House to work on state pension overhaul
House Speaker William O'Brien said the Special House Committee on Defined Contribution Retirement Plans for Public Employees will be asked to provide the House with details and procedures for moving from the defined-benefit plan state employees currently have to a defined-contribution plan for all new state employee hires.
'It's just not something we can wait for,' O'Brien said. 'This is necessary to ensure we can have a state government that we can afford.'
The committee can ask for proposals and information from vendors, O'Brien said.
A defined-benefits plan provides employees a set amount at retirement based on salary and length of service. A defined-contribution plan sets an amount to be invested by employees and employers.
The committee's formation comes on the heels of legislation adopted by the House in the spring to set up a defined-contribution plan that wasn't adopted by the Senate.
The Senate referred the matter to a study commission in April after finding technical problems with the House bill, which would have set up a retirement plan similar to 401k plans for state employees. State employees are enrolled in the New Hampshire Retirement System, which has an unfunded liability of about $4 billion.
Diana Lacey, president of the State Employees Association Local 1984, questioned the committee's formation, given that the NHRS estimated that converting the plan could creating a $1.2 billion unfunded actuarial accrued liability.
'Why is the speaker trying to push a solution that the Legislature has already said would cost New Hampshire taxpayers millions?' said Lacey.
She also criticized the committee formation as redundant, given the Senate's action and pension reforms that were adopted last year.
'This one's been studied and studied and studied,' she said.
O'Brien said he didn't consider the House committee to be redundant and said the House has a duty to act independent of the Senate.
'We decided not to sit around for the next six months until the next session begins in January,' he said. 'We want to make sure that, when we draft legislation, that there are no questions left unanswered.'
The committee's deadline is Nov. 1, five days before the election, which could see many House members, O'Brien included, no longer in office. No matter, O'Brien said.
'I certainly expect we're going to have a Republican majority, a conservative majority, and that I will be speaker,' he said. 'But even if I am not speaker, this is work that needs to be done.'
He said he is asking for support from Democrats and noted the appointment of three 'senior' Democrats, Reps. Steven Shurtleff, David Campbell and Robert Foose, to the 11-member committee, which he said is 'proportional' to the overall political makeup of the House.
'This should not be just a partisan effort or from one leadership team,' O'Brien said. 'Whoever is in the majority (in 2013), we hope will bring it forward with bipartisan support.
'This is just a problem that needs to be solved,' he said. 'People ought to be encouraged that we're not just sitting back and sweeping this under the rug while we try to get reelected.'