New Hampshire

1

• New Hampshire
• Retirement System

2
Overview of Presentation

• Structure and Governance
• Plan Funding
• Legislation
• Important Reminders
• Health Insurance after Retirement
• Working after Retirement

3
Membership Structure

• 53,000 active and vested deferred members
• Employees, teachers, firefighters, police
  officers
• 24,500 pension recipients
• Retirees and beneficiaries
• Growing by 1,500 - 2,000 per year
• 475 participating employers
• State of NH, cities, counties, towns, school
  districts, and other units of local government

4
Plan Governance

• NH Legislature Plan Sponsor
• RSA 100-A serves as plan document
• NHRS Board of Trustees and Independent Investment
  Committee Members serve as fiduciaries
• Internal Revenue Code provisions
• NH Constitution Art. 36-a protects funds for the
  exclusive purpose of providing benefits
• Sununu Supreme Court ruling

5
Defined Benefit Plan

• Benefits are determined by a specific formula
  which consists of three components
• Earnings
• Creditable Service
• Benefit Multiplier

6
Defined Benefit Plan

• Lifetime pension benefits
• To retired member
• To eligible beneficiary upon retired members
  death (Survivorship Option)
• Benefits are not based on investment returns or
  contributions

7
Fiduciary Management
Benefit Payments
Contributions



Investment Earnings
Expenses

Equation must balance over time
8
Member Contributions

• Member Contributions Set by Statute
• Group I Members
• Employees teachers 5.0 of earnings
• Group II Members
• Firefighters police officers 9.3 of earnings

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

• Biannual Actuarial Valuation
• Calculates funding status and employer rates
• Rates based on membership classification
• Rates include pension contribution and medical
  subsidy contribution
• Actuarial Experience Study
• Conducted every five years
• Evaluates underlying assumptions

10

• Employer Contributions FY 10
• Group I Political Subdivision Employers

Member Classification Pension Medical Subsidy Total
Employees 9.09 0.07 9.16
Teachers Employer Share State share Total 6.57 2.81 9.38 0.92 0.40 1.32 7.49 3.21 10.70
The State of NH contributes 30 of the cost for
teacher members, and the employer contributes the
remaining 70.
11
Employer Contributions

• States share reduced for teachers, firefighters,
  and police officers of political subdivisions
  (Laws of 2009)
• From 35 to 30 for fiscal year 2010
• To 25 for fiscal year 2011
• To revert back to 35 for fiscal year 2012 and
  each fiscal year thereafter

12
Employer Assessment

• Employer assessment for excess pension benefits
• Spiking
• To address high end of career payments

13
Employer Assessment

• Spiking Legislation from 2009
• Delayed the implementation of employer assessment
  - spiking assessment- to July 1, 2010 (House
  Bill 223)
• NHRS to recommend methodology for determining
  employer assessment for excess pension benefits
  (House Bill 641)
• Established a study committee to review employer
  assessments (Senate Bill 108)

14
Employer Assessment

• Status of Spiking in 2010
• Senate Bill 504 recommends delaying spiking
  assessment to July 1, 2011
• NHRS recommended methodology for determining fair
  assessment
• Study committee reviewing employer assessments
• Surveying employers, seeking spiking data
• Recommends delaying employer assessment one more
  year

15
2010 Legislation

• House Bill 1576 employment as a retired member
• House Bill 1664-FN increase in member
  contribution rates
• Senate Bill 108 (retained) - study committee
  reviewing implementation of employer assessments
• Senate Bill 504 - spiking assessment

16
Important Reminders

• Salary Continuance Plans
• Contributions must be remitted to NHRS based on
  the portion of the plan funded by the employer
• Member earns service credit
• Member is in service for certain benefits

17
Important Reminders

• Health Insurance Buy Outs and Payments in
  lieu of are not earnable compensation
• Do not report those amounts to NHRS
• Do not remit contributions on those amounts

18
Important Reminders

• Workers Compensation
• Report supplemental pay paid by the employer
  while the member is receiving Workers'
  Compensation
• Contributions must be remitted to NHRS on
  supplemental pay but not on actual Workers
  Compensation payments

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Important Reminders

• Active Military Duty
• Report military differential pay
• Contributions must be remitted to NHRS on
  differential pay
• Members should contact NHRS upon returning to
  NHRS-covered employment
• May be eligible for service credit even if no
  differential pay

20
Retiree Health Insurance

• NHRS-participating local government employers
  must allow their retiring employees to
  participate in their health insurance plan
• Employers are not required to pay for the health
  insurance coverage
• Legislative Study Commission re funding of
  medical benefits

21
Retiree Health Insurance

• Deductions from pensions for health insurance
  premiums cannot be pre-tax
• Internal Revenue Code regulations
• Cafeteria plans for employees only

22
Medical Subsidy

• A payment made by NHRS directly to the former
  employer or health insurance administrator,
  applied toward the cost of health insurance for
  the qualified retired member and qualified spouse
• The medical subsidy is not a health insurance plan

23
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

24
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

25
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

26
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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Communications Initiatives

• Outreach and education
• Member education sessions
• Regional approach - more members
• Mailing to employers in March
• 2009 Law books
• Employer newsletter
• Website and content enhancements
• Online resources
• User-friendly information

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Does NHRS have your current email address? Send
email topublic_relations_at_nhrs.org
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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