HB 590-FN – AS AMENDED BY THE SENATE
05/13/09 1575s
05/13/09 1616s
2009 SESSION
10/04
HOUSE BILL 590-FN
AN ACT relative to the retirement age for group II members.
SPONSORS: Rep. Hawkins, Hills 18; Rep. Graham, Hills 18; Rep. Kurk, Hills 7; Rep. P. McMahon, Merr 3; Rep. Reagan, Rock 1
COMMITTEE: Executive Departments and Administration
This bill increases the retirement age for group II retirement system members and state employees who begin employment on or after July 1, 2009.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05/13/09 1575s
05/13/09 1616s
09-0199
10/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nine
AN ACT relative to the retirement age for group II members.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 State Employees; Group Insurance Benefits; Group II. Amend RSA 21-I:30, III to read as follows:
III. Any vested deferred state retiree may receive medical and surgical benefits under this section if the vested deferred state retiree is eligible. To be eligible, a vested deferred state retiree shall have at least 10 years of creditable service with the state if the employee’s service began prior to July 1, 2003 or 20 years of creditable service if the employee’s service began on or after July 1, 2003. In addition, if the vested deferred state retiree is a member of group I, such retiree shall be at least 60 years of age to be eligible. If the vested deferred state retiree is a member of group II who commenced service before July 1, 2009, such retiree shall not be eligible until 20 years from the date of becoming a member of group II and shall be at least 45 years of age, and any group II member who commenced service on or after July 1, 2009 shall not be eligible until 25 years from the date of becoming a member of group II.
2 Service Retirement; Group II. Amend RSA 100-A:5, II to read as follows:
II. Group II Members.
(a) Any group II member in service, who commenced service before July 1, 2009, who has attained age 45 and completed 20 years of creditable service, or who has attained age 60 regardless of the number of years of creditable service, and a group II member who commenced service on or after July 1, 2009, who has completed 25 years of creditable service, or who has attained age 60 regardless of the number of years of creditable service, may retire on a service retirement allowance upon written application to the board of trustees setting forth at what time not less than 30 days nor more than 90 days subsequent to the filing thereof the member desires to be retired, notwithstanding that during such period of notification the member may have separated from service.
(b) Upon service retirement, a group II member shall receive a service retirement allowance which shall consist of:
(1) A member annuity which shall be the actuarial equivalent of his or her accumulated contributions at the time of retirement; and
(2) A state annuity which, together with his or her member annuity, shall be equal to 2-1/2 percent of his or her average final compensation multiplied by the number of years of his or her creditable service not in excess of 40 years.
(c)(1) Notwithstanding any provision of RSA 100-A to the contrary, any group II member who commenced service before July 1, 2009 and has retired on or after the effective date of this subparagraph after attaining the age of 45 with at least 20 years of creditable service, and any group II member who commenced service on or after July 1, 2009 and has retired on or after the effective date of this subparagraph and has completed at least 25 years of creditable service, shall receive a minimum annual service retirement allowance of $10,000. If such group II member has elected to convert the retirement allowance into an optional allowance for the surviving spouse under RSA 100-A:13, the surviving spouse shall be entitled to a proportional share of the $10,000.
(2) [Repealed.]
(3) [Repealed.]
3 Ordinary Disability Retirement; Group II; Gender Neutral. Amend RSA 100-A:6, II(b) to read as follows:
(b) Upon ordinary disability retirement, the group II member shall receive an ordinary disability retirement allowance which shall consist of: a member annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his or her ordinary disability retirement; and a state annuity which, together with his or her member annuity, shall be equal to 2-1/2 percent of his or her average final compensation at the time of [his] ordinary disability retirement multiplied by the number of years of his or her creditable service not in excess of 40 at the time of [his] ordinary disability retirement, provided, however, that such allowance shall not be less than 25 percent of the member’s final compensation at the time of his or her disability retirement.
4 Accidental Disability Retirement; Group II; Gender Neutral. Amend RSA 100-A:6, II(d) to read as follows:
(d) Upon accidental disability retirement, the group II member shall receive an accidental disability retirement allowance equal to 2/3 of his or her average final compensation at the time of [his] disability retirement. For any group II member who has more than 26-2/3 years of service, a supplemental disability retirement allowance shall be paid. Such supplement shall be equal to 2-1/2 percent of his or her average final compensation multiplied by the number of years of his or her creditable service in excess of 26-2/3 but not in excess of 40 years.
5 Vested Deferred Retirement; Group II. Amend RSA 100-A:10, II(b) to read as follows:
(b) For members who commenced service before July 1, 2009, upon the member’s attainment of age 45, provided the member would then have completed 20 years of creditable service, otherwise the subsequent date on which such 20 years would have been completed, or for members who commenced service on or after July 1, 2009, provided the member would then have completed 25 years of creditable service, or at any time after age 60, a group II member who meets the requirement of subparagraph (a) may make application on a form prescribed by the board of trustees and receive a vested deferred retirement allowance which shall consist of: (1) A member annuity which shall be the actuarial equivalent of accumulated contributions on the date the member’s retirement allowance commences; and (2) A state annuity which, together with the member annuity, shall be equal to a service retirement allowance based on the member’s average final compensation and creditable service at the time the member’s service is terminated.
6 Split Benefits; Minimum Age. Amend RSA 100-A:19-b, II to read as follows:
II. For a member who commenced service before July 1, 2009 and, who has completed 20 or more years of combined creditable service, one year shall be deducted from age 60 for each year of creditable group II service, provided that the age shall not be less than 45 years. For a member who commenced service on or after July 1, 2009 and, who has completed 25 or more years of combined creditable service, one year shall be deducted from age 60 for each year of creditable group II service.
7 Effective Date. This act shall take effect July 1, 2009.
LBAO
09-0199
Amended 06/24/09
HB 590 FISCAL NOTE
AN ACT relative to the retirement age for group II members.
FISCAL IMPACT:
The New Hampshire Retirement System states this bill, as amended by the Senate (Amendments #2009-1575s and #2009-1616s), may decrease state expenditures by $553,100 in FY 2012, $751,223 in FY 2013, and an indeterminable amount each year thereafter, and county and local expenditures by an indeterminable amount in FY 2012 and each year thereafter. There will be no fiscal impact on state, county, or local revenue.
METHODOLOGY:
The New Hampshire Retirement System states this bill would affect only Group II members commencing service on or after July 1, 2009. For these members, eligibility for various System retirement benefits (service retirement, vested deferred, split benefits) would be changed from attaining age 45 with 20 years of creditable service (or age 60) to attaining 25 years of creditable service (or age 60). The System states the multiplier used in the calculation of various benefit amounts (service retirement, accidental disability supplement, ordinary disability retirement) would remain at 2.5% of average final compensation. The System states the proposed bill would not change benefits for Group II members who commence service before July 1, 2009 and for all Group I members. Because the change would only affect those commencing service after July 1, 2009 and rates for FY 2010 and FY 2011 have already been set, decreased employer contribution rates because of the change would not begin until FY 2012. The System estimates a decline in employer contributions for the state of $553,100 in FY 2012 and $751,223 in FY 2013 and for the political subdivisions (counties and municipalities) of $510,260 in FY 2012 and $699,214 in FY 2013, for total estimated employer savings of $1,063,360 in FY 2012 and $1,450,437 in FY 2013. The System could not break down the political subdivision amount further into the county and local portions, so those amounts are reported as one number. From then on, as the number of Group II members commencing service before July 1, 2009 decreases and the number of Group II members commencing service after July 1, 2009 increases, employer contributions should slowly decline, with the System’s projected savings on employer contribution amounts in FY 2031 reaching $14,025,718 for both the state and political subdivision portions.