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
Past - 1984:
A Granite (State) Foundation
» NH Constitution amended (Part |, Article 36-a)
° Establishes that pension funds are for the exclusive
benefit of NHRS members and are not to be diverted
for any other purpose
° Requires Trustees to set actuarially sound employer
contribution rates and employers to pay the rates in
full
¢ Distinguishes NHRS from many systems where
annual funding level is at the discretion of the
legislature (e.g. Illinois, New Jersey, Kentucky)
Past - 1977:
The Employer Subsidy
» State reduces employer contribution subsidy
for teachers to 35% from 40%
> State creates 35% employer contribution
subsidy for police officers and firefighters
employed by political subdivisions
» Subsidy remained in place until it was
reduced beginning in 2009 and then
eliminated in 2011
Past - 1983:
Heads | win, tails you lose
» Legislature creates Special Account to fund
future COLA and OPEB benefits
Past - 1967:
In the beginning...
» RSA 100-A enacted, establishing NHRS
¢ Consolidates four separate plans for teachers,
police officers, firefighters and employees of
the state and political subdivisions
° Creates Group | for teachers and employees
and Group Il for police officers and firefighters,
each with its own benefit structure
o State pays 40% of employer contributions on
behalf of teachers
9/20/2021
Special Board of Aldermen 09-21-2021 Page 23
Yea: Alderman O’Brien, Alderman Dowd, Alderman Caron, Alderman Lopez,
Alderman Jette, Alderman Schmidt, Alderman Laws, Alderman Cleaver,
Alderman Harriott-Gathright, Alderman Wilshire 10
Nay: Alderman Clemons 1
MOTION CARRIED
ADJOURNMENT
MOTION BY ALDERMAN O’BRIEN THAT THE SEPTEMBER 21, 2021, SPECIAL MEETING OF THE BOARD OF
ALDERMEN BE ADJOURNED, BY ROLL CALL
Special Board of Aldermen 09-21-2021 Page 22
Alderman Lopez
| said we have the Facebook comments section that can handle it.
Alderman Jette
Oh. Good point. Thank you.
Alderman Clemons
Thank you Madam President. Through you to Cooperation Counsel, my question is hypothetically, what would happen if
this motion failed?
Steve Bolton, Corporation Counsel
You could all go to jail. | don't think that would happen but theoretically was how you prefaced your question. You're
required by law to put this on the ballot.
