Employer Notice: Shared and Loaned Employees

Aug 12, 2016
  • Employer Notices

For Immediate Release: August 12, 2016
Contact:  Mark F. Cavanaugh, Associate Counsel and Compliance Officer, 603-410-3592; [email protected]

CONCORD – The New Hampshire Retirement System (NHRS, the Retirement System) is aware of an increase in situations where participating employers are using shared or loaned employees. Fiscal and workforce challenges have caused some employers to seek innovative solutions to their staffing needs. This includes the utilization of one person to provide services to two or more employers. These arrangements may be structured in several ways and NHRS is still evaluating what, if any, impact this may have with respect to NHRS administration on such matters as enrollment, participation, creditable service, and “earnable compensation.” In the meantime, we strongly encourage participating employers to call NHRS for guidance when contemplating the implementation of such arrangements as any impact regarding NHRS administration is “fact specific” on a case-by-case basis.

Membership in NHRS is only permitted, and is mandatory, for Group I Employees and Teachers who meet the minimum participation rules under NHRS administrative rule Ret. 302.  Group II hires – Police and Fire – must be enrolled if they are “regularly employed on a full-time basis” under the NHRS statute, RSA 100-A.  In addition, when a full-time worker is paid additional amounts for a separate part-time job, even with the same employer, such amounts are generally not considered to be earnable compensation. Employers should also be aware that NHRS retirees are limited to 32 work hours per week for all participating employers combined.

Non-compliance with statutory provisions and administrative rules can result in adverse outcomes such as restoration to service and the recoupment of pension benefits. In other cases, it could result in the exclusion of earnable compensation or the termination of active membership due to a failure to meet the minimum participation standards. The financial impact on an individual member or retiree can be significant.  By consulting with NHRS in advance, employers can avoid any unintended consequences and assure that the proposed arrangement is consistent with the NHRS laws and rules. 

About NHRS

NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries.  The State of New Hampshire and nearly 470 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers.  NHRS has approximately 48,000 active members and 31,000 pension recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code.

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