Revision: Jan. 31, 2023, 8:21 a.m.
SB 134-FN - AS INTRODUCED
2023 SESSION
23-0908
10/05
SENATE BILL 134-FN
AN ACT relative to disability pensions for public safety employees who are victims of violence.
SPONSORS: Sen. Birdsell, Dist 19; Sen. Carson, Dist 14; Sen. Abbas, Dist 22; Sen. Soucy, Dist 18; Sen. Prentiss, Dist 5; Rep. Soucy, Merr. 21; Rep. Moffett, Merr. 4
COMMITTEE: Executive Departments and Administration
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ANALYSIS
The bill establishes a retirement system benefit for group II members who retire due to a violent act injury.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
23-0908
10/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Three
AN ACT relative to disability pensions for public safety employees who are victims of violence.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraph; Retirement System; Disability Retirement; Group II Violent Act Injury Disability. Amend RSA 100-A:6 by inserting after paragraph II the following new paragraph:
II-a. Group II Violent Act Injury Disability. Upon the application of a group II member in service or of his or her employer, any such member who has, during the performance of their duties, sustained a serious and permanent bodily injury as a direct result of a violent attack upon such member by means of a dangerous weapon to include but not limited to a firearm, knife, automobile, explosive device, personal weapon, or other dangerous weapon, which for the purposes of this paragraph shall be defined as an item which is designed for the purpose of causing serious injury or death, shall be retired by the board of trustees on a violent act injury disability retirement allowance, according to the following procedures:
(a) Any member in service classified in group II, who is unable to perform the essential duties of the member’s job and that such inability is likely to be permanent before attaining the normal retirement age for the member’s group by reason of a personal injury or violent act injury sustained or a hazard undergone as a result of, and while in the performance of the member’s duties at some definite place and at some definite time on or after the date of becoming a member or prior to such date while any provision of this chapter was applicable to the member, without serious and willful misconduct on the member’s part, upon the member’s written application on a prescribed form filed with the board and the member’s respective employer or upon such an application by the head of the member’s department after a hearing, if requested, shall be deemed retired for an accidental disability as of a date which shall be specified in such application and which shall be not less than 15 days nor more than 4 months after the filing of such application, but in no event later than the normal retirement age for group II retirement. No such retirement shall be allowed unless such injury or violent act injury was sustained or such hazard was undergone within 2 years prior to the filing of such application or, if occurring earlier, unless written notice thereof was filed with the board by such member or on the member's behalf within 90 days after its occurrence. No retirement shall be allowed unless the board, after a review of the evidence it deems appropriate, and after review and examination by the regional medical panel and certification of such incapacity by a majority of the physicians on such medical panel, shall find that such member is physically unable to perform the essential duties of the member's job because of a violent act injury, that such inability is likely to be permanent, and that the member should be so retired.
(b) Prior to the determination of a retirement under this paragraph, a member shall submit to the board a written statement authorizing release of information from the federal Internal Revenue Service and the department of revenue administration relative to the annual gross earned income of the member in pursuant to an agreement between the federal internal revenue service, the department of revenue, and the board of trustees.
(c) Upon a violent act injury disability retirement, the group II member shall receive a disability retirement allowance which shall be equal to 100 percent of their regular compensation, including all applicable benefits and stipends, that the member was earning on the date of such violent act injury or an annual allowance of $75,000, which ever is greater and which shall include annual 2.5 percent supplemental allowances.
(d) In the event that the member shall predecease their spouse and the member’s death is the result of the same violent act injury, the member’s spouse shall be entitled to 75 percent of the member’s annual allowance, paid monthly, as long as such spouse shall live; provided that, when the member would have reached the mandatory retirement age, the member’s spouse shall continue to be entitled to 75 percent of the member’s annual allowance, including any cost of living increases, that the member would have received upon reaching the normal retirement age; provided, however, that if a beneficiary is eligible for benefits under this paragraph, the beneficiary shall elect to receive either a benefit pursuant to this paragraph but shall not be eligible for both benefits. In the event that the member and the member’s spouse predecease their children, the member’s surviving unmarried children, if any, who are under age 18 or, if over that age and under age 22, are full-time students at an accredited educational institution, or who are over age 18 and physically or mentally incapacitated from earning income on the date of such member’s retirement, shall be entitled to receive a pension of equal proportion, paid monthly, which shall total 75 percent of the amount of the allowance payable to the member at the time of their death. When a child no longer meets the qualifications for receipt of an allowance allocation under this paragraph, said child’s allowance allocation shall cease and any remaining qualified children shall continue to receive the same amount each received before any child’s allocation ceased.
(e) Nothing in this paragraph or any other provision of New Hampshire statutes shall limit the member’s aforementioned retirement benefit or restrict the member from seeking accommodating employment by any entity or agency which is not classified under group II of the retirement system.
2 Maximum Benefit Limitation; Reference Added. Amend RSA 100-A:6-a to read as follows:
100-A:6-a Maximum Retirement Benefit. Notwithstanding any other provision of this chapter to the contrary, for members who commenced service before July 1, 2009, or have attained vested status prior to January 1, 2012, a member's initial calculation of the retirement benefit granted under the provisions of RSA 100-A:5 or RSA 100-A:6 shall not exceed 100 percent of the member's highest year of earnable compensation. For members who commenced service on or after July 1, 2009 and have not attained vested status prior to January 1, 2012, a member's maximum retirement benefit granted under the provisions of RSA 100-A:5 or RSA 100-A:6 shall not exceed the lesser of 85 percent of the member's average final compensation or $120,000. Nothing in this section shall affect the ability of a member to receive disability benefits pursuant to RSA 100-A:6, II(b) and (c) or RSA 100-A:6, II-a. This provision shall not limit the application of supplemental allowances.
3 Medical Insurance Benefits; Violently Injured Police or Fire Member. Amend RSA 21-I:3, VII to read as follows:
VII. For the purposes of this section, "retired employee" also means each group II state employee who:
(a) Retires if the employee's state service began prior to July 1, 2010 or who retires with at least 20 years of creditable service for the state if the employee's state service began on or after July 1, 2010; or
(b) Dies or retires and is eligible for accidental death or accidental disability retirement benefits, regardless of the state employee's age or number of years of creditable service; or
(c) Retires and is eligible for violent act injury disability retirement benefits under RSA 100-A:6, II-a, regardless of the state employee's age or number of years of creditable service, and provided in such instance additional medical benefits subsidies shall be provided to the retired member at a rate not to exceed $1,000 for a single plan, $1,500 for a 2-person plan, or $2,000 for a family plan for all hospital, medical, and other health care expenses, not otherwise covered by health insurance, related to treatment of injuries that have been or may be incurred after the date of the member’s retirement as a result of the injuries sustained by the member relating to the violent act injury while in the performance of the member’s duties; or
[(c)] (d) Retires and is eligible for ordinary disability retirement benefits, regardless of the state employee's age; or
[(d)] (e) Dies and is eligible for ordinary death retirement benefits, if the state employee was eligible for service retirement at the time of his or her death, if the state employee had at least 20 years of creditable service for the state if the employee's state service began on or after July 1, 2010.
4 Effective Date. This act shall take effect July 1, 2023.
23-0908
Revised 1/30/23
SB 134-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to disability pensions for public safety employees who are victims of violence.
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2023 | FY 2024 | FY 2025 | FY 2026 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Minimum $1,970,000 |
Funding Source: | [ X ] General [ ] Education [ X ] Highway [ X ] Other - Various State Agency Funds and the Internal Service Fund | |||
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|
|
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POLITICAL SUBDIVISIONS: |
|
|
|
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | $0 | $0 | $6,820,000 |
*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 bills create a new category of disability pensions relating to Group II members that are disabled due to a “violent injury” that is likely to be permanent before attaining normal retirement age. Eligible members would receive a benefit equal to 100% of “regular compensation” with an annual 2.5% cost of living adjustment. In addition, the member will receive a refund of accumulated contributions, and surviving spouses are eligible for a 75% survivor benefit upon the death of the member/retiree. This bill also includes eligibility for the retiree health benefit plan regardless of their age and number of years of creditable service with the State. In addition to retiree health benefits, the bill provides for additional medical benefit subsidies at a rate not to exceed $1,000 for a single plan, $1,500 for a 2-person plan or $2,000 for a family plan for all hospital, medical and other health care expenses not otherwise covered by health insurance, related to treatment of injuries that have been or may be incurred after the date of the member's retirement as a result of the injuries sustained by the member relating to the violent act injury while in the performance of the member's duties.
The NHRS's actuary states since contributions rates for FY 2024-2025 have been certified they are not subject to change and there will be no fiscal impact in FY 2024-2025. The NHRS actuary states the FY 2026-2027 contribution rates will be set using the June 30, 2023 valuation. Since the rates for the 2026-2027 biennium are unknown at this time, only the net impact for FY 2026 is shown. It should be noted the fiscal impact of this bill will go well beyond FY 2026.
State Impact
Increase (Decrease) in Employer Pension Rates as a Percent of Payroll | |
| Net Impact of Proposal |
Employees | 0.00% |
Police | 1.83% |
Fire | 1.15% |
Expected Employer Dollar Increase (Decrease) Due to Proposal | ||||
| FY 2023 | FY 2024 | FY 2025 | FY 2026 |
Employees | - | - | - | $0 |
Police | - | - | - | $1,920,000 |
Fire | - | - | - | $50,000 |
TOTAL | $0 | $0 | $0 | $1,970,000 |
POLITICAL SUBDIVISIONS IMPACT
Increase (Decrease) in Employer Pension Rates as a Percent of Payroll | |
| Net Impact of Proposal |
Employees | 0.00% |
Teachers | 0.00% |
Police | 1.83% |
Fire | 1.15% |
Expected Employer Dollar Increase (Decrease) Due to Proposal | ||||
| FY 2023 | FY 2024 | FY 2025 | FY 2026 |
Employees | - | - | - | $0 |
Teachers | - | - | - | $0 |
Police | - | - | - | $4,940,000 |
Fire | - | - | - | $1,880,000 |
TOTAL | $0 | $0 | $0 | $6,820,000 |
The NHRS actuary projects an increase in the actuarial accrued liability by $60.5 million, with $900k for entry age accrued liability and $59.6m present value of future benefits, based on the provisions in the bill and which will be amortized over a fixed period of no longer than 20-years.
The NHRS states the proposed changes in the bill will involve significant administrative costs relating to reprogramming of the pension administration system, revisions to administrative procedures and staff training which will result in an indeterminable increase in expenditures. The NHRS also states they are currently in the process of upgrading the pension administration system and the proposed changes would require updates to the current and future systems and procedures increasing administrative costs and challenges.
The NHRS indicates there are several provisions within this bill that are inconsistent/conflict with existing law or do not provide clarity on how to implement. Additionally, there are references to other types of plans or processes that do not apply to the NHRS. Below are several examples of issues cited by the NHRS:
Without further clarification or changes, it would be difficult for NHRS to administer this bill.
The Department of Administrative Services (DAS) states the fiscal impact of this bill is an indeterminable increase on State expenditures as it is not possible to project the number of State employees who may be approved for a Violent Act Disability Retirement. The DAS notes the State is currently paying the cost of all hospital, medical and other health care expenses related to treatment of any injury, including violent acts, that are determined to be sustained by the member while in the performance of their duties, for his/her lifetime and cannot be settled under RSA281-A, the NH Department of Labor (DOL) Workers' Compensation laws. Work related injuries are excluded from coverage under the State of NH Employee and Retiree Health Benefit Plan (HBP). If it is the intention of this bill to no longer cover medical claims costs incurred because of a violent act injury under the State's workers compensation program, then the costs could be high due to the shift of workers compensation costs to the retiree health benefit plan.
The DAS also notes this bill references subsidies to be paid out to Violent Act Disability Retirements. However, it does not state how the subsidies are funded nor how they are administered. Since the eligible work-related medical expenses outlined in bill are already paid for under RSA 281-A at no cost to the employee for their lifetime, it is not clear what the subsidy will cover. The bill references "expenses, not otherwise covered by health insurance" which could include treatments that are experimental or not approved for safety and efficacy by the Food and Drug Administration (FDA), the American Medical Association (AMA) or other widely accepted medical review board. If DAS is responsible for processing the subsidy payment, it will create an administrative burden on the limited resources available in the Retiree Health Benefits Office who service over 12,000 State of NH retirees today. The DAS is assuming that the premium for the HBP would not be covered by the subsidy since the HBP only covers non-work-related medical expenses. There is no charge to the member for workers compensation insurance. Additional information about the subsidy is required to determine if the rates listed in the bill are to be paid out regardless of the expense incurred and if it is a one-time lifetime maximum or if intended to be paid monthly.
AGENCIES CONTACTED:
New Hampshire Retirement System and Department of Administrative Services