Revision: Dec. 30, 2024, 2:58 p.m.
SB 20-FN - AS INTRODUCED
2025 SESSION
25-0186
06/05
SENATE BILL 20-FN
SPONSORS: Sen. Rosenwald, Dist 13; Sen. Fenton, Dist 10; Sen. Altschiller, Dist 24; Sen. Prentiss, Dist 5; Sen. Perkins Kwoka, Dist 21; Sen. Long, Dist 20; Sen. Reardon, Dist 15; Sen. Watters, Dist 4; Rep. Edgar, Rock. 29; Rep. Wallner, Merr. 19; Rep. Telerski, Hills. 11; Rep. Simpson, Rock. 33; Rep. Nagel, Belk. 6
COMMITTEE: Finance
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ANALYSIS
This bill provides that the state shall pay 7.5 percent of contributions of retirement system employers other than the state for group I teachers and group II members.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
25-0186
06/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Five
Be it Enacted by the Senate and House of Representatives in General Court convened:
I. This act may be known as the "Property Tax Relief Act of 2025."
II. This act renews a promise made by state to municipalities and restores the state’s contribution of a portion of the retirement costs of teachers, firefighters, and local police. Its purpose is to help ease the local property tax burden, provide property tax relief to the cities and towns, and enhance public education and public safety.
2 Retirement System; Employer Contributions; State Share of Contributions. Amend RSA 100-A:16, II(b) and (c) to read as follows:
(b) The contributions of each employer for benefits under the retirement system on account of group II members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution," and an additional amount to be known as the "accrued liability contribution;" provided that beginning with state fiscal year [2013] 2026 and for each state fiscal year thereafter, any employer [shall pay the full amount of such total contributions] other than the state, shall pay 92.5 percent of such total contributions, and 7.5 percent thereof shall be paid by the state; and provided further that, in case of group II members employed by the state, the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution, including contributions on behalf of group II members whose group II creditable service is in excess of 40 years, in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuations, except as provided in subparagraph (i).
(c) The contributions of each employer for benefits under the retirement system on account of group I members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution," and an additional amount to be known as the "accrued liability contribution;" provided that beginning with state fiscal year [2013] 2026 and for each state fiscal year thereafter, in the case of teachers, any employer other than the state, shall pay 92.5 percent of such total contributions, and 7.5 percent thereof shall be paid by the state; and provided further that, in case of teacher members employed by the state, the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuation, except as provided in subparagraph (i).
3 Effective Date. This act shall take effect July 1, 2025.
25-0186
11/19/24
SB 20-FN- FISCAL NOTE
AS INTRODUCED
FISCAL IMPACT: This bill does not provide funding.
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Estimated State Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Revenue Fund(s) | None | |||||
Expenditures* | $0 | $28.0 million | $28.74 million | $29.51 million | ||
Funding Source(s) | General Fund | |||||
Appropriations* | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None | |||||
*Expenditure = Cost of bill *Appropriation = Authorized funding to cover cost of bill | ||||||
| ||||||
Estimated Political Subdivision Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Expenditures | $0 | ($28.00 million) | ($28.74 million) | ($29.51 million) | ||
*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 bill requires the State to pay 7.5 percent of contributions of retirement system employers other than the State for group I teachers and group II members beginning in FY 2026. The New Hampshire Retirement System (NHRS) states the proposed change affects the pension contribution rate, but not the medical subsidy contribution rate. The NHRS indicates this bill does not impact the NHRS unfunded actuarial accrued liability (UAAL) or funded ratio because it does not change the total amount of employer contributions due to the retirement system, only
the funding source. Because this bill shifts the impact from political subdivisions to the state the
fiscal impact of this bill is an increase in general fund expenditures and decrease in political subdivision expenditures by $28.0 million in FY 2026 and $28.74 million in FY 2027, and $29.51
million in FY 2028. See tables below for more detail of fiscal impact.
Net Impact on State Employer Contributions
Expected Employer Dollar Increase (Decrease) Due to Proposal ($ in Millions) | ||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 |
Employees | - | - | - | - |
Teachers | - | $18.61 | $19.07 | $19.55 |
Police | - | $6.00 | $6.18 | $6.37 |
Fire | - | $3.39 | $3.49 | $3.59 |
TOTAL | $0 | $28.00 | $28.74 | $29.51 |
Net Impact on Political Subdivisions Employer Contributions
Expected Employer Dollar Increase (Decrease) Due to Proposal ($ in Millions) | ||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 |
Employees | - | - | - | - |
Teachers | - | ($18.61) | ($19.07) | ($19.55) |
Police | - | ($6.00) | ($6.18) | ($6.37) |
Fire | - | ($3.39) | ($3.49) | ($3.59) |
TOTAL | $0.00 | ($28.00) | ($28.74) | ($29.51) |
This bill does not appropriate funds to cover the expenditures in FY 2026 or FY 2027. Additionally, the costs for FY 2028 and forward would need to be included in the NHRS's operating budget.
AGENCIES CONTACTED:
New Hampshire Retirement System