Public Pension Changes Could be Costly

A new estimate from the state’s public retirement system shows a change in benefits could prove costly. 

Earlier this fall, lawmakers asked the retirement system to run some numbers.

They wanted to know how much it would cost employers- that’s the state, cities and towns - if New Hampshire went from a defined benefit plan to a defined contribution plan.

Going from a system where the employers are responsible for guaranteed benefits, to one where employers only guarantee they pay a certain contribution.

Initial numbers from the retirement system’s actuarial firm are sobering.

Over the next 26 years, the switch would end up costing employers at least $237 million dollars more than they currently expect to pay.

Lawmakers will consider legislation next year to switch to a defined contribution plan, based on the assumption that it will save employers money.

State labor leaders are pointing to this report that such a change could put cities and towns on a road to financial instability.