Retirees Fear Changes to Pension System

Lately, public workers, and retirees have used words like ‘oath,’ ‘covenant,’ ‘contract.’

They’re talking about one of the central benefits that comes with being a teacher, police officer, firefighter or town employee- the promise of a pension.

That guarantee is what kept John Amirol at the Highway Department for 44 ½ years.

18:11 I had many opportunities. Consultants had watched me. I had job proposals from several consultants, which I refused to take even though the pay was higher, I would have to make my own retirement plan.

Amirol started working for the state in 1953, he was 17.

He says as he got older, had a family of his own, one thing was obvious.

17:51 I wanted to do better than my folks.

His parents, both immigrants, had worked in restaurants all their lives.

14:22 my father at 65 retired, started collecting his social security. I could sense, I treid to stop in and see my folks couple times a week, and it was amazing, I could see him sitting in his chair after the first of the month. And I says, ‘had to take out of your savings again this week, huh?’...’yeah.’

For years, Amirol and others have planned to avoid spending their twilight years watching their savings dwindle away.

But now, lawmakers are considering House Bill 1645, and retirees aren’t so sure what will happen to all their plans.

1:21 as long as there is a little trickle coming in, I can survive. And that’s my problem with the issues today.

After teaching for 30 years, Peter DeSaultes gets $1100 a month for his pension.

If HB 1645 passes, DeSaultes check wouldn’t get any fatter.

The legislation cuts cost of living increases.

Like most retirees, the 68 year old is on a fixed income.

So he and his wife have begun to live more frugally, shutting off the upstairs in winter, getting rid of their second car.

DeSaultes and others would also lose an 8% annual increase in a health subsidy that helps them buy into the health insurance plans offered by their former employers.

He says those cuts will just make his life less comfortable.

17:16 as a diabetic I wouldn’t be able to afford my medications the oral medications I take. I would probably end up on insulin. Other impacts?..I personally, what would I do? Financially I would try to find and negotiate a reverse mortgage. But that would be a last resort.

Right now, the pension system is supporting about 21,000 retirees.

The average age is nearly 69 years old...the average pension is almost $17,000 a year.

6:27 there are people who have come before us that tell us these very sad stories...

That’s Representative John Regan.

....and the point of their story is they failed to prepare for inflation...they apparently didn’t look down the road to see that we have inflation and our retirement checks will buy less every year.

Regan says what is often lost in the debate is that neither cost of living increases nor health subsidies are promised in law.

The only promise to public employees is a monthly pension check.

And right now, people who support HB 1645 say the system is in such disarray comprehensive changes are needed just to preserve that benefit.

The attempt to salvage the whole system began last year, when a new law required employers to increase their contributions.

Everyone agrees that was a good first step.

But there’s still a 2.7 billion dollar gap in how much the system has and how much it needs over the next 30 years.

So on top of health subsidy and cost of living cuts, HB 1645 would require current employees kick in more money to ensure they get cost of living adjustments when they retire.

The legislation would also affect future employees by raising the retirement age for firefighters and police officers from 45 to 50.

Representative Ken Hawkins agrees HB 1645 hurts, but he says sometimes that’s what you’ve got to do.

3:38 if we do not start to make some of these hard changes, employer rates are going to start having to go up. At some point the employee rates are going to have to go up. b/c the money has to be there somehow.

The American Federation of Teachers, the Professional Firefighters of New Hampshire and the State Employees Association are urging lawmakers to SLOW DOWN.

Employee leaders complain HB 1645 is a ‘kitchen sink’ bill with a whole bunch of proposals that may not help shore up the retirement system.

Representative John DeJOIE- who is also a firefighter- says the state can’t afford to rush the plan through.

2:46 I don’t think any employee says let’s do nothing....I think they say let’s be measured. Let’s not respond and move so quickly we are back here in another 5-10 years having to fix again what ew have done...this is a very complex issue.

Senator Harold Janeway, who sits on the Retirement Board of Trustees, says the state can’t afford to make that mistake again.

2:32 one of the reasons we are in the soup now is underfunding decisions that were made 10 and 15 years ago. And they weren’t evident right away. And now the bill has become due. And we don’t want to add anymore due bills to this process.

The full House is expected to support much of HB1645 when it takes up the measure next week.

Both sides agree the real fight will begin when the bill makes it to the Senate.

For NHPR News, I’m DG.