HB593 (2018) Detail

Granting group II retirement system status to certain positions in the department of corrections.


HB 593-FN - AS INTRODUCED

 

 

2017 SESSION

17-0560

10/04

 

HOUSE BILL 593-FN

 

AN ACT granting group II retirement system status to certain positions in the department of corrections.

 

SPONSORS: Rep. Cushing, Rock. 21; Rep. Welch, Rock. 13; Rep. Pantelakos, Rock. 25; Sen. Feltes, Dist 15

 

COMMITTEE: Executive Departments and Administration

 

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ANALYSIS

 

This bill grants group II status to certain positions in the department of corrections.  Persons employed in those positions with service prior to the effective date shall be eligible for split benefits.

 

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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

17-0560

10/04

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Seventeen

 

AN ACT granting group II retirement system status to certain positions in the department of corrections.

 

 

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

 

1  Department of Corrections; Authorization for Transfer to Group II.

I.  Pursuant to the provision of RSA 100-A:3, IX, the following positions in the department of corrections classified as group I positions are deemed to have met the requirement of RSA 100-A:1, VII(b) and shall be transferred to group II status in the New Hampshire retirement system:

Position Title Position Number

Administrator II 30336

Administrator II 40891

Administrator III 42255

Administrator of Programs 41525

Carpentry Supervisor I 12978

Carpentry Supervisor II 41483

Electrician Supervisor II 12940

Electrician Supv. II (El. Supv. I) 41481

Electronic Technician I 16917

Electronic Technician I 18798

Electronic Technician II 13010

Electronic Technician II 41484

Electronic Technician Ill 40232

Inventory Control Supervisor 41514

Maintenance Technician 12930

Maintenance Technician 12952

Maintenance Technician 40167

Maintenance Technician 13029

Nutrition Consultant 41529

Plumber Supervisor II 41482

Prison Dental Office Supv. 12991

Program Assistant II 12879

Program Coordinator 12864

Program Coordinator 16804

Program Coordinator 19534

Program Coordinator 41524

Records Control Clerk 41315

Recreational Therapist II 16265

Recreational Therapist II 42270

Senior Dentist 19564

Supervisor I 18777

Supervisor I 18778

Supervisor I 18810

Supervisor I 41474

Supervisor II 12907

Supervisor II 41426

Supervisor III 19909

Supervisor Ill 16280

Warehouse Manager I 16903

Warehouse Manager Ill 41530

Warehouseman 18848

Warehouseman 43511

II.  The provisions of RSA 100-A:3, II-b shall apply to positions transferred by this act.

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

 

LBAO

17-0560

1/19/17

 

HB 593-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT granting group II retirement system status to certain positions in the department of corrections.

 

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

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2018

FY 2019

FY 2020

FY 2021

   Appropriation

$0

$0

$0

$0

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

Funding Source:

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

 

METHODOLOGY:

This bill grants group II retirement system status to certain positions in the Department of Corrections.  Persons employed in those positions with service prior to the effective date shall be eligible for split benefits.  The bill identifies 42 positions that would be shifted from a group I retirement system status to a group II retirement system status.  There are 38 general fund positions and 4 positions funded by other funds. The employer contribution rate for group I members is 12.15 percent and for group II members it is 29.43 percent, an increase of 17.28 percent going from group I to group II.  The bill is effective 60 days after passage.

 

The Department of Corrections assumes the change is first reflected in the 2018-2019 employer contribution rates. The Department states that the transfer to group II status will eliminate the employer’s share of FICA at 6.20 percent.  The net increased cost of converting all positions from Group I to Group II for FY 2018 is $260,708 ($236,706 general funds and $24,002 other funds) and for FY 2019 is $264,372 ($240,243 general funds and $24,128).  The Department states the fiscal impact is indeterminable beyond FY 2019 because there is no wage data and the NH Retirement System has not established employer rates beyond FY 2019.

 

 

FY 2018

FY 2019

 

General Fund

 

Salary

Benefits

Total

Salary

Benefits

Total

 

$2,136,331

$1,160,197

$3,296,528

$2,168,261

$1,217,166

$3,385,427

Less FICA 6.2%

-

 

($132,453)

 

($132,453)

-

 

($134,432)

 

($134,432)

Add Increase in Employer Rate (29.43-12.15 =17.28)

 

-

 

$369,158

 

$369,158

 

-

 

$374,675

 

$374,675

New Total GF Wages and Benefits

 

$2,136,331

 

$1,396,902

 

$3,533,234

 

$2,168,261

 

$1,457,410

 

$3,625,670

Net Change

-

$236,706

$236,706

-

$240,243

$240,243

 

 

 

 

 

 

 

 

Other Funds

 

Salary

Benefits

Total

Salary

Benefits

Total

 

$216,625

$164,150

$380,775

$217,764

$171,743

$389,507

Less FICA 6.2%

-

 

($13,431)

 

($13,431)

-

 

($13,501)

 

($13,501)

Add Increase in Employer Rate (29.43-12.15 =17.28)

 

-

 

$37,433

 

$37,433

 

-

 

$37,630

 

$37,630

New Total GF Wages and Benefits

 

$216,625

 

$188,152

 

$404,777

 

$217,764

 

$195,871

 

$413,635

Net Change

 

$24,002

$24,002

 

$24,128

$24,128

Net Change for All Funds

 

 

$260,708

 

$260,708

 

 

$264,372

 

$264,372

 

The New Hampshire Retirement System’s actuary assumes the proposed change is measured as of June 30, 2015, the most recent certified actuarial valuation, with the estimated impact on employer contribution rates shown for the 2018-2019 biennium.  The assumption is an effective date of June 30, 2017 for the employer to begin contributing the Police rate of 29.43 percent, an increase of 17.28 percent from the current employee rate of 12.15 percent. All contribution rates for the 2020-2021 biennium are estimates based on the June 30, 2015 actuarial valuation.  Actual employer contribution rates for the 2020-2021 biennium will be based on the June 30, 2017 actuarial valuation and will reflect the plan provisions in effect at the time of the valuation.  

 

The actuary assumes that if these positions are covered by Social Security before the change to Group II status they will continue to be covered by Social Security after the change.  Therefore the actuary assumes there will be no reduction in the Social Security tax for the employer or the member.

 

There will not be a material impact on the unfunded accrued liability since affected members with service prior to the effective date will receive split benefits.  Assuming a rate of interest of 7.25%, wage inflation of 3.25%, and an amortization period of a closed 22 year period beginning in FY 2018, the actuary determined the following increases:

 

Eligible Members

Active Members

42

Projected Payroll as of June 2017

 

$2,352,956

 

Impact on Employer Pension and Medical Subsidy Rates

 

Employees

Police

Increase

2018-2019 Employer Rates

12.15%

29.43%

17.28%

 

Expected Employer Dollar Increase (Decrease) Due to Proposal

 

FY 2018

$410,000

 

FY 2019

$410,000

 

FY 2020

$430,000

 

FY 2021

$440,000

 

 

AGENCIES CONTACTED:

Department of Corrections and New Hampshire Retirement System

 

 

Links

HB593 at GenCourtMobile

Action Dates

Date Body Type
Jan. 31, 2017 House Hearing
Feb. 23, 2017 House Exec Session
Nov. 1, 2017 House Exec Session

Bill Text Revisions

HB593 Revision: 2422 Date: Jan. 25, 2017, 3:09 p.m.

Docket


Jan. 3, 2018: Refer for Interim Study: MA VV 01/03/2018 HJ 1 P. 35


Jan. 3, 2018: Committee Report: Refer for Interim Study for 01/03/2018 (Vote 15-2; CC)


Nov. 1, 2017: Executive Session: 11/01/2017 10:30 AM LOB 306


Oct. 26, 2017: Retained Bill Subcommittee Work Session: 10/26/2017 10:30 AM LOB 306


Aug. 22, 2017: Retained Bill Full Committee Work Session: 08/22/2017 10:00 AM LOB 306


June 6, 2017: Retained Bill Subcommittee Work Session: 06/06/2017 09:30 AM LOB 306


: Retained in Committee


Feb. 23, 2017: Executive Session: 02/23/2017 02:30 PM LOB 305-307


Jan. 31, 2017: Public Hearing: 01/31/2017 01:00 PM LOB 306


Jan. 5, 2017: Introduced 01/05/2017 and referred to Executive Departments and Administration HJ 3 P. 20