The State Employees Association argued that Benson has an obligation to take the money from general funds, not from the retirement system, said Denis Parker, who represents the union, according to an Associated Press report. “A lot of folks worked long and hard for the state, only to find out their health benefits are being underwritten by their retirement account,” Parker told the AP.
He said $68 million has already been taken out of the fund to help subsidize 8% of the health insurance for retired public workers, who have health insurance with their former employees. As of June 30, 2002, the special fund had about $358 million for employees, teachers, police and firefighters. Money goes into the account when the return on retirement system investments tops 9.5%.
New Hampshire retirement system officials said the special account has been tapped before to pay for retiree cost-of-living increases and that its list of potential uses has been expanded to include the subsidy for health insurance.
Keith Herman, a Benson policy adviser, said that Benson’s proposal is a one-time tradeoff needed to offset a $70 million state deficit. He said that if the money isn’t shifted from the special account, retirement and health care benefits would be affected in the future. Herman said the one-time shift would not change the retirement program.
There are 46,187 active members of the retirement system, including 23,435 employees, 17,186 teachers, 4,101 police and 1,465 firefighters.