sb 0329

CHAPTER 146

SB 329-FN – FINAL VERSION

AN ACT relative to the recovery by the retirement system of the overpayment of benefit amounts, relative to payment of medical benefits costs for disabled group II members of the retirement system, and making technical changes to the judicial retirement plan.

SPONSORS: Sen. Flanders, Dist 7; Rep. Zolla, Rock 77

This bill allows the board of trustees of the retirement system to recover the overpayment of benefit amounts which were paid after the death of a retiree or beneficiary or after the remarriage of a surviving spouse.

This bill extends the year of eligibility of group II disabled members for the payment of medical benefits costs by the retirement system.

This bill also makes technical changes to the judicial retirement plan relating to managing assets, required distributions, compensation limits, rollover of returned contributions, and actuarial assumptions.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

Be it Enacted by the Senate and House of Representatives in General Court convened:

146:1 New Paragraph; Retirement System; Administration; Recovery of Overpayments. Amend RSA 100-A:14 by inserting after paragraph XIII the following new paragraph:

XIV. The board of trustees shall have the authority to recover for the retirement system any benefits deemed not payable under this chapter as a result of a death of any retiree or beneficiary, or as the result of the remarriage of a surviving spouse in receipt of benefits.

146:2 Group II Disabled Members; Medical Benefits; Application. Amend RSA 100-A:55, I to read as follows:

I. The additional benefits provided under RSA 100-A:52 shall apply to persons who are active or retired members of group II as of June 30, 2000; to persons who prior to July 1, 1988, had completed no less than 20 years of group II creditable service, but who for reasons other than retirement or death ceased to be a group II member prior to attaining the age of 45, and who, as of July 1, 1993, are eligible for vested deferred retirement benefits; and to persons who are group II permanent policemen or permanent firemen members on disability retirement as the natural and proximate result of injuries suffered while in the performance of duty who become permanent policemen members of group II before July 1, [~~2004~~] 2005 or permanent firemen members of group II before July 1, [~~2004~~] 2005. Such additional benefits shall not apply to other persons who become members of group II after the dates stated in this paragraph, without future legislation to include them. It is the intent of the legislature that future group II members shall be included only if the total cost of such inclusion can be funded by reimbursement from the special account established under RSA 100-A:16, II(h).

146:3 Judicial Retirement Plan; Definitions; Actuarial Equivalent. Amend RSA 100-C:1, II to read as follows:

II. “Actuarial equivalent” means a benefit of equal value when computed at regular interest upon the basis of the mortality tables last adopted by the board of trustees. The actuarial equivalent shall be based upon an interest rate assumption of 6 percent, and the 1971 Group Annuity Mortality Table (males) for members and the 1971 Group Annuity Mortality Table (males) set back 6 years for spouses or beneficiaries. For purposes of determining the present value of a lump sum payment, the applicable interest rate is the annual interest rate on 30-year Treasury securities for the month before the date of distribution or such other time as the United States Secretary of the Treasury may prescribe by regulations and the applicable mortality table is the mortality table prescribed by the Secretary of the Treasury which shall be based on the prevailing commissioners’ standard table as described in Internal Revenue Code section 807(d)(5)(A) used to determine reserves for group annuity contracts issued on the date as of which present value is being determined. Any changes must be approved by the board of trustees.

146:4 Judicial Retirement Plan; Definitions; Earnable Compensation. Amend RSA 100-C:1, VII to read as follows:

VII. “Earnable compensation” means a member’s annual salary. The annual compensation that may be taken into account in determining contributions to a member or the benefit of a member may not exceed $150,000, or such greater amount as permitted under section 401(a)(17) of the Internal Revenue Code.

146:5 New Paragraph; Judicial Retirement Plan; Return of Contributions; Rollover. Amend RSA 100-C:8 by inserting after paragraph IV the following new paragraph:

V. A distributee may elect, in a time and manner prescribed in rules of the board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. For purposes of this paragraph:

(a) “Distributee” means a member or former member, or spouse of a member or former member.

(b) “Eligible retirement plan” means an individual retirement account described in section 408(a) of the Internal Revenue Code, an individual retirement annuity described in section 408(b) of the Internal Revenue Code, an annuity plan described in section 403(a) of the Internal Revenue Code, a qualified trust described in section 401(a) of the Internal Revenue Code, or an eligible 457(b) deferred compensation plan maintained by an eligible employer, that accepts the distributee’s eligible rollover distribution.

(c) “Eligible rollover distribution” means any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution shall not include any distribution that is one of a series of substantially equal periodic payments, not less frequently than annually, made for the life, or life expectancy, of the distributee or the joint lives, or joint life expectancies, of the distributee and the distrubutee’s designated beneficiary, or for a specified period of 10 years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Internal Revenue Code; and any distribution which is made upon hardship of the distributee.

I. Notwithstanding any other provisions of this chapter, the maximum benefit payable to any retired member or beneficiary of the New Hampshire judicial retirement plan shall be limited to such extent as may be necessary to conform to the requirements of sections 401(a)(9) and 415 of the United States Internal Revenue Code of 1986 for a qualified retirement plan.

II.(a) In accordance with section 401(a)(9) of the Internal Revenue Code, distribution of the member’s contributions shall commence by the April 1 following the later of the calendar year in which the participant attains age 70-1/2 or retires. Actuarial increases shall be provided for a member who retires in a calendar year after the calendar year in which the participant attains age 70-1/2, for the period after age 70-1/2 in which the member was not receiving any benefits under the plan.

(b) When the distribution of the member’s entire interest is not made in a lump sum, the distribution shall be made in one or more of the following ways:

(3) Over a period certain not extending beyond the life expectancy of the member; or

(4) Over a period certain not extending beyond the joint life and last survivor expectancy of the member and a designated beneficiary.

(c) If distribution has commenced before the member’s death, the remaining interest shall be distributed at least as rapidly as under the method of distribution being used as of the date of the member’s death.

(d) If the member dies before distribution commences, any remaining portion of the member’s interest that is not payable to a beneficiary designated by the member shall be distributed within 5 years after the member’s death, and any portion of the member’s interest that is payable to a beneficiary designated by the member shall be distributed either within 5 years after the member’s death, or over the life of the beneficiary or over a period certain not extending beyond the life expectancy of the beneficiary, commencing not later than the end of the calendar year following the calendar year in which the member died, or if the designated beneficiary is the member’s surviving spouse, commencing not later than the end of the calendar year in which the member would have attained age 70-1/2.

(e) Distributions from the plan shall be made in accordance with the requirements of the regulations under Internal Revenue Code section 401(a)(9), including the minimum distribution incidental benefit requirements.

146:7 Judicial Retirement Board of Trustees; Investing and Managing Assets. Amend RSA 100-C:12, III to read as follows:

III. The contribution shall be used for the exclusive benefit of members and their beneficiaries and in no event shall revert to the state unless the reversion is due to a good faith mistake of fact or law. The board may return a member or state contribution, or make alternative arrangements for reimbursement, if the board determines the contribution was made because of a mistake of fact or law.

II. Remainder shall take effect May 24, 2004.)