Revision: Feb. 2, 2024, 2:42 p.m.
SB 134-FN - AS AMENDED BY THE SENATE
01/03/2024 2476s
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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
01/03/2024 2476s 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 bodily injury as defined in RSA 625:11 which results in any permanent physical condition that is congenital or due to injury or disease and that is of such seriousness as to constitute a hindrance or obstacle to obtaining employment as a police officer or to obtaining employment as a police officer if the employee should become unemployed as a direct result of a purposeful, violent attack upon such member by means of a deadly weapon as defined in RSA 625:11 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 violent act injury sustained 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, 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. No such retirement shall be allowed unless such violent act injury was sustained 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, or if the member is actively receiving accidental disability retirement benefits the date this act shall take effect such member or on the member’s behalf shall have 90 days to file application for violent act injury disability benefits and if approved such members benefit shall adjust to violent act injury disability benefits. No retirement shall be allowed unless the board, after a review of the evidence it deems appropriate, and after review and examination by a medical practitioner and certification of such incapacity, 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) Upon a violent act injury disability retirement, the group II member shall receive a disability retirement allowance which shall be equal to the member's annual rate of earnable compensation or an annual allowance of $75,000, whichever is greater, and which shall include annual 2.5 percent supplemental allowances.
(c) 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.
(d) 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 the retirement system shall make medical subsidy payments directly to the retiree’s employer, or to the former employer’s insurer or health care administrator, applied toward the cost of health insurance. Medical subsidy payments shall not be paid directly to the retiree.
(1) If the health insurance premium amount is less than the medical subsidy amount, then only the insurance premium amount will be paid.
(2) If the health insurance premium amount exceeds the medical subsidy amount, then the retiree, or other qualified person, will be responsible for paying any portion that the employer does not pay. Premium amounts may be deducted from the retiree’s, or other qualified person’s, pension and remitted by the retirement system to the employer or health care administrator.
(3) Monthly medical subsidy rates for retiree’s eligible under violent act injury disability retirement benefits shall be: 1 person, $1,000, and 2 person, $2,000; 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, 2024.
23-0908
Amended 2/2/24
SB 134-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2023-2476s)
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 State Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Revenue | $0 | Indeterminable | Indeterminable | Indeterminable | ||
Revenue Fund(s) | Internal Service Fund | |||||
Expenditures | $0 | $0 | $3,920,000+ to Indeterminable | $4,030,000+ to Indeterminable | ||
Funding Source(s) | General Fund and Highway Fund Various Agency Funds | |||||
Appropriations | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None | |||||
• Does this bill provide sufficient funding to cover estimated expenditures? [X] No • Does this bill authorize new positions to implement this bill? [X] N/A | ||||||
| ||||||
Estimated Political Subdivision Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Expenditures | $0 | $0 | $10,410,000 | $10,700,000 | ||
*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 several new provision for violent liability/death benefits. One, it creates 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” or an annual allowance of $75,000, which ever is greater, with an annual 2.5% cost of living adjustment. In addition, the surviving beneficiaries are eligible for a 75% survivor benefit upon the death of the member/retiree. Two, it expands the Group II accidental death benefit to members who have not attained the normal retirement age, upon the death of a violently injured police or fire member, will receive a state annuity payable equal to 75% of the members annual allowance calculated as if the member had retired under a violent act injury disability.
Lastly, this bill expands the medical insurance benefits for violently injured members to include eligibility for the retiree health benefit plan regardless of their age and number of years of creditable service with the State. A medical subsidy payment will be made by the New Hampshire Retirement System to the retiree's employer and applied toward the cost of health insurance with any excess amount requiring the retiree or another qualified person to cover the difference, either through pension deductions or personal payments. Monthly medical subsidy rates for retiree's eligible under violent act injury disability retirement benefits shall be $1,000 for one person and $2,000 for two person.
The New Hampshire Retirement System's actuary provided valuations based upon data used in the annual actuarial valuation as of June 30, 2021. The valuation assumes an annual rate of interest of 6.75 percent, wage inflation of 2.75 percent per year and uses the entry-age actuarial cost valuation method. Contribution rates for fiscal years 2024 and 2025 are certified and will remain unchanged. However, Actual FY 2026-2027 employer rates will be based on the actuarial valuation of June 30, 2023 and are currently unknown at this time, so only the net impact of the estimated allocation of this benefit is shown below.
Estimate State Impact
Increase (Decrease) in Employer Pension Rates as a Percent of Payroll | |
| Net Impact of Proposal |
Employees | 0.00% |
Police | 3.72% |
Fire | 0.23% |
Expected Employer Dollar Increase (Decrease) Due to Proposal | ||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 |
Employees | - | - | $0 | $0 |
Police | - | - | $3,910,000 | $4,020,000 |
Fire | - | - | $10,000 | $10,000 |
TOTAL | $0 | $0 | $3,920,000 | $4,030,000 |
Estimated Political Subdivision Impact
Increase (Decrease) in Employer Pension Rates as a Percent of Payroll | |
| Net Impact of Proposal |
Employees | 0.00% |
Teachers | 0.00% |
Police | 3.72% |
Fire | 0.23% |
Expected Employer Dollar Increase (Decrease) Due to Proposal | ||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 |
Employees | - | - | $0 | $0 |
Teachers | - | - | $0 | $0 |
Police | - | - | $10,040,000 | $10,320,000 |
Fire | - | - | $370,000 | $380,000 |
TOTAL | $0 | $0 | $10,410,000 | $10,700,000 |
The NHRS actuary projects an increase in the actuarial accrued liability of $87.6 million based on the provisions in the bill 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 related to reprogramming of the pension administration system, revisions to administrative procedures and staff training which will result in an indeterminable increase in FY 2025 expenditures.
Lastly, the NHRS also state the bill has significant technical issues, such as ambiguous provisions and inconsistencies with current law, which could hinder proper implementation of the bill. Below are examples of the technical issues the NHRS has identified in the bill:
The Department of Administrative Services (DAS) states the fiscal impact on the Retiree Health Benefit Plan costs due to violent act injury disability retirement is indeterminable as the bill mentions subsidies to be paid out to employers for disability retirements resulting from violent acts but does not specify the funding source or administration process for these subsidies. The lack of information regarding subsidy funding makes it challenging to assess the overall cost impact on the state.
AGENCIES CONTACTED:
New Hampshire Retirement System and Department of Administrative Services