Minutes

Special Board of Aldermen 09-21-2021 Page 11

Earlier, you asked what the contributions were that came in during the past year. There was a total of $722 million in
contributions. Yes this is less than the benefits that were paid and as Marty said, we are in a negative cash flow position.
But | would like you to know that this is very typical of what is referred to as a mature pension plan. That's why we have
the assets to pay the benefits.

Mayor Donchess

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city to deliver basic services, schools and everything else. | mean, it's just drives property taxes so high.

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Mayor Donchess

Well, of course, we're trying not to shoot the messenger here because | know...
Alderman O’Brien

Right and | hope you understand that.

Mayor Donchess

| know that most of the policies are set by the legislature and you carry out those mandates by and large. But just to get
some basic facts. So you said that last year, the pension system paid out $860 million in benefits. What did you take in
from employers and employees? Do you know that?

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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

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Mayor Donchess
Oh okay. Sorry.

Jan Goodwin, Executive Director of NH Retirement System

No worries. Without this five years smoothing, the employer contribution rates would experience significant swings every
few years. Slide 20. The employer contribution rate for NHRS has three separate components: normal cost, unfunded
liability amortization, and the medical subsidy. Let's look at these one at a time.

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Jan Goodwin, Executive Director of NH Retirement System

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far the most significant changes to the pension system since it was established. In a set of changes, member
contributions were increased as a percent of pay. Several benefit provisions were reduced for non-vested active
members and for future hires. Some of the pension formulas themselves were changed so they would generate a lower
result for, you know, non-vested in future generations. It changed the composition of our Board of Trustees to bring
more employers on, you know, a huge slate of changes.

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So, you know, this is one where you could say how could this happen. | think people trying to make, you know,
reasonable decisions based on the information they had.

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The following year, and this was sort of wending parallel tracks through the courts. There was a Supreme Court case
Sununu v. NHRS and obviously Sununu the elder. The issue there was whether the Executive Council could approve
NHRS contracts for vendors, and investments, and such, and the court found that we are not an executive branch
agency and we're operating for the exclusive benefit of the members. So that sort of got us farther removed from the
hurly burly of State government in the Executive Branch.

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President Wilshire
No you’re fine seated. That’s fine.

Marty Karlon, Director of Communications and Legislative Affairs