective component of the special account].
II. The supplemental allowance in this paragraph shall apply only for the fiscal year beginning July 1, 2008, the state fiscal year beginning July 1, 2009, and the state fiscal year beginning July 1, 2010. Any retired member of the New Hampshire retirement system or any of its predecessor systems who retired prior to January 1, 1993, or any beneficiary of such member who is receiving an allowance, shall be entitled to receive an additional supplemental allowance, in addition to the provisions of RSA 100-A:41-a and paragraph I, on the retired member’s latest anniversary date. The amount of the additional temporary supplemental allowance under this paragraph shall be $500[, paid from the respective component of the special account].
III. The supplemental allowance in this paragraph shall apply only for the fiscal years beginning July 1, 2008 up to and including the fiscal year beginning July 1, 2012. In addition to paragraphs I and II, any retired member of the New Hampshire retirement system or any of its predecessor systems or any beneficiary of such retired member who is receiving an allowance, except for a retired state member, or his or her beneficiary, whose medical benefits are paid by the state pursuant to RSA 21-I, who is receiving a medical benefit subsidy payment under RSA 100-A:52 or RSA 100-A:52-a, shall be entitled to receive an additional supplemental allowance, in addition to the provisions of RSA 100-A:41-a, on the retired member’s latest anniversary date. The amount of the additional temporary supplemental allowance under this paragraph shall be $500 for retirees taking a one-person medical benefit and $1,000 for retirees taking a 2-person medical benefit[, paid from the respective component of the special account]. Provided, however that no 2-person subsidy recipient may receive more than $1,000 per year under this paragraph, and that once a recipient is entitled to Medicare, the additional allowance under this paragraph shall be reduced to 60 percent of the non-Medicare eligible retiree amounts.
IV. The additional supplemental allowances under this section shall be issued as separate payment to eligible members or their beneficiaries on or after July 1. Supplemental allowances under this section shall not become a permanent addition to the base retirement allowance.
[V. No supplemental allowance shall be paid if it would reduce the funds in the respective component of the special account to an amount less than zero. If insufficient funds exist in the special account to fund all the supplemental allowances provided for in this section and in RSA 100-A:41-a, the available funds shall be used first to fund the supplemental allowance in RSA 100-A:41-a then to fund the supplemental allowance in paragraphs I, II, and III of this section, in that order.]
261:7 Method of Financing; Group I Teachers; Special Account Reference Removed. 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.
261:8 Method of Financing; Group I Political Subdivision Employees; Special Account References Removed. 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.
261:9 Method of Financing; Group I State Employees; Special Account Reference Removed. 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.
261:10 Application; Special Account Reference Removed. Amend RSA 100-A:55 to read as follows:
100-A:55 Application.
I. The additional benefits provided under RSA 100-A:52 shall apply to persons who are active or retired members of group II as of June 30, 2000; to persons who prior to July 1, 1988, had completed no less than 20 years of group II creditable service, but who for reasons other than retirement or death ceased to be a group II member prior to attaining the age of 45, and who, as of July 1, 1993, are eligible for vested deferred retirement benefits; and to persons who are group II permanent policemen or permanent firemen members on disability retirement as the natural and proximate result of injuries suffered while in the performance of duty who become permanent policemen members of group II before July 1, 2005 or permanent firemen members of group II before July 1, 2005. Such additional benefits shall not apply to other persons who become members of group II after the dates stated in this paragraph, without future legislation to include them. It is the intent of the legislature that future group II members shall be included only if the total cost of such inclusion can be terminally funded [by reimbursement from the special account established under RSA 100-A:16, II(h)].
I-a. It is the intent of the legislature that future group I teacher members eligible after July 1, 2008 shall be included under the provisions of RSA 100-A:52-a only if the total cost of such inclusion can be terminally funded [from the special account established under RSA 100-A:16, II(h)].
I-b. It is the intent of the legislature that future group I political subdivision employee members eligible after July 1, 2008 shall be included under the provisions of RSA 100-A:52-a only if the total cost of such inclusion can be terminally funded [from the special account established under RSA 100-A:16, II(h)].
I-c. It is the intent of the legislature that future group I state employee members eligible after July 1, 2004 shall be included under the provisions of RSA 100-A:52-b only if the total cost of such inclusion can be terminally funded [from the special account established in RSA 100-A:16, II (h)].
II. For the purposes of this subdivision, group II in the New Hampshire retirement system shall include predecessor systems under RSA 102 and RSA 103.
[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.]
261:11 Reference Removed; Return of Group I Member Contributions. 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. A group I member shall cease to be an active member if he or she is absent from service for more than 180 days, without requesting return of the amount of his or her accumulated contributions, and 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 may make a written request for his or her total accumulated contributions, provided he or she is not on a leave of absence, and he or she shall be paid within 3 months after his or her written request. 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.
261:12 Reference Removed; Return of Group II Member Contributions. 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. A group II member shall cease to be an active member if he or she is absent from service for more than 180 days, without requesting return of the amount of his or her accumulated contributions, and 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 may make a written request for his or her total accumulated contributions, provided he or she is not on a leave of absence, and he or she shall be paid within 3 months after his or her written request. 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.
261:13 Reference Removed; Method of Financing. Amend RSA 100-A:16, II(c) to read as follows:
(c) The contributions of each employer for benefits under the retirement system on account of group I members shall consist of a percentage of the earnable compensation of its members to be known as the “normal contribution,” and an additional amount to be known as the “accrued liability contribution;” provided that beginning with state fiscal year 2013 and for each state fiscal year thereafter, any employer shall pay both normal and accrued liability contributions. The rate percent of such normal contribution in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuation, except as provided in [subparagraphs (h) and] subparagraph (i).
261:14 Repeal.
I. RSA 100-A:53, II, relative to the augmentation of the special account for group II members.
II. RSA 100-A:53-e, II, relative to the reimbursement of the state annuity accumulation fund from the special fund.
III. RSA 100-A:16, II(h), relative to the retirement system special account.
IV. RSA 100-A:16, II(j), relative to the 2008 one time transfer to the retirement system special account.
261:15 Repeal; Employer Assessments. RSA 100-A:16, III-a, as inserted by 2008, 300:33, relative to employer assessments for excess benefits paid by employers in the retirement system, is repealed.
261:16 Repeal; Prospective Amendment of Assessments. 2011, 230:1, 2, and 5, relative to the amendment, application, and interactive estimator of assessments for excess benefits paid by employers in the retirement system, are repealed.
261:17 Method of Financing; Calculation of Interest; Contingent Version. 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 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. The rate of interest for the calendar year beginning January 1 shall be 2 percentage points less than either the most recent board of trustees approved 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) as approved and accepted by the board of trustees by December 1 of each year, provided the rate shall not be less than zero. Such interest shall be compounded at an annual rate and shall be 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.
261:18 Contingency. If SB 244-FN of the 2012 legislative session becomes law, then section 17 of this act shall take effect on July 1, 2012 and section 4 of this act shall not take effect. If SB 244-FN does not become law, then section 4 of this act shall take effect on July 1, 2012 and section 17 of this act shall not take effect.
261:19 Effective Date.
I. Sections 4 and 17 of this act shall take effect as provided in section 18 of this act.
II. Sections 15, 16, and 18 of this act shall take effect upon its passage.
III. The remainder of this act shall take effect July 1, 2012.
Approved: June 18, 2012
Effective Date: I. Sections 4 and 17 shall take effect as provided in section 18.
II. Sections 15, 16 and 18 shall take effect June 18, 2012.
III. Remainder shall take effect July 1, 2012.