Benefits February 3, 2012

N.H. Court Says Increasing State Employee Pension Contributions Illegal

February 3, 2012 (PLANSPONSOR.com) - A Merrimack County (New Hampshire) Superior Court judge decided it is illegal to ask longtime state employees to contribute more from their paychecks for their pensions.

Reported by

Rebecca Moore

Judge Richard McNamara agreed with a coalition of the state’s five largest public employee labor unions that it is against the law to increase the contributions for all employees who had worked for at least a year, according to the New Hampshire Union Leader.

The decision deals a blow to the state retirement reform law passed last spring — and could cost the New Hampshire retirement system at least an estimated $25 million a year. Members of the Legislature who helped craft the law are already pondering an appeal, the Union Leader said.

The union coalition vowed to stay on the offensive.

The reform law was written in the hopes of reducing the $4.7 billion unfunded liability of the New Hampshire Retirement System.

Last July, McNamara rejected a request from the retirement system to immediately block implementation of the part of a new pension overhaul regarding setting employer contribution rates to the system (see Judge Rejects Request to Block Part of NH Pension Reform).