HB 594-FN-LOCAL - AS INTRODUCED
2003 SESSION
10/09
HOUSE BILL 594-FN-LOCAL
AN ACT relative to the return of employer contributions for retirement system members who terminate employment prior to vesting.
SPONSORS: Rep. Stritch, Rock 75; Rep. Dumaine, Rock 75; Rep. Introne, Rock 75; Rep. Hutchinson, Rock 75; Rep. Packard, Rock 75
COMMITTEE: Executive Departments and Administration
This bill requires the retirement system to return the employer contributions made on behalf of an employee who terminates employment and retirement system membership prior to vesting.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03-0620
10/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Three
AN ACT relative to the return of employer contributions for retirement system members who terminate employment prior to vesting.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Retirement System; Membership; Return of Employer Contributions. Amend RSA 100-A:3, V-a to read as follows:
V-a. Notwithstanding any provision of this chapter to the contrary, if any member who is an employee of a political subdivision terminates employment and withdraws his or her accumulated contributions and ceases to be a member [within 6 months of the initial date of his employment] at any time prior to the member's vesting under this chapter of eligibility to receive a retirement benefit, the accumulated contributions of the employer made during that [6-month] period shall be returned to that political subdivision.
2 Effective Date. This act shall take effect 60 days after its passage.
LBAO
03-0620
1/16/03
HB 594-FN-LOCAL - FISCAL NOTE
AN ACT relative to the return of employer contributions for retirement system members who terminate employment prior to vesting.
FISCAL IMPACT:
The New Hampshire Retirement System states this bill will increase state and local expenditures by an indeterminable amount in FY 2003 and each year thereafter. There will be no fiscal impact on state, county, and local revenue or county expenditures.
METHODOLOGY:
The System states this bill would require the System to return employer contributions made on behalf of an employee of a political subdivision when the employee terminates and receives a return of member contributions. The System assumes there are 2,156 employees of political subdivisions who will terminate employment and elect to receive a refund of member contributions, and that the employees have seven years of service with an average compensation of $27,712. As a result, this bill would increase the normal contribution rate for political subdivision employees by .25%, which would require an additional annual contribution of approximately $830,000.
The System states, if enacted, this bill would require separate normal rates for State employees and political subdivision employees to be calculated to reflect that only the political subdivision employees will be receiving a refund of employer contributions. The System would have to separately account for the refunds made to the political subdivisions. In addition, the System states there would be a one-time administrative cost to modify the mainframe system to track refunds ranging between $75,000 and $100,000.
The Actuary's letter is on file in the bill jacket in the House Clerk's Office.