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

New Hampshire Retirement System NH School Administrators Association September 25, 2009. Presentation Topics. General Overview of NHRS Legislative Update – Laws of 2009 Working after Retirement Disability Retirement NHRS Initiatives. Membership. 57,000 members

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

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

  2. Presentation Topics • General Overview of NHRS • Legislative Update – Laws of 2009 • Working after Retirement • Disability Retirement • NHRS Initiatives

  3. 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

  4. 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.

  5. Trust Fund Contributions $ $ $ $ Fund $ $ $ $ Benefit Payments Investment Income • Contributions + Investment Income = Benefit Payments

  6. 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

  7. 2009 Laws State’s 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.

  8. 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%.

  9. 2009 Laws 125% Assessment – Spiking Provision House Bill 223, Chapter 4 • Delays the implementation of RSA 100-A:16, 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.

  10. 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.

  11. 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

  12. 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.

  13. 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.

  14. 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.

  15. 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.

  16. 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.

  17. 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

  18. Medical Subsidy Rates Type of PlanRate 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

  19. 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%.

  20. 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.

  21. 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.

  22. 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.

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

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

  25. NHRS Moving Forward • Funding methodology • Annual investment policy review • Independent Investment Committee • Biannual actuarial valuation • Five–year actuarial experience study in 2010

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

  27. NH Retirement System 54 Regional Drive Concord, NH 03301 Phone: 603-410-3500 Toll Free: 877-600-0158 www.nhrs.org info@nhrs.org

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