HB1447 (2020) Detail

Relative to penalties for retired members of the retirement system exceeding part-time hourly limit.


HB 1447-FN - AS INTRODUCED

 

 

2020 SESSION

20-2365

10/04

 

HOUSE BILL 1447-FN

 

AN ACT relative to penalties for retired members of the retirement system exceeding part-time hourly limit.

 

SPONSORS: Rep. Abramson, Rock. 20

 

COMMITTEE: Executive Departments and Administration

 

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ANALYSIS

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

20-2365

10/04

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT relative to penalties for retired members of the retirement system exceeding part-time hourly limit.

 

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

 

1  Retirement System; Exceeding Part-Time Employment Limit; Penalty.  Amend RSA 100-A:7, II to read as follows:

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.

2  Effective Date.  This act shall take effect January 1, 2021.

 

LBAO

20-2365

11/12/19

 

HB 1447-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to penalties for retired members of the retirement system exceeding part-time hourly limit.

 

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

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

$0

Indeterminable

Indeterminable

Indeterminable

   Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

Funding Source:

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

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

 

METHODOLOGY:

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.

 

AGENCIES CONTACTED:

New Hampshire Retirement System, Department of Administrative Services, New Hampshire Municipal Association, and New Hampshire Association of Counties

 

Links

HB1447 at GenCourtMobile
HB1447 Discussion

Action Dates

Date Body Type
Jan. 22, 2020 House Hearing
Jan. 29, 2020 House Exec Session
House Floor Vote
Feb. 19, 2020 House Floor Vote
Feb. 20, 2020 House Floor Vote

Bill Text Revisions

HB1447 Revision: 7073 Date: Dec. 3, 2019, 9:28 a.m.

Docket

Date Status
Jan. 8, 2020 Introduced 01/08/2020 and referred to Executive Departments and Administration HJ 1 P. 22
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. 20, 2020 Removed from Consent (Rep. Abramson) 02/20/2020
Feb. 19, 2020 Removed from Consent (Rep. Abramson) 02/19/2020
Feb. 20, 2020 Special Order to regular place in next calendar (Rep. Ley): MA VV 02/20/2020
March 5, 2020 Inexpedient to Legislate: MA DV 339-8 03/05/2020