Board Of Aldermen

9/20/2021

Future -
Paying down the UAAL

Future -

Projected Contribution Rates

Total NHRS Contribution Rate as a Percent of Payroll

MUAAL Core foten

faz O25 ro ft
Fncal Year [nding june 30

Future -
Paying d

own the UAAL

L

Funding Progress, 2020-41

000

120.0%

100.0%

80.0%

60.0%

40.0%

20.0%

0.0%

GAS

9/20/2021

12

9/20/2021

Present -
What’s Important

» NIRS’ six common elements of a successful

plan:

° Employer contributions that pay the full amount of
the annual required contribution, and that maintain
stability in the contribution rate over time;

e Employee contributions to help share pian cost;

° Benefit improvements actuarially valued before

adoption and properly funded upon adoption;

Cost of living adjustments granted responsibly;

“Anti-spiking” measures in place;

9/20/2021.

Present -
Most Recent Facts & Figures

| ~—-:20-Year Investment Performance

Present -
Most Recent Facts & Figures

Assets in Billions: June 30, 2011 to present

y
__f,

$111132
$9.208 $9.134
$8.293 $8.874
$7.414 $7.530 $7.460

sh $5.774 poses

6/3G/11 630/12 6/30/13 GIFQI14 GlFOIIS $= G30/16 6/30/17 GIO/FB Gi30/19 Gi30/20 6/30/21"

"unaudited

Present -
Most Recent Facts & Figures

100 * Funded ratio relative to peers - FY 2010-19
80 —g 2h 76.0 95-5 44g FP PPP Pt 2

; rare

60 —p S85 574-561 567 580.7 592 60.0 O13 663.6 cos
A A A

Present -
Most Recent Facts & Figures

> $11+ billion in Assets

> Unfunded Liability of $6 Billion; 12 years into
a 30-year amortization

> Funded Ratio of 61.0%

» 48,479 members

> 39,612 benefit recipients

> $860 million in annual pension and medical

subsidy benefits
° Nearly 80% of recipients live in NH

Present -
Most Recent Facts & Figures

Active Members and Benefit Recipients, 2011-20

e Active members af Benefit Recipients

9/20/2021

Past - 2017:
Decennial Commission Redux

» Decennial Commission meets for several months
and generates recommendations, some of which
are subsequently the basis for legislation
° Revisions to Working After Retirement provisions,
limiting the number of hours that can be worked and
simplifying the approach

° Adoption of layered amortization, a mechanism to
reduce volatility by amortizing future asset gains or
losses over 20-year periods

° One-time $500 retiree payment

Past - 2011:
Back to the Drawing Board

>» HB 2 enacted
e increases contribution rates for all members by 2% -
2.5% of payroll
° Changes benefit provisions for some current
members and all future members by:

- Increasing retirement ages and reducing benefit
formulas for non-vested and future members

- Amending definition of earnable compensation

Past - 2008:
Rebuilding the Foundation

» Legislature enacts HB 1645

° Establishes Independent Investment Committee

° Transfers $250 million from Special Account to
Pension Trust

° Changes method of funding the Medical Subsidy
and freezes the 8% escalator for four years

° Revises definition of earnable compensation

° Followed by litigation; AFT v State of NH

Past - 2009:
Unfunded Mandate?

Past - 1991:
Digging the Hole

> Following an actuarial valuation in 1989 which
indicated a dramatic increase in unfunded
liability from $3.9 million to $217.5 million, the
legislature in 1991 adopts the ‘Open Group
Aggregate’ actuarial method and sets the
assumed rate of return at 9.75%, both done for
the purpose of reducing employer contribution
rates

> Infringement of Board’s fiduciary duty to set
actuarially sound rates

>» Resulted in artificially depressed employer