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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.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