Bill Text - HB1427 (2018)

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


Revision: Nov. 6, 2017, 8:24 a.m.

HB 1427-FN - AS INTRODUCED

 

 

2018 SESSION

18-2511

10/08

 

HOUSE BILL 1427-FN

 

AN ACT relative to membership in the retirement system for certain officials.

 

SPONSORS: Rep. Freeman, Hills. 12

 

COMMITTEE: Executive Departments and Administration

 

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ANALYSIS

 

This bill allows a school district governing body to exempt the superintendent of schools from compulsory membership in 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

18-2511

10/08

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Eighteen

 

AN ACT relative to membership in the retirement system for certain officials.

 

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

 

1  Retirement System; Exemption from Membership; Certain School Officials.  Amend RSA 100-A:22 to read as follows:

100-A:22  Modifications.

I.  Membership in the retirement system shall be optional for officers and employees of the employer who are in the service of the employer on the date when participation becomes effective, and any such officer or employee who elects to join the retirement system within one year thereafter shall be credited with prior service covering such periods of prior service rendered to such employer for which the employer is willing to make accrued liability contributions.  If the employer is unable or unwilling to make such contributions, a member in service may petition the board of trustees for periods of prior service rendered to such employer.  Upon payment by the member of the amount determined in accordance with RSA 100-A:3, VI(b) and with the approval of the board, the member shall receive credit for such prior service.  Thereafter, service for such employer on account of which contributions are made by the employer and member shall also be considered as creditable service.  However, in no event shall prior service purchased as creditable service under this section be used as creditable service for the purpose of eligibility for medical benefits under RSA 100-A:52, RSA 100-A:52-a, or RSA 100-A:52-b.

II.  Membership shall be compulsory for all employees entering the service of such employer after the date participation becomes effective.  Except that:

(a)  Municipalities may, by action of their city council or board of selectmen, exempt their chief administrative officer, at the time of initial hiring or appointment, from compulsory membership provided herein.  The chief fiscal officer of the employer, and the heads of its departments, shall submit to the board of trustees such information and shall cause to be performed with respect to the employees of such employer, who are members of the retirement system, such duties as shall be prescribed by the trustees in order to carry out the provisions of this chapter.

(b)  School districts may, by action of their governing body, exempt their superintendent of schools, at the time of initial hiring or appointment, from compulsory membership provided herein.  If such exemption is adopted, a superintendent of schools who was enrolled as a member in the retirement system within the 2-year period preceding the effective date of this subparagraph may make a request to the school district governing body to withdraw from membership.  Upon approval of a withdrawal from membership and notice provided to the retirement system, a superintendent who ceases to be a member of the retirement system shall not be permitted to re-enroll as a member for as long as he or she holds the same position with the employer.

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

 

LBAO

18-2511

10/30/17

 

HB 1427-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to membership in the retirement system for certain officials.

 

FISCAL IMPACT:      [ X ] State              [    ] 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

$2,664

$0

$0

$0

Funding Source:

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

 

POLITICAL

 

 

 

 

SUBDIVISIONS*:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

*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 allows school districts, by action of their governing bodies, to exempt their superintendent of schools, at the time of initial hiring or appointment, from compulsory membership in the New Hampshire Retirement System (NHRS).  Upon approval of such exemption, a superintendent of schools who was enrolled as a member in the NHRS within the 2 year period preceding the effective date of this bill may make a request to the governing body to withdraw from such membership.  A superintendent who ceases to be a member of the NHRS shall not be permitted to re-enroll as a member for as long as he or she holds the same position with such employer.

 

The Department of Education states that superintendents are Group I employees and the total compensation paid for superintendents statewide for 2017-2018 was $11,400,648.64, excluding 2 superintendents whom are paid an hourly rate.  The Group I employer rate for employees in effect through June 30, 2019 is 11.08%.  Assuming that all superintendents would be exempt from the NHRS, there would be a reduction in local expenditures of $1,263,191.87 (11.08% x $11,400,648.64).  

 

The NHRS states the local expenditure is indeterminable since the changes are expected to have a small impact on the actuarial status of the system and employer contribution rates (i.e. increase of less than .01% of payroll).  Each superintendent removed will reduce the covered payroll used to amortize the unfunded accrued liability, and therefore, increase the amortization rate.  The System states it will need to make an estimated  $2,664 change to the Pension Gold software.

 

AGENCIES CONTACTED:

Department of Education and New Hampshire Retirement System