New Year, Same Concern over Pensions

Last year lawmakers, workers, retirees along with cities and towns worked overtime to hammer out a deal to avoid a huge spike in costs to municipalities.

The omnibus package that passed included a lot of compromises.

For the next four years, retirees will not get a health benefit.

Cost of Living Increases, or COLAs won’t be as lucrative either.

Cities and towns wanted to eliminate employee control over the Board of Trustees.

Instead an investment committee was created that took away some employee oversight of investments.

But even though, technically, 2009 is a new year, the battles are strikingly similar to the ones fought in 2008.

:25 NH and one other state are the only states that allow a 20 year pension. Very expensive.

That’s Representative John Regan, who is co-sponsoring a bill to increase the retirement age for police and firefighters from age 45 to 50, and working 25 years.

Regan says this measure would mean the retirement system would wind up paying less over time.

TAPE: as we know, the nightmare of the NH Retirement System is that it is so woefully shortfunded...that’s where the dilemma comes in, we are trying to place constantly increasing benefits, where the main body of the fund is failing.

TAPE: I don’t want to be the individual that puts some water on folks fire, but if you simply change the age and years of service, you are only doing one thing, you are lowering the cost to the community. And the payment to the retiree. That’s all you are doing.

That’s Dave Lang, President of the New Hampshire Firefighters Union.

Lang and Regan made virtually the same arguments last session, when they were debating virtually the same bill.

And just like last session, the state’s retirement system for teachers, police, firefighters and municipal and state workers continues to be about 2.7 billion dollars underfunded.

TAPE: some of this feels like déjà vu.

Representative Ann Marie Irwin chairs the Executive Departments and Administration Committee, which plays a major role in pension reform.

TAPE....what we need to be careful about is that we are not all reiterating the same old positions we did last year. There has to be an effort to address the shockingly dramatic increases to the system.

Irwin says there are certainly new concerns.

As the stock market has tanked, there’s more pressure on the retirement system to come up with enough money to make its payments to retirees.

And Irwin says everyone is waiting for the governor’s budget proposal.

TAPE: we also don’t know what the governor is going to say about the 35% the state contributes to all public employees. If the governor whacks that, we are looking at additional costs for the communities. So the situation is seriously dramatic.

During the hearing on the bill to increase the retirement age, Irwin applauded Firefighter President Lang for suggesting new approaches to save the system money.

She says she’s also interested in hearing more about a bill that would allow communities to divest from the retirement system.

Despite the challenges, new Retirement System Director Dick Ingram says he’s optimistic.

He believes last year’s omnibus bill put building blocks in place to help with long-term stability.

TAPE: no matter what you are reading in the headlines about the investment market...checks going out on a regular basis the members are getting their benefits, have the pieces in place that will keep us where we need to be.

For NHPR News, I’m DG.