HB1427 (2018) Detail

(New Title) relative to the reduction in the calculation of state retirement system annuities at age 65.


HB 1427-FN - AS AMENDED BY THE SENATE

 

6Mar2018... 0568h

04/19/2018   1472s

2018 SESSION

18-2511

10/08

 

HOUSE BILL 1427-FN

 

AN ACT relative to the reduction in the calculation of state retirement system annuities at age 65.

 

SPONSORS: Rep. Freeman, Hills. 12

 

COMMITTEE: Executive Departments and Administration

 

─────────────────────────────────────────────────────────────────

 

AMENDED ANALYSIS

 

This bill provides for the application of the reduction of a retiree’s annuity at the member’s full retirement age under the federal Social Security 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

6Mar2018... 0568h

04/19/2018   1472s 18-2511

10/08

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Eighteen

 

AN ACT relative to the reduction in the calculation of state retirement system annuities at age 65.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Retirement System; Service Retirement Benefits; Reduction Age.  Amend RSA 100-A:5, I(b) to read as follows:

(b)  Upon service retirement, an employee member or teacher member of group I shall receive a service retirement allowance which shall consist of a member annuity which shall be the actuarial equivalent of the member’s accumulated contributions at the time of retirement, and a state annuity.  Prior to the member’s attainment of [age 65] the member’s full retirement age for Social Security, the state annuity, together with the member annuity, shall be equal to 1/60 of the member’s average final compensation multiplied by the number of years of creditable service.  After attainment of [age 65] the member’s full retirement age for Social Security, the state annuity, together with the member annuity, shall be equal to 1/66 of the member’s average final compensation multiplied by the number of years of creditable service.  Provided, however, that a group I member who commenced service on or after July 1, 2011 shall not receive a service retirement allowance until attaining the age of 65; but may receive a reduced allowance after age 60 if the member has at least 30 years of creditable service where the allowance shall be reduced, for each month by which the date on which benefits commence precedes the month after which the member attains 65 years of age, by 1/4 of one percent.

2  Retirement System; Ordinary Disability Retirement Benefits; Reduction Age.  Amend RSA 100-A:6, I(b)(1)(A) and (B) to read as follows:

(A)  Prior to the member’s attainment of [age 65] the member’s full retirement age for Social Security, the state annuity, together with the member annuity, shall be equal to 1/60 of the member’s average final compensation at the time of his or her ordinary disability retirement multiplied by the number of years of creditable service at the time of his or her ordinary disability retirement;

(B)  After attainment of [age 65] the member’s full retirement age for Social Security, the state annuity, together with the member annuity, shall be equal to 1/66 of the member’s average final compensation at the time of his or her ordinary disability retirement multiplied by the number of years of creditable service at the time of his or her ordinary disability retirement;

3  Retirement System; Accidental Disability Retirement Benefits; Reduction Age.  Amend RSA 100-A:6, I(d)(1)(A) and (B) to read as follows:

(A)  Prior to the member’s attainment of [age 65] the member’s full retirement age for Social Security, the state annuity, together with the member annuity, shall be equal to 1/60 of the member’s average final compensation at the time of his or her accidental disability retirement multiplied by the number of years of creditable service at the time of his or her accidental disability retirement;

(B)  After attainment of [age 65] the member’s full retirement age for Social Security, the state annuity, together with the member annuity, shall be equal to 1/66 of the member’s average final compensation at the time of his or her accidental disability retirement multiplied by the number of years of creditable service at the time of his or her accidental disability retirement;

4  Effective Date.  This act shall take effect 60 days after its passage.

 

LBAO

18-2511

Amended 4/23/18

 

HB 1427-FN- FISCAL NOTE

AS AMENDED BY THE SENATE (AMENDMENT #2018-1472s)

 

AN ACT relative to the reduction in the calculation of state retirement system annuities at age 65.

 

FISCAL IMPACT:      [ X ] State              [ X ] County               [ X ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2019

FY 2020

FY 2021

FY 2022

   Appropriation

$0

$0

$0

$0

   Revenue

$0

$0

$0

$0

   Expenditures

$0

$918,880

$940,000

$970,000

Funding Source:

  [ X ] General            [ X ] Education            [ X ] Highway           [ X ] Other

 

 

 

 

 

POLITICAL

SUBDIVISIONS*:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

$0

$3,380,000

$3,490,000

$3,590,000

*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 would provide for the application of the reduction of a Group I (employee or teacher) retiree's annuity at the member's full retirement age under the federal Social Security system rather than at age 65.  The New Hampshire Retirement System assumes an effective date of July 1, 2018 and therefore apply to Group I members who retire on or after July 1, 2018.  Currently the normal Social Security retirement age is 67 for anyone born in 1960 or later.  For people born between 1938 and 1959, the normal retirement age varies from 65 years, 2 months, to 66 years, 10 months.  For anyone born between 1943-1954, the normal retirement age is 66.  Assuming an annual rate of return of 7.25 percent, wage inflation of 3.25 percent a year, a  valuation method of entry age actuarial cost method,  and an amortization period of a closed 22 year period beginning in FY 2018, the New Hampshire Retirement System's actuary determined the following:

 

 

 

 

State Employer Pension Rates as a Percent of Payroll

 

Current

2018-2019 Rates

Impact of Proposal

Proposed

2018-2019 Rates

Employees

11.08%

0.15%

11.23%

Teachers

N/A

N/A

N/A

Police

25.33%

0.00%

25.33%

Fire

27.79%

0.00%

27.79%

Political Subdivisions Employer Pension Rates as a Percent of Payroll

Employees

11.08%

0.15%

11.23%

Teachers

15.70%

0.19%

15.89%

Police

25.33%

0.00%

25.33%

Fire

27.79%

0.00%

27.79%

 

 

State Estimated Employer Increase/(Decrease)

 

FY 2020

FY 2021

FY 2022

Employees

$910,000

$940,000

$970,000

Police

$0

$0

$0

Fire

$0

$0

$0

State Total

 

$910,000

$940,000

$970,000

Political Subdivisions Estimated Employer Increase/(Decrease)

 

FY 2020

FY 2021

FY 2022

Employees

$1,070,000

$1,110,000

$1,140,000

Teachers

$2,310,000

$2,380,000

$2,450,000

Police

$0

$0

$0

Fire

$0

$0

$0

Political Subdivisions Total

 

$3,380,000

 

$3,490,000

 

$3,590,000

 

The System states it will need to make an estimated $8,880 change to the Pension Gold reporting software.

 

AGENCIES CONTACTED:

New Hampshire Retirement System

 

 

Links

HB1427 at GenCourtMobile

Action Dates

Date Body Type
Jan. 31, 2018 House Hearing
Feb. 20, 2018 House Exec Session
House Floor Vote
March 6, 2018 House Floor Vote
March 21, 2018 Senate Hearing
April 19, 2018 Senate Floor Vote
May 2, 2018 Senate Floor Vote
May 2, 2018 Senate Floor Vote
May 3, 2018 Senate Floor Vote

Bill Text Revisions

HB1427 Revision: 3510 Date: April 23, 2018, 1:49 p.m.
HB1427 Revision: 3201 Date: April 12, 2018, 7:34 a.m.
HB1427 Revision: 1839 Date: Nov. 6, 2017, 8:24 a.m.

Docket

Date Status
Jan. 3, 2018 Introduced 01/03/2018 and referred to Executive Departments and Administration HJ 1 P. 10
Jan. 31, 2018 Public Hearing: 01/31/2018 10:00 AM LOB 306
Feb. 8, 2018 ==CANCELLED== Subcommittee Work Session: 02/08/2018 01:00 PM LOB 306
Feb. 12, 2018 ==RESCHEDULED== Subcommittee Work Session: 02/12/2018 11:30 AM LOB 306
Feb. 20, 2018 Executive Session: 02/20/2018 LOB 306
Committee Report: Ought to Pass with Amendment # 2018-0568h (Vote 10-3; RC)
March 6, 2018 Committee Report: Ought to Pass with Amendment # 2018-0568h for 03/06/2018 (Vote 10-3; RC) HC 9 P. 40
March 6, 2018 Amendment # 2018-0568h: AA VV 03/06/2018 HJ 6 P. 82
March 6, 2018 Ought to Pass with Amendment 0568h: MA VV 03/06/2018 HJ 6 P. 82
March 8, 2018 Introduced 03/08/2018 and Referred to Executive Departments and Administration; SJ 7
March 21, 2018 Hearing: 03/21/2018, Room 101, LOB, 09:45 am; SC 13
April 19, 2018 Committee Report: Ought to Pass with Amendment # 2018-1472s, 04/19/2018; SC 17
April 19, 2018 Committee Amendment # 2018-1472s, AA, VV; 04/19/2018; SJ 13
April 19, 2018 Ought to Pass with Amendment 2018-1472s, MA, VV; Refer to Finance Rule 4-5; 04/19/2018; SJ 13
May 2, 2018 Committee Report: Inexpedient to Legislate, 05/02/2018; SC 19
May 3, 2018 Special Order to 05/03/2018, Without Objection, MA; 05/02/2018 SJ 15
May 3, 2018 Committee Report: Inexpedient to Legislate, 05/03/2018;
May 3, 2018 Inexpedient to Legislate, RC 12Y-12N, MF; 05/03/2018; SJ 16
May 2, 2018 Inexpedient to Legislate, RC 12Y-12N, MF; 05/02/2018; SJ 16
May 2, 2018 Sen. Bradley Moved Laid on Table, RC 13Y-11N, MA; 05/02/2018; SJ 16
May 3, 2018 Sen. Bradley Moved Laid on Table, RC 13Y-11N, MA; 05/03/2018; SJ 16
May 3, 2018 No Pending Motion; 05/03/2018 SJ 16
May 2, 2018 No Pending Motion; 05/02/2018 SJ 16