This bill redefines average final compensation for certain group II retirement system members. It specifically applies to members who commenced service prior to July 1, 2011, and did not attain vested status prior to January 1, 2012. The bill amends RSA 100-A:1, XIII(c)(1) to change the calculation of average final compensation. Currently, the calculation is based on the average percentage of compensation paid in excess of the full base rate of compensation over all the member's years of creditable service. The bill would change this to the average percentage of compensation paid in excess of the full base rate of compensation over the member's last 7 years of creditable service on or after January 1, 2012. The bill is set to take effect 60 days after its passage.

The fiscal impact of this bill is indeterminable. The New Hampshire Retirement System (NHRS) states that there is not enough data to accurately assess the liability adjustment based on the current population affected by the bill. However, it is projected that there will be an increase in normal, early, and vested retirement liabilities for the affected members. The NHRS's actuary estimates that employer contributions will rise in line with wage inflation, and there will be an increase in administrative costs in FY 2025 due to reprogramming of the pension administrative system. The NHRS projects an increase in the actuarial accrued liability of $18.5 million based on the provisions in the bill.

Statutes affected:
Introduced: 100-A:1