Revision: Jan. 5, 2012, midnight
HB 465-FN – AS INTRODUCED
2011 SESSION
10/05
HOUSE BILL 465-FN
AN ACT relative to the number of years for calculating average final compensation for retirement system benefits.
SPONSORS: Rep. Hawkins, Hills 18; Rep. Reagan, Rock 1; Rep. Kurk, Hills 7; Sen. Bradley, Dist 3; Sen. White, Dist 9
COMMITTEE: Special Committee on Public Employee Pensions Reform
This bill increases the number of years for calculating average final compensation from 3 to 5. The change applies to new and non-vested active members.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0370
10/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to the number of years for calculating average final compensation for retirement system benefits.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Retirement System; Definitions; Average Final Compensation. Amend RSA 100-A:1, XVIII to read as follows:
XVIII. “Average final compensation” shall mean, for members who have vested status prior to July 1, 2011, the average annual earnable compensation of a member during his or her highest 3 years of creditable service, or during all of the years in his or her creditable service if less than 3 years. For members who began service or have non-vested status on or after July 1, 2011, “average final compensation” shall mean the average annual earnable compensation of a member during his or her highest 5 years of creditable service, or during all of the years in his or her creditable service if less than 5 years.
2 Effective Date. This act shall take effect July 1, 2011.
LBAO
11-0370
Revised 02/28/11
HB 465 FISCAL NOTE
AN ACT relative to the number of years for calculating average final compensation for retirement system benefits.
FISCAL IMPACT:
The New Hampshire Retirement System states this bill will decrease state expenditures by $3,480,000 in FY 2014 and by $3,650,000 in FY 2015 and will also decrease county and local expenditures by $4,270,000 in FY 2014 and by $4,450,000 in FY 2015. There will be no fiscal impact on state, county or local revenues.
METHODOLOGY:
The New Hampshire Retirement System states this bill would define average final compensation for members who began service or have non-vested status on or after July 1, 2011 as a member’s average annual earnable compensation during the five highest years of credible service or all years if less than five, rather than the three highest years as currently in statute. The System states if enacted, this bill would not affect employer contribution rates for FY 2011, FY 2012, or FY 2013 as rates for those fiscal years have already been established. However, the System states their actuaries project the following reductions in state and political subdivision employer contributions in FY 2014 and FY 2015:
State |
|
Political Subdivisions | ||
FY 2014 |
FY 2014 |
| ||
Employees |
$1,740,000 |
Employees |
$1,910,000 | |
Teachers |
590,000 |
Teachers |
1,110,000 | |
Police |
880,000 |
Police |
780,000 | |
Fire |
270,000 |
Fire |
470,000 | |
Total |
$3,480,000 |
Total |
$4,270,000 | |
|
| |||
FY 2015 |
FY 2015 |
| ||
Employees |
1,820,000 |
Employees |
$1,990,000 | |
Teachers |
620,000 |
Teachers |
1,160,000 | |
Police |
920,000 |
Police |
820,000 | |
Fire |
290,000 |
Fire |
480,000 | |
Total |
$3,650,000 |
|
Total |
$4,450,000 |
The System’s actuaries are unable to separate local and county expenditures from their actuarial valuation within totals for political subdivisions. The System did not provide estimates beyond FY 2015.