All of the assets of the retirement system shall be credited, according to the purpose for which they are held, between 2 funds, namely, the member annuity savings fund and the state annuity accumulation fund. Each of the funds shall be subdivided on account of the various member classifications. In making the determinations required under this section for financing the retirement system, the board of trustees shall use the entry age normal funding methodology. The board of trustees shall direct the system's actuary to prepare biennial valuations of the system's assets and liabilities commencing with the valuation prepared as of June 30, 2007. Such biennial valuation shall be the basis for determining the annual contribution requirements of the system until the next following biennial valuation. I. Member Annuity Savings Fund. (a) The member annuity savings fund shall be a fund in which shall be accumulated the contributions deducted from the compensation of members to provide for their member annuities together with any amounts transferred thereto from a similar fund under one or more of the predecessor systems. Such contribution shall be, for each member, dependent upon the member's employment classification at the rate determined in accordance with the following table: Employees of employers other than the state 5.00 Employees of the state hired on or before June 30, 2009 5.00 Employees of the state hired after June 30, 2009 7.00 Teachers 5.00 Permanent Policemen 9.30 Permanent Firemen 9.30 The board of trustees shall certify to the proper authority or officer responsible for making up the payroll of each employer, and such authority or officer shall cause to be deducted from the compensation of each member, except group II members with creditable service in excess of 40 years as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), on each and every payroll of such employer for each and every payroll period, the percentage of earnable compensation applicable to such member. No deduction from earnable compensation under this paragraph shall apply to any group II member with creditable service in excess of 40 years, as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), and this provision for such members shall not affect the method of determining average final compensation as provided in RSA 100-A:1, XVIII. In determining the amount earnable by a member in a payroll period, the board may consider the rate of compensation payable to such member on the first day of a payroll period as continuing throughout the payroll period and it may omit deduction from compensation for any period less than a full payroll period if such person was not a member on the first day of the payroll period, and to facilitate the making of deductions it may modify the deduction required of any member by such an amount as shall not exceed 1/10 of one percent of the annual earnable compensation upon the basis of which such deduction is made. The amounts deducted shall be reported to the board of trustees. Each of such amounts, when deducted, shall be paid to the retirement system at such times as may be designated by the board of trustees and credited to the individual account, in the member annuity savings fund, of the member from whose compensation the deduction was made. (b) The deductions provided for herein shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions herein provided as a condition of his membership. (c) [Repealed.] (d) The accumulated contributions of a member withdrawn by the member, or paid to his or her estate or designated beneficiary in event of his or her death in service, shall be paid from the member annuity savings fund. Upon the retirement of a member, his or her accumulated contributions shall be transferred from the member annuity savings fund to the state annuity accumulation fund. (e) With respect to all employees of any employer, such employer may pick up the employee contributions required by this section for all compensation earned after July 1, 1983; and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the United States Internal Revenue Code; however, each employer shall continue to withhold federal income tax based upon these contributions until the Internal Revenue Service, or the federal courts, rule that, pursuant to section 414(h) of the United States Internal Revenue Code (1954), as amended, these contributions shall not be included as gross income of the employee until such time as they are distributed or made available. The employer shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The employer may pick up these contributions by a reduction in the cash salary of the employee. Employee contributions picked up shall be treated for all purposes of this section in the same manner and to the same extent as employee contributions made prior to the date picked up. II. State Annuity Accumulation Fund. (a) The state annuity accumulation fund shall be the fund in which shall be accumulated all reserves for the payment of all state annuities payable from contributions made by employers, any amounts transferred thereto from a similar fund under one or more of the predecessor systems, amounts transferred from the member annuity savings fund, and all amounts paid to the system by or on account of call, substitute, or volunteer firemen and from which shall be paid all benefits payable under the system other than those payable from the member annuity savings fund. (b) The contributions of each employer for benefits under the retirement system on account of group II members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution,'' and an additional amount to be known as the "accrued liability contribution;'' provided that any employer, other than the state, shall pay 70 percent of such total contributions for state fiscal year 2010, and 30 percent thereof shall be paid by the state for state fiscal year 2010, and that beginning with state fiscal year 2011 any employer, other than the state, shall pay 75 percent of such total contributions, and 25 percent thereof shall be paid by the state, and that beginning with state fiscal year 2012, and every state fiscal year thereafter, any employer, other than the state, shall pay 65 percent of such total contributions, and 35 percent thereof shall be paid by the state; and provided that, in the case of compensation attributable to extra or special duty, the employer shall pay the full amount of such total contributions; and provided further that, in case of group II members employed by the state, the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution, including contributions on behalf of group II members whose group II creditable service is in excess of 40 years, in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuations, except as provided in subparagraphs (h) and (i). (c) The contributions of each employer for benefits under the retirement system on account of group I members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution,'' and an additional amount to be known as the "accrued liability contribution;'' provided that, in the case of teachers, any employer, other than the state, shall pay 70 percent of such total contributions for state fiscal year 2010, and 30 percent thereof shall be paid by the state for state fiscal year 2010, and that beginning with state fiscal year 2011 any employer, other than the state, shall pay 75 percent of such total contributions, and 25 percent thereof shall be paid by the state, and that beginning with state fiscal year 2012, and every state fiscal year thereafter, any employer, other than the state, shall pay 65 percent of such total contributions, and 35 percent thereof shall be paid by the state; and provided further that in case of teacher members employed by the state the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuation, except as provided in subparagraphs (h) and (i). (d). [Repealed.] (e) Immediately following the actuarial valuation prepared as of June 30 of each fiscal year, the board shall have an actuary determine the amount of the unfunded accrued liability for each member classification as the amount of the total liabilities of the state annuity accumulation fund on account of such classification which is not dischargeable by the total of the funds in hand to the credit of the state annuity accumulation fund on account of such classification, and the aforesaid normal contributions to be made on account of the members in such classification during the remainder of their active service. The amount so determined with respect to each member classification shall be known as the "unfunded accrued liability'' with respect to such classification. On the basis of each such unfunded accrued liability, the board shall have an actuary determine the level annual contribution required to discharge such amount over a period of 30 years or the maximum period allowed by standards adopted by the Government Accounting Standards Board, whichever is less. (f) The total amount payable to the state annuity accumulation fund in each year on account of each member classification shall not be less than normal contribution rate multiplied by the total compensation earnable by all members in such classification for such year, plus the amount of the accrued liability contribution necessary to liquidate the unfunded accrued liability on behalf of such classification as determined by the actuary under subparagraph (e) above. (g) All interest and dividends earned on the funds of the retirement system shall be credited to the state annuity accumulation fund. The board of trustees shall allow interest at such rate or rates as it shall determine from time to time on the individual accounts of members in the member annuity savings fund and shall annually transfer such interest amount from the state annuity accumulation fund. Such interest shall be compounded at an annual rate and shall be prorated and credited to the member annuity savings fund to the date of processing upon termination of active service for any reason including withdrawal, retirement, or death. (h) There shall be a special account for additional benefits held by the board of trustees. Beginning July 1, 2003, the special account shall be subdivided into components representing the 4 retirement system member classifications, as defined in RSA 100-A:1, with each component subdivided proportionally between employees of the state and employees of the political subdivisions of the state. The balance of the special account attributed to each component as of June 30, 2003 shall be subdivided between state and political subdivision classifications based upon the actuarial liabilities of the member and retiree groups. Beginning with the fiscal year ending June 30, 1990, the amount credited annually to the special account shall be determined as follows: (1) Each component of the special account shall first be credited with all the earnings of that component for the fiscal year. (2) If the actuary determines that the funded ratio of the consolidated retirement system as of June 30 of any given year is equal to or greater than 85 percent, then all of the earnings of the remaining assets of the retirement system which are in excess of 10 and one-half percent shall be allocated to the 4 member classifications. The assumed rate of return shall be determined by the board of trustees. (3) Any funds held in special reserve as of June 30, 1996, shall be transferred to the respective component of the special account according to the following schedule: (i) One-half of the funds held in special reserve as of June 30, 1996. (ii) One-half of the remaining funds as of June 30, 1997, plus earnings from July 1, 1996 to June 30, 1997. (iii) All remaining funds as of June 30, 1998, plus earnings from July 1, 1997, to June 30, 1998. (4) [Repealed.] (5) None of the assets held in the special account shall be used in the actuarial determination of the rate percent of normal contribution as set forth in subparagraphs (b) and (c) . (6) [Repealed.] (7) The actuarial cost of all legislation enacted during each fiscal year and calling for funding from the special account shall be withdrawn from the respective components of the special account, as of June 30 of each year, after funds are credited to the special account as provided in this subparagraph. The special account shall be used only to fund or partially fund additional benefits as follows: first, to provide supplemental allowances, or COLAs, pursuant to RSA 100-A:41-a and, second, to provide additional benefits to retired members and beneficiaries of the retirement system with the specific approval of the appropriate policy committees and approval of the general court. (i) If the actuarially determined normal contribution rate as set forth in subparagraphs (b) and (c) on account of any of the various member classifications shall be negative in any fiscal year, then the excess amount resulting from the difference between zero and the negative actuarially determined normal contribution rate shall be used to reduce the employee contribution rate for that member classification in that fiscal year. (j) To account for no longer making transfers from the special account to the state annuity accumulation fund, notwithstanding RSA 100-A:16, II(h)(5) and (7), there shall be a one-time transfer of $250,000,000 not later than June 30, 2008 from the special account to the state annuity accumulation fund, provided however that if the employers' obligation to fund the 401(h) subtrust under RSA 100-A:53, RSA 100-A:53-b, RSA 100-A:53-c, and RSA 100-A:53-d ceases as a result of a final court order, the transfer of $250,000,000 plus any interest accrued shall be returned to the special account. The sum transferred shall be credited proportionally to each member subgroup based on the proportion of the funds transferred into each special account subgroup from the special medical account, as identified by the retirement system, on June 30, 2007. III. Employer Contributions. (a) On or before the first day of October next preceding each regular session of the state legislature, the board of trustees shall certify to the commissioner of administrative services the amounts which will become due and payable by the state during the biennium next following to the retirement system and it shall be the duty of the commissioner of administrative services in preparing the executive budget for each ensuing biennium to include in the budget the amounts so certified which amounts shall be appropriated by the legislature. The amounts so certified under this subparagraph shall include the unfunded accrued liability of the retirement system. The annual employer contribution requirements effective July 1, 2008 and as calculated each year thereafter shall not be less than the employee contribution rates under RSA 100-A:16, I(a). (b) A county, city, town, school district or other political subdivision of the state having any employee members who are paid directly by the state but for whom the staff is later reimbursed for the part of their compensation not chargeable to state funds shall likewise reimburse the state for that part of the contribution made by the state to this system which is based on such part of compensation not chargeable to state funds. (c) At the beginning of each year commencing on the first day of July the board of trustees shall certify to each employer other than the state the percentage rates of contribution due the system from each such employer, and shall assess upon each such employer such percentages of the earnable compensation of members in its employ, and it shall be the duty of the treasurer or other disbursing officer of each such employer to pay to the board of trustees such portion of the annual amount so assessed at such times and in such manner as the board of trustees may prescribe. Each such employer is hereby authorized to appropriate the sums necessary for the payment of such assessments. The annual employer contribution requirements effective July 1, 2008 and as calculated each year thereafter shall not be less than the employee contribution rates under RSA 100-A:16, I(a). (d) Notwithstanding RSA 100-A:16, III(a), the New Hampshire retirement system board of trustees shall, within a reasonable period of time not to exceed 30 days from the effective date of this subparagraph, certify to the commissioner of administrative services the amounts that will become due and payable by the state during the biennium beginning July 1, 2009 based upon a state employee group other post-employment benefit (OPEB) plan balance as of July 1, 2009 for the state medical plan subtrust of $0.00. Such certification shall in all other respects be based upon the data and assumptions used to calculate the state employer rate as certified in September 2008. In no event shall the board of trustees certify a rate in any subsequent year based upon payments made from the medical plan subtrust to the state prior to July 1, 2009.
[Paragraph III-a effective July 1, 2010.]
III-a. Upon the retirement of a member: (a) The retirement system shall: (1) Calculate average base pay of a member during his or her highest 3 years of creditable service, or during all of the years in his or her creditable service if less than 3 years; (2) Multiply the average base pay determined in subparagraph (1) above by 125 percent; (3) Subtract the result from subparagraph (2) from the member's average final compensation. (b) If the calculation in subparagraph (a)(3) is greater than zero, the employer shall be assessed the cost of the excess benefit provided by multiplying the present value of the member's retirement benefit by the amount determined in subparagraph (a)(3) divided by the amount in subparagraph (a)(2). (c) The employer shall certify to the accuracy of each member's base pay. (d) The retirement system shall certify to the cost determined in subparagraph (b) to the employer and assess upon the employer such cost for payment to the retirement system at such times and in such manner as the board of trustees may prescribe. Each such employer is hereby authorized to appropriate the sums necessary for payment of such assessments. III-b. Every employer shall annually report to the retirement system the annual base pay paid to each member. IV. [Repealed.] V. Notwithstanding any other provision of law any member contributions deducted by an employer, or any employer assessments or contributions not remitted at the times designated by the board of trustees, shall be subject to interest on the amount due at the rate of one percent for each month or fraction thereof that they remain unpaid. For reasonable cause, the board may abate all or any part of the interest. VI. Every employer shall report monthly to the retirement system all compensation of group II members that is attributable to extra or special duty. When an employer provides extra or special duty services, the employer shall include in its billing or charge to the entity for whom the extra or special duty is being provided the full amount of contributions required under RSA 100-A16, II(b) attributable to the extra or special duty. Notwithstanding any provision to the contrary, the employer shall be responsible for the full amount of employer contributions required under RSA 100-A16, II(b) attributable to extra or special duty.
Source. 1967, 134:1. 1969, 354:4. 1974, 33:7, 8. 1977, 510:1; 528:2. 1979, 297:3; 434:29, II. 1981, 548:2. 1983, 303:1; 469:140, 144-146. 1985, 398:2, 3, 7; 399:3, I. 1986, 95:5-8, 13, I. 1987, 254:1. 1988, 193:6. 1989, 251:1; 400:1. 1990, 273:4. 1992, 55:4. 1994, 119:1-3. 1996, 287:4, 5, 6, 7, I-II. 1998, 302:1, eff. June 30, 1998. 2001, 275:3, 4, eff. July 1, 2001. 2003, 221:1, eff. July 1, 2003. 2004, 216:2, eff. Dec. 31, 2004. 2006, 120:12, eff. July 14, 2006; 178:5, eff. July 24, 2006. 2007, 268:5-9, 11, II, eff. June 30, 2007. 2008, 300:8, eff. June 30, 2008; 300:33, eff. July 1, 2010. 2009, 144:50, eff. June 30, 2009; 144:52, 53, eff. July 1, 2009; 144:55, eff. June 1, 2009; 289:2, eff. July 29, 2009.
All of the assets of the retirement system shall be credited, according to the purpose for which they are held, between 2 funds, namely, the member annuity savings fund and the state annuity accumulation fund. Each of the funds shall be subdivided on account of the various member classifications. In making the determinations required under this section for financing the retirement system, the board of trustees shall use the entry age normal funding methodology. The board of trustees shall direct the system's actuary to prepare biennial valuations of the system's assets and liabilities commencing with the valuation prepared as of June 30, 2007. Such biennial valuation shall be the basis for determining the annual contribution requirements of the system until the next following biennial valuation. I. Member Annuity Savings Fund. (a) The member annuity savings fund shall be a fund in which shall be accumulated the contributions deducted from the compensation of members to provide for their member annuities together with any amounts transferred thereto from a similar fund under one or more of the predecessor systems. Such contribution shall be, for each member, dependent upon the member's employment classification at the rate determined in accordance with the following table: Employees of employers other than the state 5.00 Employees of the state hired on or before June 30, 2009 5.00 Employees of the state hired after June 30, 2009 7.00 Teachers 5.00 Permanent Policemen 9.30 Permanent Firemen 9.30 The board of trustees shall certify to the proper authority or officer responsible for making up the payroll of each employer, and such authority or officer shall cause to be deducted from the compensation of each member, except group II members with creditable service in excess of 40 years as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), on each and every payroll of such employer for each and every payroll period, the percentage of earnable compensation applicable to such member. No deduction from earnable compensation under this paragraph shall apply to any group II member with creditable service in excess of 40 years, as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), and this provision for such members shall not affect the method of determining average final compensation as provided in RSA 100-A:1, XVIII. In determining the amount earnable by a member in a payroll period, the board may consider the rate of compensation payable to such member on the first day of a payroll period as continuing throughout the payroll period and it may omit deduction from compensation for any period less than a full payroll period if such person was not a member on the first day of the payroll period, and to facilitate the making of deductions it may modify the deduction required of any member by such an amount as shall not exceed 1/10 of one percent of the annual earnable compensation upon the basis of which such deduction is made. The amounts deducted shall be reported to the board of trustees. Each of such amounts, when deducted, shall be paid to the retirement system at such times as may be designated by the board of trustees and credited to the individual account, in the member annuity savings fund, of the member from whose compensation the deduction was made. (b) The deductions provided for herein shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions herein provided as a condition of his membership. (c) [Repealed.] (d) The accumulated contributions of a member withdrawn by the member, or paid to his or her estate or designated beneficiary in event of his or her death in service, shall be paid from the member annuity savings fund. Upon the retirement of a member, his or her accumulated contributions shall be transferred from the member annuity savings fund to the state annuity accumulation fund. (e) With respect to all employees of any employer, such employer may pick up the employee contributions required by this section for all compensation earned after July 1, 1983; and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the United States Internal Revenue Code; however, each employer shall continue to withhold federal income tax based upon these contributions until the Internal Revenue Service, or the federal courts, rule that, pursuant to section 414(h) of the United States Internal Revenue Code (1954), as amended, these contributions shall not be included as gross income of the employee until such time as they are distributed or made available. The employer shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The employer may pick up these contributions by a reduction in the cash salary of the employee. Employee contributions picked up shall be treated for all purposes of this section in the same manner and to the same extent as employee contributions made prior to the date picked up. II. State Annuity Accumulation Fund. (a) The state annuity accumulation fund shall be the fund in which shall be accumulated all reserves for the payment of all state annuities payable from contributions made by employers, any amounts transferred thereto from a similar fund under one or more of the predecessor systems, amounts transferred from the member annuity savings fund, and all amounts paid to the system by or on account of call, substitute, or volunteer firemen and from which shall be paid all benefits payable under the system other than those payable from the member annuity savings fund. (b) The contributions of each employer for benefits under the retirement system on account of group II members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution,'' and an additional amount to be known as the "accrued liability contribution;'' provided that any employer, other than the state, shall pay 70 percent of such total contributions for state fiscal year 2010, and 30 percent thereof shall be paid by the state for state fiscal year 2010, and that beginning with state fiscal year 2011 any employer, other than the state, shall pay 75 percent of such total contributions, and 25 percent thereof shall be paid by the state, and that beginning with state fiscal year 2012, and every state fiscal year thereafter, any employer, other than the state, shall pay 65 percent of such total contributions, and 35 percent thereof shall be paid by the state; and provided that, in the case of compensation attributable to extra or special duty, the employer shall pay the full amount of such total contributions; and provided further that, in case of group II members employed by the state, the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution, including contributions on behalf of group II members whose group II creditable service is in excess of 40 years, in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuations, except as provided in subparagraphs (h) and (i). (c) The contributions of each employer for benefits under the retirement system on account of group I members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution,'' and an additional amount to be known as the "accrued liability contribution;'' provided that, in the case of teachers, any employer, other than the state, shall pay 70 percent of such total contributions for state fiscal year 2010, and 30 percent thereof shall be paid by the state for state fiscal year 2010, and that beginning with state fiscal year 2011 any employer, other than the state, shall pay 75 percent of such total contributions, and 25 percent thereof shall be paid by the state, and that beginning with state fiscal year 2012, and every state fiscal year thereafter, any employer, other than the state, shall pay 65 percent of such total contributions, and 35 percent thereof shall be paid by the state; and provided further that in case of teacher members employed by the state the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuation, except as provided in subparagraphs (h) and (i). (d). [Repealed.] (e) Immediately following the actuarial valuation prepared as of June 30 of each fiscal year, the board shall have an actuary determine the amount of the unfunded accrued liability for each member classification as the amount of the total liabilities of the state annuity accumulation fund on account of such classification which is not dischargeable by the total of the funds in hand to the credit of the state annuity accumulation fund on account of such classification, and the aforesaid normal contributions to be made on account of the members in such classification during the remainder of their active service. The amount so determined with respect to each member classification shall be known as the "unfunded accrued liability'' with respect to such classification. On the basis of each such unfunded accrued liability, the board shall have an actuary determine the level annual contribution required to discharge such amount over a period of 30 years or the maximum period allowed by standards adopted by the Government Accounting Standards Board, whichever is less. (f) The total amount payable to the state annuity accumulation fund in each year on account of each member classification shall not be less than normal contribution rate multiplied by the total compensation earnable by all members in such classification for such year, plus the amount of the accrued liability contribution necessary to liquidate the unfunded accrued liability on behalf of such classification as determined by the actuary under subparagraph (e) above. (g) All interest and dividends earned on the funds of the retirement system shall be credited to the state annuity accumulation fund. The board of trustees shall allow interest at such rate or rates as it shall determine from time to time on the individual accounts of members in the member annuity savings fund and shall annually transfer such interest amount from the state annuity accumulation fund. Such interest shall be compounded at an annual rate and shall be prorated and credited to the member annuity savings fund to the date of processing upon termination of active service for any reason including withdrawal, retirement, or death. (h) There shall be a special account for additional benefits held by the board of trustees. Beginning July 1, 2003, the special account shall be subdivided into components representing the 4 retirement system member classifications, as defined in RSA 100-A:1, with each component subdivided proportionally between employees of the state and employees of the political subdivisions of the state. The balance of the special account attributed to each component as of June 30, 2003 shall be subdivided between state and political subdivision classifications based upon the actuarial liabilities of the member and retiree groups. Beginning with the fiscal year ending June 30, 1990, the amount credited annually to the special account shall be determined as follows: (1) Each component of the special account shall first be credited with all the earnings of that component for the fiscal year. (2) If the actuary determines that the funded ratio of the consolidated retirement system as of June 30 of any given year is equal to or greater than 85 percent, then all of the earnings of the remaining assets of the retirement system which are in excess of 10 and one-half percent shall be allocated to the 4 member classifications. The assumed rate of return shall be determined by the board of trustees. (3) Any funds held in special reserve as of June 30, 1996, shall be transferred to the respective component of the special account according to the following schedule: (i) One-half of the funds held in special reserve as of June 30, 1996. (ii) One-half of the remaining funds as of June 30, 1997, plus earnings from July 1, 1996 to June 30, 1997. (iii) All remaining funds as of June 30, 1998, plus earnings from July 1, 1997, to June 30, 1998. (4) [Repealed.] (5) None of the assets held in the special account shall be used in the actuarial determination of the rate percent of normal contribution as set forth in subparagraphs (b) and (c) . (6) [Repealed.] (7) The actuarial cost of all legislation enacted during each fiscal year and calling for funding from the special account shall be withdrawn from the respective components of the special account, as of June 30 of each year, after funds are credited to the special account as provided in this subparagraph. The special account shall be used only to fund or partially fund additional benefits as follows: first, to provide supplemental allowances, or COLAs, pursuant to RSA 100-A:41-a and, second, to provide additional benefits to retired members and beneficiaries of the retirement system with the specific approval of the appropriate policy committees and approval of the general court. (i) If the actuarially determined normal contribution rate as set forth in subparagraphs (b) and (c) on account of any of the various member classifications shall be negative in any fiscal year, then the excess amount resulting from the difference between zero and the negative actuarially determined normal contribution rate shall be used to reduce the employee contribution rate for that member classification in that fiscal year. (j) To account for no longer making transfers from the special account to the state annuity accumulation fund, notwithstanding RSA 100-A:16, II(h)(5) and (7), there shall be a one-time transfer of $250,000,000 not later than June 30, 2008 from the special account to the state annuity accumulation fund, provided however that if the employers' obligation to fund the 401(h) subtrust under RSA 100-A:53, RSA 100-A:53-b, RSA 100-A:53-c, and RSA 100-A:53-d ceases as a result of a final court order, the transfer of $250,000,000 plus any interest accrued shall be returned to the special account. The sum transferred shall be credited proportionally to each member subgroup based on the proportion of the funds transferred into each special account subgroup from the special medical account, as identified by the retirement system, on June 30, 2007. III. Employer Contributions. (a) On or before the first day of October next preceding each regular session of the state legislature, the board of trustees shall certify to the commissioner of administrative services the amounts which will become due and payable by the state during the biennium next following to the retirement system and it shall be the duty of the commissioner of administrative services in preparing the executive budget for each ensuing biennium to include in the budget the amounts so certified which amounts shall be appropriated by the legislature. The amounts so certified under this subparagraph shall include the unfunded accrued liability of the retirement system. The annual employer contribution requirements effective July 1, 2008 and as calculated each year thereafter shall not be less than the employee contribution rates under RSA 100-A:16, I(a). (b) A county, city, town, school district or other political subdivision of the state having any employee members who are paid directly by the state but for whom the staff is later reimbursed for the part of their compensation not chargeable to state funds shall likewise reimburse the state for that part of the contribution made by the state to this system which is based on such part of compensation not chargeable to state funds. (c) At the beginning of each year commencing on the first day of July the board of trustees shall certify to each employer other than the state the percentage rates of contribution due the system from each such employer, and shall assess upon each such employer such percentages of the earnable compensation of members in its employ, and it shall be the duty of the treasurer or other disbursing officer of each such employer to pay to the board of trustees such portion of the annual amount so assessed at such times and in such manner as the board of trustees may prescribe. Each such employer is hereby authorized to appropriate the sums necessary for the payment of such assessments. The annual employer contribution requirements effective July 1, 2008 and as calculated each year thereafter shall not be less than the employee contribution rates under RSA 100-A:16, I(a). (d) Notwithstanding RSA 100-A:16, III(a), the New Hampshire retirement system board of trustees shall, within a reasonable period of time not to exceed 30 days from the effective date of this subparagraph, certify to the commissioner of administrative services the amounts that will become due and payable by the state during the biennium beginning July 1, 2009 based upon a state employee group other post-employment benefit (OPEB) plan balance as of July 1, 2009 for the state medical plan subtrust of $0.00. Such certification shall in all other respects be based upon the data and assumptions used to calculate the state employer rate as certified in September 2008. In no event shall the board of trustees certify a rate in any subsequent year based upon payments made from the medical plan subtrust to the state prior to July 1, 2009.
[Paragraph III-a effective July 1, 2010.]
III-a. Upon the retirement of a member: (a) The retirement system shall: (1) Calculate average base pay of a member during his or her highest 3 years of creditable service, or during all of the years in his or her creditable service if less than 3 years; (2) Multiply the average base pay determined in subparagraph (1) above by 125 percent; (3) Subtract the result from subparagraph (2) from the member's average final compensation. (b) If the calculation in subparagraph (a)(3) is greater than zero, the employer shall be assessed the cost of the excess benefit provided by multiplying the present value of the member's retirement benefit by the amount determined in subparagraph (a)(3) divided by the amount in subparagraph (a)(2). (c) The employer shall certify to the accuracy of each member's base pay. (d) The retirement system shall certify to the cost determined in subparagraph (b) to the employer and assess upon the employer such cost for payment to the retirement system at such times and in such manner as the board of trustees may prescribe. Each such employer is hereby authorized to appropriate the sums necessary for payment of such assessments. III-b. Every employer shall annually report to the retirement system the annual base pay paid to each member. IV. [Repealed.] V. Notwithstanding any other provision of law any member contributions deducted by an employer, or any employer assessments or contributions not remitted at the times designated by the board of trustees, shall be subject to interest on the amount due at the rate of one percent for each month or fraction thereof that they remain unpaid. For reasonable cause, the board may abate all or any part of the interest. VI. Every employer shall report monthly to the retirement system all compensation of group II members that is attributable to extra or special duty. When an employer provides extra or special duty services, the employer shall include in its billing or charge to the entity for whom the extra or special duty is being provided the full amount of contributions required under RSA 100-A16, II(b) attributable to the extra or special duty. Notwithstanding any provision to the contrary, the employer shall be responsible for the full amount of employer contributions required under RSA 100-A16, II(b) attributable to extra or special duty.
Source. 1967, 134:1. 1969, 354:4. 1974, 33:7, 8. 1977, 510:1; 528:2. 1979, 297:3; 434:29, II. 1981, 548:2. 1983, 303:1; 469:140, 144-146. 1985, 398:2, 3, 7; 399:3, I. 1986, 95:5-8, 13, I. 1987, 254:1. 1988, 193:6. 1989, 251:1; 400:1. 1990, 273:4. 1992, 55:4. 1994, 119:1-3. 1996, 287:4, 5, 6, 7, I-II. 1998, 302:1, eff. June 30, 1998. 2001, 275:3, 4, eff. July 1, 2001. 2003, 221:1, eff. July 1, 2003. 2004, 216:2, eff. Dec. 31, 2004. 2006, 120:12, eff. July 14, 2006; 178:5, eff. July 24, 2006. 2007, 268:5-9, 11, II, eff. June 30, 2007. 2008, 300:8, eff. June 30, 2008; 300:33, eff. July 1, 2010. 2009, 144:50, eff. June 30, 2009; 144:52, 53, eff. July 1, 2009; 144:55, eff. June 1, 2009; 289:2, eff. July 29, 2009.
All of the assets of the retirement system shall be credited, according to the purpose for which they are held, between 2 funds, namely, the member annuity savings fund and the state annuity accumulation fund. Each of the funds shall be subdivided on account of the various member classifications. In making the determinations required under this section for financing the retirement system, the board of trustees shall use the entry age normal funding methodology. The board of trustees shall direct the system's actuary to prepare biennial valuations of the system's assets and liabilities commencing with the valuation prepared as of June 30, 2007. Such biennial valuation shall be the basis for determining the annual contribution requirements of the system until the next following biennial valuation. I. Member Annuity Savings Fund. (a) The member annuity savings fund shall be a fund in which shall be accumulated the contributions deducted from the compensation of members to provide for their member annuities together with any amounts transferred thereto from a similar fund under one or more of the predecessor systems. Such contribution shall be, for each member, dependent upon the member's employment classification at the rate determined in accordance with the following table: Employees of employers other than the state 5.00 Employees of the state hired on or before June 30, 2009 5.00 Employees of the state hired after June 30, 2009 7.00 Teachers 5.00 Permanent Policemen 9.30 Permanent Firemen 9.30 The board of trustees shall certify to the proper authority or officer responsible for making up the payroll of each employer, and such authority or officer shall cause to be deducted from the compensation of each member, except group II members with creditable service in excess of 40 years as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), on each and every payroll of such employer for each and every payroll period, the percentage of earnable compensation applicable to such member. No deduction from earnable compensation under this paragraph shall apply to any group II member with creditable service in excess of 40 years, as provided in RSA 100-A:5, II(b) and RSA 100-A:6, II(b), and this provision for such members shall not affect the method of determining average final compensation as provided in RSA 100-A:1, XVIII. In determining the amount earnable by a member in a payroll period, the board may consider the rate of compensation payable to such member on the first day of a payroll period as continuing throughout the payroll period and it may omit deduction from compensation for any period less than a full payroll period if such person was not a member on the first day of the payroll period, and to facilitate the making of deductions it may modify the deduction required of any member by such an amount as shall not exceed 1/10 of one percent of the annual earnable compensation upon the basis of which such deduction is made. The amounts deducted shall be reported to the board of trustees. Each of such amounts, when deducted, shall be paid to the retirement system at such times as may be designated by the board of trustees and credited to the individual account, in the member annuity savings fund, of the member from whose compensation the deduction was made. (b) The deductions provided for herein shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions herein provided as a condition of his membership. (c) [Repealed.] (d) The accumulated contributions of a member withdrawn by the member, or paid to his or her estate or designated beneficiary in event of his or her death in service, shall be paid from the member annuity savings fund. Upon the retirement of a member, his or her accumulated contributions shall be transferred from the member annuity savings fund to the state annuity accumulation fund. (e) With respect to all employees of any employer, such employer may pick up the employee contributions required by this section for all compensation earned after July 1, 1983; and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the United States Internal Revenue Code; however, each employer shall continue to withhold federal income tax based upon these contributions until the Internal Revenue Service, or the federal courts, rule that, pursuant to section 414(h) of the United States Internal Revenue Code (1954), as amended, these contributions shall not be included as gross income of the employee until such time as they are distributed or made available. The employer shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The employer may pick up these contributions by a reduction in the cash salary of the employee. Employee contributions picked up shall be treated for all purposes of this section in the same manner and to the same extent as employee contributions made prior to the date picked up. II. State Annuity Accumulation Fund. (a) The state annuity accumulation fund shall be the fund in which shall be accumulated all reserves for the payment of all state annuities payable from contributions made by employers, any amounts transferred thereto from a similar fund under one or more of the predecessor systems, amounts transferred from the member annuity savings fund, and all amounts paid to the system by or on account of call, substitute, or volunteer firemen and from which shall be paid all benefits payable under the system other than those payable from the member annuity savings fund. (b) The contributions of each employer for benefits under the retirement system on account of group II members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution,'' and an additional amount to be known as the "accrued liability contribution;'' provided that any employer, other than the state, shall pay 70 percent of such total contributions for state fiscal year 2010, and 30 percent thereof shall be paid by the state for state fiscal year 2010, and that beginning with state fiscal year 2011 any employer, other than the state, shall pay 75 percent of such total contributions, and 25 percent thereof shall be paid by the state, and that beginning with state fiscal year 2012, and every state fiscal year thereafter, any employer, other than the state, shall pay 65 percent of such total contributions, and 35 percent thereof shall be paid by the state; and provided that, in the case of compensation attributable to extra or special duty, the employer shall pay the full amount of such total contributions; and provided further that, in case of group II members employed by the state, the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution, including contributions on behalf of group II members whose group II creditable service is in excess of 40 years, in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuations, except as provided in subparagraphs (h) and (i). (c) The contributions of each employer for benefits under the retirement system on account of group I members shall consist of a percentage of the earnable compensation of its members to be known as the "normal contribution,'' and an additional amount to be known as the "accrued liability contribution;'' provided that, in the case of teachers, any employer, other than the state, shall pay 70 percent of such total contributions for state fiscal year 2010, and 30 percent thereof shall be paid by the state for state fiscal year 2010, and that beginning with state fiscal year 2011 any employer, other than the state, shall pay 75 percent of such total contributions, and 25 percent thereof shall be paid by the state, and that beginning with state fiscal year 2012, and every state fiscal year thereafter, any employer, other than the state, shall pay 65 percent of such total contributions, and 35 percent thereof shall be paid by the state; and provided further that in case of teacher members employed by the state the state shall pay both normal and accrued liability contributions. The rate percent of such normal contribution in each instance shall be fixed on the basis of the liabilities of the system with respect to the particular members of the various member classifications as shown by actuarial valuation, except as provided in subparagraphs (h) and (i). (d). [Repealed.] (e) Immediately following the actuarial valuation prepared as of June 30 of each fiscal year, the board shall have an actuary determine the amount of the unfunded accrued liability for each member classification as the amount of the total liabilities of the state annuity accumulation fund on account of such classification which is not dischargeable by the total of the funds in hand to the credit of the state annuity accumulation fund on account of such classification, and the aforesaid normal contributions to be made on account of the members in such classification during the remainder of their active service. The amount so determined with respect to each member classification shall be known as the "unfunded accrued liability'' with respect to such classification. On the basis of each such unfunded accrued liability, the board shall have an actuary determine the level annual contribution required to discharge such amount over a period of 30 years or the maximum period allowed by standards adopted by the Government Accounting Standards Board, whichever is less. (f) The total amount payable to the state annuity accumulation fund in each year on account of each member classification shall not be less than normal contribution rate multiplied by the total compensation earnable by all members in such classification for such year, plus the amount of the accrued liability contribution necessary to liquidate the unfunded accrued liability on behalf of such classification as determined by the actuary under subparagraph (e) above. (g) All interest and dividends earned on the funds of the retirement system shall be credited to the state annuity accumulation fund. The board of trustees shall allow interest at such rate or rates as it shall determine from time to time on the individual accounts of members in the member annuity savings fund and shall annually transfer such interest amount from the state annuity accumulation fund. Such interest shall be compounded at an annual rate and shall be prorated and credited to the member annuity savings fund to the date of processing upon termination of active service for any reason including withdrawal, retirement, or death. (h) There shall be a special account for additional benefits held by the board of trustees. Beginning July 1, 2003, the special account shall be subdivided into components representing the 4 retirement system member classifications, as defined in RSA 100-A:1, with each component subdivided proportionally between employees of the state and employees of the political subdivisions of the state. The balance of the special account attributed to each component as of June 30, 2003 shall be subdivided between state and political subdivision classifications based upon the actuarial liabilities of the member and retiree groups. Beginning with the fiscal year ending June 30, 1990, the amount credited annually to the special account shall be determined as follows: (1) Each component of the special account shall first be credited with all the earnings of that component for the fiscal year. (2) If the actuary determines that the funded ratio of the consolidated retirement system as of June 30 of any given year is equal to or greater than 85 percent, then all of the earnings of the remaining assets of the retirement system which are in excess of 10 and one-half percent shall be allocated to the 4 member classifications. The assumed rate of return shall be determined by the board of trustees. (3) Any funds held in special reserve as of June 30, 1996, shall be transferred to the respective component of the special account according to the following schedule: (i) One-half of the funds held in special reserve as of June 30, 1996. (ii) One-half of the remaining funds as of June 30, 1997, plus earnings from July 1, 1996 to June 30, 1997. (iii) All remaining funds as of June 30, 1998, plus earnings from July 1, 1997, to June 30, 1998. (4) [Repealed.] (5) None of the assets held in the special account shall be used in the actuarial determination of the rate percent of normal contribution as set forth in subparagraphs (b) and (c) . (6) [Repealed.] (7) The actuarial cost of all legislation enacted during each fiscal year and calling for funding from the special account shall be withdrawn from the respective components of the special account, as of June 30 of each year, after funds are credited to the special account as provided in this subparagraph. The special account shall be used only to fund or partially fund additional benefits as follows: first, to provide supplemental allowances, or COLAs, pursuant to RSA 100-A:41-a and, second, to provide additional benefits to retired members and beneficiaries of the retirement system with the specific approval of the appropriate policy committees and approval of the general court. (i) If the actuarially determined normal contribution rate as set forth in subparagraphs (b) and (c) on account of any of the various member classifications shall be negative in any fiscal year, then the excess amount resulting from the difference between zero and the negative actuarially determined normal contribution rate shall be used to reduce the employee contribution rate for that member classification in that fiscal year. (j) To account for no longer making transfers from the special account to the state annuity accumulation fund, notwithstanding RSA 100-A:16, II(h)(5) and (7), there shall be a one-time transfer of $250,000,000 not later than June 30, 2008 from the special account to the state annuity accumulation fund, provided however that if the employers' obligation to fund the 401(h) subtrust under RSA 100-A:53, RSA 100-A:53-b, RSA 100-A:53-c, and RSA 100-A:53-d ceases as a result of a final court order, the transfer of $250,000,000 plus any interest accrued shall be returned to the special account. The sum transferred shall be credited proportionally to each member subgroup based on the proportion of the funds transferred into each special account subgroup from the special medical account, as identified by the retirement system, on June 30, 2007. III. Employer Contributions. (a) On or before the first day of October next preceding each regular session of the state legislature, the board of trustees shall certify to the commissioner of administrative services the amounts which will become due and payable by the state during the biennium next following to the retirement system and it shall be the duty of the commissioner of administrative services in preparing the executive budget for each ensuing biennium to include in the budget the amounts so certified which amounts shall be appropriated by the legislature. The amounts so certified under this subparagraph shall include the unfunded accrued liability of the retirement system. The annual employer contribution requirements effective July 1, 2008 and as calculated each year thereafter shall not be less than the employee contribution rates under RSA 100-A:16, I(a). (b) A county, city, town, school district or other political subdivision of the state having any employee members who are paid directly by the state but for whom the staff is later reimbursed for the part of their compensation not chargeable to state funds shall likewise reimburse the state for that part of the contribution made by the state to this system which is based on such part of compensation not chargeable to state funds. (c) At the beginning of each year commencing on the first day of July the board of trustees shall certify to each employer other than the state the percentage rates of contribution due the system from each such employer, and shall assess upon each such employer such percentages of the earnable compensation of members in its employ, and it shall be the duty of the treasurer or other disbursing officer of each such employer to pay to the board of trustees such portion of the annual amount so assessed at such times and in such manner as the board of trustees may prescribe. Each such employer is hereby authorized to appropriate the sums necessary for the payment of such assessments. The annual employer contribution requirements effective July 1, 2008 and as calculated each year thereafter shall not be less than the employee contribution rates under RSA 100-A:16, I(a). (d) Notwithstanding RSA 100-A:16, III(a), the New Hampshire retirement system board of trustees shall, within a reasonable period of time not to exceed 30 days from the effective date of this subparagraph, certify to the commissioner of administrative services the amounts that will become due and payable by the state during the biennium beginning July 1, 2009 based upon a state employee group other post-employment benefit (OPEB) plan balance as of July 1, 2009 for the state medical plan subtrust of $0.00. Such certification shall in all other respects be based upon the data and assumptions used to calculate the state employer rate as certified in September 2008. In no event shall the board of trustees certify a rate in any subsequent year based upon payments made from the medical plan subtrust to the state prior to July 1, 2009.
[Paragraph III-a effective July 1, 2010.]
III-a. Upon the retirement of a member: (a) The retirement system shall: (1) Calculate average base pay of a member during his or her highest 3 years of creditable service, or during all of the years in his or her creditable service if less than 3 years; (2) Multiply the average base pay determined in subparagraph (1) above by 125 percent; (3) Subtract the result from subparagraph (2) from the member's average final compensation. (b) If the calculation in subparagraph (a)(3) is greater than zero, the employer shall be assessed the cost of the excess benefit provided by multiplying the present value of the member's retirement benefit by the amount determined in subparagraph (a)(3) divided by the amount in subparagraph (a)(2). (c) The employer shall certify to the accuracy of each member's base pay. (d) The retirement system shall certify to the cost determined in subparagraph (b) to the employer and assess upon the employer such cost for payment to the retirement system at such times and in such manner as the board of trustees may prescribe. Each such employer is hereby authorized to appropriate the sums necessary for payment of such assessments. III-b. Every employer shall annually report to the retirement system the annual base pay paid to each member. IV. [Repealed.] V. Notwithstanding any other provision of law any member contributions deducted by an employer, or any employer assessments or contributions not remitted at the times designated by the board of trustees, shall be subject to interest on the amount due at the rate of one percent for each month or fraction thereof that they remain unpaid. For reasonable cause, the board may abate all or any part of the interest. VI. Every employer shall report monthly to the retirement system all compensation of group II members that is attributable to extra or special duty. When an employer provides extra or special duty services, the employer shall include in its billing or charge to the entity for whom the extra or special duty is being provided the full amount of contributions required under RSA 100-A16, II(b) attributable to the extra or special duty. Notwithstanding any provision to the contrary, the employer shall be responsible for the full amount of employer contributions required under RSA 100-A16, II(b) attributable to extra or special duty.
Source. 1967, 134:1. 1969, 354:4. 1974, 33:7, 8. 1977, 510:1; 528:2. 1979, 297:3; 434:29, II. 1981, 548:2. 1983, 303:1; 469:140, 144-146. 1985, 398:2, 3, 7; 399:3, I. 1986, 95:5-8, 13, I. 1987, 254:1. 1988, 193:6. 1989, 251:1; 400:1. 1990, 273:4. 1992, 55:4. 1994, 119:1-3. 1996, 287:4, 5, 6, 7, I-II. 1998, 302:1, eff. June 30, 1998. 2001, 275:3, 4, eff. July 1, 2001. 2003, 221:1, eff. July 1, 2003. 2004, 216:2, eff. Dec. 31, 2004. 2006, 120:12, eff. July 14, 2006; 178:5, eff. July 24, 2006. 2007, 268:5-9, 11, II, eff. June 30, 2007. 2008, 300:8, eff. June 30, 2008; 300:33, eff. July 1, 2010. 2009, 144:50, eff. June 30, 2009; 144:52, 53, eff. July 1, 2009; 144:55, eff. June 1, 2009; 289:2, eff. July 29, 2009.
