Employer Notice: Legislative Changes Affecting Participating Employers

House Bill 1494 clarifies several provisions of RSA 100-A

Feb 23, 2015
  • Employer Notices

For Immediate Release: July 17, 2014
Contact: [email protected]

CONCORD, N.H. – House Bill 1494, Chapter 183, Laws of 2014, made several changes to RSA 100-A to allow the New Hampshire Retirement System (NHRS, the retirement system) to administer the plan more effectively, primarily by clarifying statutory language and updating or eliminating out-of-date provisions.

HB 1494 is effective July 1, 2014. Below is a summary and explanation of employer-related changes contained in the bill:

Employer reporting penalties: An employer penalty for late remittance of NHRS contributions has been in RSA 100-A since 1969, but there had been no penalty if an employer submitted incorrect data that prevented the processing of wage and contribution information.  In some cases, the retirement system has been forced to allocate significant staff-hours to clean incorrect data submitted by employers.  A delay in the processing of even a single member’s data can prevent NHRS from updating wage and contribution data for all members of that employer.  The new penalty for incorrect data submission of active member records is the same as the existing penalty for late remittance of NHRS contributions: interest on the amount due at the rate of one (1) percent for each month or fraction thereof that the data remains uncorrected. RSA 100-A:16, V

In addition, the bill also adds a similar penalty for late or incorrect reporting of retiree data required pursuant to HB 342 (Chapter 251, Laws of 2013).  The penalty for late reporting of retiree data is $25 per day.  Monthly retiree data is due no later than the last day of the following month (i.e. June data is due by the end of July; July data is due by the end of August, etc.). RSA 100-A:16, VII(b)

Note: HB 1494 does not create mandatory employer penalties: but, rather, it provides NHRS with the discretion to assess a penalty for due cause, which employers may appeal to the Board of Trustees.  The Board may abate all or any part of the penalty upon a showing that the employer did not willfully, intentionally, through gross negligence, or through a pattern of negligence fail to file the correct data.
Reporting of monthly retiree data to NHRS for elected officials: This section of the bill repeals the requirement that employers must track and report hours worked and compensation paid to retirees serving as elected officials. RSA 100-A:16, VII(a)

Definitions (Earnable Compensation): This section clarifies legislative intent that compensation for “extracurricular and instructional activities” is Earnable Compensation for full-time paraprofessionals and other full-time school support staff, as well as for teachers. RSA 100-A:1, XVII

Definitions (Employer, Employee): This section adds a sentence to the definition of “Employer” to clarify that political units that combine payroll operations continue to be considered separate employers for the purposes of administering benefits under RSA 100-A.  This change deals with the administration of member benefits and will not impact employer payroll reporting. RSA 100-A:1, IV

This section also adds “nonclassified” state employees to the definition of  “Employee” to clarify that these positions are subject to the same membership requirements as classified and unclassified state employees. RSA 100-A:1, V

Credit for prior service: The cost calculation to purchase most types of prior service had been based on a statutory formula, rather than a member-specific calculation of the true actuarial cost.  This section requires that the purchase price for prior service be the full actuarial cost. This change may impact the employer cost – positively or negatively, on a case-by-case basis – for prior service purchases related to employer oversight or modifications. RSA 100-A:3, VI(b)

Salary continuance; ability to earn service: This section clarifies that a member does not continue to earn service credit while on a salary continuance (i.e. employer-funded disability coverage) following termination of employment. The change is prospective.  RSA 100-A:4, III-a

Further information on HB 1494 is available on the NH General Court website.

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NHRS is issuing this notice Pursuant to RSA 100-A:14, XII to inform participating employers about legislation that may have a cost impact on employers.