Thanks to all of the State Reps and Senator Clegg who attended tonight's meeting.
The meeting was also attended by two members of the School Board, unfortunately the Town Council had no representation.
See below for more details. Taxpayers in Londonderry need to better educate themselves regarding this critical issue. It will continue to significantly impact the town & school budget and everyone's tax bill for 10 -12 years. What Glenn wrote above from Rep. McKinney is accurate. PAY ATTENTION TO THIS ISSUE.
LONDONDERRY – If there's one certainty with regard to the state's struggling retirement system it's that there will be no easy fix.
This was the message delivered by state legislators to members of the town's budget committee last night. The committee invited Londonderry's representatives in Concord to attend its monthly meeting to discuss the state of the New Hampshire Retirement System.
"It's a whole host of errors. The retirement system has made some mistakes, the Legislature has made some mistakes, the communities have made some mistakes," said Republican Rep. Ken Hawkins of Bedford. Hawkins was invited by Rep. James Headd, who was in attendance, because of his experience with the NHRS.
The NHRS has contributing members from two groups: one, municipal employees and teachers, and the other, firefighters and police officers. Group I contributes 5 percent of their gross earnings while Group II contributes 9.3 percent. Sen. Robert Clegg said part of the funding problem can be traced back to the 1990s, when the NHRS morphed into what is known as open aggregate, which he likened to the Social Security system. With the change came lower employer rates. If a floor was placed with regard to employer rates, he said, "We would not be in the position we are in today."
Hawkins said that in 2000, return on the system was 6 percent, while in 2001 and 2002 it was 2 percent and 1 percent. With the system facing deficits of $2 million in its pension plan, health plan and special accounts program, everyone agreed something has to be done.
If not, municipalities will continue to feel the brunt of the shortfall. According to state law, if the retirement system does not have ample funds, it will be on the taxpayers to make up that difference. Such a revelation has local officials in a tizzy.
"This is going to be difficult, it's going to be challenging, it's going to go up and we have to budget accordingly," budget committee member Mike Brown said. Brown said he was pleased to see some taxpayers in the audience, since this is an issue that affects everyone. Taxpayers need to understand there are "major financial drivers outside of our communities," in addition to local school and town budgets, he said.
Hawkins assured the committee that working to fix the NHRS is on the forefront of legislators' agendas. The New Hampshire Retirement System Board, made up of a cross-section of folks, is continually working toward a solution, while lawmakers, such as Rep. Neal Kurk, R-Weare, have devoted much time to the issue. Kurk is the sponsor of HB 876, which has a couple of key ingredients.
The bill proposes to eliminate the special account; change the definition of earnable compensation used to calculate retirement payout benefits; provide that normal contribution rates shall be borne equally by the employer and employee; provide for an annual calculation of cost-of-living adjustments rather than a fixed number or index; and require that everyone hired after July 1 be Group I employees.
"We're trying," Hawkins said about tackling the problem. "We're not setting it aside and putting it away for a rainy day."
"You don't have to pressure us," Clegg added, "we're already in your corner."
B. Committee Work – Continued discussion on whether to individually record members votes on motions.
The Budget Committee vote 6-0-1 to record individual votes of members on 4/19/2007. Tom Dolan was not present at the meeting.
I'll be curious to see how that works.
I think it will work just fine it and it was supported by at least 6 of the seven Budget Com members.
The Reps in Concord record their votes all the time when a roll call is requested. They have a few more than seven. If they can do it I'm sure it can be done here.