For Immediate Release: September 8, 2020
Contact: Marty Karlon, Director of Communications & Legislative Affairs, (603) 410-3594; firstname.lastname@example.org
CONCORD, NH – The Board of Trustees of the New Hampshire Retirement System (NHRS, the retirement system) certified employer contribution rates for fiscal years 2022 and 2023 at its meeting on September 8, 2020.
The Board’s certification of the 2022-23 employer contribution rates – mandated under state law (RSA 100-A:16, III) – formalized the draft rates that were developed by GRS, the retirement system’s consulting actuary, in the biennial actuarial valuation for the year ending June 30, 2019. The new rates will take effect on July 1, 2021, which marks the start of the 2022 fiscal year.
Employer contribution rates for the four membership classifications – Employee, Teacher, Police, and Fire – have increased from the current rates. The rate increase is largely the result of adjustments to the actuarial assumptions used to value the pension plan that were adopted by the Board this June based on the recommendations contained in a four-year (2015-2019) actuarial experience study, along with additional input on long-term capital market expectations from multiple outside investment experts. The most significant drivers of the rate increase, in order of impact, were: 1) the reduction of the assumed rate of investment return from 7.25% to 6.75%; 2) the adoption of updated post-retirement mortality assumptions; and 3) a reduction in the payroll growth factor. For more information on the actuarial assumptions, click here.
The New Hampshire Constitution (Part I, Article 36-a) requires NHRS Trustees to set actuarially sound employer contribution rates and requires employers to annually pay those rates in full. Employer rates are calculated every two years to reflect the cost of benefits as they accrue as well as pay down existing unfunded liabilities.
For the five-year period ending July 1, 2020, the aggregate employer contribution rate for all member groups increased cumulatively by 6.3%; for the same five-year period, the U.S. consumer price index (CPI) increased cumulatively by 8.6%.
Employer contribution rates for the State of New Hampshire and for political subdivision employers are available here.
Political subdivision rates (printable copy):
State of New Hampshire rates (printable copy):
In addition, NHRS has prepared answers to frequently asked questions on the new employer rates. The FAQ is available here.
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 38,000 benefit 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.