HB 1447-FN - AS INTRODUCED
HOUSE BILL 1447-FN
SPONSORS: Rep. Abramson, Rock. 20
COMMITTEE: Executive Departments and Administration
This bill revises the penalty for a retired member of the retirement system working part-time for a retirement system employer who exceeds the maximum hours during a calendar year to be a 23 percent deduction from the part-time compensation for the remainder of the year.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty
Be it Enacted by the Senate and House of Representatives in General Court convened:
II. Any retired member who, in any calendar year, works part-time for one or more participating employers and exceeds the maximum permitted hours as provided in RSA 100-A:1, XXXIV, shall [forfeit the state annuity portion of his or her retirement allowance, and any allocable cost of living adjustments, with such forfeiture] have deducted from the compensation paid to the retired member by the part-time employer or employers, a penalty of 23 percent of the compensation paid commencing as soon as administratively feasible [in the next calendar year and continuing for a period of 12 months] and ending at the last payment for the calendar year. Sums deducted shall be paid to the state annuity accumulation fund. The executive director shall certify to the proper employer authority or officer responsible for making the payroll of the part-time employee of the deductions herein provided.
HB 1447-FN- FISCAL NOTE
FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None
Estimated Increase / (Decrease)
[ X ] General [ X ] Education [ X ] Highway [ X ] Other
This bill changes the penalty for retired members of the New Hampshire Retirement System (NHRS) working part-time for participating employers who exceed the maximum permitted hours allowed. Currently, the penalty is forfeiture of the state annuity portion of the individual's retirement allowance and any allocable cost of living adjustments. The bill proposes to change this to a deduction of 23% of compensation paid by the employer or employers. Such deduction will be made as soon as administratively feasible and ending at the last payment for the calendar year, removing the current reference to the deduction beginning in the next calendar year and continuing for 12 months. The sums deducted will be paid to the state annuity accumulation fund. The NHRS Executive Director shall certify the deductions to the proper employer(s).
NHRS indicates there may be administrative issues rendering the proposed penalty to be a significantly reduced deterrent compared to current law. In addition it may be possible to mitigate such penalty by voluntarily reducing hours and income after the limit has been exceeded. NHRS states that it will be problematic to identify in a timely manner which retirees may be subject to the penalty, particularly if there are more than one employer involved. No one employer in this instance will know if or when a retirees combined work hours exceed the limit. In 2018, 275 retirees worked for more than one employer. Hours will not be reported to NHRS until February of the calendar year following the year the violation occurred under current law. NHRS will not be able to identify violations until the calendar year is over unless it is contacted in advance by the employer or retiree. NHRS is unable to determine when the penalty may be applied. NHRS also is not able to address potential Internal Revenue Code and labor wage issues relating to whether the penalty is an employee contribution subject to limitations on contributions, whether wages may be withheld and remitted to NHRS, and if the penalty is paid on a post-tax basis and withheld from the remaining wages paid. NHRS is unable to provide any estimated fiscal impact due to the variables and ambiguity of the bill's application.
The Department of Administrative Services indicates as an employer, there is no financial impact. Any penalty amount would be paid to the NHRS state annuity accumulation fund instead of wages paid to an employee. The Department cites similar issues involving the administration of the penalty as NHRS.
The New Hampshire Municipal Association indicates there may be an administrative cost to set up a new payroll deduction and payment process.
The New Hampshire Association of Counties indicated there is no fiscal impact to county government.
New Hampshire Retirement System, Department of Administrative Services, New Hampshire Municipal Association, and New Hampshire Association of Counties
|Jan. 22, 2020||House||Hearing|
|Jan. 29, 2020||House||Exec Session|
|Feb. 19, 2020||House||Floor Vote|
|Feb. 20, 2020||House||Floor Vote|
|Jan. 8, 2020||Introduced 01/08/2020 and referred to Executive Departments and Administration|
|Jan. 22, 2020||Public Hearing: 01/22/2020 10:00 am LOB 306|
|Jan. 29, 2020||Executive Session: 01/29/2020 01:00 pm LOB 306|
|Feb. 19, 2020||Committee Report: Inexpedient to Legislate for 02/19/2020 (Vote 19-1; CC) HC 7 P. 8|
|Committee Report: Inexpedient to Legislate (Vote 19-1; CC)|
|Feb. 19, 2020||Removed from Consent (Rep. Abramson) 02/19/2020|
|Feb. 20, 2020||Removed from Consent (Rep. Abramson) 02/20/2020|
|Feb. 20, 2020||Special Order to regular place in next calendar (Rep. Ley): MA VV 02/20/2020|