NHRS Statement on Employer Contribution Ruling

NH Supreme Court rules that 2009 legislation reducing the state’s contribution toward municipal retirement costs is constitutional

Release date: August 31, 2013 Published: Dec 11, 2014
  • Legal
  • Employers

For Immediate Release: August 31, 2012
Contact:  Marty Karlon, Public Information Officer, (603) 410-3594; [email protected]

CONCORD, N.H. – The New Hampshire Retirement System (NHRS, the retirement system) has released the following statement concerning today’s New Hampshire Supreme Court decision in City of Concord & a . v. State of New Hampshire & a.:

The New Hampshire Supreme Court released a decision on Aug. 31, 2012, upholding statutory changes to RSA 100-A:16 enacted in 2009 that reduced the percentage the State of New Hampshire paid toward employer retirement contributions for Teacher, Police, and Fire members employed by political subdivisions (cities, towns, school districts, counties, etc.).

Although the retirement system was named in the lawsuit, NHRS took no position on the legality of reducing the state contribution, which it contended was a dispute between the State of New Hampshire and the political subdivisions which initiated the lawsuit.

The decision released today does not change the amount of employer contributions that must be paid to the retirement system. The New Hampshire Constitution (Article 36-a) requires that the full employer contribution amounts be appropriated to NHRS. The relevant section of Article 36-a reads, in part: “The employer contributions certified as payable to the New Hampshire retirement system … as shall be determined by sound actuarial valuation and practice … shall be appropriated each fiscal year to the same extent as is certified.”

When RSA 100-A:16 was enacted in 1967, the state was responsible for 40 percent of the employer contribution for Teacher members employed by political subdivisions. The statute was amended in 1977, requiring the state to pay 35 percent of the employer contributions for Teacher, Police, and Fire members employed by political subdivisions.

RSA 100-A:16 was amended in 2009 to reduce the state’s share to 30 percent in Fiscal Year 2010 and 25 percent in Fiscal Year 2011. The 2009 amendment also restored the state contribution to 35 percent in Fiscal Year 2012, however, the statute was amended again in 2011 and eliminated the state’s percentage share of employer contributions altogether. The 2011 amendment also appropriated $3.5 million in an effort to offset political subdivision employer contributions in Fiscal Year 2012.

The New Hampshire Retirement System provides retirement, disability, and death benefits to its eligible members and their beneficiaries.  The State of New Hampshire and more than 470 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers.  NHRS has approximately 50,000 active members and 27,000 pension recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under section 401(a) and 501(a) of the Internal Revenue Code.

Related links:

#  #  #