NHRS has approximately 53,000 active members and 24,500 pension recipients. A 2007 study by the New Hampshire Center for Public Policy Studies forecast that New Hampshire public pension funding, at the local government level, would increase from $108 million in 2007 to $262 million in 2011. This same study projected that State contributions to the NHRS would rise from 3% of General Fund revenues in 2000 to 10% in 2011. The state has historically shared the employer cost contributing 35% for public safety employees and teachers. In 2010 the state, as the result of action of the legislature, reduced its share to 30% of the total employer rate and in 2011 the state will only pay 25% of the total cost, down shifting these additional costs to the local communities. Under current statute, the state's share is scheduled to return to the previous level of 35% in 2012.
The NHRS is currently funded at 58% and was among 19 states given the lowest grade in a February 2010 "Pew Center on the States" report. Enough studies have been completed in recent years to conclude there is a problem. Now is the time that the state must take substantive action to bring solidity to the program, or there will not be sufficient funds to provide pensions to those currently retired nor those currently in the system. The NHRS actuaries are recommending rate increases for municipalities of 21% to 31%, beginning July 1, 2011.
If we are to keep promises that have been made, we must take steps to address the solvency of the Retirement system.
1. Increase the minimum retirement age to 55 or 60.
2. Cash out awards and extra duty pay would be set in a personal contribution package.
3. A long term approach of shifting to a defined contribution plan.
4. Establish a date certain for the change for new employees.