Lawmakers Begin to Hammer Out Pension Reform

In some important ways, the Senate and the House versions to shore up the retirement system aren’t all that different.

Both want to transfer $250 million dollars to the body of the trust fund to help lower employer contributions.

Both want to make mechanical changes so the system becomes IRS compliant.

And its likely the House will adopt the Senate’s position on how to fund a healthcare benefit for retirees.

Retirement Board Chair Lisa Shapiro says- after running the numbers- there’s not a big difference between the House and Senate plans for the so-called health subsidies.

2:27 the difference in the medical subsidy is 5 million over 10 years. It does start to widen the gap and you can see that in the out years and that would accelerate over time.

All of the common ground between the House and the Senate means municipalities won’t see huge new budgetary increases- provided lawmakers do reach those compromises.

But while there may be general agreement on the short-term solutions, there’s real disagreement over what long-term changes need to be made.

1:08...I think the Legislature is realizing the cost of a benefit plan is expensive, and periodically they have to look at the benefits that are being provided and see if they are affordable in the long-term.

That’s Maura Carroll of the Municipal Association which is backing the House-version.

The provisions that lawmakers will likely discuss the rest of the week include increasing cost of living allowances and eliminating employee majority on the retirement board.

Long-term sustainability is a phrase Carroll and other House-version supporters like to use to define their position.

As an example, Representative Anne-Marie Irwin- who is chairing the conference committee- points to the difference in Cost of Living Increase or COLA benefits.

The House plan cost about 11 million dollars, the Senate’s costs nearly 90 million.

2:05...with our position, we can sustain the Colas we want to do until we can come up with a better scheme, better way of doing the whole thing.

Irwin says the Senate COLA plan would burn through some employee funds in just a few years.

If the House is thinking about the pension system’s long-term viability, the Senate would say they are thinking about employee and retiree long-term viability.

Senator Mike Downing- a retired police officer- says he’s got a real problem with the House version of COLAs.

The House would provide what amounts to a 13th pension check.

The Senate would give retirees a COLA for up to the first 40 thousand dollars of a person’s pension and money would be compounded annually.

Downing says he’s worried about people who won’t be able to keep up with the rising costs of everything.

T.389
2:15 if you give them a 13th check that’s not included in their retirement, they never get ahead...and we are just trying to address that problem.

Over the next few days lawmakers will be meeting regularly to try and hash out these big-picture problems.

What hangs in the balance for retirees, employees and taxpayers is just what kind of benefits will be included after the Legislature puts the finishing touches on retirement reform.

For NHPR News, I’m DG.