Making an appropriation to the New Hampshire retirement system to pay down the unfunded accrued liability.
The financial implications of HB 436 are substantial, with estimated increases in expenditures of about $165,000 for FY 2024 and around $3.28 million for FY 2025, predominantly attributed to employer contributions for police and fire services. Moreover, the bill indicates an indeterminable fiscal impact on local governments, as adjusting benefit formulas and restoring earnable compensation can lead to higher overall costs. Stakeholders, including the New Hampshire Retirement System, emphasize that the proposed changes will necessitate administrative adjustments, potentially incurring additional expenses related to system overhauls.
House Bill 436 aims to address the unfunded accrued liability within the New Hampshire Retirement System by making significant appropriations and adjustments to retirement benefits for Group II members. Specifically, the bill proposes an annual appropriation of $25 million starting in FY 2025 to the system, which is intended to gradually pay down this liability and restore certain benefits that were amended in 2011. This involves modifying age and service requirements, as well as key calculations related to average final compensation.
Debate surrounding HB 436 highlights the tension between the urgency of addressing unfunded liabilities and the impacts of increased costs on local budgets and public services. Supporters of the bill argue that restoring retirement benefits is crucial for the welfare of public sector employees, whereas opponents raise concerns regarding the financial burden on municipalities and the potential for increased taxes. The complexity of restoring benefits also raises questions about fairness for newer employees, who may not reap the same benefits as older employees covered under the previous regulations.