CONCORD – The Special House Committee on Defined Contribution Retirement Plans for Public Employees today released the committee’s final report. The report recommends that the state move away from a defined benefit retirement system (pension) towards a defined contribution system, similar to a 401(k) arrangement favored by the private sector. The proposal would be mandatory for new state employees, and would be voluntary for contributing local and county employees, who could opt into a defined contribution system and away from the defined benefit model.
The report, which used an independent actuarial analysis, finds that moving to defined contribution system would incrementally increase the retirement system’s unfunded liability over the short term, and dramatically reduce the liability over the long term.
House Speaker William O’Brien
“The Committee did an outstanding job of doing a comprehensive review of our retirement system and considering change that will strengthen the program for future generations of taxpayers and employees. While I suspect it is unlikely that the incoming Legislature will be able to move forward on a major change to shore up our retirement system, this report represents a roadmap that can be used in the future to resolve the looming pension crisis at the state level.”
Rep. Greg Hill, Special House Committee on Defined Contribution Retirement Plans for Public Employees
“Our committee put a tremendous amount of effort into the process of researching existing options and the methods employed in other states to solve the looming struggle with insolvency of our retirement system. Our goal was to design a durable solution to protect taxpayers from the potential unfunded liabilities of billions of dollars while ensuring that, above all, we treat our valued public employees fairly. Throughout, this was an open process that invited all stakeholders to the table to search for answers and a consensus for a system that clearly must work for years to come. It’s clear that if we were setting up a retirement system from scratch today, there would be no question that we would establish a defined contribution plan as a great many employers and employees, both public and private, across the state and the nation currently enjoy. Now, it’s time for the State of New Hampshire to use the best practices of these established plan designs to help us get to a solvent retirement program for the tens of thousands of state, county and local employees and this report, we believe, provides a clear roadmap to the future.”