CONCORD – Unions offered a series of concessions Thursday as the Legislature takes up reforming the state's troubled pension plan.
The N.H. Retirement System Coalition, which includes police, firefighters, teachers and state workers, offered to start paying higher contributions, work more years to an older age, cut the size of the retirement system board, and adjust the formula used to figure their pensions.
The move came in reaction to Senate Majority Leader Jeb Bradley's bill that proposes a series of reforms, including those the unions proposed. Union officials said the Bradley bill goes too far in shifting the burden onto workers and retirees.
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Bradley, R-Wolfeboro, said the $5 billion New Hampshire Retirement System is in a condition that requires immediate reform to preserve it for all public workers. He said the system, with more than 76,000 active and retired participants, is funded at 58.5 percent of its long-term obligations, and has unfunded liabilities of $3.7 billion. Taxpayers are being hit with rapidly escalating contributions that strain local budgets, he said Thursday.
"Experts predict large spikes going forward," he said. Change has to happen now, "given the magnitude, the enormity and the burden taxpayers not only face today . . . but also face in the future."
Unions argued that Bradley's changes will not address the unfunded liability, but will have a distinct effect on workers who are part of the NHRS.
They were backed by Senate Minority Leader Sylvia Larsen, D-Concord, who said that over the last four years substantial reforms have already passed.
"Those policies are working and claims that the system is insolvent are alarmist and inaccurate," Larsen said. Keeping promises made to workers is both a legal and moral commitment, she added.
In addition to steps the unions agree with, Bradley wants to transfer into the pension trust fund $89 million now in a special medical reserve account for police and firefighters. That idea is drawing vigorous opposition, as unions argue it is an unconstitutional diversion of funds.
Bradley also wants to eliminate extra duty and special duty pay being used in pension calculations for all police, no matter their years of experience.
Bradley and Republican supporters were joined yesterday by the state School Boards Association, the New Hampshire Municipal Association and the Business and Industry Association.
Quoting an e-mail Bradley sent to voters this week, School Boards Association president Ted Comstock said "the system is on a course where a day of reckoning is coming."
Pam Brenner, president of the New Hampshire Municipal Association, said pressure on taxpayers cannot be borne much longer. Towns are cutting workers because they cannot afford benefits costs, including retirement, she said.
The Bradley bill, "will attain a stable, fiscally healthy, sustainable plan."
Bradley said the NHRS problems come from three sources: quirky accounting the Legislature put in place more than 15 years ago that masked the system's problems; the transfer of $900 million in what were considered excess earnings to pay for medical subsidies; and serious downturns on Wall Street that cut NHRS assets by nearly $1 billion two years ago.
Bradley said the burden of fixing the system "has to be shared.
He said he expects professional forecasts next month that will show how quickly the system will recover under his plan. The bill has 11 co-sponsors in the Senate and four in the House.
Unions argued that many of the provisions are unconstitutional, such as transfer of medical funds and alteration of benefits for workers vested in the pension plan.
David Lang, president of the Professional Firefighters of New Hampshire, said the reforms would put too much burden on workers.
"What we have in this special legislation is a political sleight of hand, in which we'd now require employees to pay for the 30-year mortgage that was created by employers," he said.
State Employees Association president Diana Lacey said taxpayers avoided paying their full share for nearly 20 years, so the weight of reform should not fall on workers who kept up their end.
Lacey urged a cautious approach. The Legislature made several pension reforms already that will take time to produce results, she said. One is a 30-year plan to restore full funding as new workers move toward retirement age.
"It will take time. What we don't want to see is anything hasty. We want purposeful, responsible, affordable and possible solutions," she said.
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