Working After Retirement Laws to Change in 2019

HB 561 modifies statutes governing part-time employment of NHRS retirees by participating employers

Jun 27, 2018
  • Legislation

For Immediate Release: June 27, 2018
Contact:  [email protected]

CONCORD, NH – Legislation passed in 2018 will change the laws governing New Hampshire Retirement System (NHRS, the retirement system) retirees who work part-time for retirement system participating employers. The changes take effect January 1, 2019.

The retirement system is developing a list of frequently asked questions concerning the changes to working after retirement, which will be available in mid-July.

Under House Bill 561 (Chapter 293, Laws of 2018), NHRS retirees who take a part-time position with one or more retirement system participating employers after the effective date of the bill are allowed to work a maximum of 1,352 hours per calendar year.

The bill also contains a “grandfathering” provision that allows retirees who are already working part-time for NHRS participating employers to work a maximum of 1,664 hours per calendar year for as long as they remain in the positions they held on the effective date of the bill.

These calendar year limits on hours worked will replace the weekly ceiling on hours worked contained in the current statutes. The bill also includes the following elements:

  • Separation from service: Members who retire on/after January 1, 2019, must wait 28 days from their effective date of retirement before commencing part-time employment with an NHRS-participating employer. Note: The effective date of retirement is always the first of the month.
  • Penalty for violating statute: A retiree who exceeds the maximum permitted hours will forfeit the state annuity portion of his or her retirement allowance, and any allocable cost of living adjustments, with the forfeiture commencing as soon as administratively feasible in the next calendar year and continuing for 12 months. On average, the state annuity portion provides about half of a retiree’s total pension benefit, although it can be more or less for specific individuals.
  • Employer reporting: Employers are required to report on an annual basis, no later than February 15, all hours worked and compensation paid to any NHRS retirees employed during the prior calendar year.
  • Documenting “grandfathered” retirees: Employers, no later than February 15, 2019, are required to provide the names and position titles of any retired members employed as of the effective date of the law. This data will be used as the basis for administering the grandfathering provision. Following the initial reporting of grandfathered retirees in 2019, employers will then be required to verify annually that these retirees remain in the same position as of January 1 of each calendar year in order to maintain their grandfathered status.
  • Other: The bill also: (a) clarifies that restoration to service under RSA 100-A:7, I, does not apply to beneficiaries of deceased members; (b) updates RSA 100-A:7-a to specify that the annual notice to retirees concerning working after retirement includes a description of the penalty for exceeding the annual limit on hours; and (c) updates the emergency exception in RSA 100-A:7-b.

The law does not apply to retirees working for employers that do not participate in the retirement system.

Background

The New Hampshire Legislature initially enacted statutory limits on NHRS retirees working for participating employers – sometimes referred to as “double-dipping” – in 2011, creating a weekly ceiling on hours worked with a seasonal exception to allow retirees to exceed the weekly ceiling on hours within a 5-month period as long as they did not exceed an annual cap on hours worked. In 2013, the law was amended to require employers to provide monthly data to NHRS on retiree hours worked and compensation paid.

HB 561 was introduced in 2017 and passed by the House. The bill was retained by the Senate, which made significant amendments to the bill this year. The final bill was the result of a House-Senate Committee of Conference report, which was adopted in May by both legislative chambers. It was signed by the Governor on June 25, 2018.

There have been numerous unsuccessful attempts to modify the working after retirement laws in recent legislative sessions. In addition, the working after retirement issue was reviewed by the 2017 Decennial Retirement Commission. The commission recommended the penalty for exceeding the annual limit on hours worked and the 28-day separation from service contained in HB 561, but recommended that retirees be allowed to work fewer hours than what was ultimately adopted.

Based on unaudited, employer-reported data, just under 10 percent of NHRS retirees worked for a participating employer in 2017, with the average retiree working about 18 hours per week.

The full text of the bill is available here.

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 35,000 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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