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HB 1645 – February 14, 2008
Good morning my name is Jim Valiquet and I am
a member and beneficiary of the New Hampshire Retirement System. I have
29 years of group two service. I also had the honor and privilege of
serving on the Commission created by HB 876. I come before you today
representing a number of groups currently making up the New Hampshire
Public Employees Retirement Coalition. The Coalition is made up of:
AFSCME Council 93
AFT-NH
New Hampshire AFL-CIO
New Hampshire Association of Chiefs of Police
New Hampshire Police Association
New Hampshire Permanent Fire Fighters Association
Professional Firefighters of New Hampshire
State Employees Association of New Hampshire
New Hampshire Association of Fire Chiefs
Funding
Promises made should
be promises kept. Our police officers, firefighters, teachers and other
public employees work hard every day for the citizens of New Hampshire.
They arrived for work daily and contributed into the New Hampshire
Retirement System each and every pay day. They were told that
participation in the New Hampshire Retirement System was a requirement
of the position.
We are all tax
payers and feel the same burden of taxation like our neighbors. We
fully understand the need for a sound spending plan. We certainly know
that state and local governments must find ways to provide the services
necessary while balancing the ability to fund those services. We must
all be conscious of the responsibility the state and local government
have for contractual obligations created while delivering these
services. The balancing of budgets should not be at the expense of our
teachers, employees, police officers, firefighters and especially our
retirees.
New Hampshire has
had a difficult time recruiting police officers, firefighters,
corrections officers and teachers. This is due the fact that they can
make more money in the private sector and in neighboring states. As
result and it is not getting any easier to find good candidates and then
retain them. One of the major factors effecting recruitment in New
Hampshire has been the Retirement System. Reducing benefits for newly
hired employees will make it harder for New Hampshire to compete for
skilled workers and will continue to drive our youth to neighboring
states for better opportunities. This bill takes and extends the
retirement age for Group II from 45 to 55 and 20 years service to 25
years. Additionally HB 1645 would change final compensation from 3
years to 5 years. Neither of these provisions were offered in the
Commission Report. Please consider some basic and proven facts. Eye
sight in particular begins to diminish around age 42 for everyone. The
rods and cones within the eyes become less reactive to changes in
light. Muscle tone and reflexes slow. All the effects work against the
first responder and the people they are trying to protect. Why would we
want to risk their safety or the safety of the public? Is it because
group II is less funded that group I?
In fact as a group
Police are five percent (5%) better funded and firefighters
approximately 3% better funded than Group I members. This begs the
question why then would we risk the lives of our police and firefighters
by forcing them to stay longer than they should and then compensate them
by reducing their pensions by 3.9%? I like to repeat neither the
service retirement or final compensation were endorsed by the
Commission. These were minority reports provisions.
Changing these
benefits for future employees will not solve our budget problems and
will not reduce the unfunded liability of the pension system. As I
stated above there are physical changes that occur with age, raising the
retirement age will increase work related injuries and disability
claims. Also consider that these employees do not pay into social
security. If they have not worked anywhere else they will not receive
any social security benefits. If a Group II member works before,
during, or after their careers as a first responder and accumulate the
quarters necessary to collect social security. The federal government
will reduce their benefits as much as 48%. These are Social Security
provisions which impact state, county, and local employees. Not only do
these provisions effect the employee but their spouses as well. The
Government Pension Offset (GPO) eliminates or reduces the spousal
benefit by two thirds the value of the public employees retirement
benefit. The Windfall Elimination Provision (WEP) reduces, but does not
eliminate, a portion of an individuals Social Security earned outside of
their public employment. Non-public employees with private pensions get
to keep their ENTIRE Social Security benefits and their Social Security
survivor benefits.
Extending the
Service Retirement is not only a potentially dangerous change. It
shortens their ability to develop secondary plans for a financially
sound retirement.
The theme over the
past five months has been reducing employer contribution rates. The
issues facing the retirement system are many but, it is a sound system.
The main cause for our current funding issue is really the coming
together of events that formed the perfect storm of retirement systems.
But our ship weathered the rough seas and has made it back to port.
First, had we not changed to the OPEN GROUP AGGREGATE actuarial
methodology the employers would have been paying a fairer share for the
past 17 years. Over the past ten years the employers contributed 16%,
the employees 21% and return on investments accounted for 64% of the
funding. Nationally, employers have paid more for the plans. The
second event was the collapse of the dot com industry and the events of
9-11-2001. Both had adverse effects on the market and therefore on the
system for a number of years. The one constant during these trying
times were the employees they continued to perform with pride and
dignity while making their contributions to the system they were told
would be there for them.
If nothing else
happens this session we hope that the legislature develops a plan to
fully fund the retirement system and to insure that both the state and
local governments meet their full obligations and commitments to the
plan within a reasonable time frame so that full funding can be
achieved.
Plan Changes
The strength of our
defined benefit retirement system is that it is flexible. Plan design
changes are a normal part of a strong, sustainable defined benefit
retirement system that provides security to dedicated public servants.
Change should be entertained with the balance between the needs of the
state, the employers and the workers and should not merely be undertaken
to reduce employer costs—to do so makes us less competitive and deprives
the state and local governments of access to the most skilled future
workers.
The coalition
strongly believes the makeup of the Board of Trustees is sound. In fact
the Commission voted against the recommendation for change. If
employees had had a greater involvement in the pension funds of Tyco and
Enron, does anyone believe that the “experts” would have had the
opportunity to mismanage these pensions costing many employees their
life savings?
Health care
No one should be
forced to seek public assistance or rely on emergency rooms in their
retirement—especially not the teachers, police officers, firefighters,
and other employees who have made New Hampshire strong, educated and
safe throughout their careers in public service.
Health care costs
are a national problem for families in every state. Our coalition is
ready to work with the Legislature and employers towards finding a
solution to address the problem and achieve quality, affordable care.
Public employee and
retiree health care benefits are not the real problem. The real problem
is the increased cost of health care for everyone nationwide, due to
rising hospital costs, lack of control over prescription drug costs, new
technologies, and people living longer. We do not need to cut retired
public workers’ health care benefits, we need to fix the broken health
care system. |
Dedicated to the Law Enforcement Manager, by Law Enforcement Managers
