New Hampshire Retirement System

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• New Hampshire Retirement System
• NH School Administrators Association
• September 25, 2009

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Presentation Topics

• General Overview of NHRS
• Legislative Update Laws of 2009
• Working after Retirement
• Disability Retirement
• NHRS Initiatives

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Membership

• 57,000 members
• Employees, teachers, firefighters, police
  officers
• 24,000 pension recipients
• Retirees and beneficiaries
• 475 participating employers
• State of NH, cities, counties, towns, school
  districts, and other units of local government

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Defined Benefit Plan

• Benefits are determined by a specific formula.
• Salary and Creditable Service
• Benefits are not based on investment returns or
  contributions.
• Lifetime pension benefits.

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Trust Fund
Contributions
Fund
Benefit Payments
Investment Income
Contributions Investment Income Benefit
Payments
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Trust Fund

• Member Contributions
• Firefighters police officers 9.3 of gross
  pay
• Employees teachers 5.0 of gross pay
• Employer Contributions
• Based on membership classification
• Includes pension contribution and medical subsidy
  contribution
• Trust Fund Investment Income

State employees hired on or after July 1, 2009,
must contribute 7.0 of gross earnings
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2009 Laws

• States Share of Employer Contribution
• House Bill 2, Chapter 144
• Reduced from 35 to 30 for the state fiscal year
  2010, and to 25 for the state fiscal year 2011.
• Reverts back to 35 for the state fiscal year
  2012 and each fiscal year thereafter.

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• Employer Contributions
• Group I Political Subdivision Employers

The State of NH contributes 30 of the cost for
teachers members, and the employer contributes
the remaining 70.
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2009 Laws

• 125 Assessment Spiking Provision
• House Bill 223, Chapter 4
• Delays the implementation of RSA 100-A16, III-a,
  from August 29, 2008, until July 1, 2010.
• Sought to address dramatic increases in pensions
  as the result of excessively high end-of-career
  payments made to a retiring employee by an
  employer.
• Employers assume financial responsibility for the
  increased pension amounts.

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2009 Laws

• 125 Assessment Spiking Provision
• House Bill 641, Chapter 289
• NHRS to develop a methodology to determine
  employer assessment for excess pension benefits
  paid to members who retire after July 1, 2010.
• NHRS working with its consulting actuary
• Report due December 1, 2009
• Every participating employer must report annually
  to NHRS the annual base pay of each member.

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2009 Laws

• Employer Assessments
• Senate Bill 108, Chapter 304
• Establishes a committee to study the imposition
  of employer assessments for excess benefits paid
  to NHRS retirees.
• Two state senators and four state representatives
• Findings and any recommendations for proposed
  legislation.
• Interim report due on November 1, 2009
• Final report due November 1, 2010

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2009 Laws

• Accidental Death Benefit
• Senate Bill 160, Chapter 327
• Allows the surviving spouse of a member who is
  killed or dies in the performance of duty to
  continue to receive an accidental death benefit
  annuity after the surviving spouse remarries.

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2009 Laws

• Ordinary Death Benefit
• Senate Bill 200, Chapter 324
• Ordinary Death benefit annuity paid to a
  surviving spouse will not terminate upon the
  remarriage of such surviving spouse.
• Provides Ordinary Death benefits for
  beneficiaries of NHRS members who die on or after
  January 1, 2007, while performing qualified
  military service.

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2009 Laws

• Same Gender Married Couples
• House Bill 436, Chapter 59
• NHRS must follow the federal definition of
  marriage when administering pension plan
  benefits.
• Certain retirement benefits for same gender
  married couples will be limited.

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2009 Laws

• Medical Subsidy
• House Bill 633, Chapter 12
• Provides medical subsidy benefits for certain
  Group I teacher and political subdivision
  employee members who retired on or before July 1,
  2009.

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Medical Subsidy

• Employee or teacher member of a political
  subdivision
• Must have accumulated at least 20 years of
  eligible creditable service for the medical
  subsidy as a Group I member as of July 1, 2008,
  AND
• Was eligible to retire (but may not have retired)
  on or before July 1, 2008, AND
• Retired on or before July 1, 2009.

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Medical Subsidy

• Employee or teacher member of a political
  subdivision
• Eligible for medical subsidy at age 60 with at
  least 20 years of creditable service
• Eligible for medical subsidy at age 55 with at
  least 30 years of creditable service

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Medical Subsidy Rates

• Type of Plan Rate
• 1 Person 375.56
• 2 Person 751.12
• 1 Person 236.84
• (Medicare supplement)
• 2 Person 473.68
• (Medicare supplement)
• Rates effective through 6/30/2012

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Medical Subsidy

• Pursuant to HB 1645, beginning
• July 1, 2008, the medical
• subsidy amounts payable shall
• not be increased for four years.
• Effective July 1, 2012, and each
• July 1st thereafter, the medical
• subsidy rates will increase by 4.

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Working after Retirement

• May work for non-NHRS employer (such as private
  sector).
• May not occupy NHRS-covered position and receive
  pension.
• Pension will cease
• Active membership will be restored
• Disability Retirement Contact NHRS for details.

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Working after RetirementFrom Retiree to Active
Member

• Teachers who are regularly scheduled for 30
  hours per week.
• Employees who are regularly scheduled for 35
  hours per week.
• Teachers who are employed for 30 or more hours
  per week for 18 weeks during the school year.

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Working after RetirementFrom Retiree to Active
Member

• NHRS-covered position that requires mandatory
  enrollment.
• Under Contract or Independent Contractor to
  avoid enrollment.
• Part-time but working and/or being paid for
  full-time work.

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Disability Retirement

• Members must apply for benefits while in service,
  OR
• Apply within one year of date last contribution
  to NHRS is paid.

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Disability Retirement

• Employer-funded salary continuance plans require
  member and employer contributions
• Even if members employment terminates.
• Member will earn creditable service.
• Member is eligible to apply for Disability
  Retirement.

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NHRS Moving Forward

• Funding methodology
• Annual investment policy review
• Independent Investment Committee
• Biannual actuarial valuation
• Fiveyear actuarial experience study in 2010

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Email Updates

• Visit www.nhrs.org
• Enter information in section entitled, NHRS
  Email Updates

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NH Retirement System 54 Regional Drive Concord,
NH 03301 Phone [phone] Toll Free
877-600-0158 www.nhrs.org info_at_nhrs.org