Retirement rescue plan fast-tracked

The committee intentionally gave larger increases to those who make the least, and who struggle with rising bills for energy and health insurance.

The bill is moving quickly to meet legislative deadlines. It needs to go to the full Senate by next week so it can get through a Senate Finance Committee review and a second Senate vote, all in time to go back to the House for agreement or negotiations. Lawmakers want to wrap up all their business on June 5.

The version of the bill approved yesterday freezes for four years the current automatic 8 percent annual increase in a health insurance subsidy payment some retirees get. After four years, a series of 4 percent annual increases would begin. That assumes there are no other changes in the law between now and 2012.

Committee Chairman Sen. Peter Burling, D-Cornish, said that the process of reforming NHRS €" setting its finances in order and setting up long-term funding for COLAs and health insurance subsidies €" could take five years.

New Hampshire Retirement System Chairman Lisa Shapiro said the changes the Senate made to HB 1645 do not change the cost of the plan by much.

Both the Senate and House reform plans will raise local retirement costs by about 15 percent, Shapiro said. The Senate plan costs about $700,000 more than the House version, on annual payments to the NHRS of nearly $400 million a year. The two plans are "practically identical" in their impact on local taxpayers, she said.

If no changes are made to retirement law for public workers such as teachers, police and firefighters, the cost of retirement payments for their employers will go up 53 percent next year.

The steep increase comes from a change in law that requires towns and school districts to cover a $2.7 billion gap in the NHRS long-term pension obligations. After the initial jump in 2010, the higher payments would continue at a fairly stable rate for 30 years. The costs of COLAs and health subsidies come out of a special account that does not hit employers with extra costs.

The bill also drops the House's idea of shifting power on the NHRS board away from retirees. Instead of cutting their numbers from eight to four, it maintains the current board structure. It also continues a policy that lets police and firefighters retire at age 45 with 20 years of service. The House wanted to add five years in age and time on the job.