A compromise was reached on the provision that stalled negotiations on Monday – a cap on pension benefits for new hires after July 1, 2009 (See NH Lawmakers Bogged Down Over Pension Reform Snag ). The Associated Press reports that pensions for those employees will still be capped at 100% of pay under the compromise, but the House conceded to including overtime and other income in the calculations.
Other provisions of the bill include:
- A shift of $250 million from an account used to pay for cost-of-living increases for retirees into the main pension fund to help hold down increases in employer contributions;
- A cost-of-living increase for all retirees capped at $450 for those with pensions over $30,000;
- An extra check for retirees with the smallest pensions — $1,000 for those with pensions of $20,000 or less, and $500 for those who retired before 1993 (The COLA and extra checks would be for one year.);
- No change to the system’s 14-member board and creation of an independent five-member committee to make investment decisions (with new education and experience standards for members);
- Continuation of the medical subsidy for some retirees, but with increases frozen for four years and set at 4% the year after the freeze is lifted; and
- A temporary medical subsidy for retirees whose pensions are $20,000 or less – $500 for singles and $1,000 for couples.
According to the AP, the deal also calls for a commission to study ways to provide health care to retirees not eligible for a health insurance subsidy, which includes most active employees and to study how to pay for future cost-of-living increases.
A provision requiring police and firefighters to have worked 25 years and be age 50 to be eligible to retire, instead of the current 20 years of service and age 45 requirement, was dropped in the compromise.
The bill is intended to shore up New Hampshire’s $6 billion retirement system, which is funded at 63. The House and Senate will vote on the bill on Wednesday.