By GARRY RAYNO, InDepthNH.org
CONCORD — State revenues, while ahead of a year ago, are not enough for Legislative leaders to support fixing the retirement system for firefighters and police officers without waiting for more information and analysis.
Meeting Thursday the Retirement Benefits Commission, voted to seek additional information from the New Hampshire Retirement Systems’ actuarial firm on two proposals to change the system that would increase benefits for some retirees.
An overhaul of the system 10 years ago reduced how benefits were determined for law enforcement and firefighter members of the system, but not for those with the 10 years needed to be vested.
The change affects about 1,700 Group 2 members and according to advocates for the change, is hampering retention of current employees.
Senate President Jeb Bradley, R-Wolfeboro, presented two amendments that would increase benefits for those affected by the change 10 years ago.
One would raise the multiplier in determining retirement benefits to 2.5 percent, and the other would be a two-tiered system raising it to 2.5 percent for those between six and 10 years of service when the calculation was changed and 2.25 percent for those with between four and six years of service.
The commission asked for the system’s actuarial firm to run the numbers of the changes but the firm was only able to do the higher percentage for all of the 1,700 employees.
The firm estimates the cost would be approximately $78.6 million as opposed to an earlier prediction of $92.6 million.
The commission asked the firm to also do the calculations for the 2.25 multiplier for those affected by the change or a little less than half of the total.
The study will also include a figure for the cost of when employees actually leave the system instead of assuming they would work until their 20-year anniversary when they could collect full benefits.
Sen. James Grey, R-Rochester, asked the actuarial firm to also consider his proposal which would raise the multiplier to 2.5 percent for all Group 2 employees when they reach the 20-year mark and for all Group 1 employees when they reach the 30-year mark for full benefits.
He said the commission should be looking at the whole system, not just making changes for 1,700 Group 2 employees. His proposal would only be for state employees and municipalities would negotiate similar changes with their employees.
Rep. Peter Leishman, D-Peterborough, said the commission’s work should focus on fixing the system for the 1,700 employees as the House dealt with in its budget plan. “That is what got us here in the first place,” he said.
But Grey said the bill that passed did not follow the House’s plan, but instead directed the commission to review benefit changes to the system.
“If we’re going to spend the money, the conversation is not high enough,” he said. “If we raise those benefits we’re going to have to come up with money, because once you do that you can’t take them back.”
Bradley told the commission while the state revenues for September were good with a $37 million surplus, the first two months of the fiscal year were not that great resulting in a $34.6 million revenue surplus for the first three months of the 2024 fiscal year.
He noted with either of his two proposals, the price tag is substantially higher and there is going to be an additional impact from the YDC settlement process to consider.
The original estimates were for the first amendment to cost between $52.2 million and $92.6 million, and the second with less increase in benefits costing $57.1 million.
Sen. David Watters, D-Dover, wondered if the cost could be spread out over several biennium, but Bradley said that would leave it up to future legislatures to fund the change and they may not want to do that.
Brian Ryll of the Professional Firefighters Association said the issue has gone way beyond restoring benefits to 1,700 to the public’s safety as State Troopers are down 77 positions, while the National Guard has to cover shifts in the state prisons.
“I’m tired of hearing that New Hampshire is the safest state, because we are not,” Ryll said. “We have a real problem here, because we are losing people in this state.”
He said watching Bradley’s floor speech at the end of the session, first responders were confident this would get fixed and noted he said he wanted to look at the revenues and study the costs for the first few months of the new fiscal year.
“You have to look hard at what the results will be,” Ryll said. “The result will be a tragedy for citizens of this state and that is one thing we don’t want to see.”
Bradley said they all want to move forward and keep the costs down, and hoped for revenue surpluses like last year when some months were over $100 million, but that is not what is happening.
Revenues are good, but not enough to be confident the money will be there for the changes some want.
He said he would like to have an analysis of what his two-tiered plan would cost from the actuarial firm.
Ryll said he could support seeking more information but would not be able to support the two-tier system. He said the line of demarcation for him would be to fix the problem with the first amendment.
The commission agreed to seek additional information on the two-tier amendment and Grey’s proposal and to meet again Nov. 2.
The commission also discussed other possible changes to the retirement system including moving from a 10-year vesting period to five years.
The change was suggested by Robert Fuller of the NEA-NH. He said that would bring the state in line with its neighbors which should also help with retaining workers.
The idea was supported by representatives from the counties, Cathy Stacey, and the municipal association, David Caron, saying many workers today do not want to commit to a 10-year career at one place and a five-year commitment is more likely to attract younger workers.
The commission suggested either Watters or Sen. Donna Soucy, D-Manchester, file a bill request before today’s 4 p.m. deadline to make the change.
The bill will have a public hearing next year and the retirement system will have time to determine the impact on the system, Bradley noted.
Garry Rayno may be reached at garry.rayno@yahoo.com.