HB 542-FN - AS INTRODUCED
2017 SESSION
17-0625
10/05
HOUSE BILL 542-FN
AN ACT relative to retired members employed in a part-time position by retirement system employers.
SPONSORS: Rep. Proulx, Hills. 44
COMMITTEE: Executive Departments and Administration
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This bill requires a retired member of the retirement system who becomes employed part-time with a retirement system employer to pay a fee to 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
17-0625
10/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seventeen
AN ACT relative to retired members employed in a part-time position by retirement system employers.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Retirement System; Part-time Employment; Employment Fee Deducted. Amend RSA 100-A by inserting after section 16 the following new section:
100-A:16-a Part-Time Employment Fee. As a condition of part-time employment, a retired member employed by an employer in a part-time position who is not restored to service because of such employment, shall have deducted from his or her salary or wages paid by the employer a fee to be calculated as an equivalent percentage to the deductions under RSA 100-A:16, I(a) for group I, group II firemen members, and group II police members, respectively. The employer shall determine the classification of the part-time position for purposes of determining the appropriate fee, subject to the approval of the board of trustees. The employer shall cause such amounts to be deducted from the compensation of each such retired member, and 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 state annuity accumulation fund for the benefit of the retirement system. The fees collected are not contributions of a member shall not accrue to the benefit of the retired member paying the fees.
2 Retirement System; Part-time Employment. Amend RSA 100-A:7-a to read as follows:
100-A:7-a Certain Part-Time Employment; Notice Required. The retirement system shall annually provide written notice to all retired members of the retirement system of the hourly limitations on part-time employment as defined in RSA 100-A:1, XXXIV [and], the potential effect that exceeding such hourly limitations could have on the retired member's retirement benefits, including restoration to service as required in RSA 100-A:7, and the required fee to be deducted from part-time salary or wages under RSA 100-A:16-a.
3 Effective Date. This act shall take effect July 1, 2017.
17-0625
1/12/17
HB 542-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to retired members employed in a part-time position by retirement system employers.
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $4.31 million | $4.45 million | $4.60 million | $4.74 million |
Expenditures | $0 | $0 | ($1.84 million) | ($1.90 million) |
Funding Source: | [ X ] General [ X ] Education [ X ] Highway [ X ] Other | |||
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|
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POLITICAL SUBDIVISIONS*: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | $0 | ($3.66 million) | ($3.79 million) |
*The New Hampshire Retirement System states it is not able to separate the fiscal impact of this legislation between county and local government, therefore the fiscal impact is shown together as political subdivisions.
METHODOLOGY:
This bill requires a retired member of the retirement system who becomes employed part-time with a retirement system employer to pay a fee to the retirement system equivalent to the percentage deductions under RSA 100-A:16, I (a) for Group I, Group II firemen members and Group II police members, respectively. The employer shall determine the classification of the part-time position for the purposes of determining the appropriate fee, subject to the approval of the Board of Trustees. Such fee shall be deducted from the compensation of the retired member by the employer and credited to the state annuity accumulation fund for the benefit of the retirement system and shall not accrue to the benefit of the retired member paying the fee. Assuming an annual rate of return of 7.25 percent, wage inflation of 3.25 percent a year, and an amortization period of a closed 22 year period beginning in FY 2018, the New Hampshire Retirement System’s actuary determined the following increase in fees paid to the system from part-time retirees and the expense reductions for decreased employer contributions that result from this additional revenue:
State Anticipated Fees Received from Part-Time Retirees ($Millions)
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| FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Employees | $1.14 | $1.18 | $1.22 | $1.25 |
Police | - | - | - |
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Fire | - | - | - |
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State Total | $1.14 | $1.18 | $1.22 | $1.25 |
State Expected Employer Dollar Increase/(Decrease) ($Millions)
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| FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Employees | - | - | ($1.52) | ($1.57) |
Police | - | - | ($0.32) | ($0.33) |
Fire | - | - | - | - |
State Total | - | - | ($1.84) | ($1.90) |
Political Subdivisions Anticipated Fees Received From Part-Time Retirees ($Millions)
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| FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Employees | $1.47 | $1.52 | $1.57 | $1.62 |
Teachers | $0.69 | $0.71 | $0.73 | $0.75 |
Police | $0.90 | $0.93 | $0.96 | $1.00 |
Fire | $0.11 | $0.11 | $0.12 | $0.12 |
Political Subdivisions Total | $3.17 | $3.27 | $3.38 | $3.49 |
Political Subdivisions Expected Employer Dollar Increase/(Decrease) ($Millions)
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| FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Employees | - | - | ($1.79) | ($1.85) |
Teachers | - | - | ($0.85) | ($0.88) |
Police | - | - | ($0.89) | $0.92) |
Fire | - | - | ($0.13) | ($0.14) |
Political Subdivisions Total | - | - | ($3.66) | ($3.79) |
The System states the proposal would be reflected in the next rate setting valuation as of June 30, 2017, which determines employer contribution rates for the 2020-2021 biennium. Since the rates for the 2020-2021 biennium are unknown at this time, only the net impact of the proposal is shown. This bill would decrease employer pension rates as a percent of payroll for both state and political subdivisions by 0.25% for employees, 0.37% for police, 0.10% for fire and 0.07% for teachers (political subdivision only)
The System states it will need to make an estimated $5,000 change to the Pension Gold reporting software.
AGENCIES CONTACTED:
New Hamsphire Retirement System
| Date | Body | Type |
|---|---|---|
| Jan. 24, 2017 | House | Hearing |
| Feb. 23, 2017 | House | Exec Session |
| March 8, 2017 | House | Floor Vote |
March 8, 2017: Inexpedient to Legislate: MA VV 03/08/2017 HJ 9 P. 25
March 8, 2017: Committee Report: Inexpedient to Legislate for 03/08/2017 (Vote 20-0; CC) HC 14 P. 13
Feb. 23, 2017: Executive Session: 02/23/2017 02:00 PM LOB 305-307
Feb. 1, 2017: Subcommittee Work Session: 02/01/2017 03:30 PM LOB 303
Jan. 24, 2017: Public Hearing: 01/24/2017 01:15 PM LOB 306
Jan. 5, 2017: Introduced 01/05/2017 and referred to Executive Departments and Administration HJ 3 P. 17