Retirement system seeks to block set rates for pensions
CONCORD – The New Hampshire Retirement System went to court Tuesday to try to block the setting of pension rates for public employers.
The suit argues the change would cut public employer costs $100 million over the next two years.
“The difference is not trivial but substantial,” Andrew Shulman, the system’s lawyer, wrote in the lawsuit.
Last month, the system’s board of trustees voted, 7-5, to authorize Shulman to file this injunction in Merrimack County Superior Court in Concord.
The lawsuit is over a provision in the trailer bill to the two-year state budget (HB 2) that directs the system to recertify pension rates charged to employers for 2012 and 2013.
Lawmakers want to readjust the pension rates and lower them for public employers because the retirement reform plan contained in this budget bill increased retirement costs for all public employees.
The lawsuit does not maintain that the rate cut for employers would endanger the system’s financing because rates for employers could be increased in the future.
The request for a preliminary injunction called the move “unsound.”
State prosecutors will defend against the lawsuit, a governor’s spokesman said.
“Certainly the governor had said there would be challenges to some of the changes made to the retirement system, and that’s what we are seeing,” press secretary Colin Manning said.
The new retirement law reshuffles the retirement system’s board of trustees giving Lynch five new seats to fill appointments.
Lynch will make nominations for at least “some” of those openings when the Executive Council meets today at the New Hampshire Food Bank in Manchester, Manning said.
Some councilors want to approve the new trustees as soon as they receive Lynch’s picks.
House Speaker William O’Brien, R-Mont Vernon, praised those intentions.
“We all look forward to working with a new, responsible and accountable NHRS board that is focused on meeting our obligations to the retirees while also bringing long-term solvency to the system,” O’Brien said in a statement. “Both the reform and the actions tomorrow by the governor and council are good news for New Hampshire’s taxpayers.”
Legislative leaders are hoping the newly constituted board agrees with its view on changing the rates.
The changes end the solid majority that organized labor have on the trustees board.
Currently, labor holds eight of the 14 seats; the new 13-member board will have only four members who represent public employees.
A coalition of labor unions last month filed their own lawsuit against the retirement reform law.
The union suit among other things challenges the right to change benefits for employees who have worked less than 10 years and are not fully vested in the retirement system.
An initial hearing on the labor union lawsuit is set for Thursday morning in Concord.
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