Judge Rejects Request to Block Part of NH Pension Reform

July 15, 2011 (PLANSPONSOR.com) - A New Hampshire judge has rejected a request from the New Hampshire Retirement System to immediately block implementation of part of a new pension overhaul.

The Associated Press reports that Merrimack Superior Court Judge Richard McNamara said he was not convinced irreparable harm would occur if more time was taken to resolve the dispute over part of the law dealing with setting employer contribution rates.  

The system’s Board of Trustees filed the suit arguing that the Legislature is violating the state constitution by requiring it to recertify employer rates (see NH Retirement System Sues to Block Part of Pension Reform). It points to a clause in the constitution adopted by voters in 1984 to protect the pension fund from raids by lawmakers. The board argues the clause gives it the fiduciary responsibility to set employer rates independently.    

The board voted in June to move ahead with $50 million in higher annual rates for employers on top of already planned rate increases. The Legislature voted to block the board and stick with the planned rate increases.  

The judge set an October rehearing on the case.  

According to the AP, McNamara also heard arguments in another lawsuit by a coalition representing New Hampshire public employees that asked the court to stop the state from charging workers more for their pensions. McNamara asked both sides to make more legal arguments on the issue. He said he was not able to decide if the increase in rates — roughly 2% — met the legal test for the immediate relief the coalition had requested.  

Starting July 1, teachers, state and municipal workers began paying 7% instead of 5%; firefighters’ contributions rose from 9.3% to 11.8%; and police pay 11.55%, up from 9.3%, the news report said.