Bill Text: NH HB675 | 2019 | Regular Session | Enrolled

New Hampshire House Bill 675 (Prior Session Legislation)

Bill Title: Relative to the purchase of service credit in the state retirement system.

Spectrum: Slight Partisan Bill (Democrat 4-2)

Status: (Passed) 2019-05-16 - Signed by Governor Sununu 05/15/2019; Chapter 38; Eff: 07/14/2019 [HB675 Detail]

Download: New_Hampshire-2019-HB675-Enrolled.html

HB 675-FN - VERSION ADOPTED BY BOTH BODIES

2019 SESSION

19-0759

10/08

HOUSE BILL 675-FN

AN ACT relative to the purchase of service credit in the state retirement system.

SPONSORS: Rep. Schultz, Merr. 18; Rep. Schuett, Merr. 20; Rep. P. Schmidt, Straf. 19; Rep. Sytek, Rock. 8; Sen. Feltes, Dist 15; Sen. Carson, Dist 14

COMMITTEE: Executive Departments and Administration

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ANALYSIS

This bill modifies the calculation methodologies for the cost of the purchase of service credit in the retirement system for active service in the armed forces and in cases of employer fault.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0759

10/08

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nineteen

AN ACT relative to the purchase of service credit in the state retirement system.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Retirement System Membership' Purchase of Prior Service Credit. Amend RSA 100-A:3, VI(b) to read as follows:

(b) In the case of prior service credit for time served as a member for which the member's accumulated contributions have been withdrawn, the amount of creditable service purchased may be the full length of service relating to the withdrawn contributions or a partial share of such service. The amount determined by the actuary to reinstate full or partial service credit shall be the amount of withdrawn contributions, but not less than one month's contributions multiplied by the ratio of the service credit to be purchased to the full length of service relating to the withdrawn contributions, with this amount adjusted for interest from the date of withdrawal to the date of payment based on the interest rates in effect for each fiscal year. The amount determined by the actuary to purchase prior service credit related to Peace Corps and AmeriCorps service shall be computed under RSA 100-A:4, VIII. For all other prior service credit the amount determined by the actuary shall be the full actuarial cost of service credit determined by the actuary based on methods and assumptions recommended by the actuary and approved by the board of trustees, unless another calculation methodology is otherwise specified. The member may be required to prepay all or part of the actuarial calculation fee, as determined by the board. Credit shall not be granted until the active member has fully paid for such service credit in a lump sum or by installment payments as permitted by the board. The member's payment shall be credited to the member annuity savings fund.

2 Retirement System; Purchase of Service Credit; Employer Fault. Amend RSA 100-A:3, VI(d)(1) to read as follows:

(d)(1) In the case of an employer which through its own fault, and not the fault of the employee, failed to enroll an eligible employee at the time such employee became eligible for membership in this retirement system or a predecessor system, the employer and not the employee shall pay the cost of the actuary's statement obtained under this subparagraph. The actuary's statement shall be based on: [the product of the member's annual rate of compensation at the time of buy-in, multiplied by the sum of the member and employer contribution rates in effect with respect to the member at the time of buy-in, multiplied by the number of years of prior service credit bought. In addition, if such employee has not received final approval of the board before July 1, 1989, to receive credit for such service, the employer shall pay 1/2 of the amount determined by the actuary and the employee shall pay 1/2] (A) the member rate attributable to the period multiplied by the earnable compensation attributable to the oversight period which shall be paid by the member, plus (B) the current employer rate multiplied by the earnable compensation attributable to the oversight period which shall be paid by the employer. Upon payment, and with the approval of the board, the member shall receive credit for prior service. The amount paid by the employee for prior service credit under this subparagraph shall be credited to the member annuity savings fund, and the amount paid by the employer shall be credited to the state annuity accumulation fund.

3 Retirement System; Credit for Active Service in the Armed Forces. Amend RSA 100-A:4, VI(b) to read as follows:

(b) Credit for active service in the armed services shall not be made until the member has paid either in lump sum or, if permitted by the board of trustees, by installment deductions from pay from an employer. The actuary's statement shall be the [product of the member's annual rate of compensation at the time of buy-in, multiplied by the sum of the member and employer contribution rates in effect with respect to the member at the time of buy-in, multiplied by the number of years of prior service credit bought] full actuarial cost of service credit determined by the actuary based on methods and assumptions recommended by the actuary and approved by the board of trustees.

4 Effective Date. This act shall take effect 60 days after its passage.

LBAO

19-0759

1/16/19

HB 675-FN- FISCAL NOTE

AS INTRODUCED

AN ACT relative to the purchase of service credit in the state retirement system.

FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None


	Estimated Increase / (Decrease)
STATE:	FY 2020	FY 2021	FY 2022	FY 2023
Appropriation	$0	$0	$0	$0
Revenue	$0	$0	$0	$0
Expenditures	Indeterminable Increase	Indeterminable Increase	Indeterminable Increase	Indeterminable Increase
Funding Source:	[ X ] General [ X ] Education [ X ] Highway [ ] Other

POLITICAL SUBDIVISIONS:
Revenue	$0	$0	$0	$0
Expenditures	Indeterminable Increase	Indeterminable Increase	Indeterminable Increase	Indeterminable Increase

*The New Hampshire Retirement System states it is not able to separate the fiscal impact of this legislation between county and local government, therefore the fiscal impact is shown together as political subdivisions.

METHODOLOGY:

This bill modifies the calculation methodologies for the cost of New Hampshire Retirement System (NHRS) service credit for active service in the armed forces as well as service credit in cases of employer fault to timely enroll an employee in the NHRS. The NHRS actuary has determined these changes are expected to have a small impact (minimal gains and losses over time) on the actuarial status of the System and employer contribution rates. Such minimal costs are indeterminable.

AGENCIES CONTACTED:

New Hampshire Retirement System