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Retirement Reform 101
Lawmakers continue to push through a massive bill to reform the public pension system that provides retirement benefits to police, firefighters, teachers, state and municipal workers.
Today a senate committee finished its work on the bill and is sending it to the Senate floor.
New Hampshire Public Radio’s Dan Gorenstein has more.
Ok, before your eyes glaze over here’s a sort of quick primer on the state of the retirement bill.
The following story will be almost entirely jargon free.
Earlier this session, the House passed its version of the bill.
Under that plan, employees lose an annual 8% stipend increase that helps retirees purchase health insurance....they lose an annual cost of living increase....new firefighters and police would have to work an additional five years....and employees lose their voting majority on the Retirement Board of Trustees.
Obviously, employees and retirees didn’t like that plan.
But the employers- the cities and towns that pay pension benefits- did.
Simply, supporters believe those changes will control costs.
As the bill moved to the Senate, employees and retirees have leaned hard on the upper chamber to restore benefits.
The Senate Executive Department and Administration Committee has obliged.
On a unanimous vote, the ED and A Committee has eliminated both the board restructuring, and the requirement that police and firefighters work an additional five years.
But the provision that carries the biggest price tag- in the short term- is the 8% increase for the health subsidy.
Based on that measure alone, if the Legislature does nothing and current law continues, cities and towns- on average- would see a 53% increase in their pension bill.
If the House plan became law, according to the pension system, cities and towns would see only a 15% increase.
Instead of cutting the subsidy starting in 2009, the Senate wanted to freeze the growth of that annual health stipend for only four years, then providing a 4% annual increase after that.
It has been widely assumed that that plan would cost employers- i.e. taxpayers- more money.
Board Chair Lisa Shapiro even testified on Monday that is what would happen.
She was back in front of the Senate ED and A Committee today/Wednesday.
TAPE: the other day we were guessing it might come in 20-25%, point of fact it looks like it is 15-16%. There’s very little difference from what the House has proposed.
Shapiro’s calculations brought smiles to employees and their representatives.
Offering greater benefits than the House version, but not really costing much more money greatly improves employees leverage going forward.
How the pension system can provide more benefits without increases costs is the subject for another day.
The Municipal Association- who represents the employers- still prefers the House version.
Their lobbyists believe the reforms passed in that plan help shore up the system not just today- but into the future.
They warn if the Senate version becomes law, the state could be in jeopardy of pushing an unfunded mandate onto cities and towns.
Another important issue that will likely keep Senators up late at night for the next few weeks is how to handle cost of living increases.
The full Senate is scheduled to take begin weighing in on the measure next week.
For NHPR News, I’m DG.