50 Facts About NHRS
To mark our 50th anniversary in 2017, the retirement system has compiled “50 Facts About NHRS.” We are posting a new fact every Friday on Facebook and Twitter (hashtag #FactFriday) and keeping a running list here.
No. 1: In 1967, the pension trust fund stood at $98 million (about $700 million in 2016 dollars). Today, the fund is more than $7.5 billion, most of which derives from investment income.
No. 2: At the close of the 2016 fiscal year, NHRS had 27 pension recipients who were 100 years old or older – two men and 25 women.
No. 3: When NHRS was created in 1967, the average cost of a new home was under $25,000 and it cost about $1.25 to see a movie. Tickets for the very first Super Bowl topped out at $12. The New England Patriots were headed into a 3-10-1 season and decades of futility and heartbreak. How things have changed!
No. 4: Until 1977, Group I Employee members were required by law to retire at age 70. By the end of the 2016 fiscal year, NHRS had 271 active Employee members working beyond age 70.
No. 5: For the first 10 years of NHRS’ existence, member contribution rates were assessed on a sliding scale based on age, and, for Group I only, gender. (“Mad Men,” anyone?) Generally, Group I female members paid a higher contribution than male members. For example, the contribution rate for a 25-year-old male Employee was 7.5%, while the rate for a 25-year-old female Employee was 8.95%. In 1977, legislation replaced the differentiated rates with flat contribution rates for Group I and Group II.
No. 6: Before NHRS was created, there were separate retirement systems for firefighters (established in 1939), police (1942), employees (1945) and teachers (1950).
No. 7: Legislation changed the calculation for Average Final Compensation (AFC) from the highest 5 years to the highest 3 years in 1973; Legislation in 2011 changed it back to 5 years for any member not vested prior to January 1, 2012.
No. 8: When everything was done manually, benefit calculation processes were tedious. In 1967, a Group I member’s benefit was calculated with as many steps as the member’s years of service. For example, a benefit calculation for a 30-year member would have 30 steps.
No. 9: In 1967, NHRS started out with just 10 employees. Today, there are currently 58 employees working for NHRS to provide secure retirement benefits and superior service for our members and retirees.
No. 10: The first NHRS discretionary investment advisor was hired in 1969, two years after NHRS was established. Today, NHRS has 60-plus external investment managers.
No. 11: At its beginning, NHRS had a total of only 36 pension recipients. 50 years later, we have 33,000 retirees or beneficiaries collecting an NHRS pension.
No. 12: Back in 1967, NHRS had 12,000 active members. In 2017, we have approximately 48,000 active, contributing members.
No. 13: NHRS was originally a division of the NH Department of Treasury. State Treasurer Robert Flanders asked Harry Descoteau, the state’s first Assistant State Treasurer, to assume the responsibility of day to day NHRS management in 1967.
No. 14: 23% of NHRS members work for the State of New Hampshire. (9,825 Group I employees, 1,042 Group II police/corrections officers, 62 Group II fire personnel).
No. 15: Prior to 1977, most Group I Teacher members were required by law to retire at age 65. At the close of the 2016 fiscal year, NHRS had 665 active Teacher members working beyond age 65, including 83 teachers age 70 and older.
No. 16: More than 61% of NHRS members are female (29,477 of 48,069). The Teacher population leads the way at 78% female.
No. 17: Since over 80% of NHRS pension recipients reside in New Hampshire, much of the money from those benefits helps to support the state's economy.
No. 18: Increasing from our original 11-member Board of Trustees, today’s Board consists of 13 members: 1 member from each of the four membership classes (Employee, Teacher, Police, and Fire), 4 employer representatives, 4 public members, and the State Treasurer.
No. 19: Previously, a member needed 15 years of service to become vested. In 1973, the vesting requirement was lowered to 10 years, where it has remained ever since.
No. 20: At the close of Fiscal Year 2016, total NHRS membership (members, retirees, and beneficiaries) was 92,158.
No. 21: The average age of an NHRS active member is 46.9, with an average service time of 12.1 years.
No. 22: Before NHRS was established, each member group had a separate retirement system with its own Board of Trustees. Each board had five members—apart from the police board (1942), which had seven. It was required that the two additional seats were filled by “prominent citizens” who could not be of the same political party.
No. 23: A lot can happen in 25 years. Since our 25th anniversary in 1992, NHRS membership has increased from 36,791 active members to approx. 48,000. Retiree membership has increased from 10,444 to 36,000.
No. 24: In 1957, a Federal-State agreement modified and integrated the employee and teacher retirement systems with Social Security. In 1988, legislation de-linked Group I pension benefits from Social Security.
No. 25: The NHRS actuarial report for Fiscal Year 1969 noted whether state employees were paid from state funds or from “Special” funds. Among those paid from Special funds were 123 Fish and Game employees, 69 Department of Safety employees, and the lone employee of the Hairdressers’ Board.
No. 26: When NHRS was established in 1967, members had the option of remaining with their original retirement system (there were four separate systems for Employees, Teachers, Police, and Fire), or joining the newly established NHRS. Each member was sent a letter explaining how benefits were calculated under their present system compared to the new system, and what the different calculations looked like. After figuring out which calculation made the most sense for them, they could elect to remain in their original system, or become a member in the new system.
No. 27: “Windy” by The Association, which hit Number One on the Billboard Hot 100 the same day NHRS came into existence – July 1, 1967 – ended its four-week run at the top of the charts today (7/28).
No. 28: At the close of Fiscal Year 2016, NHRS’s total membership was numbered at 92,158. This equates to approximately 1 in every 14 Granite Staters being an NHRS member.
No. 29: As of June 30, 2016, NHRS had 26 active members under the age of 20. That's 0.0005 percent of the membership!
No. 30: 12 individuals have served as Governor of New Hampshire in the 50 years that NHRS has existed, from John King (1963-69) to current Governor Chris Sununu.
No. 31: As of Fiscal Year 2016, NHRS has 471 participating employers—the State of New Hampshire, individual communities, school districts, counties, and other political subdivisions.
No. 32: The NHRS actuarial report for fiscal year 1977 noted that as of 6/30/1977 there were 4 active employee members working at the age of 16.
No. 33: Investment income has historically provided the majority of the funding for pension benefits. Over the past 25 years, NHRS investments have achieved an average annual return of 8.2%.
No. 34: In Fiscal Year 2016, NHRS paid out $670 million in pension benefits, with the average annual pension benefit just over $20,500.
No. 35: At our 10 year anniversary in 1977, the average annual benefit for retirees was about $2,318—which equates to just under $9,400 today.
Come back for a new fact next week, or follow us on Facebook and Twitter.