Revision: April 9, 2012, midnight
SB 229-FN – AS AMENDED BY THE SENATE
03/21/12 1265s
03/28/12 1413s
2012 SESSION
10/03
SENATE BILL 229-FN
AN ACT establishing a commission to make recommendations on whether the New Hampshire retirement system should be replaced with a defined contribution plan for all new hires and to study the impact such change would have on the retirement system.
SPONSORS: Sen. Groen, Dist 6; Sen. Boutin, Dist 16; Sen. Bradley, Dist 3; Sen. Bragdon, Dist 11; Sen. De Blois, Dist 18; Sen. Forsythe, Dist 4; Sen. Gallus, Dist 1; Sen. Lambert, Dist 13; Sen. Stiles, Dist 24; Sen. White, Dist 9; Rep. Hawkins, Hills 18; Rep. Winter, Merr 3; Rep. Hill, Merr 6; Rep. O'Brien, Hills 4; Rep. Bettencourt, Rock 4
COMMITTEE: Executive Departments and Administration
This bill establishes a commission to make recommendations on whether the New Hampshire retirement system should be replaced with a defined contribution plan for all new hires and to study the impact such change would have on the retirement system. The bill allows the commission to accept and expend private sector grants, gifts, or donations for purposes of the duties of the commission.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/21/12 1265s
03/28/12 1413s
12-2876
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT establishing a commission to make recommendations on whether the New Hampshire retirement system should be replaced with a defined contribution plan for all new hires and to study the impact such change would have on the retirement system.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Commission to Study a Viable Defined Contribution Plan. Amend RSA 100-A by inserting after section 56 the following new section:
100-A:56-a Commission to Study a Viable Defined Contribution Plan.
I. There is established a commission to make recommendations on whether the New Hampshire retirement system should be replaced with a defined contribution plan for all new hires and to study the impact such change would have on the retirement system.
II. 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 chairman of the New Hampshire retirement system board of trustees, or designee.
(d) Two member representatives of group I of the retirement system, one appointed by the governor and one appointed by the speaker of the house of representatives.
(e) Two member representatives of group II of the retirement system, one appointed by the governor and one appointed by the president of the senate.
(f) Four employer representatives, with one of the 4 employer representative appointed by the New Hampshire Municipal Association, one appointed by the New Hampshire School Boards Association, one appointed by the New Hampshire Association of Counties, and one representing the state of New Hampshire, appointed by the governor.
(g) One public member with recognized expertise in finance, financial management, or the governance and oversight of large endowments or public funds, appointed by the governor.
(h) Two public members with recognized expertise in the design, administration, implementation and educational components of public sector and/or private sector defined contribution plans. One member to be appointed by the speaker of the house of representatives and one member to be appointed by 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 and make recommendations regarding a viable defined contribution plan to replace the current defined benefit plan for new hires. Such study shall include but not necessarily be limited to:
(1) Evaluation and comparison of defined contribution plans in place in other states, in the private sector, and in public and private sector higher education.
(2) Evaluation and comparison of mandatory and voluntary contribution requirements in defined contribution plans and the statistical outcomes for each in providing retirement benefits.
(3) Evaluation of the effect on retirement account balances and member retirement outcomes of allowing participant loans or hardships withdrawals.
(4) Evaluation of various investment management options for participants and the effect such options have on retirement outcomes.
(5) Evaluation of employer and employee education programs for administration and participation in defined contribution plans.
(6) Evaluation of a plan design with a fixed employer and employee contribution, but which provides a hybrid defined benefit and defined contribution member benefit.
(b) Provide a legislative history of the existing New Hampshire retirement system and the financial impact that major legislative decisions have had on the funding of the corpus of the plan.
(c) Analyze the current financial status of the retirement system and the challenges facing the system in the future.
(d) Study the impact on the investment returns and plan funding of closing the existing New Hampshire retirement system defined benefit plan, and compare and evaluate how other jurisdictions and/or the private sector have addressed these issues.
(e) Evaluate various methods for continued funding of the unfunded accrued liability of the existing New Hampshire retirement system, including but not limited to recent legislative proposals establishing a state administered defined contribution plan.
(f) Evaluate options for providing a cost of living increase for current New Hampshire retirement system plan participants and provide an analysis of the annual costs of the same for the amortization period of the system’s unfunded accrued liability.
(g) Study the issue of equity in contribution rates between employers and employees.
(h) Study other matters deemed necessary by the commission.
(i) Seek technical assistance as necessary from the New Hampshire retirement system and from other independent financial, investment, actuarial, and retirement experts. The commission may employ support staff for the purposes of its duties.
V. The commission shall elect a chairperson from among the members. The first meeting of the commission shall be called by the first-named senate member. The first meeting of the commission shall be held within 45 days of the effective date of this section.
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 December 1, 2013.
2 Expenditures. The commission established in RSA 100-A:56-a as inserted by this act is authorized to accept and expend private sector grants, gifts, or donations of any kind for the purpose of the duties required in this act. Any moneys collected shall be continually appropriated to the commission for the purposes of this act.
3 Commission Repealed. RSA 100-A:56-a, relative to the commission on long-term viability, defined contribution plan, is repealed.
4 Effective Date.
I. Section 3 of this act shall take effect January 1, 2014.
II. The remainder of this act shall take effect upon its passage.
LBAO
12-2876
Amended 04/09/12
SB 229 FISCAL NOTE
AN ACT establishing a commission to make recommendations on whether the New Hampshire retirement system should be replaced with a defined contribution plan for all new hires and to study the impact such change would have on the retirement system.
FISCAL IMPACT:
The New Hampshire Retirement System states this bill, as amended by the Senate (Amendments #2012-1265s and #2012-1413s), will have an indeterminable impact on state restricted revenues and expenditures in FY 2012, FY 2013, and FY 2014. There will be no impact on county and local revenues or expenditures.
METHODOLOGY:
The New Hampshire Retirement System this bill establishes a commission to make recommendations on whether the New Hampshire Retirement System should be replaced with a defined contribution plan for all new hires and to study the impact of such change on the existing system. In addition, this bill would allow the commission to accept and expend private sector gifts, grants, or donations for purposes of the duties of the commission. The System states it is unable to determine how much revenue, in the form of gifts, grants, or donations, the commission may receive or the total amount of expenditures the commission will incur.