Special Board of Aldermen 09-21-2021 Page 8
Alderman O’Brien
So there’s about nine years difference between approximately with that. Okay. And can you also define what is anti-
spiking measures?
Jan Goodwin, Executive Director of NH Retirement System
Yes. Anti-spiking is when someone, a member deliberately tries to increase their salary so they will have a higher
pension. So the way we do that is the changes that were made in 2011 and the access of compensation over base was
considered when determining what someone's pension benefit is so that has been (inaudible).
Alderman O’Brien
All right. If | may follow up, you know, not to get into any debate but | always felt that this kind of hurts the pension
system because if you take in the example of a police officer who was working overtime at a construction site, when he
used to get paid, you know, in the back, part of that overtime from that detail was cut out into the pension system. So by
these anti-spiking measures have they crippled the pension system by allowing what the police officer in my example, by
contributing to the pension system? | wonder how many hundreds of 1,000s of dollars that could have could have been
lost here.
Marty Karlon, Director of Communications and Legislative Affairs
| can jump in. | think with the issue of spiking, and it is a very fraught, you know, issue, you know, politically in some
States. You know, it's more the timing of the payments. You know, if someone was working detail or over time
throughout their career, you know, that money is coming in on a regular basis throughout, you know, a 20 or 30 year
career we've got. We're investing that money for decades or as someone who only works and gets extra money in their
final years, you know, when it's going to reduce their permanent lifetime benefit significantly but that money hasn't been
growing for them over that time. So even before the changes in 2011, back in 1990, the legislature did put a cap on the
members last year of earnable compensation and anything more than 150% of the next highest year...
Alderman O’Brien
Right. Correct.
Marty Karlon, Director of Communications and Legislative Affairs
...doesn't count against the pension. These folks get all the money that they earn. They just wouldn't put in pension
contributions nor would the employer or any of these, you know, above the cap level. So, yeah, so that it's more of a
timing issue with this spiking then...
Alderman O’Brien
And | thank you. | mean, the thing is when does that member get that money back out of the system his first pension
check or the one before he dies? | don't know. You know what | mean. But...
Marty Karlon, Director of Communications and Legislative Affairs
On average what the folks who are involved with the numbers tell me that, you know, the first five to seven years for a
typical member, you know, their benefit is their money coming back to them and then, you know, for however long they
live beyond that it's money from the overall trust fund funding their benefit. If a member does pass away before all of
their money is paid back to them, their beneficiary is going to get it back one way or the other either as a lump sum or if
they chose a survivorship option to leave some of that benefit to a beneficiary. They get the money back. You know the
IRS frowns on us keeping members money. So sometimes we have to hunt down people in their 70s with a required
minimum distribution and start paying the money even though they haven't come to us.
Alderman O’Brien
Okay. | thank you both because | think we both agree that if a person is paying some of their shift coverage or overtime
pay into the pension system, it benefits the pension system, you know, then not doing it. So anti-spiking, | have a little
problem with that definition or what it's actually doing. | think its taking money out of the system. Thank you.
