April 22, 2008   

Public employees seek corrective action to continue retiree benefits

Coalition is taking the lead to protect people and prevent tax hikes

CONCORD, NH —   In response to an online report issued Monday evening by  <http://www.politickernh.com/> www.PolitickerNH.com where James Pindell detailed the filing of a lawsuit by members of the New Hampshire Retirement Security Coalition, public employees are providing additional details.

Public employees asked a Merrimack County Superior Court Monday to force the New Hampshire Retirement System (NHRS) to follow the law and continue payments to fund the medical subsidy with the 8 percent cost of living increase in tact for Granite State retirees. The suit seeks to correct an action by the system they say will cause tax rates to spike, the core concern of cities and towns across the state. This request would essentially allow retirement benefits to continue without increased costs to the taxpayers, according to the Coalition.

James Valiquet, president of the New Hampshire Association of Chiefs of Police, said taking legal action is never an easy undertaking. “The retirement system was not designed to be a burden to the taxpayer, and rather to provide an employment incentive to hire the best police officers, firefighters, teachers and employees and ensure a well-functioning and safe government,” Valiquet said. “We all heard Governor John Lynch repeat time and again in his previous election theme that you can take care of people and watch the bottom line. The action we seek in court does just that.”

Public employees supporting the suit include the Professional Firefighters of New Hampshire, State Employees Association of New Hampshire – Local 1984, SEIU, CLC, New Hampshire Police Association, New Hampshire Association of Chiefs of Police, New Hampshire State Permanent Firefighters Retirement Association, and New Hampshire Association of Fire Chiefs.

As a means to safeguard the viability of the medical subsidy and prevent potential tax increases, the public employees who police local streets, fight fires and teach Granite State children are asking the NHRS to immediately reverse its November 2007 decision to cease making replenishment payments from the special account to the state annuity accumulation fund in an amount equal to that paid by employers to the 401(h) subtrust to offset the cost of the medical subsidy. The special account was established in the late 1980s as a place to deposit earnings over and above the actuarial rate of return. The money is used to fund the medical subsidy and reimburse the employers so the benefit is cost neutral for the taxpayers.

The public employees say they recognize the prior action was taken upon the advice of legal consultant. However, they believe this action was rash and unnecessary. “Public employees continue to go to work to teach local children, respond to emergencies and protect New Hampshire’s streets,” said David Lang, president of the Professional Firefighters of New Hampshire. “They were promised this benefit and we beleive there is no legal reason to prevent them from receiving it.”

In a letter sent the NHRS Board Chair Lisa Shapiro, Attorney Glenn Milner, on behalf of the members, writes, “We recognize that your prior action was taken upon the advice of your legal consultant, Ice Miller. We believe this action was taken far too hastily and contrary to New Hampshire Law and the best interests of the members of the NHRS. As well, you have now been provided a second legal opinion by Attorney Wagner establishing that the conclusions of Ice Miller are highly suspect.”

Last week, Attorney Marcia S. Wagner, who specializes in retirement related issues, blasted the “Ice Miller Report” - the findings from a funding review of retiree health benefits through a 401(h) subtrust by the law firm of Ice Miller LLP that resulted in the loss of employer reimbursement for medical benefits and is expected to increase contribution rates for cities and towns around the state.  The “Wagner Report” discredits the foundation for proposed reform found in House Bill 1645 which eliminates the employer replenishment of contributions to the 401(h) subaccount.



The law states (RSA 100A:53), “At the end of each fiscal year beginning with the year ending June 30, 1989, the state annuity accumulation fund of the New Hampshire Retirement System shall be reimbursed from the special account established in RSA 100-A:16, II(h) for the amount of funds allocated to the 401(h) subtrust for that year.”

Jon Garvin, president of the New Hampshire Police Association, said the Coalition is following the advice of the Senate Executive Departments and Administration (ED&A) Committee. “During the last Senate public hearing, State Sen. Peter Burling (D-Cornish) made it abundantly clear that this issue is a NHRS issue and is best presented to them,” Garvin said. “We believe Senator Burling is right and we have taken this issue to the System and have asked the courts to order the system to follow the law. Based on advice we have received and presented, we believe you can have a medical subsidy and save the taxpayers money.”

Arthur Beaudry, president of the New Hampshire State Permanent Retired Firefighters Association, said retired teachers, firefighters and police and other public employees paid into the system and devoted their lives to public service under the promise of retirement security including a medical subsidy. “If the law is not followed and House Bill 1645 is passed, these same dedicated people will be forced to decide between medications or meals,” Beaudry said. “It’s just not right.”

Rhonda Wesolowski, president of the National Education Association of New Hampshire, said every child has a right to be educated in a great public school and the entire community shares the responsibility to recruit and retain the highly qualified teachers that  students deserve. “Part of this recruitment effort must be to ensure that teachers and other public employees get the benefits they were promised,” said Wesolowski. “By taking part in this lawsuit, we are protecting the taxpayers’ interests as well as our members’, because it requires the NHRS to reimburse employers for every dollar spent on the retirement medical subsidy. This will translate into savings for taxpayers. We are asking the community to join us in calling on the New Hampshire Retirement System to continue funding the retirees’ medical subsidy established in New Hampshire law.”



Media Contacts:
Laura Hainey, President, New Hampshire AFT-NH, 603-661-7293
David Lang, President, PFFNH, 603-437-0035
Bradford Police Chief James S. Valiquet, 603-938-2522
Gary Smith, President, SEA of New Hampshire, 603-271-3411
Arthur Beaudry, New Hampshire State Permanent Firefighters Retirement Association, 603-622-3473
Rick Trombly, NEA - New Hampshire, 603-224-7751
Gerri Madrid-Davis, NPPC, 202-657-1549