NH Supreme Court Rules in NHRS Contributions Case

State’s top court finds that members do not have a contractual right to a fixed contribution rate

Feb 23, 2015
  • Legal

For Immediate Release: December 10, 2014
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 Professional Fire Fighters of NH v. State of NH, commonly referred to as the “HB 2 Contributions Case”:

The New Hampshire Supreme Court released a unanimous decision earlier today finding that NHRS members do not have a contractual right to a fixed contribution rate. The decision reversed a lower court ruling that the July 1, 2011, increase to member contribution rates enacted in House Bill 2 (Chapter 224, Laws of 2011) violated the contract clause of the state and federal constitutions for “vested” members with 10 or more years of creditable service in the retirement system on or before the effective date of the contribution increase.

In its ruling, the court wrote that, “The narrow question before us is whether, by enacting RSA 100-A:16, I(a), the legislature unmistakably intended to establish NHRS member contribution rates as a contractual right that cannot be modified. We hold that it did not.”

The Supreme Court decision reversed the lower court ruling on the contract question and remanded the case back to the Superior Court.

As a result of the decision, current member contribution rates remain in effect.

HB 2 included several changes to RSA 100-A, the statute governing the retirement system, including an increase in member contributions. Effective July 1, 2011, contribution rates increased to 7 percent of Earnable Compensation (i.e. “pensionable wages”) for all Group I Employee and Teacher members, 11.55 percent for all Group II Police members, and 11.8 percent for all Group II Fire members. Previously, Group I members contributed 5 percent and Group II members contributed 9.3 percent.

The New Hampshire Retirement System was not named as a party in this case, and NHRS took no position with respect to the constitutionality of the contribution increase.

The parties have 10 days to file a motion for reconsideration with the Supreme Court.

About NHRS

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 48,500 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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