NH City Sues State over Increase in Pension Contributions
March 9, 2010 (PLANSPONSOR.com) - The city of Concord, New Hampshire,
and two other plaintiffs have filed a lawsuit claiming the state violated the
state Constitution by increasing what municipalities and school districts must
pay into the pension system for police officers, firefighters, and teachers.
The state for years has paid 35% of the employer
contribution to the New Hampshire Retirement System for those employees, but
the current budget reduced that portion to 30% this year and 25% next year,
which in turn increases the portion local governments must pay, according to
the Concord Monitor. Judy Silva, acting director of legal services and
government affairs for the New Hampshire Municipal Association, the advocacy
branch of the Local Government Center, said forcing municipalities and school
districts to pay more into the system amounts to an unfunded mandate, which has
been unconstitutional since 1985, the Monitor reports.
The suit claims the change will cost local governments $9
million this year and $18 million next year.
Associate Attorney General Anne Edwards, who will respond
for the state, said she had not yet seen the suit, but State Representative
Neal Kurk, who worked on the budget in the House Finance Committee, said he did
not see how increasing local contributions could be an unfunded mandate, since
the state never required local governments to join the retirement system. "When
the retirement system was set up, we gave them an inducement to join,"
Kurk said, according to the news report. "But we did not require them to
join. The fact that we're reducing the inducement I think escapes the
constitutional prohibition."
The New Hampshire
Retirement System was created in 1967 to coordinate four existing statewide
programs for public employees: the New Hampshire Teachers' Retirement System,
the New Hampshire Policemen's Retirement System, the New Hampshire Permanent
Firemen's Retirement System, and the Employees Retirement System of the State
of New Hampshire. The state and local governments in 1977 began splitting the
employer contribution for the police, firefighters and teachers, according to
the New Hampshire Municipal Association.
Rebecca Moore
editors@plansponsor.com